2labor Law - Upto 2015 BAR

LABOR LAW AND SOCIAL LEGISLATION
TABLE OF CONTENTS
I. Fundamental Principles and Policies

A. Constitutional provisions .............................................................................................. 1
1. Article II, Secs. 9, 10, 11, 13, 14, 18, 20. ......................................................... 1
2. Article III, Secs. 1, 4, 7, 8, 10, 16, 18(2). ......................................................... 2
3. Article XIII, Secs. 1, 2, 3, 13, 14. ..................................................................... 3
B. Civil Code
1. Article 19
2. Article 1700
3. Article 1702
C. Labor Code
1. Article 3
2. Article 4 ........................................................................................................ 20
3. Article 166
4. Article 211
5. Article 212
6. Article 255 ..................................................................................................... 21
7. Article 277
II. Recruitment and Placement

A. Recruitment of local and migrant workers .................................................................. 22
1. Illegal recruitment (Sec. 5, R.A. No. 10022) .................................................. 24
a) License vs. authority .......................................................................... 25
b) Essential elements of illegal recruitment
c) Simple illegal recruitment
d) Illegal recruitment in large scale
e) Illegal recruitment as economic sabotage .......................................... 27
f) Illegal recruitment vs. estafa
g) Liabilities ............................................................................................ 28
(i) Local recruitment agency
(ii) Foreign employer
(a) Theory of imputed knowledge
(iii) Solidary liability
h) Pre-termination of contract of migrant worker .................................... 30
2. Direct hiring .................................................................................................... 32
B. Regulation and enforcement ...................................................................................... 32
1. Suspension or cancellation of license or authority (Art. 35, Labor Code) ....... 32
2. Regulatory and visitorial powers of the DOLE secretary
3. Remittance of foreign exchange earnings ...................................................... 34
4. Prohibited activities ........................................................................................ 35
III. Labor Standards ............................................................................................................... 36

A. Hours of work ........................................................................................................... 37
1. Coverage/Exclusions (Art. 82, Labor Code) ................................................ 37
2. Normal hours of work ................................................................................... 38
a) Compressed work week ................................................................... 40

3. Meal break
4. Waiting time
5. Overtime work, overtime pay ........................................................................ 40
6. Night work (R.A. No. 10151), Night shift differential ..................................... 49
7. Part-time work
8. Contract for piece work (see Civil Code)
B. Wages...................................................................................................................... 51
1. Wage vs. salary ............................................................................................ 52
2. Minimum wage defined, Minimum wage setting ........................................... 54
3. Minimum wage of workers paid by results .................................................... 54
a) Workers paid by results
b) Apprentices
c) Learners
d) Persons with disability
4. Commissions ............................................................................................... 55
5. Deductions from wages ................................................................................ 56
6. Wage Distortion/Rectification........................................................................ 58
7. Non-diminution of benefits ............................................................................ 62
8. Facilities vs. supplements ............................................................................. 64
9. Divisor to determine daily rate
C. Rest Periods ............................................................................................................. 65
1. Weekly rest day
2. Emergency rest day work
D. Holiday pay/Premium pay ....................................................................................... 66
1. Coverage, exclusions ..................................................................................... 66
2. Teachers, piece workers, takay, seasonal workers, seafarers ........................ 71
E. Leaves ....................................................................................................................... 72
1. Maternity Leave .................................................................................................. 75
2. Paternity Leave .................................................................................................. 73
3. Service Incentive Leave ..................................................................................... 77
4. Parental Leave (R.A. No. 8972)
5. Leave for Victims of Violence against Women and Children (R.A. No. 9262)
6. Special leave benefit for women
F. Service Charge ........................................................................................................ 78
G. Thirteenth Month Pay ............................................................................................... 80
H. Separation Pay ........................................................................................................ 81
I. Retirement Pay ........................................................................................................ 87
a. Eligibility ....................................................................................................... 90
b. Amount......................................................................................................... 91
c. Retirement benefits of workers paid by results
d. Retirement benefits of part-time workers
e. Taxability
J. Women Workers ...................................................................................................... 92
a. Provisions against discrimination .................................................................. 92
b. Stipulation against marriage ......................................................................... 93
c. Prohibited acts ............................................................................................. 96
d. Anti-Sexual Harassment Act (R.A. No. 7877) .............................................. 97

K. Employment of Minors (Labor Code and R.A. No. 7678, R.A. No. 9231) .............. 102
L. 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) .................................................................................................................... 107
M. Employment of Homeworkers ................................................................................ 114
N. Apprentices and Learners ...................................................................................... 116
O. Persons with disability (R.A. No. 7277, as amended by R.A. No. 9442) ................ 118
a. Definition
b. Rights of persons with disability
c. Prohibition on discrimination against persons with disability ....................... 120
d. Incentives for employers
IV. Termination of Employment ........................................................................................... 121

A. Employer-employee relationship .............................................................................. 123
1. Four-fold test ................................................................................................ 132
2. Kinds of employment.................................................................................... 144
a. Probationary ..................................................................................... 145
b. Regular ............................................................................................ 149
c. Project employment .......................................................................... 156
d. Seasonal .......................................................................................... 159
e. Casual .............................................................................................. 160
f. Fixed-term ....................................................................................... 162
3. Job contracting ............................................................................................. 163
a. Articles 106 to 109 of the Labor Code .............................................. 163
b. Department Order No. 18-A
c. Department Circular No. 01-12
d. Effects of Labor-Only Contracting
e. Trilateral relationship in job contracting ............................................ 169
B. Dismissal from employment ..................................................................................... 175
1. Just Causes ................................................................................................. 177
2. Authorized Causes ....................................................................................... 197
3. Due Process ................................................................................................ 212
a) Twin-notice requirement
b) Hearing; meaning of opportunity to be heard
C. Reliefs for Illegal Dismissal ...................................................................................... 224
1. Reinstatement.............................................................................................. 225
a. Pending appeal (Art. 223, Labor Code)
b. Separation pay in lieu of reinstatement
2. Backwages .................................................................................................. 233
a. Computation
b. Limited backwages
D. Preventive Suspension ............................................................................................ 236
E. Constructive Dismissal ............................................................................................ 237
V. Management Prerogative .................................................................................................. 237

A. Discipline ................................................................................................................. 242
B. Transfer of employees ............................................................................................. 243
C. Productivity standard ............................................................................................... 247

D. Grant of bonus ........................................................................................................ 248
E. Rules on Marriage between employees of competitor-employers ............................ 251
F. Post-employment ban.............................................................................................. 251
G. Change of working hours ......................................................................................... 252
VI. Social Welfare Legislation (P.D. 626)

A. SSS Law (R.A. No. 8282) ....................................................................................... 252
1. Coverage ......................................................................................................... 253
2. Exclusions from coverage ................................................................................ 259
3. Benefits ............................................................................................................ 260
4. Beneficiaries .................................................................................................... 264
B. GSIS Law (R.A. No. 8291) ...................................................................................... 267
1. Coverage ......................................................................................................... 267
2. Exclusions from coverage ................................................................................ 270
3. Benefits ............................................................................................................ 270
4. Beneficiaries .................................................................................................... 272
C. Limited Portability Law (R.A. No. 7699) .................................................................. 273
D. Employees compensation coverage and when compensable .............................. 274
VII. Labor Relations Law

A. Right to self-organization ......................................................................................... 276
1. Who may unionize for purposes of collective bargaining .............................. 281
a) Who cannot form, join or assist labor organizations
2. Bargaining unit ............................................................................................. 295
a) Test to determine the constituency of an appropriate bargaining unit
b) Voluntary recognition
(i) Requirements
c) Certification election ......................................................................... 301
(i) In an unorganized establishment ........................................ 313
(ii) In an organized establishment............................................. 314
d) Run-off election ................................................................................ 317
(i) Requirements
e) Re-run election
f) Consent election ............................................................................... 319
g) Affiliation and disaffiliation of the local union from the mother union
(i) Substitutionary doctrine ........................................................ 320
h) Union dues and special assessments .............................................. 322
(i) Requirements for validity
i) Agency fees ...................................................................................... 323
(i) Requisites for assessment
B. Right to collective bargaining ................................................................................... 326
1. Duty to bargain collectively ......................................................................... 327
a) When there is absence of a CBA
b) When there is a CBA
2. Collective Bargaining Agreement (CBA) .................................................... 332
a) Mandatory provisions of CBA ......................................................... 335
(i) Grievance procedure
(ii) Voluntary arbitration

(iii) No strike-no lockout clause
(iv) Labor management council
b) Duration .......................................................................................... 337
(i) For economic provisions
(ii) For non-economic provisions
(iii) Freedom period
3. Union Security .............................................................................................. 339
a) Union security clauses; closed shop, union shop, maintenance
of membership shop, etc.
b) Check-off; union dues, agency fees
4. Unfair Labor Practice in collective bargaining .............................................. 349
a) Bargaining in bad faith ..................................................................... 351
b) Refusal to bargain ............................................................................ 352
c) Individual bargaining
d) Blue sky bargaining
e) Surface bargaining ........................................................................... 353
5. Unfair Labor Practice (ULP) ........................................................................ 355
a) Nature of ULP .................................................................................. 355
b) ULP of employers ........................................................................... 356
c) ULP of labor organizations ............................................................. 364
C. Right to peaceful concerted activities ....................................................................... 366
1. Forms of concerted activities ........................................................................ 367
2. Who may declare a strike or lockout? ......................................................... 372
3. Requisites for a valid strike .......................................................................... 373
4. Requisites for a valid lockout ........................................................................ 382
5. Requisites for lawful picketing ...................................................................... 383
6. Assumption of jurisdiction by the DOLE Secretary or Certification of the labor
dispute to the NLRC for compulsory arbitration ................................................ 385
7. Nature of assumption order or certification order.......................................... 390
8. Effect of defiance of assumption or certification orders ................................ 391
9. Illegal strike .................................................................................................. 395
a) Liability of union officers ................................................................. 395
b) Liability of ordinary workers ............................................................ 396
c) Liability of employer ........................................................................ 398
d) Waiver of illegality of strike
10. Injunctions .................................................................................................. 400
a) Requisites for labor injunctions
b) Innocent bystander rule
VIII. Procedure and Jurisdiction

A. Labor Arbiter ............................................................................................................ 401
1. Jurisdiction
a) versus Regional Director
2. Reinstatement pending appeal
3. Requirements to perfect appeal to NLRC
B. National Labor Relations Commission (NLRC) ....................................................... 420
1. Jurisdiction .................................................................................................. 420
2. Effect of NLRC reversal of Labor Arbiters order of reinstatement

3. Remedies ................................................................................................... 425
4. Certified cases
C. Bureau of Labor Relations Med-Arbiters ............................................................... 427
1. Jurisdiction (original and appellate)
D. National Conciliation and Mediation Board .............................................................. 428
1. Nature of proceedings
2. Conciliation vs. Mediation
3. Preventive mediation
E. DOLE Regional Directors ......................................................................................... 430
1. Jurisdiction
F. DOLE Secretary ....................................................................................................... 433
1. Visitorial and enforcement powers
2. Power to suspend/effects of termination ...................................................... 438
3. Assumption of jurisdiction............................................................................. 438
4. Appellate jurisdiction
5. Voluntary arbitration powers
G. Grievance Machinery and Voluntary Arbitration ....................................................... 444
1. Subject matter of grievance.......................................................................... 445
2. Voluntary Arbitrator ...................................................................................... 445
a) Jurisdiction
b) Procedure
c) Remedies
H. Court of Appeals ..................................................................................................... 448
1. Rule 65, Rules of Court
I. Supreme Court
J. Prescription of actions .............................................................................................. 449

I. Fundamental Principles and Policies
A. Constitutional provisions
1. Article II, Secs. 9, 10, 11, 13, 14, 18, 20
Q: What is the foundation of the agrarian reform program under the 1987
Constitution? Who are the direct beneficiaries of the program?
SUGGESTED ANSWER:
The 1987 Constitution enunciates in Article II as one of the state policies that (t)he
State shall promote comprehensive rural development and agrarian reform."
In Article XII of the Constitution, in dealing with the national economy and patrimony, it
is also stated that (t)he State shall promote industrialization and full employment based
on sound agricultural development and agrarian reform, x x x"
Then in Article XIII of the Constitution, in dealing with social justice and human rights,
there is this provision, among others: 'The State shall, by law, undertake an agrarian
reform program founded on the right of farmers and regular farm-workers, who are
landless, to own directly or collectively the lands they till or in the case of other
farmworkers, to receive a just share of the fruits thereof. To this end. the State shall
encourage and undertake the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may prescribe, taking into
account ecological, developmental, or equity considerations, and subject to the payment
of just compensation. In determining the retention limits, the State shall respect the right
of small landowners. The State shall further provide incentives for voluntary
landsharing."
Taken togetner, the above provisions could be considered as the foundation of the
agrarian reform program.
Under the Comprehensive Agrarian Reform Law, the lands covered by the
Comprehensive Agrarian Refonn Program shall be distributed as much as possible to
landless residents of the same barangay. or in the absence thereof, landless residents
of the same municipality in the following order of priority:
a)agricultural lessees and share tenants:

b)regular farm workers;
c) seasonal farm workers;
d)other farm workers;
e)actual tillers or occupants of public lands;
f) collectives or cooperatives of the above beneficiaries; and
g)others directly working on the land.
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The children of landowners, who are qualified to be awardees of not more than three (3)
hectares, shall be given preference in the distribution of the land of their parents. Actual
tenant-tillers in the landholding shall not be ejected or removed therefrom.
Beneficiaries under Presidential Decree No. 27 who have culpubly sold, disposed of, or
abandoned their land are disqualified to become beneficiaries under the CARP.
A basic qualification of a beneficiary shall be his willingness, aptitude, and ability to

cultivate and make the land as productive as possible. The DAR shall adopt a system of
monitoring the record or performance of each beneficiary, so that any beneficiary guilty
of negligence or misuse of the land or any support extended to him shall forfeit his right
to continue as such beneficiary. The DAR shall submit periodic reports on the
performance of the beneficiaries to the CARP.
If, due to the landowners retention rights or to the number of tenants, lessees, or
workers on the land, there is not enough land to accommodate any or some of them,
they may be granted ownership of other lands available for distribution under the CARL,
at the option of the beneficiar-ies.
Farmers already in place and those not accommodated in the distribution of privately-
owned lands will be given preferential rights in the distribution of lands from the public
domain.
2. Article III, Secs. 1, 4, 7, 8, 10, 16, 18(2)
Q: Distinguish Just compensation under the Comprehensive Agrarian Reform

Law of 1988 from just compensation under the Bill of Rights? How it is
determined under the former?
SUGGESTED ANSWER:
In the Bill of Rights, it is provided that private property shall not be taken for public use
without just compensation.
In the provisions of the 1987 Constitution on agrarian reform, it is provided that in the
just distribution of all agricultural lands, the same shall be subject, among others, to the
payment of just compensation.
The concepts of just compensation in the Bill of Rights and in agrarian reform are
similar in the sense that in both situations, the person who is deprived of his property
should be given the fair and full equivalent value of the property that is taken from him.
In both situations, ultimately, it is the courts which may determine ultimately just
compensation.
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Under the CARL, however, the Land Bank of the Philippines shall compensate the
landowner in such amount as may agreed upon by the landowner and the Department
of Agrarian Reform and the Land Bank of the Philippines.
Also, under the CARL, compensation could be in cash and in government financial
instruments like Land Bank of the Philippines bonds. At the option of the landowner, the
compensation may be in shares of stock in government owned and controlled
corporations, or in tax credits. The Comprehensive Agrarian Reform Law provides that
in determining just compensation, the cost of acquisition of the land, the current value
of like properties, its nature, actual use of income, the sworn valuation by the owner, the
tax declarations, and the assessment made by government assessors shall be
considered. The social and economic benefits contributed by the farmers and the
farmworkers and by the Government to the property as well as the non-payment of
taxes or loans secured from any government financing Institution on the said land shall
be considered as additional factors to determine its valuation.
3. Article XIII, Secs. 1, 2, 3, 13, 14
Q: What are the salient features of the protection to labor provision of the
Constitution? [5%] (1998 Bar Question)
SUGGESTED ANSWER:
The salient features of the Protection to Labor provision of the Constitution (Article XIII.
Section 3} are as follows:
1. Extent of Protection - Full protection to labor;

2. Coverage of Protection - Local and overseas, organized and
unorganized;
3. Employment Policy - Full employment and equality of employment
opportunities for all;
4. Guarantees
4.1. Unionism and Method of Determination Conditions of
Employment - Right of all workers to self-organization, collective
bargaining and negotiations.
4.2. Concerted Activities - Right to engage in peaceful concerted
activities, including the right to strike in accordance with law.
4.3. Working Conditions - Right to security of tenure, humane
conditions of work and a living wage.
4.4. Decision Making Processes - Right to participate in policy
and decision, making processes affecting their rights and
benefits as way to provide by law.
5. Share In Fruits of Production - Recognition of right of labor to ita just
share in fruits of production.
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ANOTHER SUGGESTED ANSWER:
The Constitution (In Article XIII, Section 3) provides that the State shall afford protection
to labor, local and overseas, organized and unorganized.
The State shall afford protection to labor by promoting full employment and equality of
employment opportunities for all.
Workers are entitled to security of tenure, humane conditions of work and a living wage.
The State shall guarantee the right of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right to
strike, in accordance with law.
Workers shall also participate in policy and decision making processes affecting their
rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and
employers and the preferential us of voluntary modes in settling labor disputes,
including conciliation, and shall enforce mutual compliance therewith to foster industrial
peace.
The State shall regulate the relations between workers and employers, recognizing the
right of labor to its just share in the fruits of production and the right of enterprises to
reasonable returns on investments, and to expansion and growth.
Q: The constitution promotes the principle of shared responsibility between

workers and employers, preferring the settlement of disputes through (2011 BAR)
(A) compulsory arbitration.

(B) collective bargaining.
(C) voluntary modes, such as conciliation and mediation.
(D) labor-management councils.
Q: What are the three (3) general classifications of labor statutes? Describe and
give an example of each classification. (1995 Bar Question)
SUGGESTED ANSWER:
The three (3) general classifications of labor statutes are:

i. Labor Relations Laws;
ii. Labor Standards Laws: and
iii. Social Security Laws.
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Labor Relations Laws are those labor statutes that deal with the relations of labor and
management, like the laws on unions, collective bargaining, unfair labor practices,
strikes, lockouts and picketing.
Labor Standards are those labor statutes that prescribe standards relating to terms and
conditions of employment for compliance by employers, like the laws on hours of work,
weekly rest periods, holiday pay, wages, and laws dealing with women, minors,
househelpers, and industrial homeworkers.
Social security laws are those labor statutes that provide protection not only to a worker
but also to members of his family in case of loss of income or when there is need for
medical care brought about by contingencies like sickness, disability, death, and old
age. Examples of social security laws are the Social Security Law, Revised Government
Service Insurance Act, the Articles of the Labor Code on Employees Compensation, the
State Insurance Fund, and the National Health Insurance Act.
Another way of classifying labor statutes may be:
a. Labor Legislation like the Labor Code:

b. Social Legislation, like the Social Security Law and Agrarian Law (Comprehensive
Agrarian Reform Law); and
c. Social Security Laws may also be referred to as Welfare Legislation.
Q: How do the provisions of the law on labor relations interrelate, if at all, with the
provisions pertaining to labor standards? (2005 Bar Question)
SUGGESTED ANSWER:
Labor relations law focuses its provisions on the collective aspects of employer-
employee relationship. Its legal provisions deal with employees organizing unions and
how through these unions, employees are able to have collective bargaining with their
employer.
On the other hand, labor standards law focuses on the terms and conditions of
employment of employees as individual employees or those legal provisions dealing
with wages, hours of work and other terms and conditions of employment.
There may be instances when the provisions of labor relations law may interrelate with
provisions of labor standards law. Thus, a CBA which is dealt with in labor relations law
may have provisions that improves upon the minimum terms and conditions of
employment prescribed in labor standards law, like a CBA providing for a higher
minimum wage, or for the computation of a higher overtime pay or the payment of
holiday pay not only for regular holidays but also for certain special holidays.
Q: Is there any distinction between labor legislation and social

legislation?
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SUGGESTED ANSWER:
Labor legislation is sometimes distinguished from social legislation by the former

referring to labor statutes, like Labor Relations Law and Labor Standards, and the latter
to Social Security Laws. Labor legislation focuses on the rights of the worker in the
workplace. Social legislation is a broad term and may include not only laws that give
social security protection, but also those that help the worker secure housing and basic
necessities. The Comprehensive Agrarian Reform law could also be considered a social
legislation.
ALTERNATIVE ANSWER:
Yes. Labor Legislation is limited in scope, and deals basically with the rights and duties
of employees and employers. Social Legislation is more encompassing and includes
such subjects as agrarian relations, housing and human settlement, protection of
women and children, etc. All labor laws are social legislation, but not all social
legislation is labor law.
Q: What is the concept of liberal approach in interpreting the Labor Code and its
Implementing Rules and Regulations in favor of labor? 2.5% (2006 Bar Question)
SUGGESTED ANSWER:
In carrying out and interpreting the Labor Codes provisions and its implementing
regulations, the workingman's welfare should be the primordial and paramount
consideration. This kind of interpretation gives meaning and substance to the liberal and
compassionate spirit of the law as provided in Article 4 of the Labor Code as amended,
which states that all doubts in the implementation and interpretation of the provisions of
the Labor Code including its implementing rules and regulations shall be resolved in
favor of labor," as well as the Constitutional mandate that the State shall afford full
protection to labor and promote full employment opportunities for all (PLOT v. NLRC,
276 SCRA 1 [1997]).
Q: May social justice as a guiding principle in labor law be so used by the courts
in sympathy with the working man if it collides with the equal protection clause of
the Constitution? Explain. (2005 Bar Question)
SUGGESTED ANSWER:
Yes. The State is bound under the Constitution to afford full protection to Labor; and
when conflicting interests collide and they are to be weighed on the scales of social
justice, the law should accord more sympathy and compassion to the less privileged
workingman. (Fuentes v. NLRC. 266 SCRA 24 119971) However, it should be borne in
mind that social justice ceases to be an effective instrument for the equalization of the
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social and economic forces by the State when it is used to shield wrongdoing.
(Corazon Jamer v. NLRC, 278 SCRA 632 [1997])
No, social justice as a guiding principle in law may not be used by the courts if it collides
with the equal protection clause of the Constitution. Social justice is not a magic wand
applicable in all circumstances. Not all labor cases will be automatically decided in favor
of the worker. Management has also rights which are entitled to recognition and
protection; justice must be dispensed according to facts and law; and social justice is
not designed to destroy or oppress the employer.
Social justice as a guiding principle in Labor Law can be implemented side by side with
the equal protection clause of the Constitution.
In implementation of the principle of social justice, the Constitution commands that the
State shall afford protection to labor. Thus Labor Law may be pro-labor in the sense that
labor is given certain benefits not given to management. But this is not necessarily
violative of the equal protection clause of the Constitution because said clause allows
reasonable classification.
Q: For labor, the Constitutionally adopted policy of promoting social justice in all
phases of national development means (2011 BAR)
(A) the nationalization of the tools of production.

(B) the periodic examination of laws for the common good.
(C) the humanization of laws and equalization of economic forces.
(D) the revision of laws to generate greater employment.
Q: Clarito, an employee of Juan, was dismissed for allegedly stealing Juans

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 Juans testimony doubtful. On appeal,
the NLRC reversed the Labor 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. (3%) (2009 Bar Question)
SUGGESTED ANSWER:
The NLRC is not correct. It is a well settled doctrine that if doubts exist between the
evidence presented by the employer and the employee, the scale of justice must be
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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 the laborer.
No, the NLRC is not correct. Art. 221 of the Labor Code read: In any proceeding before
the Commission....the rules of evidence prevailing in Courts of law....shall not be
controlling and it is the spirit and intention of this Code that the Commission and its
members and the Labor Arbiters shall use every and reasonable means to ascertain the
facts in each case speedily and objectively without regard to technicalities of law and
procedure, all in the interest of due process. The question of doubt is not important in
this case.
Q: Article 4 of the Labor Code provides that in case of doubt in the

implementation and interpretation of the provisions of the Code and its
Implementing Rules and Regulations, the doubt shall be resolved in favor of
labor. Article 1702 of the Civil Code also provides that in case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and
decent living for the laborer.
Mica-Mara Company assails the validity of these statutes on the ground that they
violate its constitutional right to equal protection of the laws. Is the contention of
Mica Mara Company tenable? Discuss fully. (1995 Bar Question)
SUGGESTED ANSWER:
No, the Constitution provides that the state shall afford full protection to labor.
Furthermore, the State affirms labor as a primary economic force. It shall protect the
rights of workers and promote their welfare.
ALTERNATIVE ANSWER:
1. No, because a law which promotes a constitutional mandate does not violate the
equal protection clause. The constitutional mandate is for the State to afford full
protection to labor such that, when conflicting interests of labor and capital are to be
weighed on the scales of justice, the heavier influence of the latter should be
counter-balanced by the sympathy the law should accord the underprivileged.
2. The contention of Mica-Mara Company is not tenable. The constitutional right to

equal protection of the laws is not violated by reasonable classification. Thus, it is
constitutionally possible to treat workers differently from employers.
The social justice principle embodied in the Constitution could be the basis for
treating workers more favorably than employers, in the implementation and
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interpretation of the provisions of the Labor Code and of its implementing rules and
regulations.
Q: Differentiate labor standards law from labor relations law. Are the two mutually
exclusive? (1997 Bar Question)
SUGGESTED ANSWER:
Labor standards law is that labor law which prescribes terms and conditions of
employment like Book in, Book IV, Title I and Book VI of the Labor Code. These Books
of the Labor Code deal with working conditions, wages, working conditions for women,
minors, househelpers and home-workers, medical and dental services, occupational
health and safety, termination and retirement.
On the other hand, labor relations law is that labor law which regulates the relations
between employers and workers like Book V of the Labor Code which deals with labor
organizations, collective bargaining, unfair labor practices and strikes and lockouts.
Labor standards laws and labor relations laws are not mutually exclusive; they are
complement to each other. Thus, the law on strikes and lockouts which is an example of
labor relations law includes some provisions on the security of tenure of workers who go
on strike or who are locked out. These provisions are examples of labor standards law.
Q: What are the rights of an employer and an employee? (1996 Bar Question)
SUGGESTED ANSWER:
The Constitution in Art. XIII, Section 3 provides for the following rights of employers and
employees:
A. Employers Right to a reasonable return on investments, and to expansion and

growth. To a just share in the fruits of production;
1. Right to self organization, collective bargaining and negotiations and peaceful

concerted ac-tivities, including the right to strike in accordance with law;
2. To security of tenure, humane conditions of work, and a living wage; and
3. To participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.
ALTERNATIVE ANSWER:
In an employer-employee relationship, it is the right of the employer to use the services

of an employee who is under his (employers) orders as regards the employment. On
the other hand, it is the right of the employee to receive compensation for the services
he renders for the employer.
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Q: Which takes precedence in conflicts arising between employers
MANAGEMENT PREROGATIVE and the employees right to security of tenure?
Why?
SUGGESTED ANSWER:
The employee's right to security of tenure takes precedence over the employer's
management prerogative. Thus, an employer's management prerogative includes the
right to terminate the services of an employee but this management prerogative is
limited by the Labor Code which provides that the employer can terminate an employee
only for a just cause or when authorized by law. This limitation on management
prerogative is because no less than the Constitution recognizes and guarantees an
employees right to security of tenure. (Art. 279. Labor Code: Art. XIII, Sec. 3.
Constitution)
Q: Enumerate at least four (4) policies enshrined in Section 3, Article XIII of the
Constitution that are not covered by Article 3 of the Labor Code on declaration of
basic policy. (2%) (2009 Bar Question)
SUGGESTED ANSWER:
Four (4) policies enshrined in Section 3, Article XIII of the 1987 Constitution which are
not covered by Article 3 of the Labor Code on declaration of basic policy are:
1. All workers shall have the right to peaceful concerted activities, including the right to
strike in accordance with law.
2. They shall be entitled to a living wage.
3. They shall participate in policy and decision making processes affecting their rights
and benefits as may be provided by law.
4. The state shall promote the principle of shared responsibility between workers and
employers.
Q: In her State of the Nation Address, the President stressed the need to provide
an investor-friendly business environment so that the country can compete in the
global economy that now suffers from a crisis bordering on recession.
Responding to the call, Congress passed two innovative legislative measures,
namely: (1) a law abolishing the security of tenure clause in the Labor Code; and
(2) a law allowing contractualization in all areas needed in the employers
business operations. However, to soften the impact of these new measures, the
law requires that all employers shall obtain mandatory unemployment insurance
coverage for all their employees.
The constitutionality of the two (2) laws is challenged in court. As judge, how will
you rule? (5%) (2009 Bar Question)
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SUGGESTED ANSWER:
The first innovative measure, on abolition of the security of tenure clause in the Labor
Code, is unconstitutional as it goes against the entitlement of workers to security of
tenure under Section 3, Article XIII of the 1987 Constitution.
The second innovative measure, on a law allowing contractualization in all areas

needed in the employers business operations, is legal. Article 106 of the Labor Code
already allows the Secretary of Labor and Employment not to make appropriate
distinction between labor-only and job contracting. This means that the Secretary may
decide, through implementing regulation, not to prohibit labor-only contacting, which is
an arrangement where the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and place by such person are
performing activities which are directly related to the principal business of the employer.
Hence, it would be legal for Congress to do away with the prohibition on labor-only
contracting and allow contractualization in all areas needed in the employers business
operations. Assuming, of course, that contractual workers are guaranteed their security
of tenure.
Q: Explain the extent of the workers right to participate in policy and decision-
making process as provided under Article XIII, Section 3 of the Philippine
Constitution. Does, it include membership in the Board of Directors of a
corporation? (3%) (2008 Bar Question)
SUGGESTED ANSWER:
The workers right to participate in policy and decision making processes of the
establishment where they are employed in so far as said processes affect their rights,
benefits and welfare as embodied in Section 3 of Article XIII of the Constitution is
reiterated in Art. 255 of the Labor Code where it is provided that for the purpose of
implementing such right, workers and employers may form labor management councils
provided that the representatives of workers in such labor management councils shall
be elected by the majority of all the employees in said establishment. It is clear from the
aforementioned Article of the Labor Code that the right of workers to participate in policy
and decision making processes as provided in Article XIII, Section 3 of the Constitution
does not include membership in the Board of Directors of a Corporation but this could
be the proper subject of a Collective Bargaining Agreement.
In Manila Electric Company v. Quisumbing 302 SCRA 173[1999], the Supreme Court
recognized the right of the union to participate in policy formulation and decision-
making process on matters affecting the Union members rights, duties and welfare.
However, the Court held that such participation of the union in committees of employer
Page 11 of 450
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Meralco is not in the nature of a co-management control of the business of Meralco.
Impliedly, therefore, workers participatory right in policy and decision-making
processes does not include the right to put a union member in the Corporations Board
of Directors.
Q: Armstrong Corporation, a foreign corporation intends to engage in the

exploration of Philippine natural resources. Mr. Antonio Reyes offered the forest
land he owns to the president of the corporation. May Armstrong Corporation
enter into a financial and technical assistance agreement (FTAA) with Mr. Reyes
to explore, develop, and utilize the land? Explain. 5% (2006 Bar Question)
SUGGESTED ANSWER:
No, Armstrong Corporation may not enter into an FTAA with Mr. Reyes for the
exploration of natural resources found on his forest land. Even assuming that Mr. Reyes
could validly own forest land (like an industrial tree plantation), all natural resources
found therein are owned by the State under the Regalian doctrine. The exploration,
development and utilization of natural resources shall be under the full supervision and
control of the State (Article XII, Sec. 2, Constitution). An FTAA for large-scale
exploration, development and exploitation of natural resources may only be negotiated
with the DENR Secretary, executed and approved by the President.
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. (5%) (2005 Bar Question)
SUGGESTED ANSWER:
The position taken by the walk-out leaders and participants is not legally correct. They
are government employees, and as such, they do not have the right to strike. According
to the actual wording of Section 3 of Article XIII of the Constitution, the State "shall
guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities including the right to strike in accordance
with law."
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Thus, the last clause of the above-quoted provision of the Constitution makes it very
clear: the right to strike is not constitutional, it is statutory because the right should be
"in accordance with law. And there is as yet no law giving government employees the
right to strike.
No. What Art. XIII, Sec. 3 of the 1987 Constitution guarantees is "the right to strike in
accordance with law. 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 walk-out should be validly grounded on a (a) deadlock in collective
bargaining, or (b) unfair labor practice, either of which is not present here.
Q: Deeds of release, waivers and quitclaims are always valid and binding. (2%)
(2010 Bar Question)
SUGGESTED ANSWER:
FALSE. Deeds of release, waivers and quitclaims are not always valid and binding. An
agreement is valid and binding only if: (a) the parties understand the terms and
conditions of their settlement; (b) it was entered into- freely and voluntarily by them; and
(c) it is contrary to law, morals, and public policy.
ALTERNATIVE ANSWER:
FALSE. Not all deeds of release, waivers and quitclaims are valid and binding. The
Supreme Court, in Periquet v. NLRC (186 SCRA 724 [1990]) and affirmed in Solgus
Corporation v. Court of Appeals (514 SCRA 522 [2007]), provided the following
guideposts in determining the validity of such release, waivers and quitclaims:
Not all waivers and quitclaims are invalid as against public policy. If the agreement was
voluntarily entered into and represents a reasonable settlement, it is binding on the
parties and may not later be disowned simply because of a change of mind. But where it
is shown that the person making the waiver did so voluntarily, with full understanding of
what he was doing, and the consideration for the quitclaim is credible and reasonable,
the transaction must be recognized as a valid and binding undertaking.
Q: Because of continuing financial constraints, XYZ, Inc. gave its employees the
option to voluntarily resign from the company. A was one of those who availed of
the option. On October 5, 2007, he was paid separation benefits equivalent to
seven (7) months pay for his six (6) years and seven (7) months of service with
the company and he executed a waiver and quitclaim. A week later, A filed
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against XYZ, Inc. a complaint for illegal dismissal. While he admitted that he was
not forced to sign the quitclaim, he contended that he agreed to tender his
voluntary resignation on the belief that XYZ, Inc. was closing down its business.
XYZ, Inc., however continued its business under a different company name, he
claimed.
Rule on whether the quitclaim executed by A (Gabriel) is valid or not. Explain.

(3%) (2010 Bar Question)
SUGGESTED ANSWER:
The quitclaim executed by A is valid and binding.
Generally, deeds of release, waiver or quitclaims cannot bar employees from

demanding benefits to which they are legally entitled or from contesting the legality of
their dismissal, since quitclaims are looked upon with disfavor and are frowned upon as
contrary to public policy. However, where the person making the waiver has done so
voluntarily, with a full understanding thereof, and the consideration for the quitclaim is
credible and reasonable, the transaction must be recognized as being a valid and
binding undertaking (Francisco Soriano, Jr. v. NLRC, et al., 530 SCRA 526 [2007]).
A elected to voluntarily resign, and accepted a credible and reasonable separation

benefits package. In exchange, A executed a waiver and quitclaim.
As resignation could not have possibly been vitiated by any fraud or misrepresentation
on the part of XYZ, Inc. The company offered its voluntary resignation package because
of continuing financial constraints, and not preliminary to closure of business. As belief
is not the kind of proof required that will show he was defrauded, his consent vitiated,
and therefore the termination of his employment illegal.
ALTERNATIVE ANSWER:
The quitclaim is invalid. The signing of the quitclaim was based on a wrong premise,
and the employer was deceitful by not divulging full information. The subsequent re-
opening of the business under another name is an indication of bad faith and fraud.
Q: Can a final and executory judgment be compromised under a Release and-

Quitclaim" for a lesser amount? (3%) (1999 Bar Question)
SUGGESTED ANSWER:
Yes, as long as the "Release and Quitclaim is signed by the very same person entitled
to receive whatever is to be paid under the final and executory judgment that was the
subject of the compromise agreement and that the Release and Quitclaim was signed
voluntarily.
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In Alba Patio de Makati v. NLRC: A final and executory judgment can no longer be
altered, even if the modification is meant to c'orrect what is perceived to be an
erroneous conclusion of fact or law, and regardless of whether the modification is
attempted to be made by the court rendering it or by the highest court of the land.
Moreover, a final and executory judgment cannot be negotiated, hence, any act to
subvert It is contemptuous.
It was incumbent upon the counsel for the complainant to have seen to it that the
interest of all complainants was protected. The quitclaim and the release in the
preparation of which he assisted clearly worked to the grave disadvantage of the
complainants. To render the decision of this Court meaningless by paying the
backwages of the affected employees in a much lesser amount clearly manifested a
willful disrespect of the authority of this Court as the final arbiter of cases brought to it.
A final and executory judgment cannot be compromised under a Release and

Quitclaim" if said Release and Quitclaim is clearly to the grave disadvantage of the
affected employees by paying them much lesser amounts than what they were entitled
to receive under the judgment. (See Alba Patio de Makati vs. NLRC, 201 SCRA 355).
Q: Under the Labor Code, is the right of first preference a lien on the property of
the insolvent debtor in favor of the workers? Explain. (1995 Bar Question)
SUGGESTED ANSWER:
The right of first preference in favor of workers is not a lien on the property of the
insolvent debtor.
The preference could be exercised only in the event of bankruptcy or liquidation of an

employer's business.
ALTERNATIVE ANSWER:
A preference does not attach to specific properties. Lien creates charges on a particular
property. The right of first preference as regards unpaid wages recognized by the Labor
Code does not constitute a lien on the property of the Insolvent debtor In favor of the
workers. It is but a preference of credit in their favor, a preference in application.
The Labor Code does not purport to create a lien in favor of workers or employees for
unpaid wages either upon all of the properties or upon any particular property owned by
their employer.
Q: Distinguish the mortgage created under the Civil Code from the right of first
preference created by the Labor Code as regards the unpaid wages of workers.
Explain. (1995 Bar Question)
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SUGGESTED ANSWER:
A mortgage directly subjects the property upon which it is imposed, whoever the
possessor may be. to the fulfillment of the obligation for which it was constituted.
It creates a real right which is enforceable against the whole world. It is therefore a lien
on an identified real property.
Mortgage credit is a special preferred credit under the Civil Code in the classification of
credits.
The preference given by the Labor Code when not attached to any specific property, is
an ordinary preferred credit.
ALTERNATIVE ANSWER:
If the asset of an employer which has become bankrupt or has been liquidated has
been mortgaged, the proceeds of the sale of said mortgaged asset is first subject to the
lien of the person to whom the property is mortgaged. Said lien is superior to the first
preference enjoyed by the workers pursuant to the Labor Code.
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 firms business
operations ceased without a declaration of bankruptcy. Jose Gaspar, 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
Gaspar, 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? (2005 Bar Question)
SUGGESTED ANSWER:
No. The preference of credits established in Art. 110 of the Labor Code cannot be
invoked in the absence of any insolvency proceedings, declaration of bankruptcy, or
judicial liquidation. (DBP v. Santos. 171 SCRA 138 [19891] ).
No. What Art. 110 of the Labor Code establishes is not a lien but a preference of credit
in favor of employees. Unlike a lien, a preference of credit does not create a charge
upon any particular property of the debtor. (Development Bank of the Philippines v.
Secretary of Labor, 179 SCRA 630 f1989]).
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The Decision of the Labor Arbiter holding Premiere Bank (as foreclosing mortgagee-
creditor) subsidiarily liable for a money obligation of XYZ & Co, (as mortgagor) to
Gaspar, its employee, has no legal basis.
1. There is no privity of relationship between the Bank and Gaspar. The relationship,
upon which the obligation to pay a sum of money is based, is between XYZ (the
mortgagor) and Gaspar as its employee arising from the Labor Code provision
requiring an employer to pay separation pay, re: other causes of employment.
2. At both times - Labor Arbiter Decision to pay separation pay and foreclosure - XYZ &
Co. was an existing business entity and neither bankrupt or in liquidation, although
its business operations after the foreclosure ceased.
3. The decision of the Labor Arbiter for XYZ & Co. to pay a sum of money to Gaspar
was based on an action in personam, not in rem, enforceable against any party.
(Sundowner Corporation vs. Drilon, 180 SCRA 14 f19891)
4. The reference in the Decision to labor benefits due to an employee is superior to

the right of a mortgagee of property is misplaced. The preferential claim rule has no
basis and runs contrary to law and jurisprudence.
Q: The Independence Bank of the Philippines (IBP) is the mortgage creditor of

San Juan Trading Company (SJTC). For failure of SJTC to pay its obligations, IBP
foreclosed the formers mortgaged properties and in the bidding acquired the
properties as the highest bidder. SJTCs workers, whose claims for separation
pay, unpaid wages and other benefits could not be satisfied, filed an action
against IBP to enforce their claims, contending that they enjoyed preference in
respect of separation pay, wages and other benefits due them prior to the
cessation of SJTC's operations.
Will the action of the workers against IBP prosper? Explain. Suggested Answer:
The action of the workers against IBP will not prosper. It is true that the Labor Code
provides: In the event of bankruptcy or liquidation of an employer's business, his
workers shall enjoy first preference as regards their wages and other monetary claims,
any provisions of law to the contrary notwithstanding. Such unpaid wages and monetary
claim shall be paid in full before claims of the government and other creditors may be
paid. But, here, the mortgaged property is no longer owned by SJTC. The first
preference of the workers can only be enforced against the judgement debtor, meaning
SJTC, and not against IBC who now owns the mortgaged property which has been fore-
closed. (Development Dank of the Philippines vs. Minister of Labor and Employment, et
al. G.R. No. 75801, March 20,1991)
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Labor Law

Q: XYZ Company filed a petition for bankruptcy before a Regional Trial Court.
Among the list of creditors are the Philippine National Bank (PNB), various
suppliers, the Bureau of Internal Revenue (BIR) for payment of back taxes and the
Union in representation of the employees for unpaid wages, leaves and bonuses.
a. With regards to the other creditors, particularly the PNB and BIR, what is
the standing of the employees claims?
b. Would it make any difference if there is no judicial declaration of

bankruptcy?
SUGGESTED ANSWER:
a. In Republic v. Peralta, the claims of the 'Government, like the taxes that should
be paid to the BIR, should first be paid before the money claims of the workers.
But if, the question is now resolved under Rep. Act No. 6715, it is now provided
that unpaid wages and monetary claims (of workers) shall be paid in full before
the claims of the Government and the other creditors may be paid.
b. If there is no judicial declaration of bankruptcy, the claim of the Union in

representation of the employees for unpaid wages, leaves and bonuses will be
given preference after there is a finding by a Labor Arbiter, hearing the case as a
money claim, that an employer is bankrupt.
Q: Which is not a constitutional right of the workers? (2012 Bar Question)
a. The right to engage in peaceful concerted activities;

b. The right to enjoy security of tenure;
c. The right to return on investment;
d. The right to receive a living wage.
SUGGESTED ANSWER:
c) The right to return on investment [Art. XIII, Sec. 3, Constitution]
Q: Which of the following is correct with respect to the extent of the application of
security of tenure? (2012 Bar Question)
a. It applies to managerial and to all rank-and-file employees if not yet

regular, but not to management trainees;
b. It applies to managerial and to all rank-and-file employees including those
under probation;
c. It applies to seasonal and project employees, if they are hired repeatedly;
d. It applies to all kinds of employees except those employed on a part-time
basis.
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SUGGESTED ANSWERS:
a. It applies to managerial and to all rank-and-file employees if not yet

regular, but not to management trainees. [Management Trainee are not
employees yet].
b. It applies to managerial and to all rank-and-file employees including those
under probation
Q: Mr. Del Carmen, unsure if his foray into business (messengerial service
catering purely to law firms) would succeed but intending to go long-term if he
hurdles the first year, opted to open his operations with one-year contracts with
two law firms although he also accepts messengerial service requests from other
firms as their orders come. He started with one permanent secretary and six (6)
messengers on a one-year, fixed-term, contract.
Is the arrangement legal from the perspective of labor standards? (2013 Bar
Questions)
(A) No, because the arrangement will circumvent worker's right to security of tenure.
(B) No. If allowed, the arrangement will serve as starting point in weakening the security
of tenure guarantee.
(C) Yes, if the messengers are hired through a contractor.
(D) Yes, because the business is temporary and the contracted undertaking is specific
and time-bound.
(E) No, because the fixed term provided is invalid.
SUGGESTED ANSWER:
(A)
ALTERNATIVE ANSWER:
(E) Reason: The employer and employee must deal with each other on more or less
equal terms.
Q: What is the quantum of evidence required in labor case? (2012 Bar Question)
a. The degree of proof which produces the conclusion that the employee is
guilty of the offense charged in an unprejudiced mind;
b. Such amount of relevant evidence which a reasonable mind might accept as
adequate to justify a conclusion;
c. That degree of proof which is greater in weight than the opposing partys
evidence;
d. Such evidence which must be highly and substantially more probable to be
true than not which convinces the trier of facts of its factuality.
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SUGGESTED ANSWER:
b. Such amount of relevant evidence which a reasonable mind might accept as

adequate to justify a conclusion. [Tancirco vs. GSIS, G.R. No. 132916, Nov.
16, 2001]
C. Labor Code
2. Article 4
Q: In what manner do the labor laws show its solicitous compassionate policy
towards the working man? Explain your answer.
SUGGESTED ANSWER:
Labor laws show solicitous compassionate policy towards the working man by providing
that all doubts in the implementation and interpretation of labor laws including its
implementing rules and regulations shall be resolved in favor of labor. Thus, among
others, the Constitution recognizes that workers are entitled to security of tenure,
humane conditions of work and a living wage. Labor laws should be liberally interpreted
to ensure that the above rights are given to workers. Many times, an employee commits
an offense that is a valid ground for disciplinary action but law and jurisprudence do not
automatically provide for the termination of the guilty employee because termination
may be too harsh a penalty, his employment may, more often than not be the sole
source of his means of livelihood. (Art. 4, Labor Code; Art. XIII. Sec. 3. Constitution)
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 Boija 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 Boija Anders and at the same time protect Philippine labor.
Discuss fully. (1995 Bar Question)
SUGGESTED ANSWER:
To ensure the legitimate employment of Borja Anders, a non -resident alien, I will apply
at the Department of Labor and Employment for the issuance of an employment permit
claiming that there is no one in the Philippines who can do the work that Anders is being
asked to do.
At the same time, to protect Philippine labor. 'I will see to it that Anders will have an
understudy who will learn by working with Anders, how to install and operate the highly
sophisticated and sensitive instruments from Sweden.
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Labor Law

To protect Philippine Labor, the Labor Code provides that the alien employee shall not
transfer to another job or change his employer without prior approval of the Secretary of
Labor.
6. Article 255
Q: What is the principle of codetermination? (2007 Bar Question)
SUGGESTED ANSWER:
The principle of codetermination is one which grants to the workers the right to
participate in policy and decision-making processes affecting their rights and benefits.
(Art. 255, Labor Code)
FIRST ALTERNATIVE ANSWER:
By the principle of codetermination, the workers have a right to participate in the

decision making process of employers on matters affecting their rights and benefits,
through collective bargaining agreements, grievance machineries, voluntary modes of
settling disputes and conciliation proceedings mediated by government.
SECOND ALTERNATIVE ANSWER:
Codetermination is a term identified with workers participation in the determination of

business policy. Under the German model, the most common form of codetermination,
employees of some firms are allocated control rights by law, in the form of board seats.
It is based on the conviction that democratic legitimacy cannot be confined to
government but must apply to all sectors of society. Besides corporate control rights,
the German system deals with dual channels of representation of employees by unions
(at the industry-wide, and macroeconomic level) and works councils (at the firm level).
Q: What, if any, is the basis under the Constitution for adopting it? (2007 Bar
Question)
SUGGESTED ANSWER:
Art. XIII, Sec. 3 of the Constitution guarantees labor their right to participate in decision
and policy-making processes affecting their rights, duties and welfare.
The adoption of codetermination is based on the police power of the state and the
constitutional mandate to the State to promote, the principle of shared responsibility
between the workers and the employers. The Constitution expressly provides that:It
shall guarantee the rights of all workers to xxx collective bargaining and negotiations,
Page 21 of 450
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xxx. They shall be entitled to security of tenure, humane conditions of work, and a living
wage. They shall also participate in policy and decision-making processes affecting their
rights and benefits as may be provided by law. (Art. XIII,
Sec. 3, 1987 Constitution)
Q: What is tripartism? What is the binding effect of an agreement entered into in a

tripartite conference?
SUGGESTED ANSWER:
Tripartism in labor relations is the policy of the State enunciated in the Labor Code (in
Art. 275) which is implemented by consulting with representatives of workers and
employers in the consideration and adoption of voluntary codes of principles designed
to promote industrial peace ba.sed on social justice or to align labor movement relations
with priorities in economic and social development.
The codes of principles adopted at tripatite conferences are voluntary. They do not have
a legal binding effect on workers and employers. But because these codes are
considered and adopted by representatives of workers and employers, they are likely to
be complied with voluntarily by workers and employers.
ALTERNATIVE ANSWER:
Should not bind unions and employers organizations that were not represented in the
tripartite conference because they were not parties or signatories to any agreement
arrived at in the conference.
II. Recruitment and Placement
A. Recruitment of local and migrant workers
Q: On December 12, 2008, A signed a contract to be part of the crew of ABC

Cruises, Inc. through its Philippine manning agency XYZ. Under the standard
employment contract of the Philippine Overseas Employment Administration
(POEA), his employment was to commence upon his actual departure from the
port in the point of hire, Manila, from where he would take a flight to the USA to
join the cruise ship MS Carnegie. However, more than three months after A
secured his exit clearance from the POEA for his supposed departure on January
15,2009, XYZ still had not deployed him for no valid reason. Is A entitled to relief?
Explain. (3%) (2010 Bar Question)
SUGGESTED ANSWER:
YES. Even if no departure took place, the contract of employment has already been
perfected which creates certain rights and obligations, the breach of which may give rise
to a cause of action against the erring party:
Page 22 of 450
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(1) A can file a complaint for Recruitment Violation for XYZs failure to
deploy him within the prescribed period without any valid reason, a
ground for the imposition of administrative sanctions against XYZ
under Section 2, Rule I, Part V of the 2003 POEA Rules on
Employment of Seafarers.
(2) At the same time, A can file a case for illegal recruitment under Section 6(L) of
Rep. Act No. 8042 (cf: Section 11 Rule I, Part V of the 2003 POEA Rules on
Employment of Seafarers)
(3) A may likewise file a complaint for breach of contract, and claim damages
therefore before the NLRC, despite absence of employer-employee relationship.
Section 10 of Rep. Act No. 8042 conferred jurisdiction on the Labor Arbiter not only
on claims arising out of EER, but also by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages. (Santiago vs. CF Sharp Crew Management,
527 SCRA 165 [2007]).
Q: The State shall allow the deployment of overseas Filipino Workers only in
countries where the rights of Filipino migrant workers are protected. Which of
the following is not a guarantee, on the part of the receiving country, for the
protection of the rights of OFWs? (2012 Bar Question)
a. It has existing labor and social laws protecting the rights of migrant
workers;
b. It promotes and facilitates re-integration of migrants into the national
mainstream;
c. It is a signatory and/or ratifier of multilateral conventions, declarations or
resolutions relating to the protection of migrant workers;
d. It has concluded a bilateral agreement or arrangement with the
government on the protection of the rights of overseas Filipino workers.
SUGGESTED ANSWER:
b. It promotes and facilitates re-integration of migrants into the national

mainstream. [Sec. 4 of RA 8042 as amended by Sec. 3 of RA 10022]
Q: Which phrase is the most accurate to complete the statement A private

employment agency is any person or entity engaged in the recruitment and
placement of workers; (2012 Bar Question)
a. For a fee, which is charged directly from the workers.

b. For a fee, which is charged directly from employers.
c. For a fee, which is charged directly or indirectly from workers, employers
or both.
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d. For a fee, which is charged from workers or employers, which covers both
local and overseas employment.
SUGGESTED ANSWER:
c) For a fee, which is charged directly or indirectly from workers, employers

or both [Art. 13 (c), Labor Code]
1. Illegal recruitment (Sec. 5, R.A. No. 10022)
Q: Discuss the types of illegal recruitment under the Labor Code. (2007 Bar
Question)
SUGGESTED ANSWER:
Under the Labor Code, as amended by Republic Act No. 8042 otherwise known as the
Overseas Filipinos and Migrant workers Act of 1995, there are two types of illegal
recruitment, particularly simple illegal recruitment and illegal recruitment which is
considered as an offense involving economic sabotage. Illegal recruitment as an
offense involving economic sabotage is committed under the following qualifying
circumstances, to wit:
When illegal recruitment is committed by a syndicate, that is when it is carried out by a

group of three (3) or more persons conspiring and/or confederating with one another; or
When illegal recruitment is committed in large scale that is when it is committed against
three (3) or more persons whether individually or as a group.
ALTERNATIVE ANSWER:
Under the Labor Code, illegal recruitment refers to any recruitment activity undertaken
by non-licensees or non-holders of authority. It includes the acts of canvassing,
enlisting, contracting, transporting, utilizing, hiring, procuring, referrals, contract services
and advertising (Art. 13(b), Arts. 34 & 38, Labor Code).
The following prohibited acts are also considered acts of illegal recruitment when
undertaken by non-licensees or non-holders of authority:
a. Charging or accepting directly or indirectly, any amount greater than that

specified in the schedule of allowable fees prescribed by the Secretary of Labor,
or to make a worker pay any amount greater than that actually received by him
as a loan or advance;
b. Furnishing or publishing any false notice or information or document in felation to
recruitment or employment;
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c. Giving any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under this
Code;
d. Inducing or attempting to induce a worker already employed to quit his
employment in order to offer him to another unless the transfer is designed to
liberate the worker from oppressive terms and conditions of employment;
e. Influencing or to attempting to influence any person or entity not to employ any
worker who has not applied for employment through his agency;
f. Engaging in the recruitment or placement of workers in jobs harmful to public
health or morality or to the dignity of the Republic of the Philippines;
g. Obstructing or attempting to obstruct inspection by the Secretary of Labor or by
his duly authorized representatives;
h. Failing to file reports on the status of employment, placement vacancies,
remittance of foreign exchange earnings, separation from jobs, departures and
such other matters or information as may e required by the secretary of labor;
i. Becoming an officer or member of the Board of any corporation engaged in travel
agency or to be engaged direct or indirectly in the management of a travel
agency; and
j. Withholding or denying travel documents from applicant workers before
departure for monetary or financial considerations other than those authorized
under this code and its implementing rules and regulations. (RA 8042, Migrant
Workers & Overseas Filipinos Act of 1995)
Q: Which of the following is an essential element of illegal recruitment? (2011

BAR QUESTION)
(A) The recruiter demands and gets money from the recruit but issues no receipt.
(B) The recruiter gives the impression that he is able to send the recruit abroad.
(C) The recruiter has insufficient capital and has no fixed address.
(D) The recruiter has no authority to recruit.
a) License vs. authority
Q: Marino Palpak, Eddie Angeles and Jose Berdugo advertised in the Manila
Bulletin the following information: 20 Teachers wanted for Egypt. Apply at No.
123 Langit. Manila."
Salvacion Inocente applied and was made to pay minimal fees to cover
administrative expenses and the cost of her passport and visa. For one reason or
another, Salvacion did not get the job and filed a complaint with the POEA.
Marino, Eddie and Jose admitted having no license or authority but claimed that
they are not covered by the Labor Code since they are not engaged in the
recruitment and placement for profit and, at any rate, only one prospective worker
was involved.
May Marino, Eddie and Jose be prosecuted? If so, for what specific offense/s?
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SUGGESTED ANSWER:
Marino Eddie and Jose can be prosecuted. Recruitment and placement by persons
without a license or authority constitute illegal activities. Marino, Eddie and Jose were
engaged in recruitment and placement when they advertised that 20 teachers were
wanted to Egypt. Advertising for employment is one of the acts considered as
recruitment and placement in the Labor Code.
That they were not engaged in recruitment and placement for profit does not mean that
the conditions for a person to engage in recruitment and placement found in the Labor
Code are not applicable to them. The Code applies to any recruitment or placement,
whether for profit or not.
The fact that only one prospective worker was involved does not mean that they were
not engaged in recruitment or placement. They were. The reference in the Code that
any person who offers employment to two or more persons as being engaged in
recruitment and placement does not mean that there must be at least two persons
involved. This reference is merely evidentiary.
They may be prosecuted for these specific offenses:
They already charged fees even if they have not yet obtained employment for the
applicant.
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? [5%] (1998 Bar Question)
SUGGESTED ANSWER:
No, because of the non-transferability of the license to engage in recruitment and

placement.
The Labor Code (in Article 29) provides that no license to engage in recruitment and
placement shall be used directly or indirectly by any person other than the one in whose
favor it was issued nor may such license be transferred, conveyed or assigned to any
other person or entity.
It may be noted that the grant of a license is a governmental act by the Department of
Labor and Employment based on personal qualifications, and citizenship and
capitalization requirements. (Arts. 27-28, Labor Code)
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Q: Which of the following conditions justifies a licensed employment agency to
charge and collect fees for employment assistance? (2011 BAR QUESTION)
(A) The recruit has submitted his credentials to the employment agency.
(B) The POEA has approved the agency's charges and fees.
(C) The agency's principal has interviewed the applicant for the job.
(D) The worker has obtained employment through the agency's efforts.
b) Illegal recruitment in large scale
c) Illegal recruitment as economic sabotage
Q:
A. When is illegal recruitment considered a crime of economic sabotage?
Explain briefly. (3%)
B. 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. (2%)
SUGGESTED ANSWER:
A. According to Art. 28 of the Labor Code, illegal recruitment is considered a crime of

economic sabotage when committed by a syndicate or in large scale.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three

(3) or more persons conspiring and/or confederating with one another in carrying out
any unlawful or illegal transaction, enterprise or scheme which is an act of illegal
recruitment.
Illegal recruitment is deemed committed in large scale if committed against three (3) or
more persons individually or as a group.
B. No. A corporation, seventy percent (70%) of the authorized arid, voting capital stock
of which is owned and controlled by Filipino citizens cannot be permitted to participate
in the recruitment and placement of workers, locally or overseas, because Art 27 of the
Labor Code requires at least seventy-five percent (75%).
Q:
A. Rocket Corporation is a domestic corporation registered with the
SEC, with 30% of its authorized capital stock owned by foreigners and 70% of its
authorized capital stock owned by Filipinos. Is Rocket Corporation allowed to
engage in the recruitment and placement of workers, locally and overseas?
Briefly state the basis for your answer. (2015 Bar Question)
B. When does the recruitment of workers become an act of economic

sabotage? (2015 Bar Question)
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SUGGESTED ANSWER:
A. No. Article 27 of the Labor Code mandates that pertinently, for a

Corporation to validly engage in recruitment and placement of workers, locally and
overseas, at least seventy-five percent (75%) of its authorized and voting capital stock
must be owned and controlled by Filipino citizens. Since only 70% of its authorized
capital stock is owned by Filipinos, it consequently cannot validly engage in recruitment
and placement of workers, locally and overseas.
B. Under Section 6(m) of RA 8042, illegal recruitment is considered
economic sabotage if it is committed by a syndicate or is large scale in scope. It is
syndicated illegal recruitment if the illegal recruitment is carried out by three (3) or more
conspirators; and it is large scale in scope when it is committed against three (3) more
persons, individually or as a group.
d) Liabilities
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 housemaids in Saudi
Arabia. Mary-rose 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 falJed 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 acknowledged receipt of the refund by Maryrose of the total
amount of PI20.000,00 and indicated that they were no longer interested to pursue
the case against Maryrose.
Resolve the case with reasons. (5%) (2005 Bar Question)
SUGGESTED ANSWER:
Maryrose is still criminally liable for large scale illegal recruitment, Good faith is not a
defense in illegal recruitment as defined in Sec, 6 of R.A. 8042. Illegal recruitment is
malum prohibitum.
Refund of the PI20.000.00 she received does not likewise extinguish her criminal
liability. If at all, It satisfies only her availability. The affidavit of desistance, moreover,
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does not bar Maryrose's prosecution, The criminal offense Is not extinguished by such
desistance. Besides, affidavit of desistance, as a rule, is frowned upon.
Q: A was approached for possible overseas deployment to Dubai by X, an

interviewer of job applicants for Alpha Personnel Services, Inc., an 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 Sendees, 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 Bar Question)
A. May X be held criminally liable for illegal recruitment? Explain. (2%)
SUGGESTED ANSWER:
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. Chowdury, 325 SCRA 572 [20Q0] J. The fault
not being attributable to him, he may be considered to have apparent authority to
represent Alpha on 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.
(3%)
SUGGESTED ANSWER:
Yes. Alpha, being a licensed recruitment agency, still has obligations to A for processing
his papers for overseas employment. Under Section 6(m) of Rep. Act No. 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 workers fault, amounts to illegal recruitment.
Q: A was recruited to work abroad by Speedy Recruitment Agency as a

technician for a Saudi Arabian construction firm, with a monthly salary of
$650.00. When she got to the construction site, the employer compelled her to
sign another contract that referred her to another employer for a salary of
$350.00. She worked for the second employer and was paid $350.00 until her two-
year contract expired. Upon her return to the Philippines, she filed a case against
the agency and the two employers. May the agency validly raise the defense that
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it was not privy to the transfer of A to the second employer? Explain. (3%) (2010
Bar Question)
SUGGESTED ANSWER:
NO. Speedys obligation to A is joint and several with the principal employer (Sec. 10,
Rep. Act No. 8042).
The liability of the principal/employer and the recruitment/placement agency for any and
all claims for money claims shall be joint and several, which undertaking shall form part
of As employment contract, and condition precedent for its approval. This liability 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 said contract (Sec. 10, Rep. Act No. 8042).
Q: What is the nature of the liabilities of the local recruitment agency and its
foreign principal? (2012 Bar Question)
a. The local agency is jointly liable with the foreign principal; severance of
relations between the local agent and the foreign principal dissolves the
liability of the local agent recruiter;
b. Local agency is solidarily liable with the foreign principal; severance of
relations between the local agent and the foreign principal dissolves the
liability of the foreign principal, only;
c. Local agency is solidarily liable with the foreign principal; severance of
relations between the local agent and foreign principal does not affect the
liability of the foreign principal;
d. Local agency is jointly liable with the foreign principal; severance of the
relations between the local agent and the foreign principal does not affect
the liability of the local recruiter.
SUGGESTED ANSWER:
Local agency is solidarily liable with the foreign principal; severance of relations
between the local agent and foreign principal does not affect the liability of the foreign
principal, [Section 10, second paragraph, RA 8042]
e) Pre-termination of contract of migrant worker
Q: Peter worked for a Norwegian cargo vessel. He worked as a deckhand, whose

primary duty was to assist in cleaning the ship. He signed a five-year contract
starting in 2009. In 2011, Peters employers began treating him differently. He
was often maltreated and his salary was not released on time. These were
frequently protested to by Peter. Apparently exasperated by his frequent
protestations, Peters employer, a once top official in China, suddenly told him
that his services would be terminated as soon as the vessel arrived at the next
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port, in Indonesia. Peter had enough money to go back home, and immediately
upon arriving, he filed a money claim with the NLRC against his former
employers local agent. Will Peters case prosper? (2012 Bar Question)
a. Yes, he is entitled to full reimbursement of his placement fee, with interest

at 12% per annum, plus salary for the unexpired portion of his
employment contract or for three (3) months for every year of the
unexpired portion, whichever is higher.
b. Yes, he is entitled to full reimbursement of his placement fee, with interest
at 12% per annum, plus his salary for the unexpired portion of his
employment contract for three (3) months for every year of the unexpired
portion, whichever is less;
c. Yes, he is entitled to his salaries for the unexpired portion of his
employment contract, plus full reimbursement of his placement fee with
interest at 12% per annum;
d. Yes, he is entitled to his salaries for three (3) months for every year of the
unexpired portion of his unemployment contract, plus full reimbursement
of his placement fee with interest at 12% per annum.
SUGGESTED ANSWER:
a) Yes, he is entitled to his salaries for the unexpired portion of his

employment contract, plus full reimbursement of his placement fee with
interest at 12% per annum [Serrano vs. Gallant Maritime, G.R. No.
167614, March 24, 2009]
Q: Celia, an OFW that Moonshine Agency recruited and deployed, died in Syria,
her place of work. Her death was not work-related, it appearing that she had been
murdered. Insisting that she committed suicide, the employer and the agency
took no action to ascertain the cause of death and treated the matter as a closed
case. The worker's family sued both the employer and the agency for moral and
exemplary damages. May such damages be awarded? (2011 BAR QUESTIONS)
(A) Yes, the agency and the employers uncaring attitude makes them liable for
such damages.
(B) Yes, but only the principal is liable for such damages since the agency had
nothing to do with Celias death.
(C) No, since her death is not at all work-related.
(D) No, since her death is not attributable to any act of the agency or the
employer.
Q: Philworld, a POEA-licensed agency, recruited and deployed Mike with its

principal, Delta Construction Company in Dubai for a 2-year project job. After he
had worked for a year, Delta and Philworld terminated for unknown reason their
agency agreement. Delta stopped paying Mike's salary. When Mike returned to
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the Philippines, he sued both Philworld and Delta for unpaid salary and damages.
May Philworld, the agency, be held liable? (2011 BAR QUESTIONS)
(A) No, since Philworld, the recruitment agency, is not the employer liable for
unpaid wages.
(B) Yes, since the agency is equally liable with the foreign principal despite the
termination of their contract between them.
(C) Yes, since the law makes the agency liable for the principals malicious
refusal to pay Mikes salary.
(D) No, since Mike did not get paid only after Delta and Philworld terminated their
contract.
Q: When a recruitment agency fails to deploy a recruit without valid reason and
without the recruit's fault, the agency is obligated to
(A) reimburse the recruit's documentary and processing expenses.

(B) reimburse the recruits expenses with 6% interest.
(C) pay the recruit damages equivalent to one years salary.
(D) find another employer and deploy the recruit within 12 months.
2. Direct Hiring
Q: TRUE or FALSE. As a general rule, direct hiring of Overseas Filipino Workers

(OFWs) is not allowed. (2%) (2010 Bar Question)
SUGGESTED ANSWER:
TRUE. Art. I5 of the Labor Code provides that no employer may hire a Filipino worker
for overseas employment except through the Boards and entities authorized by the
Department of Labor and Employment (DOLE) except direct-hiring by members of the
diplomatic corps, international organizations and such other employers as may be
allowed by the DOLE.
Another exemption is Name Hire, which refers to a worker who is able to secure an
overseas employment opportunity with an employer without the assistance or
participation of any agency.
B. Regulation and enforcement
1. 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.
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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.
Should the DOLE orders be upheld or set aside? (5%). (2005 bar Question)
SUGGESTED ANSWER:
B. 1. The DOLE order cancelling the licenses of XYZ is void because a report that an
agency is covertly transporting extremists is not a valid ground for cancellation of a
Certificate of Registration (Art. 239, Labor Code) and there is failure of due process as
no hearing was conducted prior to the cancellation (Art. 238, Labor Code).
2. The DOLE order imposing the travel ban is valid because it is a valid exercise of
police power to protect the national interest (Sec. 3, Art. XIll, Constitution on full
protection to labor safety of workers) and on the rule making authority of the Secretary
of Labor (Art. 5. Labor Code; Phil. Assn. of Service Exporters v. Drilon, 163 SCRA 386
[1988]).
The DOLE orders should be set aside. It is true that the Migrant Workers and Overseas
Filipinos Act, particularly Its Section 5, could be the basis of the power, of DOLE to
effect a ban on the deployment of OFWs by XYZ, If the ban, however " is for the
purpose of preventing XYZ from transporting extremists to terrorist training camps
abroad, this is a -police and national security, problem better dealt with by the police or
the Office of the National Security Adviser.
More importantly, the cancellation of the license of XYZ requires notice and hearing.
Absent such notice and hearing, the order of cancellation of the Secretary of Labor and
Employment is null and void because of the denial of due process.
Q: Which of the following acts is NOT part of the regulatory and visitorial power
of the Secretary of Labor and Employment over recruitment and placement
agencies? The power to (2011 BAR QUESTION)
(A) order arrest of an illegal recruiter

(B) inspect premises, books and records
(C) cancel license or authority to recruit
(D) garnish recruiter's bond
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Q: The power suspend or cancel a license to recruit employees is vested on:
(2012 Bar Question)
a. The Secretary of Labor and Employment;

b. The POEA Administrator;
c. A and B concurrently;
d. Neither of them.
SUGGESTED ANSWER:
b. The POEA Administrator [POEA Rules on Overseas land-based employment {2002}].
ALTERNATIVE ANSWERS:
a. The Secretary of Labor and Employment;

b. The POEA Administrator.
c. A and B concurrently: [Transaction Overseas Corp. vs. Sec. of Labor, G.R. NO.
109583, Sept. 5, 1997]
2. Remittance of foreign exchange earnings
Q: Can an overseas worker refuse to remit his earnings to his dependents and
deposit the same in the country where he works to gain more interests? Explain.
5% (2006 Bar Question)
SUGGESTED ANSWER:
No. Art. 22 of the Labor Code provides that it shall be mandatory for all Filipino workers
abroad to remit a portion of their foreign exchange earnings to their families,
dependents and/or beneficiaries in the country in accordance with rules and regulations
prescribed by the Secretary of Labor and Employment.
The answer must be qualified. While Article 22 of the Labor Code provides that it shall
be mandatory for all Filipino workers abroad to remit a portion of foreign exchange
earnings to beneficiaries in the Philippines, such an imposition can be implemented in
accordance with rules and regulations prescribed by the Secretary of Labor. There are
currently no rules issued by the Secretary pertaining to Article 22. There was a
mandatory remittance provision in the 1991 POEA Rules and Regulations, but such
provision was deleted in the 2002 POEA Rules and Regulations.
The answer is likewise, no if the overseas worker signs an employment contract with a
mandatory remittance provision. Such is the case of seafarers, where the standard
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practice is to have a provision on mandatory remittance provision amounting to 80% of
their salary.
No. Art. 22 of the Labor Code provides that it shall be mandatory for all Filipino workers
abroad to remit a portion of their foreign exchange earnings to their families,
dependents, and/or beneficiaries in the country in accordance with the rules and
regulations prescribed by the Secretary of Labor and Employment.
Executive Order No. 857 prescribe the percentage of foreign exchange remittance from
50% to 80% of the basic salary, depending on the worker's kind of job.
An overseas worker, therefore, cannot refuse to remit his earnings.
3. Prohibited activities
Q: Cite five grounds for disciplinary action by the Philippine Overseas

Employment Administration (POEA) against overseas workers. (2007 Bar
Question)
SUGGESTED ANSWER:
Under the Section 1(A) and (B), Rule III, Part VII of the 2002 POEA Rules and
Regulations Governing the Recruitment and Employment of Land-based Overseas
Workers, the following are the grounds for disciplinary action against overseas workers:
A. Pre-Employment Offenses
1. Using, providing, or submitting false information or documents for purposes of
job application or employment;
2. Unjustified refusal to depart for the worksite after all employment and travel
documents have been duly approved by the appropriate government
agency/ies.
B. Offenses during Employment

1. Commission of a felony or crime punishable by Philippine Laws or by the laws
of the host country;
2. Unjustified breach of employment contract;
3. Embezzlement of company funds or monies and/or properties of a fellow
worker entrusted for delivery to kin or relatives in the Philippines; and
4. Violation/s of the sacred practices of the host country.
Further, under Section 1(A) and (B), Rule II Part VI of the 2003 Rules and Regulations
Governing the Recruitment and Employment of Seafarers, the following are the grounds
for disciplinary action against seafarers:
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A. Pre-Employment Offenses
1. Submission/furnishing or using false information or documents or any form of

misrepresentation for the purpose of job application or employment;
2. Unjust refusal to join ship after all employment and travel documents have
been duly approved by the appropriate government agencies.
B. Offenses During Employment
1. Smuggling or violation of any custom rules and regulations of the Philippines

and foreign port;
2. Desertion;
3. Absence without leave;
4. Sleeping on post while on duty;
5. Insubordination;
6. Drunkenness;
7. Creating trouble outside the vessels premises;
8. Gambling;
9. Violation of company policies and regulations;
10. Incompetency and inefficiency;
11. Inciting mutiny, malicious destruction of ships
12. property or any activity which will hamper the efficient operation of the vessel;
13. Concerted action to breach approved contracts;
14. Any activity which tends to destroy harmonious relationship of the company;
15. Grave abuse of authority;
16. Other gross misbehaviors prejudicial to good order and discipline;
17. Negligence causing damage, loss, spoilage or deterioration of vessels stocks
and property;
18. Connivance with or cuddling of stowaway;
19. Willfully making false statements, reports, certification or spurious seafarers
documents for personal gain with or with intent to misled or defraud the
company;
20. Any other case as to cast aspersion on the good name of the company and
vessel;
21. Violation of safety and environmental rules/ regulations; and
22. Failure to observe the drug and alcohol policy of the company.
III. Labor Standards
Q: What is the requirement in order that a compromise agreement involving labor

standards cases be considered duly executed?
SUGGESTED ANSWER:
For a compromise agreement involving labor standards cases to be considered duly

executed, such compromise agreement should be voluntarily agreed upon by the
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parties with the assistance of the Bureau of Labor Relations or the regional office of the
Department of Labor and Employment. (Art. 227, Labor Code)
Q: Of the four definitions below, which one does NOT fit the definition of solo
parent under the Solo Parents Welfare Act? (2011 BAR QUESTION)
(A) Solo parenthood while the other parent serves sentence for at least one year.
(B) A woman who gives birth as a result of rape.
(C) Solo parenthood due to death of spouse.
(D) Solo parenthood where the spouse left for abroad and fails to give support for
more than a year.
A. Hours of work
1. Coverage/Exclusions (Art. 82, Labor Code)
Q: Lito Kuiangkuiang and Bong Urongsulong are employed as truck drivers of

Line Movers. Inc. Usually. Lito is required by the personnel manager to just stay
at the head office after office hours because he could be called to drive the
trucks. While at the head office, Lito merely waits in the managers reception
room. On the other hand, Bong is allowed to go home after office hours but is
required to keep his cellular phone on so that he could be contacted whenever
his services as driver becomes necessary.
Would the hours that Lito and Bong are on call be considered compensable
working hours?
SUGGESTED ANSWER:
The hours of Lito and Bong while on call can be considered compensable hours. The
applicable rule is: "An employee who is required to remain on call in the employer's
premises or so close thereto that he cannot use the time effectively and gainfully for his
own purpose shall be considered as working while on call. An employee who is not
required to leave word at his home or with company officials where be may be reached
is not working while on call." Here, Bong is required to stay at the office after office
hours so he could be called to drive the trucks of the Company. As for Bong, he is
required to keep his cellular phone so that he could be contacted whenever his services
as driver as needed. Thus, the waiting time of Lito and Bong should be considered are
compensable hours.
Note: It could be argued that in the case of Bong who is not required to stay in the office
but is allowed to go home, if he is not actually asked by cellular phone to report to the
office to drive a car, he can use his time effectively and gainfully to his own purpose,
thus, the time that he is at home may mean that there are not compensable hours.
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Q: The following are excluded from the coverage of Title I, Book II of Labor Code
of the Philippines (Conditions of Employment) except: (2012 Bar Question)
a) Field personnel;
b) Supervisors;
c) Managers;
d) Employees of government-owned and controlled corporations.
SUGGESTED ANSWER:
(b) Supervisors [Art. 82, Labor Code]
Q: Which of the following is not compensable as hours worked? (2012 Bar

Question)
a. Travel away from home;

b. Travel from home to work;
c. Working while on call;
d. Travel that is all in a days work.
SUGGESTED ANSWERS:
a) Travel away from home. [Art. 84, Labor Code]
b) Travel from home to work.
Q: Pol requested Obet, a union officer and concurrently chairman of the

company's Labor-Management Council, to appeal to the company for a
recomputation of Pols overtime pay. After 5 p.m., his usual knock-off time, Obet
spent two hours at the Personnel Office, reconciling the differing computations of
Pols overtime. Are those two hours compensable? (2011 BAR QUESTION)
(A) Yes, because Obet performed work within the company premises.
(B) No, since Obets action has nothing to do with his regular work assignment.
(C) No, because the matter could have been resolved in the labor-management
council of which he is the chairman.
(D) Yes, because the time he spent on grievance meetings is considered hours
worked.
2. Normal hours of work
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.
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.
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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? (5%) (2005 Bar Question)
SUGGESTED ANSWER:
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 from 8:00 A.M. to 5:00 P.M. on Saturdays when he is
required to keep his cellphone open.
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.
If Gil Bates can effectively utilize the Saturdays in his own interest even "while on call",
said hours on Saturdays are not compensable. However, if during said hours on
Saturdays, Bates is actually required to attend to urgent work to the extent of leaving
what he is doing, then the same are compensable, working hours to the extent of the
actual hours of work rendered by him.
The compensation paid by the company to Bates for said hours worked on Saturdays
should be reported to the SSS. This is so because the basis of computing the SSS
contribution includes all actual, remuneration, including allowances and cash value of
any compensation paid in any medium other than cash.
Q: The meal time (lunch break) for the dining crew in Glorious Restaurant is
either from 10 a.m. to 11 a.m. or from 1:30 p.m. to 2:30 p.m., with pay. But the
management wants to change the mealtime to 11: a.m. to 12 noon or 12:30 p.m. to
1:30 p.m., without pay. Will the change be legal? (2011 BAR QUESTION)
(A) Yes, absent an agreement to the contrary, the management determines work
hours and, by law, meal break is without pay.
(B) No, because lunchbreak regardless of time should be with pay.
(C) Yes, the management has control of its operations.
(D) No, because existing practice cannot be discontinued unilaterally.
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a) 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? (4%)
State your answers and your reasons therefor. (2005 Bar Question)
SUGGESTED ANSWER:
A "compressed work week" schedule may be authorized under the following conditions:
1) The employee voluntarily agrees to it.

2) There is no diminution in their weekly or monthly take home pay or fringe
benefits.
3) The benefits are more than or at least commensurate or equal to what is due
the employees without the compressed work week.
4) Overtime pay will be due and demandable when they are required to work on
those days which should have ceased to be working days because of the
compressed work week schedule.
5) No strenuous physical exertion or that they are given adequate rest periods.
6) It must be for a temporary duration as determined by the Department of
Labor.
3. Overtime work, overtime pay
Q: TRUE or FALSE. Answer TRUE if the statement is true, or FALSE if the

statement is false. Explain your answer in not more than two (2) sentences. (5%)
xx
[d] A waiver of the right to claim overtime pay is contrary to law. (2009 Bar
Question)
SUGGESTED ANSWER:
True. As a general rule, overtime compensation cannot be waived, whether expressly or

impliedly; and stipulation to the contrary is against the law. (Pampanga Sugar Dev. Co.,
Inc. v. CIR, 114 SCRA 725 [1982].) An exception would be the adoption of a
compressed work week on voluntary basis, subject to the guidelines of Department
Order No. 02, Series of 2004.
Q: In a scenario like typhoon Ondoy, who may be required by the employer to

work overtime when necessary to prevent loss of life or property? (2011 BAR
QUESTION)
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(A) Health personnel
(B) Employees with first aid training
(C) Security and safety personnel
(D) Any employee
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. (2005 Bar Question)
SUGGESTED ANSWER:
The employer is correct. While Art. 88 of the Labor Code clearly provides that undertime
work on any other particular day shall not be offset by overtime work on any other day,
this rule is inapplicable in this case pertaining to Saturday work which in reality does not
constitute overtime work as Saturday is stiil a working day under the law and there is no
CBA stipulation against it.
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 being the law between the
parties and the Union having shown that the employees rendered overtime work on
Saturday, the contention of the employer is not tenable. The employer cannot use the
undertime of 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: 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. (5%)
SUGGESTED ANSWER:
Yes. Socorro is entitled to overtime compensation. She does not fall under any of the
exceptions to the coverage of Art. 82, under the provisions of Hours of Work. The Labor
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Code is equally applicable to non-profit institutions. A covered employee who works
beyond eight (8) hours is entitled to overtime compensation.
Q: Danilo Flores applied for the position of driver in the motorpool 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 companys executives using the cars
do not need Danilos 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?
SUGGESTED ANSWER:
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 pay every month has no counterpart in Labor Law and is very
generous.
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.
Q: Pedro Sisid is a seaman who was employed in 1990 by Kuhol Ocean

Transport. In May 1993, he was discharged and correspondingly paid vacation
pay, terminal pay and overtime pay for the number of hours he actually rendered
service in excess of his eight (8) working hours a day. Pedro Sisid, however, is
dissatisfied with his overtime pay contending that he is on board the vessel 24
hours a day. or even beyond his eight (8) working hours which circumstance
renders him on call whenever his service is needed. Therefore, he insists that he
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be paid 16 hours a day by way of overtime. Is the contention of seaman Pedro
Sisid tenable? Why?
SUGGESTED ANSWER:
No. The contention of seaman Sisid is not tenable.
The fact that he is on board the vessel 24 hours a day does not mean that beyond his
eight working hours, he could be also considered as working because he is on call, and
thus, is entitled to overtime pay. Because he is a seaman, this circumstance means he
is on board his vessel while at sea. But he is not thereby on call as to be entitled to
overtime pay because when it is not his working time, he can, if he chooses to do so,
use said non-working time effectively and gainfully for his own purpose.
ALTERNATIVE ANSWER:
No, there being a record of actual overtime services rendered. An estimated period of
overtime is valid as a basis for payment of overtime, only in a case where overtime
services are actually being rendered regularly but no record of the hours were kept.
Q: A manufacturing company operates on a 6-day workweek. It employs 200

workers whose regular workday is 8 hours. On May 1. 1990, the company and
Union M", the employees; bargaining agent, agreed that the workday be 7 hours
from Monday to Wednesday and 9 hours from Thursday to Saturday. The
agreement was ratified by all the employees. In 1991
Union M" lost its majority status and Union P" was certified as bargaining
representative. Union P" filed a claim against the Company for unpaid overtime
pay of the 200 employees from May 1. 1990 when they started working 9 hours
per day, 3 days a week. Invoking the 1990 agreement, the Company moved to
dismiss the claim of Union P".
Decide with reasons.
SUGGESTED ANSWER:
The claim of Union P" is valid. The Labor Code is very clear: Undertime work on any
particular day shall not be offset by overtime work on any other day. (Article 88, Labor
Code)
The right arising from the above provision, meaning, entitlement to overtime pay for one
hour for working 9 hours per day, 3 days a week. (Article 87, Labor Code) cannot be
considered as waived by a CBA even if the CBA is ratified by the employees concerned.
The waiver in this instance is against the law, morals, and public policy. The law must
prevail over the CBA.
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Q: Ping Gabo is the Chief Engineer of the National Publishing Corp. with a
monthly salary of P3.000.00. He works over eight (8) hours daily from Monday to
Saturday. In May. June and July 1991, he rendered, each month, ten (10) hours
beyond his regular work schedule.
Is he entitled to overtime pay and holiday pay? Why?
SUGGESTED ANSWER:
The entitlement of Gabo to overtime pay and holiday pay is dependent on whether he is
a managerial employee or not. If he Is a managerial employee, he is not entitled to
overtime pay and holiday pay. The Labor Code provides that the provisions that grant
overtime pay and holiday pay shall not apply, among others, to managerial employees.
A managerial employee is defined by the Code as referring to those whose primaiy duty
consists of the management of the establishment in which they are employed or of a
department or subdivision thereof, and to other officers or members of the managerial
staff.
Gabo, as Chief Engineer, appears to be a managerial employee. On the other hand, his
monthly pay is rather low for a managerial employee. Despite his title, his duty may not
consist of a management of department or of a subdivision thereof.
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 Bar Question)
A. May A validly refuse the plant managers directive? Explain. (2%)
SUGGESTED ANSWER:
YES. A may validly refuse to fill in for C. A may not be compelled to perform overtime
work considering that the plant managers directive is not for an emergency overtime
work, as contemplated under Article 89 of the Labor Code.
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. (3%)
SUGGESTED ANSWER:
NO. Undertime is not off-set by overtime (Art. 88, Labor Code).
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Q: The Overseas Construction Company, a domestic corporation with a
recruitment license, hired two thousand Filipino workers and assigned them to its
construction project in Kuwait. They were given free housing, work clothing and
food.
The master employment contract approved for them by the Philippine Overseas
Employment Administration (POEA) stipulated that they were to work at the
overseas jobsite for twelve (12) hours per day and that they were accordingly to
be paid wages higher than the POEA-approved schedule of pay rates. The
individual employment contracts also contained the same stipulations. And
during the pre-departure briefings at the companys Mandaluyong plant site, the
workers were told about these stipulations. By actual compu-tation, the wages
paid at the overseas jobsite were at least twenty-five percent (25%) more than the
POEA-approved rates. Moreover, the record shows that the workers did not
always render the full twelve (12) hours of work stipulated in the employment
contract.
Back home after completing their one-year overseas assignment, the workers
engaged your services as their lawyer to prosecute a complaint with the POEA for
recovery of unpaid overtime work. What would your advice be?
SUGGESTED ANSWER:
Before I give an advise, I will first find the answer to this basic question: Were the
workers actually paid for their overtime work when they received wages that were at
least twenty-five percent (25%) more than the POEA-approved rates?
The answer is No if the 25% added to the POEA- approved rate (which we assume is a
rate for a day of eight (8) hours work) is only 25% of such POEA-approved daily wage
rate. This is because what should be paid to the workers for the four (4) hours that they
work overtime in their twelve (12) hour day (a 12-hour work day is 4 hours in excess of
an 8-hour work day) should be 50% more of such POEA- approved rate. The four (4)
hours of work is 50% of the normal weight (8) hours of work a day plus 25% of such
additional 50% for purposes of paying the overtime rate.
There is also the night differential pay to take into account because a 12-hour shift will
include working hours from 10:00 p.m. to 6:00 a.m. If the higher-than-the POEA-
approved rate is computed as indicated above, I will advise the workers not to sue for
they have already been paid for their overtime work.
If the higher-than-the-POEA-approved rates is not, however, computed as indicated

above, the fact that the POEA-approved the contracts and that the workers agreed to
the rates they receive will not be a bar to a complaint for unpaid overtime pay, the right
to which cannot be waived.
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The rate approved by the POEA has built-in overtime pay. Thus, there is no basis for
the claim for overtime pay.
Q: Ricardo Diestro is an accounting clerk in Aqua Sport Trading Company,

receiving three thousand pesos a month as basic salary. In addition, he gets a
free lunch valued at thirty pesos per day and free uniforms. Diestro frequently
worked overtime, for which the payroll clerk computed for him his extra overtime
pay on the basis of his basic monthly salary.
When Diestro failed to receive a pay increase, he started questioning the basis for
computing his overtime pay. He argued that the cost of the free lunch and the
value of his t-shirts should be included. His claims having been denied, he filed a
complaint with the Regional Office of the Department of Labor.
Decide. (1987 Bar Question)
SUGGESTED ANSWER:
Diestro is not entitled to have his overtime pay computed not only on the basis of his
basic salary but also on the basis of the cost of the free lunch and the value of the T-
shirts given by the Company added to the basic salary.
The Labor Code (in Art. 90) provides that for purposes of computing overtime and other
additional remuneration, the regular wage of an employee shall include the cash wage
only, without deduction on account of facilities provided by the employer. The value of
the free lunch and the t-shirts is not cash wages.
Q: Work may be performed beyond eight (8) hours a day provided that: (2012 Bar
Question)
a) Employee is paid for overtime work an additional compensation equivalent to

his regular wage plus at least 30% thereof;
b) Employee is paid for overtime work an additional compensation equivalent to
c) Employee is paid for overtime work an additional compensation equivalent to
d) None of the above.
SUGGESTED ANSWER:
(a) Employee is paid for overtime work an additional compensation equivalent

to his regular wage plus at least (25% thereof. [Art. 87, Labor Code]
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Q: The provisions of the Labor Code on the Working Conditions and Rest Periods
of employees are inapplicable to the following employees, except: (2012 Bar
Question)
a. A supervisor in a fast food chain;

b. A family driver;
c. A laborer without any fixed salary, but receiving a compensation
depending upon the result of his work;
d. A contractual employee.
SUGGESTED ANSWER:
d. A contractual employee.
Q: The following are instances where an employer can require an employee to

work overtime, except: (2012 Bar Question)
a. In case of actual impending emergencies caused by serious accident, fire,.

Flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent
loss of live property, or imminent danger to public safety;
b. When the country is at war or when other national or local emergency has
been declared by the national assembly or the chief executive;
c. When there is urgent work to be performed on machines, installations, or
equipment, in order to avoid serious loss or damage to employer or some
other cause of similar nature;
d. Where the completion or continuation of the work started before the eight
hour is necessary to prevent serious obstruction or prejudice to the business
or operation of the employer.
SUGGESTED ANSWERS:
(a) In case of actual impending emergencies caused by serious accident, fire,

flood, typhoon, earthquake, epidemic or other disaster or calamity to
prevent loss of live property, or imminent danger to public safety;
(b) When the country is at war or when other national or local emergency has
been declared by the national assembly or the chief executive;
(c) When there is urgent work to be performed on machines, installations, or
equipment, in order to avoid serious loss or damage to employer or some
other cause of similar nature;
(d) Where the completion or continuation of the work started before the eight
hour is necessary to prevent serious obstruction or prejudice to the
business or operation of the employer.
Q: May the employer and employee stipulate that the latters regular or basic
salary already includes the overtime pay, such that when the employee actually
works overtime he cannot claim overtime pay? (2012 Bar Question)
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Labor Law

a) Yes, provided there is a clear written agreement knowingly and freely
entered into by the employee;
b) Yes, provided the mathematical result shows that agreed legal wage rate
and the overtime pay. Computed separately, are equal to or higher than
the separate amounts legally due;
c) No, the employer and employee cannot stipulate that the latters regular or
basic salary already includes the overtime pay;
d) A and B
SUGGESTED ANSWER:
c) No, the employer and employee cannot stipulate that the latters regular or
basic salary includes the overtime pay. [Art. 87, Labor Code]
SUGGESTED ALTERNATIVE ANSWER:
b) Yes, provided the mathematical results shows that the agreed legal wage rate
and the overtime pay, computed separately, are equal to or higher that the
separate amounts legally due.
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 Bar Question)
SUGGESTED ANSWER:
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. 97 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 (517 SCRA 707), the Supreme
Court held that the basis of overtime claim is an employees having been permitted to
work. Otherwise, as in this case, such is not demandable.
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4. Night work (R.A. No. 10151), Night shift differential
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? 5% (2006 Bar Question)
SUGGESTED ANSWER:
An employer and employee can enter into a contract increasing night differential pay,
overtime pay, and premium pay benefits, as this is beneficial to the worker and no fraud
or vice of consent could be inferred from it.
An employer and employee could not, however, enter into a contract reducing the
minimum pay for the above-stated benefits, as these would be against public policy and
therefore void ab initio.
Q: As a tireman in a gasoline station, open twenty four (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. (3%)
SUGESTED ANSWER:
Yes. Under Art. 86 of the Labor Code, night shift differential shall be paid to every
employee for work performed between 10:00 oclock in the evening to six oclock in the
morning.
Therefore, Goma Is entitled to night shift differential for work performed from 10:00 pm
until 6:00 am of the day following, but not from 6:00 am to 7:00 am of the same day.
The Omnibus Rules Implementing the Labor Code (In Book ill, Rule lI dealing with night
shift differential) provides that its 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.
Q: Republic Drug Co. has 1,000 employees, including 50 managerial personnel,

90 supervisors and 150 sale representatives. The regular workday in the
Company is from 8:00 a.m. to 5:00 p.m. The sales representatives register their
presence with the timekeeper at 8:00 A.M. every day before they go to their
respective sales territories. They are paid a basic salary plus commission. Sixty
of the sales representatives are members of the Republic Salesmen Union which
sent to the Company a set of bargaining proposals, including a demand for
payment of overtime pay of the sales representatives for working beyond 5:00
P.M. everyday. The Company refused to consider the bargaining proposals and
rejected the demand for overtime pay for the reason that the sales
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Labor Law

representatives are not entitled thereto. The Union filed an unfair labor practice
case against the Company for refusal to bargain, and after complying with the
legal requirements declared a strike.
a) Was the Company legally justified in rejecting the Unions demand for
overtime pay? Reason.
SUGGESTED ANSWER:
The Company was legally justified.
Under the Labor Code, (in Article 82). field personnel" are among those classes of
workers who are not entitled to overtime pay, and the phrase field personnel includes
sales representatives who. like other field personnel, are non- agricultural employee
who regularly perform their duties away from the principal place of business or branch
office of the employer and whose actual hours of work in the field cannot be determined
with reasonable certainty.
ALTERNATIVE ANSWER:
If the demand for overtime pay is in the nature of a proposal made in the collective
bargaining table and the only reason for rejecting such demand is that the sales
representatives are not entitled thereto, this is not a legal justification for rejecting
outright the Union's demand for overtime pay.
It is true that under the Labor Code, field personnel - and this phrase includes sales
representatives are not entitled to overtime pay.
But it is precisely as regards benefits that are not rights under the law that collective
bargaining is used by Labor to secure these benefits that are over and above what the
law gives.
On the other hand, the rejection by the Company of the Unions demand for overtime
pay is not per se illegal. The Labor Code provides that the duty to bargain collectively
does not compel any party to agree to a proposal or to make any concession. (Article
252, Labor Code).
Q: Night differential is differentiated from overtime pay in that (2011 BAR

QUESTION)
(A) while overtime pay is given for overtime work done during day or night, night
differential is given only for work done between 10:00 p.m. and 6:00 a.m.
(B) while overtime pay is paid to an employee whether on day shift or night shift,
night shift differential is only for employees regularly assigned to night work.
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(C) while overtime pay is for work done beyond eight hours, night differential is
added to the overtime pay if the overtime work is done between 6:00 p.m. and
12 midnight.
(D) while overtime pay is 25% additional to the employee's hourly regular wage,
night differential is 10% of such hourly wage without overtime pay.
B. Wages
Q: A wage order may be reviewed on appeal by the National Wages and

Productivity Commission under these grounds, except: (2012 Bar Question)
a. Grave abuse of discretion;

b. Non-conformity with prescribed procedure;
c. Questions of law;
d. Gross under or over-valuation.
SUGGESTED ANSWER:
d) Gross under or over-valuation
Q: The following are exempt from the rules on minimum wages, except: (2012 Bar
Question)
a. Household or domestic helpers;

b. Homeworkers engaged in needle work;
c. Workers in duly registered establishment in the cottage industry;
d. Workers in the duly registered cooperative.
SUGGESTED ANSWER:
b) Workers in the duly registered cooperative. [Sec. 3 (d), Rule VII, Book III
of Omnibus Rules requires recommendations of Bureau of Cooperative
Development and approval of DOLE Secretary matters that are not in
the suggested answer]
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 clothes per week. Is this arrangement allowed? (2015 Bar
Question)
SUGGESTED ANSWER:
No. the arrangement is not allowed. The models are Benitos employees. As such,
their services require compensation in legal tender (Art. 102, Labor Code). The three
Page 51 of 450
Labor Law

sets of clothes, regardless of value, are in kind; hence, the formers compensation is not
in the form prescribed by law.
Under Article 102 of the Labor Code, wages of an employee are to be paid only in legal
tender, even when expressly requested bv the employee. Hence, no lawful deal in this
regard can be entered into by and between Benito and his models.
The models are not employees. Therefore, Art. 102 of the Labor Code applies. The
payment does not have to be in legal tender.
But even if they are employees, the wage arrangement between Benito and the models
is allowed by Art. 97(f) of the Labor Code which defines wage as the remuneration or
earning paid to an employee, however designated, capable of being expressed in terms
of money, whether fixed or ascertained on a time, task, piece, or commission basis, or
other method of calculating the same, which is payable by an employer to an employee
under a written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered. It includes the fair and reasonable value, as
determined by the Secretary of Labor, of board, lodging or other facilities customarily
furnished by the employer to the employee.
1. Wage vs. salary
Q:
1) Distinguish salary" from wages."
2) Are these subject to attachment and execution?
SUGGESTED ANSWER:
The term wages" applies to compensation for manual labor, skilled or unskilled, while
salary denotes a compensation for a higher degree of employment. (Goa vs. Court of
Appeals. 140 SCRA 304).
ALTERNATIVE ANSWER:
1) Wages" are those paid to any employee as his remuneration or earnings payable by
an employer for work done or to be done, or for services rendered or to be rendered.
On the other hand, salary" is used in the law that provides for a 13th-month pay. In this
law, basic salary includes all remuneration or earnings paid by an employer to his
employees for services rendered, but does not include allowances or monetary benefits
which are not considered or integrated as part of the regular or basic salary. (Art. 97(f).
Labor Code; Sec. 2(b), P.D. No. 851)
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2) Under Article 1708 of the Civil Code, only wages" are exempt from attachment or
execution. Salaries are not exempt from attachment or execution. (Goa vs. Court of
Appeals, 140 SCRA 304).
Q: How much attorney's fees may a lawyer assess a culpable party in cases of
unlawful withholding of wages?
SUGGESTED ANSWER:
In cases of unlawful withholding of wages, the culpable party may be assessed

attorney's fees equivalent to ten percent (10%) of the amount of wages recovered. (Art.
III, Labor Code)
Q: The unions by-laws provided for burial assistance to the family of a member
who dies. When Carlos, a member, died, the union denied his wife's claim for
burial assistance, compelling her to hire a lawyer to pursue the claim. Assuming
the wife wins the case, may she also claim attorney's fees? (2011 BAR
QUESTION)
(A) No, since the legal services rendered has no connection to CBA negotiation.
(B) Yes, since the union should have provided her the assistance of a lawyer.
(C) No, since burial assistance is not the equivalent of wages.
(D) Yes, since award of attorney's fee is not limited to cases of withholding of
wages.
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 Bar Question)
SUGGESTED ANSWER:
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:
(a) vote for or assent to patently unlawful acts of the corporation; (b) act in bad faith or
with gross negligence in directing the corporate affairs; (c) 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 solidarity
liable with the corporation for the termination of employment of employees done with
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malice or bad faith. (Sunto u. NLRC, 127 SCRA 390; General Bank and Trust Co. v.
Court of Appeals, 135 SCRA 659).
ALTERNATIVE ANSWER:
No. Unless they are guilty of malice or bad faith in connection with the non-payment of
unpaid wages and other monetary benefits due to employees.
2. Minimum wage defined, Minimum wage setting
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? [5%]
SUGGESTED ANSWER:
No, the employer cannot classify the lady worker as a handicapped worker because
according to the facts in the question, her deficiencies do not impair her working ability.
If her earning capacity is therefore not also impaired, then she cannot be considered a
handicapped worker.
Because of the above fact, the employer shall not pay her less than the applicable daily
minimum wage. (See Article 78 of the Labor Code)
Yes, the employer can classify the lady worker as a handicapped worker because her
earning capacity maybe impaired by her physical deficiencies. As such handicapped
worker, the employer may enter into an employment agreement with her whereby the
rate to be paid to her may be les* than the applicable legal minimum wage but not less
than 75% of such wage.
3. Minimum wage of workers paid by results
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 P 175.00 a day and
at other times she earns nothing. She now claims holiday pay. Is Nemia entitled
to this benefit? Explain briefly. (5%)
SUGGESTED ANSWER:
No, Nemia is not entitled to holiday pay.

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Art. 82 of the Labor Code provides that workers who are paid by results are, among
others, not entitled to holiday pay. Nemia is a worker who is paid by results. She earns
P7.00 for every manicure she does.
Yes. Nemia is entitled to holiday pay.
The Supreme Court has ruled: As to the other benefits, namely, holiday pay, premium
pay, 13m month pay, and service incentive leave which the labor arbiter failed to rule on
but which the petitioners prayed for in their complaint, we hold that petitioners are so
entitled to these benefits. Three (3) factors lead us to conclude that petitioners, although
piece rate workers, were regular employees of private respondents. First as to the
nature of the petitioners tasks, their job of repacking snack food was necessary or
desirable in the usual business of private respondents, who were engaged in the
manufacture and selling of such food products; second, petitioners worked for private
respondents throughout the year, their employment not having been dependent on a
specific project or season; and third, the length of time that petitioners worked for
private respondents. Thus, while petitioners mode of compensation was on a per piece
basis the status and nature of their employment was that of regular employees. [Labor
Congress of the Philippines v. NLRC, 290 SCRA 509(1998)]
Q: Piece rate employees are those who are paid by results or other non-time
basis. As such they are NOT entitled to overtime pay for work done beyond eight
hours if (2011 BAR)
(A) their workplace is away from the company's principal place of work.
(B) they fail to fill up time sheets.
(C) the product pieces they do are not countable.
(D) the piece rate formula accords with the labor departments approved rates.
4. Commissions
Q: A, a driver for a bus company, sued his employer for non-payment 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 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. (6%) (2010 Bar Question)
SUGGESTED ANSWER:
I will grant the prayer of A.
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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, 458 SCRA 578 [2005]).
His action has not yet prescribed. In Auto Bus v. Bautista (supra.), the Supreme Court
recognized that SIL is such 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, his right of action to claim ALL of his SIL benefits accrued at the time
when the employer refused to pay him his rightful SIL benefits. (Art. 291, Labor Code).
ALTERNATIVE ANSWER:
The money claim as cause of action has prescribed because the claim was filed after
five (5) years from date of negotiation. Art. 291 of the Labor Code provides that all
money claims arising from employer- employee relations occurring during the effectivity
of the Code shall be filed within three (3) years from that time the cause of action has
accrued, otherwise, they shall be forever barred.
5. Deductions from wages
Q: A worked as a roomboy 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. (3%) (2010
Bar Question)
SUGGESTED ANSWER:
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 law (Mayon Hotel & Restaurant v. Adana, 458 SCRA 609 [2005]).
In Mabeza v. NLRC (271 SCRA 670 [1997]), the Supreme Court held that the employer
simply cannot deduct the value from the employees wages without satisfying the
following: (a) proof that such facilities are customarily furnished by the trade; (b) the
provision of deductible facilities is voluntarily accepted in writing by the employee; and
(c) the facilities are charged at fair and reasonable value.
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Q: In accordance with the provisions of the collective bargaining agreement, the
Republic Labor Union (RLU) submitted to the Zenith Drug Company a union
board resolution authorizing the deduction from the wage of each of the unions
two thousand members a special assessment in the sum of twenty pesos to help
pay for the expenses of the RLU president during his observation tour of New
Zealand.
When the company honored the authorization and implemented the deductions,
more than a thousand of the employees complained and sought your assistance.
What legal advice would you give and what action would you take on behalf of the
employees?
SUGGESTED ANSWER:
I will advise the complaining employees that they should file a complaint against the
Company for making the illegal deductions of P20.00 from their wages.
According to the Labor Code (in Art. 113) of the legal deductions that an employer may
make from the wages of his employees are: (a) In cases where the worker is insured
with his consent by the employer, and the deduction is to recompense the employer for
the amount paid by him as premium on the insurance; (b) 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; and (c) In cases
where the employer is authorized by law or regulations issued by the Secretary of
Labor.
The deductions made by the employer are not for union dues.
I will advise the complaining employees that they should file a complaint against the
members of the union board of directors for violating the rights and conditions of
membership in a labor organization by levying a special assessment without its being
authorized by a written resolution of majority of all union members at a general
membership meeting called for the purpose. (Art. 241 (2).
Q: Corporation X is owned by Ls family. L is the President. M, Ls wife,

occasionally gives loans to employees of Corporation X. It was customary that
loan payments were paid to M by directly deducting from the employees monthly
salary. Is this practice of directly deducting payments of debts from the
employees wages allowed? (2012 Bar Question)
a) Yes, because where the employee is indebted to the employer, it is

sanctioned by the law on compensation under Article 1706 of the Civil
Code;
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b) Yes, because it has already become customary such that no express
authorization is required;
c) No, because an employees payment of obligation to a third person is
deductible from the employees wages if the deduction is authorized in
writing;
d) No, because Article 116 of the Labor Code absolutely prohibits the
withholding of wages and kickbacks. Article 116 provides for no
exception.
SUGGESTED ANSWER:
d) No, because Article 116 of the Labor Code absolutely prohibits the
withholding of wages and kickbacks. Article 116 provides for no
exception.
a) Yes, because where the employee is indebted to the employer, it is

sanctioned by the law on compensation under Article 1706 of the Civil
Code
Q: Which of the following is not a valid wage deduction? (2012 Bar Question)
a. Where the worker was insured with his consent by the employer, and the
deduction is allowed to recompense the employer for the amount paid by
him as the premium of the insurance.
b. When the wage is subject of execution or attachment, but only for debts
incurred for food, shelter, clothing and medical attendance;
c. Payment for lost or damaged equipment provided the deduction does not
exceed 25% of the employees salary for a week;
d. Union dues.
SUGGESTED ANSWER:
c) Payment for lost or damaged equipment provided the deduction does not exceed
25% of the employees salary for a week. [Implementing Rules Book III, Rule VIII,
Section 11: 20% of employees salary in a week, not 25%]
6. Wage Distortion/Rectification
Q: What is wage distortion? Can a labor union invoke wage distortion as a valid
ground to go on strike? Explain. (2%) (2009 Bar Question)
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SUGGESTED ANSWER:
Wage distortion refers to a situation 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 structure based on skills,
length of service and other logical bases of differentiation. (Art. 124, Labor Code)
No. the existence of wage distortion is not a valid ground for staging a strike because
Art. 124 of the Labor Code provides for a specific method or procedure for correcting
wage distortion. In Ilaw at Buklod ng Manggagawa vs. NLRC, (198 SCRA 586, 594-5
[1991]), the Cour said.
Q: What procedural remedies are open to workers who seek correction of wage
distortion? (2%) (2009 Bar Question)
SUGGESTED ANSWER:
The Procedural Remedies of Wage Distortion disputes are provided in Art. 242 of the
Labor Code, as follows.
1. Organized establishment - follow the grievance procedure as provided for in the

CBA, ending in voluntary arbitration.
2. Unorganized establishments - employer and workers, with the aid of the NCMB
shall endeavor to correct the wage distortion, and if they fail, to submit the issue
to the NLRC for compulsory arbitration.
Q: When is there a wage distortion? (2006 Bar Question)
SUGGESTED ANSWER:
There is wage distortion where an increase e in 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 structure based on skills, length of
service, or other logical bases of differentiation.
Wage distortion arises when (4) essential elements are present:
a. An existing hierarchy of positions with corresponding salary rates;

b. A significant change or increase in the salary rate of a lower pay class without a
corresponding increase in the salary of a higher one;
c. The elimination of the distinction between two groups or classes; and
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d. The distortion exists in the same region of the country (Prubankers Association v.
Prudential Bank and Trust Co., 302 SCRA 74 [1999]).
Q: How should a wage distortion be settled? (2006 Bar Question)
SUGGESTED ANSWER:
Any dispute arising from wage distortion shall be resolved through the grievance
procedure as provided in the applicable collective bargaining agreement and, if the
dispute remains unresolved, then through voluntary arbitration.
In cases where there are no collective bargaining agreements or recognized labor

unions, the employers and workers shall endeavor to correct such wage distortions. Any
dispute arising therefrom shall be settled through the National Conciliation and
Mediation Board and, if it remains unresolved after ten (10) calendar days of
conciliation, the issue of wage distortion shall be referred to the appropriate branch of
the National Labor Relations Commission (NLRC).
Q: Can the issue of wage distortion be raised in a notice of strike? Explain. 10%
(2006 Bar Question)
SUGGESTED ANSWER:
In Ilaw ng Manggagawa v. NLRC, 198 SCRA 586 (1991), the Supreme Court held that
any issue involving wage distortion shall not be a ground for a strike or lockout. The
legislative intent is to solve wage distortion problems through voluntary negotiation or
arbitration.
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. (3%)
SUGGESTED ANSWER:
According to Art 124 of the Labor Code, in case there Is a collective bargaining
agreement, a dispute arising from wage distortions shall be resolved through the
grievance machinery provided in the CBA, and if remains unresolved, through voluntary
arbitration. In case there is no collective bargaining agreement the employers and
workers shall endeavor to correct such distortions. Any dispute arising therefrom shall
be settled through the National Conciliation and foodSation Board and if it remains
unresolved after ten calendar days of conciliations, then the dispute is referred to the
appropriate branch of the National Labor Relations Commission.
Q:
a) Define Wage Distortion.
b) May a wage distortion, alleged by the employees but rejected by the
employer to be such, be a valid ground for staging a strike?
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SUGGESTED ANSWER:
(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 Raw at Buklod ng Manggagawa vs. NLRC, 198 SCRA 586, 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.
ALTERNATIVE ANSWER:
(b) A wage distortion, alleged by the employees but rejected by the employer can be a
valid ground for staging a strike if it happens that in rejecting the allegation of wage
distortion, the employer refuses to consider the issue under the grievance procedure
provided for in the applicable CBA and later on through Voluntary Arbitration. These
acts of the employer could be considered as a violation of its duty to bargain collectively
which is unfair labor practice (ULP). A ULP strike is legal.
Q: Which is not a procedural requirement for the correction of wage distortion in

an unorganized establishment? (2012 Bar Question)
a. Both employer and employee will attempt to correct the distortion;

b. Settlement of the dispute through National Conciliation and Mediation
Board (NCMB);
c. Settlement of the dispute through voluntary arbitration in case of failure to
resolve dispute through CBA dispute mechanism;
d. A and B.
SUGGESTED ANSWER:
c. Settlement of the dispute through voluntary arbitration in case of failure to

resolve dispute through CBA dispute mechanism. [Art. 124, Labor Code]
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Q: In what instances do labor arbiters have jurisdiction over wage distortion
cases? (2012 Bar Question)
a. When jurisdiction is invoked by the employer and employees in organized

establishments;
b. When the case is unresolved by Grievance Committee;
c. After the panel of voluntarily arbitrators has made a decision and the same
is contested by either party;
d. In unorganized establishments when the same is not voluntarily resolved
by the parties before the NCMM.
SUGGESTED ANSWER:
d) In unorganized establishments when the same is not voluntarily resolved

by the parties before the NCMB. [Art. 124, Labor Code]
7. Non-diminution of benefits
Q: R was employed as an instructor of Cruz College located in Santiago City,

Isabela. Pursuant to a stipulation in Rs employment contract that the college has
the prerogative to assign R in any of its branches or tie-up schools as the
necessity demands, the college proposed to transfer hi to Ilagan, a nearby town.
R filed a complaint alleging constructive dismissal since his re-assignment will
entail an indirect reduction of his salary or diminution of pay considering that
additional allowance will not be given to cover for board and lodging expenses.
R, however, failed to prove that allowances were given in similar instances in the
past. Is Rs contention that he will suffer constructive dismissal in view of the
alleged diminution of benefit correct? (2012 Bar Question)
a. Yes, such transfer should require an automatic additional allowance; the

non-granting of said allowance amounts to a diminution of benefit;
b. No, R failed to present evidence that the college committed to provide the
additional allowance or that they were consistently granting such benefit as
to have ripened into a practice which cannot be peremptorily withdrawn.
Hence, there is no violation of the rule against diminution of pay;
c. No, Rs re assignment did not amount to constructive dismissal because
the college has the right to transfer R based on contractual stipulation;
d. B and C.
SUGGESTED ANSWER:
b) No, R failed to present evidence that the college committed to provide the
additional allowance or that they were consistently granting such benefit as
to have ripened into a practice which cannot be peremptorily withdrawn.
Hence, there is no violation of the rule against diminution of pay.
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e) No, Rs re assignment did not amount to constructive dismissal because the

college has the right to transfer R based on contractual stipulation
[Management prerogative, Morales vs. Harbour Centre Port Terminal, Inc.,
G.R. No. 174208, January 25, 2012]
Q: X Companys CBA grants each employee a 14th month year-end bonus.

Because the company is in financial difficulty, its head wants to negotiate the
discontinuance of such bonus. Would such proposal violate the nondiminution
rule in the Labor Code? (2011 BAR)
(A) No, but it will certainly amount to negotiating in bad faith.

(B) Yes since the rule is that benefits already granted in a CBA cannot be
withdrawn or reduced.
(C) No, since the law does not prohibit a negotiated discontinuance of a CBA
benefit.
(D) Yes, since such discontinuance will cancel the enjoyment of existing benefits.
Q: In computing for 13th month pay, Balagtas Company used as basis both the
employees regular base pay and the cash value of his unused vacation and sick
leaves. After two and a half years, it announced that it had made a mistake and
was discontinuing such practice. Is the management action legally justified?
(2011 BAR)
(A) Yes, since 13th month pay should only be one-twelfth of the regular pay.
(B) No, since the erroneous computation has ripened into an established, non
withdrawable practice.
(C) Yes, an error is not a deliberate decision, hence may be rectified.
(D) No, employment benefits can be withdrawn only through a CBA negotiation.
Q: Lolong Law Firm (LLF), which employs around 50 lawyers and 100 regular
staff, suffered losses for the first time in its history. The management informed its
employees that it could no longer afford to provide them free lunch.
Consequently, it announced that a nominal fee would henceforth be charged.
Was LLF justified in withdrawing this benefit which it had unilaterally been
providing to its employees? (2014 Bar Question)
(A) Yes, because it is suffering losses for the first time.

(B) Yes, because this is a management prerogative which is not due to any
legal or contractual obligation.
(C) No, because this amounts to a diminution of benefits which is prohibited
by the Labor Code.
(D) No, because it is a fringe benefit that has already ripened into a
demandable right.
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SUGGESTED ANSWER:
(C) No, because this amounts to a diminution of benefits which is prohibited by the
Labor Code.
Q: Robert, an employee of ABC Company, is married to Wanda. One day, Wanda

visited the company office with her three (3) emaciated minor children, and
narrated to the Manager that Robert had been squandering his earnings on his
mistress, leaving only a paltry sum for the support of their children. Wanda
tearfully pleaded with the Manager to let her have one half of Robert's pay every
payday to ensure that her children would at least have food on the table. To
support her plea, Wanda presented a Kasulatan signed by Robert giving her one
half of his salary, on the condition that she would not complain if he stayed with
his mistress on weekends.
If you were the Manager, would you release one half of Robert's salary to Wanda?
(2013 Bar Questions)
(A) No, because an employer is prohibited from interfering with the freedom of its
employees to dispose of their wages.
(B) Yes, because of Robert's signed authorization to give Wanda one half of his salary.
(C) No, because there is no written authorization for ABC Company to release Robert's
salary to Wanda.
(D) Yes, because it is Robert's duty to financially support his minor children.
(E) No, because Robert's Kasulatan is based on an illegal consideration and is of
doubtful legal validity.
SUGGESTED ANSWER:
(A)
(C)
7. Facilities vs. Supplements
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.
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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 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 Bar Questions)
SUGGESTED ANSWER:
No. The following requisites were not complied with:

(a) proof that such facilities are customarily furnished by the trade
(b) the provision of deductible facilities is voluntarily accepted by the employee
(c) 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. Adarna, 485 SCRA 609 [2005])
No. RULE 78, Section 4 provides that there must be a written authorization.
C. Rest Periods (Weekly rest day, Emergency rest day work)
Q: An employer may require an employee to work on the employee's rest day

(2011 BAR)
(A) to avoid irreparable loss to the employer.

(B) only when there is a state of calamity.
(C) provided he is paid an extra of at least 50% of his regular rate.
(D) subject to 24-hour advance notice to the employee.
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? (5%) (1998 Bar Question)
SUGGESTED ANSWER:
No. The claim is not valid. The provisions on weekly rest periods in the Labor Code
cover every employer, whether operating for profit or not. (See Article 91 of the Labor
Code)
Q: Lawyer Antonio Martin recently formed a law partnership with five other
lawyer-friends of his. They hired two office secretaries, an accounting clerk -
cashier, one bookkeeper, and two messengers. You are among three associate
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attorneys. The workweek is Monday to Friday. There is no vacation leave but sick
leave is 15 days for every year of continuous and satisfactory service.
Managing partner Martin is preparing a set of personnel policies in terms and

conditions of employment for the staff and has asked you to give him a brief
memo on the questions listed below.
(a) Should the law firm schedule a rest day for the employees, including you?
(b) xxx
Explain fully. (1987 Bar Question)
SUGGESTED ANSWER:
(a) There is no need under the Labor Code to schedule a rest day. The Code (in Art.
91) requires an employer to provide each of his employees a weekly rest day after
every six consecutive normal work days. Here, the work week is such that it is for five
days. The Saturdays and Sundays when the employees are not required to work more
than satisfy the required weekly rest day.
(b) xxx
D. Holiday Pay/ Premium Pay
1. Coverage, exclusion
Q: When an employee works from 8 a.m. to 5 p.m. on a legal holiday falling on his
rest day, which of the following formulas do you use to compute for his day's
wage on that day? (2011 BAR)
(A) His regular daily wage multiplied by 200% plus 30% of the 200%
(B) His regular daily wage multiplied by 200%
(C) His regular daily wage plus 200%
(D) His daily regular wage
Q: A, a worker of ABC Company, was on leave with pay on March 31, 2010. He
reported for work on April 1 and 2, Maundy Thursday and Good Friday,
respectively, both regular holidays. Is A entitled to holiday pay for the two
successive holidays? Explain. (3%) (2010 Bar Question)
SUGGESTED ANSWER:
YES. A is entitled to holiday pay equivalent to two hundred percent (200%) of his
regular daily wage for the two successive holidays that he worked (Section 6[a], Rule
IV, Book III of the Omnibus Rules implementing the Labor Code).
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Q: During the open forum following your lecture before members of various
unions affiliated with a labor federation, you were asked the following questions:
(a) Araw ng Kagitingan and Good Friday are among the 10 paid regular holidays
under Article 94 of the Labor Code. How much will an employee receive when
both holidays fall on the same day? (4%) (2005 Bar Question)
SUGGESTED ANSWER:
The employee will receive 200% of his regular dally wage when both regular holidays
fall on the same day and he does not work. The law provides that he shall receive his
regular dally wage for each regular holiday. The employee will receive 100% for Araw
ng Kagitingan and 100% for Good Friday, If he works on that day, he is entitled to 400%
of his regular daily wage; otherwise, there will be diminution of benefits [Asian
Transmission Corp. v. Court of Appeals, 425 SCRA 478 (2004)],
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 P 175.00 a day and
at other times she earns nothing. She now claims holiday pay. Is Nemia entitled
to this benefit? Explain briefly. (5%)
SUGGESTED ANSWER:
No, Nemia is not entitled to holiday pay.
Art. 82 of the Labor Code provides that workers who are paid by results are, among
others, not entitled to holiday pay. Nemia is a worker who is paid by results. She earns
P7.00 for every manicure she does.
Yes. Nemia is entitled to holiday pay.
The Supreme Court has ruled: As to the other benefits, namely, holiday pay, premium
pay, 13m month pay, and service incentive leave which the labor arbiter failed to rule on
but which the petitioners prayed for in their complaint, we hold that petitioners are so
entitled to these benefits. Three (3) factors lead us to conclude that petitioners, although
piece rate workers, were regular employees of private respondents. First as to the
nature of the petitioners tasks, their job of repacking snack food was necessary or
desirable in the usual business of private respondents, who were engaged in the
manufacture and selling of such food products; second, petitioners worked for private
respondents throughout the year, their employment not having been dependent on a
specific project or season; and third, the length of time that petitioners worked for
private respondents. Thus, while petitioners mode of compensation was on a per piece
basis the status and nature of their employment was that of regular employees. [Labor
Congress of the Philippines v. NLRC, 290 SCRA 509(1998)]
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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? (2%)
SUGGESTED ANSWER:
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
compensation equivalent to twice his regular rate.
Q: This year, National Heroes Day (August 2.5) 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. (3%)
B. If he works for ten (10) hours on that day, how much should he receive for
his work? Explain. (2%)
SUGGESTED ANSWER:
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 cay is also his scheduled rest day.
B. 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.
Q: Ping Gabo is the Chief Engineer of the National Publishing Corp. with a
monthly salary of P3.000.00. He works over eight (8) hours daily from Monday to
Saturday. In May. June and July 1991, he rendered, each month, ten (10) hours
beyond his regular work schedule.
Is he entitled to overtime pay and holiday pay? Why?
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SUGGESTED ANSWER:
The entitlement of Gabo to overtime pay and holiday pay is dependent on whether he is
a managerial employee or not. If he Is a managerial employee, he is not entitled to
overtime pay and holiday pay. The Labor Code provides that the provisions that grant
overtime pay and holiday pay shall not apply, among others, to managerial employees.
A managerial employee is defined by the Code as referring to those whose primaiy duty
consists of the management of the establishment in which they are employed or of a
department or subdivision thereof, and to other officers or members of the managerial
staff.
Gabo, as Chief Engineer, appears to be a managerial employee. On the other hand, his
monthly pay is rather low for a managerial employee. Despite his title, his duty may not
consist of a management of department or of a subdivision thereof.
Q: All the 30 employees of Aliw Trading, Inc., are monthly salaried, and have been
such since L974, when the Labor Code of the Philippines took effect. Whenever
they would work overtime, the accounting department would compute the daily
equivalent of the employees monthly salary by using 301 days as divisor.
However, for deductions due to absences not otherwise covered by the 15-day
vacation leave policy of the company, the divisor used is 313 days. The workweek
is Monday to Saturday.
In 1985, the employees filed a complaint for nonpayment of holiday pay and
service incentive leave after years of unsuccessfully trying to convince Aliw
Trading management to grant holiday pay and the five-day service incentive
leave. In the past, whenever a demand for payment of holiday pay was presented
by the employees, management would invariably deny liability but on the other
hand would give a nominal salary adjustment. (9187 Bar Question)
(a) If you were counsel for Aliw Trading, what defenses would you raise?
(b) If you were the labor arbiter hearing the case, how would you resolve
the issues?
SUGGESTED ANSWER:
(a) As counsel for Aliw Trading, I will contend: As regards holiday pay, when the
Company uses 313 as the divisor in computing the daily equivalent of an employees
monthly salary, (in computing deductions due to absences not covered by its 15-day
vacation leave policy) the Company thereby considers that only the 52 weekly rest days
(which are Sundays) are the only days not considered as paid; and that the regular
holidays are therefore considered as paid even if they are unworked days. So, there is
no need to again pay holiday pay. As to the 5-day service incentive leave, I will contend
that the Labor Code (in Art. 95(b) provides that the provision on service incentive leaves
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shall not apply to those already enjoying the benefit, namely, those enjoying vacation
leaves with pay at leave five (5) days.
The Company here has a 15-day vacation policy and should, therefore, be already
deemed as giving the 5-day service incentive leave.
(b) As the Labor Arbiter, I will rule that the Company is liable to pay holiday pay. We will
base this ruling on the ground that the Company uses 301 as a divisor in computing the
daily equivalent of an employee's monthly salary (in computing overtime pay). Thus, the
Company considers both the 52 weekly rest days and 12 holidays as unpaid days.
Thus, the Company should pay holiday pay.
As for the service incentive leave, I will rule that with its 15-day vacation leave policy,
the Company, pursuant to the Labor Code, (in Art. 94(b) is already giving the 5-day
service incentive leave to its employees.
Q: Z owns and operates a carinderia. His regular employees are his wife, his two
(2) children, the family maid, a cook, two (2) waiters, a dishwasher and a janitor.
The family driver occasionally works for him during store hours to make
deliveries. On April 09, the dishwasher did not report for work. The employer did
not give his pay for that day is the employer correct? (2012 Bar Question)
a) No, because employees have a right to receive their regular daily wage
during regular holidays;
b) Yes, because April 09 is not a regular holiday;
c) Yes, because of the principle of a fair days wage for a fair days work;
d) Yes, because he employs less than ten (10) employees.
SUGGESTED ANSWER:
(a) No legal employees have a right to receive their regular daily wage during
regular holiday [Art. 94, Labor Code, and a carinderia is not in the
category of an excluded or service establishment].
(d) Yes, because he employs less than ten (10) employees [i.e. if we are to
consider a carinderia as a retail or service establishment].
Q: Which of the following is not a regular holiday? (2012 Bar Question)
a. New Years Eve;

b. Eidil Fitr;
c. Fathers Day;
d. Independence Day.
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SUGGESTED ANSWER:
c) Fathers Day [Art. 94 (c), Labor Code]
2. Teachers, piece-workers, takay, seasonal workers, seafarers
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 deiived 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?
SUGGESTED ANSWER:
If the boatmen are considered employees, like jeepney drivers paid on a boundary
system, the boatmen are not entitled to overtime and holiday pay because they are
workers who are paid by results. Said workers, under the Labor Code are not entitled,
among others, to overtime pay and holiday pay.
In accordance with the Rules and Regulations implementing the 13th month pay law,
however, the boatmen are entitled to the 13th month pay. Workers who are paid by
results are to be paid their 13th month pay.
No. The arrangement between the boat owner and the boat operators/crew members
partook of the nature of a joint venture. The boatmen did not receive, fixed
compensation as they shared only in the cash collections from cargo fees and
passenger fares, less expenses for fuel, food, landing fees and spare parts. It appears
that there was neither right of control nor actual exercise of such right on the part of the
beat owner over the boatmen. It is clear that there was no employer-employee
relationship between the beat owner and the boatmen. As such, these boatmen are not
entitled to overtime pay, holiday pay and 13th month pay.
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
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duration of his service, Dennis was not given his 13th month pay or his service
incentive leave pay.
a. Is Dennis entitled to 13th month pay and service leave incentive pay?
Explain. (5%) (2012 BAR)
Suggested Answer:
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 paid under the Boundary System is 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 one-twelfth (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?
Suggested Answer:
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].
E. Leaves
1. Maternity Leave
Q: AB, single and living-in with CD (a married man), is pregnant with her fifth
child. She applied for maternity leave but her employer refused the application
because she is not married. Who is right? Decide (2007 Bar Question)
SUGGESTED ANSWER:
AB is right. The Social Security Law, which administers the Maternity Benefit Program,
does not require that the relationship between the father and the mother of the child be
legitimate. The law is compensating the female worker because of her maternal function
and resultant loss of compensation. The law is morality free.
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ALTERNATIVE ANSWER:
Neither party is correct. The employer cannot refuse the application on the ground that
she is only living with CD, as a legitimate marriage is not a precondition for the grant of
maternity leave. Neither is AB correct, since maternity leave is only available for the first
four deliveries or miscarriages.
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 co-employee 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 that 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.
xxx
(b) Is Jovy entitled to maternity leave benefits? (6%)
SUGGESTED ANSWER:
(b) Yes, if Jovy, as a female employee, has paid at least three (3) monthly contributions
in the twelve-month period immediately preceding the semester of her childbirth (Sec,
14-A, R.A. 1161, as amended); otherwise; she is not entitled to the benefit.
Q: Lydia Cancio was on her sixth and last month as a probationary employee of
the Banco Seguridad when she was confirmed to be pregnant. Being unmarried
and wanting to become a regular employee, she initially kept her pregnancy a
secret from her employer. She was subsequently appointed a regular employee
on the first month of her pregnancy.
Because of morning sickness, however, Lydia frequently absented herself from

work. After two more months, the personnel manager told her that her habitual
absences had become so intolerable that she would have to go. Replying that her
absences were caused by her pregnancy, Lydia asked for a leave of absence,
which was denied. She nevertheless went on leave and was dismissed for going
on leave without prior permission.
Lydia filed a complaint for illegal dismissal, praying that she be reinstated. The
Bank contested the complaint on the ground that she was not dismissed because
of her pregnancy but because of her absence without leave.
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SUGGESTED ANSWER:
The dismissal is illegal. The Labor Code (in Art. 137(2) very clearly provides: It shall be
unlawful for any employer to discharge (a) woman (employee) on account of her
pregnancy, or while on leave or in confinement due to her pregnancy.
Of course, in the case, the woman employee asked for leave of absence because of her
pregnancy but this request was denied and she went on leave anyway.
The employer should have granted her request for leave, the request being made
because of her pregnancy.
Dismissal after she went on leave without prior permission is too harsh a punishment for
the pregnant woman who was absent without leave.
Q: Because of the stress in caring for her four (4) growing children, Tammy
suffered a miscarriage late in her pregnancy and had to undergo an operation. In
the course of the operation, her obstetrician further discovered a suspicious-
looking mass that required the subsequent removal of her uterus (hysterectomy).
After surgery, her physician advised Tammy to be on full bed rest for six (6)
weeks. Meanwhile, the biopsy of the sample tissue taken from the mass in
Tammy's uterus showed a beginning malignancy that required an immediate
series of chemotherapy once a week for four (4) weeks.
(A) What benefits can Tammy claim under existing social legislation? (2013 Bar
Questions)
SUGGESTED ANSWER:
Assuming she is employed, Tammy is entitled to a special leave benefit of two months
with full pay (Gynecological Leave) pursuant to RA 9710 or the Magna Carta of Women.
She can also claim Sickness Leave Benefit in accordance with the SSS Law.
Q: Melissa, a coffee shop worker of 5 months, requested her employer for 5 days'
leave with pay to attend to the case that she filed against her husband for
physical assault two weeks earlier. May the employer deny her request for leave
with pay? (2011 BAR)
(A) Yes, the reason being purely personal, approval depends on the employers
discretion and is without pay.
(B) No, as victim of physical violence of her husband, she is entitled to five days
paid leave to attend to her action against him.
(C) No, the employer must grant the request but the leave will be without pay.
(D) Yes, since she is not yet a permanent employee.
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5. Paternity Leave
Q: To avail himself of paternity leave with pay, when must the male employee file
his application for leave? (2011 BAR)
(A) Within one week from the expected date of delivery by the wife.
(B) Not later than one week after his wifes delivery or miscarriage
(C) Within a reasonable time from the expected deliver date of his wife.
(D) When a physician has already ascertained the date the wife will give birth.
Q: Which of the following is NOT a requisite for entitlement to paternity leave?

(2011 BAR)
(A) The employee is cohabiting with his wife when she gave birth or had a
miscarriage.
(B) The employee is a regular or permanent employee.
(C) The wife has given birth or suffered a miscarriage.
(D) The employee is lawfully married to his wife.
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 co-employee 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 that 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.
Whose contention is correct, Weto or the HRD manager?
SUGGESTED ANSWER:
(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 (Section 2, RA6187). Jovyis 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.
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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 8187). To deny Weto this benefit would be to defeat the rationaie for the law.
The HRD manager is correct. Since it is conceded that Weto earlier availed of four (4)
paternity leaves when his first wife gave birth to their four (4) children, he clearly
"already used up his entitlement under the law". His new wife's giving birth for the first
time would not, matter as the benefit given by. Section 2 of R.A. 8187 is an exhaustible
benefit granted to a father "for the first four (4) deliveries of the legitimate spouse with
whom he is cohabiting".
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?
(3%)
SUGGESTED ANSWER:
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.
Q: Because of the stress in caring for her four (4) growing children, Tammy
suffered a miscarriage late in her pregnancy and had to undergo an operation. In
the course of the operation, her obstetrician further discovered a suspicious-
looking mass that required the subsequent removal of her uterus (hysterectomy).
After surgery, her physician advised Tammy to be on full bed rest for six (6)
weeks. Meanwhile, the biopsy of the sample tissue taken from the mass in
Tammy's uterus showed a beginning malignancy that required an immediate
series of chemotherapy once a week for four (4) weeks.
(A) xxxxxxxxxxx
(B) What can Roger-Tammy's 2nd husband and the father of her two (2) younger
children -claim as benefits under the circumstances? (2013 Bar Questions)
SUGGESTED ANSWER:
Under RA 8187 or the Paternity Leave Act of 1996, Roger can claim paternity leave of
seven (7) days with full pay if he is lawfully married to Tammy and cohabiting with her at
the time of the miscarriage.
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Q: H files for a seven-day paternity leave for the purpose of lending support for
his wife, W, who suffered a miscarriage through intentional abortion. W also filed
for maternity leave for five weeks. H and W are legally married but the latter is
with her parents, which is a few blocks away from Hs house. Which of the
following statements is the most accurate? (2012 Bar Question)
a. Paternity leave shall be denied because it does not cover aborted babies;
b. Paternity leave shall be denied because W is with her parents;
c. Maternity leave shall be denied because it does not cover aborted babies;
d. Maternity leave shall be denied because grant of paternity leave bars
claim for maternity leave.
SUGGESTED ANSWER:
b) Paternity leave shall be denied because W is with her parents [RA

8187, Section 2]
3. Service Incentive Leave
Q: Which of the following grounds exempts an enterprise from the service

incentive leave law?
(A) The employees already enjoy 15 days vacation leave with pay.
(B) The employer's business has been suffering losses in the past three years.
(C) The employer regularly employs seven employees or less.
(D) The company is located in a special economic zone.
Q: If not used by the end of the year, the service incentive leave shall be (2011
BAR)
(A) carried over to the next year.

(B) converted to its money equivalent.
(C) forfeited.
(D) converted to cash and paid when the employee resigns or retires.
Q: Which type of employee is entitled to a service incentive leave? (2012 Bar

Question)
a. Managerial employees;
b. Field personnel;
c. Government workers;
d. Part-time workers.
SUGGESTED ANSWER:
d) Part-time workers [Art. 82, Labor Code]

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Q: The members of the administrative staff of Zeta, a construction company,
enjoy ten (10) days of vacation leave with pay and ten (10) days of sick leave with
pay, annually. The workers' union, Bukluran, demands that Zeta grant its workers
service incentive leave of five (5) days in compliance with the Labor Code.
Is the union demand meritorious? (2013 Bar Questions)
(A) Yes, because non-compliance with the law will result in the diminution of employee
benefits.
(B) Yes, because service incentive leave is a benefit expressly provided under and
required by the Labor Code.
(C) No, because Zeta already complies with the law.
(D) No, because service incentive leave is a Labor Code benefit that does not apply in
the construction industry.
(E) Yes, because Labor Code benefits are separate from those voluntarily granted by
the company.
SUGGESTED ANSWER:
(C) Basis: Article 95 of the Labor Code. The employee is already given vacation
leave of 10 days. This is deemed compliance with the requirement of service
incentive leave under the law.
F.Service Charge
Q: Ricardo operated a successful Makati seafood restaurant patronized by a large

clientele base for its superb cuisine and impeccable service. Ricardo charged its
clients a 10% service charge and distributed 85% of the collection equally among
its rank-and-file employees, 10% among managerial employees, and 5% as
reserve for losses and break ages. Because of the huge volume of sales, the
employees received sizeable shares in the collected service charges.
As part of his business development efforts, Ricardo opened a branch in Cebu

where he maintained the same practice in the collection and distribution of
service charges. The Cebu branch, however, did not attract the forecasted
clientele; hence, the Cebu employees received lesser service charge benefits
than those enjoyed by the Makati-based employees. As a result, the Cebu branch
employees demanded equalization of benefits and filed a case with the NLRC for
discrimination when Ricardo refused their demand.
Will the case prosper? (2013 Bar Questions)
(A) Yes, because the employees are not receiving equal treatment in the distribution of
service charge benefits.
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(B) Yes, because the law provides that the 85% employees' share in the service charge
collection should be equally divided among all the employees, in this case, among
the Cebu and Makati employees alike.
(C) No, because the employees in Makati are not similarly situated as the Cebu
employees with respect to cost of living and conditions of work.
(D) No, because the service charge benefit attaches to the outlet where service charges
are earned and should be distributed exclusively among the employees providing
service in the outlet.
(E) No, because the market and the clientele the two branches are serving, are
different.
SUGGESTED ANSWER:
D)
Q: How often should the collected service charges be distributed to employees in

hotels and restaurants? (2011 BAR)
(A) Every end of the month

(B) Every two weeks
(C) Every week
(D) At the end of each work day
Q: In order to improve the Cebu service and sales, Ricardo decided to assign
some of its Makati-based employees to Cebu to train Cebu employees and
expose them to the Makati standard of service. A chef and three waiters were
assigned to Cebu for the task. While in Cebu, the assigned personnel shared in
the Cebu service charge collection and thus received service charge benefits
lesser than what they were receiving in Makati.
If you were the lawyer for the assigned personnel, what would you advice them to
do? (2013 Bar Questions)
(A) I would advise them to file a complaint for unlawful diminution of service charge
benefits and for payment of differentials.
(B) I would advise them to file a complaint for illegal transfer because work in Cebu is
highly prejudicial to them in terms of convenience and service charge benefits.
(C) I would advise them to file a complaint for discrimination in the grant of service
charge benefits.
(D) I would advise them to accept their Cebu training assignment as an exercise of the
company's management prerogative.
(E) I would advise them to demand the continuation of their Makati-based benefits and
to file a complaint under (B) above if the demand is not heeded.
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SUGGESTED ANSWER:
(A)
G. Thirteenth Month Pay
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? [5%]
SUGGESTED ANSWER:
I will advise the manufacturing company to pay the casual employee 13th Month Pay if
such casual employee has worked for at least one (1) month during a calendar year.
The law on the 13th Month Pay provides that employees are entitled to the benefit of
said law regardless of their designation or employment status.
The Supreme Court ruled in Jackson Building Condominium Corporation v. NLRC, 246
SCRA 329, (1995) interpreting P.D. No. 851, as follows:
xxx employees are entitled to the thirteenth-month pay benefits regardless of their
designation and irrespective of the method by which their wages are paid.
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 (103 SCRA 139) 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 indebitii
overpayment of its employees' 13th-month pay, by debiting against future 13th-
month payments whatever excess amounts it had previously made.
1) Is the Companys action tenable?

2) 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.
SUGGESTED ANSWER:
1) The Companys action is not tenable. The principle of solutio indebiti which is a civil
law concept Is not applicable in labor law. Thus, solutio indebiti is not applicable to the
instant case. (Davao Fruits Corporations vs. National Labor Relations Commission, et
at. 225 SCRA, 562)
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a) The Companys action would be tenable if payment was done by mistake, in

which case recovery can be done under the principle of solutio indebiti But if there was
no mistake, the Company's action would be untenable because it would violate Article
100 of the Labor Code which prohibits elimination or diminution of benefits.
b) No. The Companys action is not tenable. The grant by Concepcion Textile Co.
of a better formula, more favorable to the employee, constituted a valid offer by the
company as the offeror and the employees as the offeree. There having been a meeting
of the minds of the parties, the rights and obligations arising therefrom were valid. Thus,
any amount received by virtue thereof could not be recovered, much less taken away
unilaterally. The principle does not apply to the case at bar.
2) Alter 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
vs. NLRC, 183 SCRA 610.
Q: Who among the following is not entitled to 13th month pay? (2012 Bar
Question)
a. Stephanle, a probationary employee of a cooperative bank who rendered

six (6) months of service during the calendar year before filing her
resignation;
b. Rafael, the Secretary of a Senator;
c. Selina, a cook employed by and who lives with an old maid and who also
tends the sari-sari store of the latter;
d. Roger, a house gardener who is required to report to work only thrice a
week.
SUGGESTED ANSWER:
b. Rafael, the secretary of a Senator [Section 3 (b), Dec. 22, 1975, Rules and
Regulations Implementing PD 851]
H. Separation Pay
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 operations and dismiss its
workers. The union representing the employees demanded that A pay the
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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 is
claim correct or not? Why? (5%) (2001 Bar Question)
SUGGESTED ANSWER:
The union's claim is not correct.
In the case of National Federation of Labor vs. NLRC, G.R. No. 12771.8, March 2,
2000, the Supreme Court ruled that there is no obligation to pay separation pay if the
closure is not a 'unilateral and voluntary act of the employer.
In the question, the closure was brought about not by a unilateral and voluntary act of
the employer but due to the act of government in the implementation of the
Comprehensive Agrarian Reform Law.
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 months salary per year of service.
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 Bar Question)
SUGGESTED ANSWER:
I agree, with some conditions.
In computing separation pay, the monthly salary should include commissions because
commissions received by a salesman is part of his salary.
But for allowances to be included as part of salary, they should be for services rendered
or to be rendered, like a cost of living allowance. But transportation and representation
allowances are not considered as part of salary because they are to meet expenses for
transportation and representation. Thu s. cost of living allowances, but not
transportation or representation allowances, shall be included as part of salary in the
computation of separation pay.
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Note: Re: allowances as part of salary, in Santos us. NLRC, 154 SCRA 166, the
Supreme Court said: "in the computation of backwages and separation pay, account
must be taken not only of basic salary but also her transportation and emergency living
allowances."
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 Daisys 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 Bar Question)
SUGGESTED ANSWER:
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
wrongdoing. In PhiLippine Long Distance Telephone Co., vs NLRC, 164 SCRA 671
(1988).
We hold 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, for humanitarian
reasons, be granted financial assistance in the form of separation pay. But also
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according to the Supreme Court, a terminated employee is not deserving of said
financial assistance if her termination is due to serious misconduct.
In the case, Daisy was dismissed because of serious misconduct. Thus, she should not
be paid separation pay.
Q: Pedro Tiongco was a salesman for ten years of Lakas Appliance Company
(LAC). Due to business reverses, the Company laid off Tiongco and three other
salesmen and offered them separation pay based on their monthly basic salary of
P5,700.00. The three salesmen accepted their separation pay and signed
individual quitclaims stating, among others, that they have no more claims or
causes of action whatsoever against LAC. The quitclaims were duly notarized.
Tiongco refused to accept his separation pay and instead, demanded that the
said pay should be computed on the basis of his monthly basic salary and his
sales commis-sions. Upon LACs rejection of Tiongcos demand. Tiongco filed
the appropriate complaint with the Labor Arbiter.
a) As Labor Arbiter, how will you resolve Tiongcos complaint? Reasons.
SUGGESTED ANSWER:
As Labor Arbiter, I will grant the demand that Tiongco be paid his separation pay
computed on the basis of his monthly basic salary and his sales commissions. The
sales commissions under the Labor
Code is part of the wage that the salesmen are entitled to receive for services
rendered. Wages may be fixed or ascertained on a time, task, piece or commission
basis. (Article 97. Labor Code. Songeo. el al.. vs. NLRC. G.R. No. 50999, March 23,
1990)
b) If Tiongco obtains a favorable decision will the three other salesmen be entitled
to separation pay differential? Reasons.
SUGGESTED ANSWER:
No. If the acceptance of their separation pay by the t hree other salesmen and their
signing individual quitclaims that stated that they have no more claims or causes of
actions whatsoever against LAC (where the quitclaims were even duly notarized) is
voluntarily, they can no longer'ask for a recomputation of their separation pay according
to the favorable decision secured by Tiongco.
The salesmen signed quitclaim that are not contrary to law morals or public policy. Not
all quitclaims are invalid as against public policy if they are voluntarily entered into and
represents a reasonable settlement. (Periquel v. NLRC, 186 SCRA 724)
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Q: Buster Sison, a 55-year old employee of Telecom Facilities, Inc., wanted to
retire. He talked to the personnel manager, who agreed. The necessary papers
were drawn up, and Sison was paid retirement benefits equivalent to 75% of his
last basic monthly salary for every year of service. Sison enjoyed post-retirement
life for more than three years, until his retirement benefits were exhausted.
Expecting to get more from Telecom, Sison filed a complaint for recovery of
separation pay under the Labor Code.
SUGGESTED ANSWER:
Sison is not entitled to separation pay under the Labor Code. The Labor Code (in Arts.
283 ad 284) provides the instances when the employer is to pay separation pay,
namely, when he terminates the employment of an employee because of the installation
of labor saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation not due to serious business losses, or when an employee has
been found to be suffering from any disease and his continued employment is
prohibited by law or is prejudicial to his health as well as the health of his co--
employees.
Sisons termination was not brought by any of the above authorized causes. He
voluntarily retired, and he accepted what was paid him by the Company which paid
retirement benefits not because it was under legal obligation to do so, there being no
CBA or any agreement providing for such payment.
Because of all the above, he is not entitled to separation pay.
If he waited so that he retired at age 60, he could have taken advantage of a provision
in the Rules and Regulations for the payment of termination pay equivalent to at least
one-half month salary for every year of service, but this is even less than 75% he
received when he retired at age 55.
Q: Linder what circumstances or instances may an employee who is found to

have been illegally dismissed and, therefore, entitled to reinstatement, be
nevertheless. NOT ordered reinstated but merely awarded (a) separation pay in
lieu of reinstatement and (b) back wages? At what rate would the separation pay
be? What would be the maximum limit for the back wages?
SUGGESTED ANSWER:
In a number of Supreme Court decision, it has been ruled that an employee who is
found to have been illegally dismissed shall be awarded separation pay in lieu of
reinstatement If reinstatement is no longer viable in view of the strained relations
between the employee and his employer. In a case, the Supreme Court also ruled that
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since reinstatement was no longer feasible in view of the advanced age of the
employees who were illegally dismissed, they should instead received separation pay.
The rate of separation pay is one month salary for every year of service. The Supreme
Court has also ruled that in the computation of separation pay account must be taken
not only of the basis salary of the employee but also his allowances.
In decisions applying the law before Rep. Act No. 6715, the Supreme Court ruled that
the maximum limit for back wages shall be three years.
The law has been changed by Rep. Act No. 6715. Back wages are now to be computed
from the time the compensation of the employee was withheld from him up to the time
of his actual reinstatement. Thus, in applying the amendment Introduced by Rep. Act
No. 6715, this means that back wages will now be paid for the entire period up to the
actual reinstatement of the employees, even if the period is over three years.
Q: Lizzy Lu is a sales associate for Luna Properties. The latter is looking to

retrench Lizzy and five other sales associates due to financial losses. Aside from
a basic monthly salary, Lizzy and her colleagues receive commissions on the
sales they make as well as cost of living and representation allowances. In
computing Lizzys separation pay, Luna Properties should consider her: (2014
Bar Question)
(A) monthly salary only

(B) monthly salary plus sales commissions
(C) monthly salary plus sales commissions, plus cost of living allowance
(D) monthly salary plus sales commissions, plus cost of living allowance and
representation allowance
SUGGESTED ANSWER:
(D) monthly salary plus sales commissions, plus cost of living allowance and
representation allowance (Songco v. NLRC, G.R. No. L-50999, March 23,
1990).
Q: Hector, a topnotch Human Resource Specialist who had worked in

multinational firms both in the Philippines and overseas, was recruited by ABC
Corp., because of his impressive credentials. In the course of Hector's
employment, the company management frequently did not follow his
recommendations and he felt offended by this constant rebuff.
Thus, he toyed with the idea of resigning and of asking for the same separation
pay that ABC earlier granted to two (2) department heads when they left the
company.
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To obtain a legal opinion regarding his options, Hector sent an email to ABC's
retained counsel, requesting for advice on whether the grant by the company of
separation pay to his resigned colleagues has already ripened into a company
practice, and whether he can similarly avail of this benefit if he resigns from his
job.
As the company's retained legal counsel, how will you respond to Hector? (2013
Bar Questions)
(A) I would advise him to write management directly and inquire about the benefits he
can expect if he resigns.
(B) I would advise him that the previous grant of separation pay to his colleagues
cannot be considered a company practice because several other employees had
resigned and were not given separation pay.
(C) I would advise him to ask for separation pay, not on account of company practice,
but on the basis of discrimination as he is similarly situated as the two resigned
department heads who were paid their separation pay.
(D) I would not give him any legal advice because he is not my client.
(E) I would maintain that his question involves a policy matter beyond the competence
of a legal counsel to give.
SUGGESTED ANSWER:
(D)
ALTERNATIVE ANSWER:
(A)
I. Retirement Pay
Q: As a rule, when is retirement due? (2007 Bar Question)
SUGGESTED ANSWER:
Article 287 provides for two types of retirement:

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 an employee upon reaching
the age of 65 years. In both instances, the law imposes the minimum service
requirement of 5 years with the establishment.
Q: When is retirement due for underground miners? (2007 Bar Question)
SUGGESTED ANSWER:
Pursuant to R.A. 8558, in the absence of a retirement plan or other applicable

agreement providing for retirement benefits of underground mine employees in the
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establishment, any such employee may retire upon reaching the age of 50 years or
more if he has served for at least 5 years as underground mine employee or in
underground mine of the establishment.
Q: A Collective Bargaining Agreement (CRA) 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 employees 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 months 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?
SUGGESTED ANSWER:
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, 11 February 1992)
ALTERNATIVE ANSWER:
a) The Company is correct. The CBA clearly provides that employees who are
terminated are entitled to retirement benefits or separation pay, whichever is higher.
The CBA, therefore, does not give the employees a right to both retirement pay and
separation pay. Hence, they cannot be entitled to both. The exclusion of one by the
other is deductible not only from the term or but also by the qualifying phrase
whichever is higher. This phrase would be immaterial if the employees were entitled to
both.
b) Dino and his co-employees were correct.
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In the case of University of the East vs. NLRC, it was clarified that the retirement
benefits arising from the CBA is an Obligation Ex Contractu while separation pay under
Art. 284 is an Obligation Ex-Lege.
Thus, the Company should grant both benefits to those who were separated due to
CLOSURE and at the same time were qualified to retire. (Cipriano v. San Miguel, 24
SCRA 703)
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.
(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? (2013 Bar Questions)
SUGGESTED ANSWER:
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 [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? (2013 Bar Questions)
SUGGESTED ANSWER:
No. He cannot be compulsorily retired twice in the same company.

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Q: At age 65 and after 20 years of sewing work at home on a piece rate basis for
PQR Garments, a manufacturer-exporter to Hongkong, Aling Nena decided it was
time to retire and to just take it easy.
Is she entitled to retirement pay from PQR? (2013 Bar Questions)
(A) Yes, but only to one month pay.

(B) No, because she was not a regular employee.
(C) Yes, at the same rate as regular employees.
(D) No, because retirement pay is deemed included in her contracted per piece pay.
(E) No, because homeworkers are not entitled to retirement pay.
SUGGESTED ANSWER:
(C)
Q: The Labor Code on retirement pay expands the term one-half () month
salary because it means (2011 BAR)
(A) 15 days' pay plus 1/12th of the 13th month pay and 1/12th of the cash value
of service incentive leave.
(B) 15 days' pay plus 1/12th of the 13th month pay and the cash equivalent of five
days service incentive leave.
(C) 15 days pay plus a full 13th month pay.
(D) 15 calendar days' pay per year of service plus allowances received during the
retirement year.
a. Eligibility
Q: Ricky Marvin had worked for more than ten (10) years in 1GB 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.
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If you were the Voluntary Arbitrator, how would you decide? Briefly explain the
reasons for your award. (5% ) (2005 Bar Question)
SUGGESTED ANSWER:
(1) I will grant Ricky Marvin the retirement benefits under Art. 287 of the Labor Code.
Art. 287 of the Labor Code, as the minimum standard in law, allows an employee an
optional retirement upon reaching the age of 60 years provided he rendered at least 5
years of service - requirements that Ricky Marvin met under the facts of the case.
Q: How many years of service is the underground mine employees required to

have rendered in order to be entitled to retirement benefits? (2012 Bar Question)
a. 5;
b. 10;
c. 15;
d. 20.
SUGGESTED ANSWER:
a) 5 [Section 2.1, 0005-04-1998, Rules Prescribing the Retirement Age for

Underground Mine Employees, May 9, 1998]
b. Amount
Q: Ukol was compulsorily retired by his employer, Kurot Bottling Corporation,

upon the formeris reaching 65 years of age having rendered 30 years of service.
Since there was no CBA, B. Ukol was paid his retirement benefits computed 15
days' pay for every year of service, based on B. Ukolis highest salary during each
year of his employment. Not satisfied, B. Ukol filed action with the Arbitration
Branch of the NLRC claiming that his retirement benefits were not computed
properly. Is B. Ukol's claim meritorious? What are the components of his
retirement benefits? (2%). (2001 Bar Question)
SUGGESTED ANSWER:
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.
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The components of retirement pay are:
1. 15 days pay
2. 1/12 of 13th month pay, and
3. Cash equivalent of not more than five {5) days of service incentive leave.
Q: What exception(s) do(es) the law on retirement benefits provide(s) if any?

(3%). (2001 Bar Question)
SUGGESTED ANSWER:
Retail, service and agricultural establishments or operations employing not more than
ten (10) employees or workers are exempted from the coverage of the provision on
retirement benefits in the Labor Code.
Also, where there is a retirement plan of the employer that grants more than what the
Labor Code grants.
J. Women Workers
a. Provisions against discrimination
Q: At any given time, approximately ninety percent (90%) of the production

workforce of a semi-conductor 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? [5%] (1998 Bar Question)
SUGGESTED ANSWER:
Yes, it is violative of Article 140 of the Labor Code which provides that no employer
shall discriminate against any person in respect to terms and conditions of employment
on account of his age.
The policy of the company to employ married women as production workers only if they
are at least thirty-five (35) years of age is valid. There is no prohibition in the Labor
Code for such an employer to exercise this management function. There is a justifiable
basis for the company policy, i.e., the need for continuity of production with minimum
absences because of the peculiar business conditions and needs of the company, i.e.,
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very tight delivery schedules. The company respects the institution of marriage as
shown by the fact that it employs married women. There is no violation of the stipulation
against marriage (Art. 136), and prohibited acts (Art. 137) of the Labor Code.
STILL ANOTHER SUGGESTED ANSWER:
It may be noted that the policy is directed only to married women. This may violate the
spirit of Article 136 of the Labor Code which provides that it shall be unlawful for an
employer to require as a condition of employment or continuation of employment that a
woman shall not get married.
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. (2005 Bar Question)
SUGGESTED ANSWER:
When an employer discriminates against women in the adoption of policy standards for
employment and promotion in his enterprise, he is not guilty of sexual harassment.
Instead, the employer is guilty of discrimination against women employees which is
declared to be unlawful by the Labor Code.
For an employer to commit sexual harassment, he - as a person of authority, influence

or moral ascendancy - should have demanded, requested or otherwise required a
sexual favor from his employee whether the demand, request or requirement for
submission is accepted by the object of said act.
In the question, no such act was committed by the sole proprietor.
Q: In a work-related environment, sexual harassment is committed when (2011

BAR)
(A) the offender has authority, influence, or moral ascendancy over his
subordinate victim.
(B) the victims continued employment is conditioned on sexual favor from her.
(C) the female victim grants the demand for sexual favor against her will.
(D) the victim is not hired because she turned down the demand for sexual favor.
b. Stipulation against marriage
Q: Dinna Ignacio was hired by Stag Karaoke Club as a guest relations officer.
Dinna was also required to sing and dance with guests of the club.
In Dinna Ignacios employment contract, which she signed, the following

stipulations appeared:
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Compensation: Tips and commissions coming from guests shall be subjected
to 15% deduction.
Hours of work: 5 P.M. up to 2 AM. Daily Including Sundays and Holidays
Other conditions: Must maintain a body weight of 95 lbs., remain single. Marriage
or pregnancy will be considered as a valid ground for a
termination of employment.
A year later. Dinna Ignacio requested to go on leave because she would be

getting married to one of the club's regular guests. The management of the club
dismissed her.
Dinna filed a complaint for illegal dismissal, night shift differential pay,
backwages, overtime pay and holiday pay. Discuss the merits of Dinnas
complaint.
SUGGESTED ANSWER:
The first issue to be resolved is: Is Dinna Ignacio an employee of the Star Karaoke
Club? Yes, she is an employee per the provision of the Labor Code that states: "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 shall be considered an
employee of such establishment for purposes of labor and social legislation"(Art. 138).
In Dinnas conditions of employment have all the aforesaid characteristics.
She has been illegally dismissed. The Labor Code expressly provides, that "It shall be
unlawful for an employer to require as a condition of employment or continuation of
employment that a woman employee shall not get married, or to stipulate expressly or
tacitly that upon getting married a woman employee shall be deemed resigned or
separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a
woman employee merely by reason of her marriage." (Art. 136)
Because of her illegal dismissal, she is entitled to backwages from the time her
compensation was withheld from her to the time of her actual reinstatement.
Dinna is not entitled to night differential pay, overtime pay and holiday pay because she
belongs to one of those classes of employees who are not covered by the provision of
the Labor Code providing for these benefits. She is a worker paid by results, since her
compensation is determined by the tips and commission that she receives from her
guests.
Q: Fil-Aire Aviation Company (FIL-AIRE) 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) major Visayan
dialects, viz: Ilongo, Cebuano and Waray. Lourdes. 23 years old was accepted as
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she possessed all the qualifications. After passing the probationary period.
Lourdes 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. Lourdes was not hired
as a regular flight attendant. Consequently, she filed a complaint against FIL-
AIRE alleging that the pre-employment qualifications violate relevant provisions
of the Labor Code and are against public policy.
Is the contention of Lourdes tenable? Discuss fully. (1995 Bar Question)
SUGGESTED ANSWER:
The contention of Lourdes is tenable. When she was not hired as a regular flight
attendant by FIL-AIRE because she disclosed that she got married when she was 18
years old, the airline company violated the provision of the Labor Code which states:
It shall be unlawful for an employer to require as a condition of employment or

continuation of employment that a woman employee shall not get married, or to
stipulate expressly or tacitly that upon getting married a woman employee shall be
deemed resigned or separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of her marriage."
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 Mam-manu 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?
(5%) (2012 BAR)
Suggested Answer:
Yes. Man-manus 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 vs. NRLC, G.R. No.
118978, May 23, 1997 citing 45A Am. Jur. 2d, Job Discrimination, Sec. 506, p.468)
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Another Suggested Answer:
Yes, Inggas contention is tenable considering Art. 136 of the Labor Code which
prohibits discrimination against married women.
c. Prohibited acts
Q: Lydia Cancio was on her sixth and last month as a probationary employee of
the Banco Seguridad when she was confirmed to be pregnant. Being unmarried
and wanting to become a regular employee, she initially kept her pregnancy a
secret from her employer. She was subsequently appointed a regular employee
on the first month of her pregnancy.
Because of morning sickness, however, Lydia frequently absented herself from

work. After two more months, the personnel manager told her that her habitual
absences had become so intolerable that she would have to go. Replying that her
absences were caused by her pregnancy, Lydia asked for a leave of absence,
which was denied. She nevertheless went on leave and was dismissed for going
on leave without prior permission.
Lydia filed a complaint for illegal dismissal, praying that she be reinstated. The
Bank contested the complaint on the ground that she was not dismissed because
of her pregnancy but because of her absence without leave.
SUGGESTED ANSWER:
The dismissal is illegal. The Labor Code (in Art. 137(2) very clearly provides: It shall be
unlawful for any employer to discharge (a) woman (employee) on account of her
pregnancy, or while on leave or in confinement due to her pregnancy.
Of course, in the case, the woman employee asked for leave of absence because of her
pregnancy but this request was denied and she went on leave anyway.
The employer should have granted her request for leave, the request being made
because of her pregnancy.
Dismissal after she went on leave without prior permission is too harsh a punishment for
the pregnant woman who was absent without leave.
Q: (2000 Bar Question)
a) 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. Is the
policy violative of any provision of the Labor Code on employment of women?
(3%)
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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? (3%)
SUGGESTED ANSWER:
a) No, the policy does not violate the Labor Code. The practice is a valid exercise of
management function. Considering the nature and reason for existence of the school, It
may adopt such policy as will advance its laudable objectives. In fact, the policy accords
with the constitutional precept of inculcating ethical and moral values in schools. The
school policy does not discriminate against women solely on account of sex (Art. 135,
Labor Code) nor are the acts prohibited under Art. 137 of the Labor Code.
b) The school violated Art. 137 (2) of the Labor Code which states that: It shall be
unlawful for any employer to discharge such woman on account of pregnancy". The
pregnancy here could obviously have resulted from love and such only lends substance
to the saying that the heart has reasons of its own which reason does not know", a
matter that cannot be so casually equated with immorality". [Chua-Qua v. Clave, 189
SCRA 117(1990)]
ALTERNATIVE ANSWER:
No, because to tolerate pregnancy out of wedlock will be a blatant contradiction of the
schools laudable mission which, as already stated, accords with high constitutional
precepts.
This answer does not contradict the ruling in Chua- Qua where the teacher merely fell in
love with a bachelor student and the teacher, also single, did not get pregnant out of
wedlock.
d. Anti-Sexual Harassment Act (R.A. No. 7877)
Q: Atty. Renan, a CPA-lawyer and Managing Partner of an accounting firm,

conducted the orientation seminar for newly-hired employees of the firm, among
them, Miss Maganda. After the seminar, Renan requested Maganda to stay,
purportedly to discuss some work assignment. Left alone in the training room,
Renan asked Maganda to go out with him for dinner and ballroom dancing.
Thereafter, he persuaded her to accompany him to the mountain highway in
Antipolo for sight-seeing. During all these, Renan told Maganda that most, if not
all, of the lady supervisors in the firm are where they are now, in very productive
and lucrative posts, because of his favorable endorsement.
[a] Did Renan commit acts of sexual harassment in a work-related or

employment environment? Reasons. (3%)
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SUGGESTED ANSWER:
Atty. Renan is guilty of sexual harassment. This conclusion is predicated upon the
following consideration:
1. Atty. Renan has authority, influence or moral ascendancy over Miss Maganda;
2. While the law calls for a demand, request or requirement of a sexual favor, it is
not necessary that the demand, request or requirement of a sexual favor be
articulated in a categorical oral or written statement. It may be discerned, with
equal certitude from the acts of the offender. (Domingo vs. Rayala, 546 SCRA 90
[2008]);
3. The acts of Atty. Renan towards Miss Maganda resound with deafening clarity
the unspoken request for a sexual favor, regardless of whether it is accepted or
not by Miss Maganda.
4. In sexual harassment, it is not essential that the demand, request or requirement
be made as a condition for continued employment or promotion to a higher
position. It is enough that Atty.
Renans act result in creating an intimidating, hostile or offensive environment for Miss
Maganda.
Q: As a condition for her employment. Josephine signed an agreement with her

employer that she will not get married, otherwise, she will be considered resigned
or separated from the service.
Josephine got married. She asked Owen, the personnel manager, if the company
can reconsider the agreement. He told Josephine he can do something about it,
insinuating some sexual favors. She complained to higher authorities but to no
avail. She hires you as her counsel. What action or actions will you take? Explain.
5%. (2006 Bar Question)
SUGGESTED ANSWER:
As counsel for Josephine, I will file a complaint for work-related sexual harassment
which, as in the case at bar, occurs when a person who has authority, influence or
moral ascendancy over another demands, requests or otherwise requires any sexual
favor from the latter as a condition for, inter alia, the continued employment of said
individual (Sec. 3, RA 7877).
I will likewise file a complaint for illegal dismissal citing Art. 136 of the Labor Code which
provides that it is unlawful for an employer to require as a condition of continued
employment or continuation of employment that a woman employee shall not get
married, or to stipulate expressly or tacitly that upon getting married a woman employee
shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate
or otherwise prejudice a woman employee merely by reason of her marriage.
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I shall advise my client to file a complaint with the grievance machinery (if the
establishment is organized) or with the companys Committee on Decorum and
Investigation (organized or unorganized) tasked to investigate sexual harassment
cases. The personnel manager Owen can definitely be held administratively liable for
his action.
I shall also advise my client to file a criminal case for sexual harassment pursuant to
Republic Act No. 7877 .
I will not take any action at all because insinuating some sexual favor" is not an act of
sexual harassment which require demands, requests, or otherwise require any sexual
favor from the other. (Sec. 3, R.A. No. 7877).
Q: Carissa. a comely bank teller, was due for her performance evaluation which is
conducted every six months. A rating of "outstanding" is rewarded with a merit
increase. She was given a "below average" rating in the last two periods.
According to the bank's personnel policy, a, third rating of "below average" will
result in termination. Mr. Perry Winkle called Carissa into his office a few days
before submitting her performance ratings. He entitled her to spend the night with
him in his rest house. She politely declined. Undaunted, Mr. Winkle renewed his
invitation, and Carissa again declined. He then warned her to "watch out"
because she might regret, it later on. A few days later, Carissa found that her
third and last rating was again "below average." Carissa then filed a complaint for
sexual harassment against Mr. Winkle with the Department of Labor and
Employment, in his counter-affidavit, he claimed that he was enamored with
Carissa. He denied having demanded, much less received any sexual favors from
her in consideration of giving her an "outstanding' rating.
He also alleged that the complaint was premature because Carissa failed to refer
the matter to the Committee on Decorum and Discipline for investigation and
resolution before the case against him was filed. In her reply affidavit, Carissa
claimed that there was no need for a prior referral to the Committee on Decorum
and Discipline of her complaint.
Resolve the case with reasons. (5%) (2005 Bar Question)
SUGGESTED ANSWER:
I will hold Mr. Perry Winkle guilty of sexual harassment. This resolution is predicated
mainly upon the following considerations:
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1) Mr. Perry Winkle exercises authority, Influence or moral ascendancy over
Carissa;
2) Mr. Winkle's insistence in inviting Carissa "to spend the night with him in his rest
house" is pregnant with sexual meaning as to imply the request or demand for a
sexual favor;
3) My. Winkles warning of "watch out" clearly manifests that the refusal of such
sexual favor would jeopardize Carissa's continued employment; and
4) Mr. Winkle's invitation for such sexual favor will clearly result in an intimidating,
hostile, or otherwise offensive working environment for Carissa, Carissa is
correct in stating that there was no need for a prior referral of her complaint to the
Committee on Decorum and Discipline, because nothing in the law shall preclude
the victim of sexual harassment from instituting a separate and independent
action for damages and other affirmative relief (Section 6, R.A. No. 7877).
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? (5%) (2005 Bar Question)
SUGGESTED ANSWER:
Yes, the elements of sexual harassment are all present. The act of Mr. Barak was
committed in a workplace. Mr. Barak. as supervisor of Pedrito Masculado, has'
authority, influence and moral ascendancy over Masculado. Given the specific
circumstances mentioned in the question like Mr. Barak following Masculado to the
comfort room, etc. Mr. Barak was requesting a sexual favor from Masculado for a
favorable recommendation regarding the latter's employment. It is not impossible for a
male, who is a homosexual, to ask for a sexual favor from another male.
I do not see any sexual favor being solicited. Having a "little drink" in Mr. Barak's Condo
Unit, as condition for a "favorable recommendation is not one of the prohibited acts
enumerated in Sec. 3 (a) of R.A. 7877, otherwise known as the Anti-Sexual Harassment
Act of 1995.
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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. (3%) (2000 Bar
Question)
SUGGESTED ANSWER:
Yes, because the Personnel Manager, a man, is in a position to grant or not to grant a
favor (a job) to the applicant. Under the circumstances, inviting the applicant for dinner
or dancing creates a situation hostile or unfriendly to the applicants chances for a job if
she turns down the invitation. (Sec. 3 (a) (3), R.A. No. 7877, Anti-Sexual Harassment
Act].
ALTERNATIVE ANSWER:
There is no sexual harassment because there was no solicitation of sexual favor in

exchange of employment. Neither was there any intimidating, hostile or offensive
environment for the applicant.
Q: In the course of an interview, another female applicant inquired from the same
Personnel Manager if she had the physical attributes required for tire position she
applied for. The Personnel Manager replied: You will be more attractive if you
will wear micro-mini dresses without the undergarments that ladies normally
wear. Did the Personnel Manager, by the above reply, commit an act of sexual
harassment? Reason. (3%) (2000 Bar Question)
SUGGESTED ANSWER:
No, the Personnel Managers reply to the applicant's question whether she qualifies for
the position she is applying for does not constitute sexual harassment. The Personnel
Manager did not ask for or insinuate a request for a sexual favor in return for a favorable
action on her application for a job. But the Managers statement may be offensive if
attire or physical look is not a criterion for the job being applied for.
ALTERNATIVE ANSWER:
Yes. The remarks would result in an offensive or hostle environment for the employee.
Moreover, the remarks did not give due regard to the applicants' feelings and it is a
chauvinistic disdain of her honor, justifying the finding of sexual harassment. (Villarama
v. NLRC, 236 SCRA 280 (1994)].
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K. Employment of Minors (Labor Code and R.A. No. 7678, R.A. No. 9231)
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 had 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 P100.00 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. Is her defense tenable? Why? (5%) (2012 BAR)
Suggested Answer:
The defense is not tenable. Children below fifteen (15) years of age shall not be
employed except:
1. When a child works directly under the sole responsibility of his/her parents or
legal guardian and where only members of his/her family are employed; or
2. Where a childs employment or participation in public entertainment or
information through cinema, theater, radio, television or other forms of media
is essential [ Section 12, RA 7610, as amended by RA 9231].

xxx
[b] Employment of children below fifteen (15) years of age in any public or
private establishment is absolutely prohibited.
SUGGESTED ANSWER:
False. Children below fifteen (15) years of age (can be employed) when he/she works
directly under the sole responsibility of his/her parents or guardian, and his employment
does not in any way interfere with his schooling.
Q: Determine whether the following minors should be prohibited from being hired
and from performing their respective duties indicated hereunder: 5% (2006 Bar
Question)
1. A 17-year old boy working as a miner at the Walwaldi Mining

Corporation.
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SUGGESTED ANSWER:
Yes, he should be prohibited from being hired and from performing the duties of a miner
because such constitutes hazardous work under D.O. No. 04 Series of 1999. Art. 139
(c) of the Labor Code expressly prohibits the employment of persons below 18 years of
age in an undertaking which is hazardous or deleterious in nature as determined by the
Secretary of Labor.
2. An 11-year old boy who is an accomplished singer and performer in

different parts of the country.
SUGGESTED ANSWER:
No, he should not be prohibited from being hired and from performing as a singer.
Under Art. VIII Sec. 12 par. 2 of RA 7610 as amended by RA 7658, this constitutes an
exception to the general prohibition against the employment of children below 15 years
of age, provided that the following requirements are strictly complied with: (a) the
employer shall ensure the protection, health, safety and morals of the child; (b) the
employer shall institute measures to prevent the childs exploitation or discrimination
taking into account the system and level of remuneration, and the duration and
arrangement of working time; and (c) the employer shall formulate and implement,
subject to the approval and supervision of competent authorities, a continuing program
for training and skill acquisition of the child. Moreover, the child must be directly under
the sole responsibility of his parents or guardian and his employment should not in any
way interfere with his schooling.
3. A 15-year old girl working as a library assistant in a girls high

school.
SUGGESTED ANSWER:
No, she should not be prohibited from working as a library assistant because the
prohibition in the Labor Code against employment of persons below 18 years of age
merely pertains to employment in an undertaking which is hazardous or deleterious in
nature as identified in the guidelines issued by the DOLE Secretary. Working as a
library assistant is not one of undertakings identified to be hazardous under D.O. No. 04
Series of 1999.
4. A 16-year old girl working as a model promoting alcoholic

beverages.
SUGGESTED ANSWER:
Yes, she should be prohibited from working as a model promoting alcoholic beverages.
RA 7610 categorically prohibits the employment of child models in all commercials or
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advertisements promoting alcoholic beverages and intoxicating drinks, among other
things.
5. A 17 -year old boy working as dealer in a casino
SUGGESTED ANSWER:
Yes, he should be prohibited from working as a dealer in a casino, because Art. 140 of
the Labor Code prohibits the employment of persons below 18 years of age in an
undertaking which is hazardous or deleterious in nature as identified in the guidelines
issued by the DOLE Secretary. Working as a dealer in a casino is classified as
hazardous under D.O. No. 04 Series of 1999 as it exposes children to physical,
psychological or sexual abuses.
Q: Discuss the statutory restrictions on the employment of minors? (2007 Bar

Question)
SUGGESTED ANSWER:
Article 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 educational and
medical certificates, and a separate file for special work permits issued by 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. (Arts. 110, 108, and
109, PD 603 of the Revised Penal Code)
Art. 272 provides that no person shall retain a minor in service against his will, in
payment of a debt incurred by an ascendant, guardian or person entrusted with the
custody of the said minor.
Art. 278 enumerates various acts of exploitations of minors prohibited under the law, to
wit:
1. Any person who shall cause any boy or girl under 16 years of age to perform
any dangerous feat of balancing physical strength or contortion.
2. Any person who, being an acrobat, gymnast, rope-walker, diver, wild animal
tamer or circus manager or engaged in a similar calling, shall employ in
exhibitions of these kinds of children under 16 years of age who are not his
children or descendants.
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3. Any person engaged in any of the callings enumerated in the next paragraph
who shall employ any descendant of his under 12 years of age in such
dangerous exhibitions.
4. Any ascendant, guardian, teacher or person entrusted in any capacity with
the care of a child under 16 years of age, who shall deliver such child
graciously to any person following any of the callings enumerated in par. 2
hereof, or to any habitual vagrant or beggar.
PD 603: Child and Youth Welfare Code
Art. 107 of Child and Youth Welfare Code provides that children below 16 years of age
may only be employed to perform light work which is not harmful to their safety, health
or normal development, and which is not prejudicial to their studies.
RA 9231, amending RA 6710
RA 6710 included a provision allowing a minor below 15 years of age to participate in

public entertainment or information through cinema, theater, radio or television,
provided the contract is concluded by the childs parents or legal guardian, with the
express agreement of the child, and approval of DOLE. The employer is charged to
secure a work permit for the child with DOLE prior to engaging the child to work. The
employer is also required to: (a) ensure the protection, health, safety, morals and
normal development of the child; (b) institute measures to prevent the childs
exploitation and discrimination taking into account the system and level of remuneration,
and the duration and arrangement of working time; and (c) formulate and implement a
continuing program for training and skills acquisition of the child.
The Department of Education is charged to promulgate a course design under its non-
formal program aimed at promoting the intellectual, moral and vocational efficiency to
working children who have not undergone or finished elementary or secondary
education.
Q: You were asked by 3 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. (2%)
SUGGESTED ANSWER:
I will advise the paint manufacturing company that it cannot hire a person who is aged
seventeen (17). Art. 139 (c) of the Labor Code provides that a person below eighteen
(18) years of age shall not be allowed to work in an undertaking which is hazardous or
deleterious in nature as determined by the Secretary of Labor. Paint manufacturing has
been classified by the Secretary of Labor as a hazardous work.
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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 such 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. (5%) (2005 Bar Question)
SUGGESTED ANSWER:
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, the provisions of
the alleged Department Order of DOLE to the contrary notwithstanding. A mere
Department Order cannot prevail over the express prohibitory provisions of the Labor
Code.
[Note: Sec. 3, RA9231 allows a child below 15 years of age to work for not more than
20 hours a week; provided, that the work shall not be more than four (4) hours at any
given day; provided. further, that he does not work between 8 o'clock in the evening and
6 o'clock in the morning of the following day; and provided, finally, that the work is not
hazardous or deleterious to his health or morals. THIS IS A RECENT LAW APPROVED
ON JULY 28, 2003, which is beyond the cut-off period of the Bar Exams]
Q: Iya, 15 years old, signed up to model a clothing brand. She worked from 9am
to 4 pm on weekdays and 1pm to 6pm on Saturdays for two (2) weeks. She was
issued a child working permit under RA 9231. Which of the following statements
is the most accurate? (2012 Bar Question)
a. Working permit for Iyas employment is not required because the job is nit
hazardous;
b. Her work period exceeds the required working hours for children aged 15
years old;
c. TO require a 15-year old to work without obtaining the requisites working
permit is a form of child labor;
d. Iya, who was engaged in a work that is not child labor, is a working child.
SUGGESTED ANSWER:
d. Iya, who was engaged in a work that is not child labor, is a working child [Sec.
12-A, 8 hours but not beyond 40 hours].
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Q: In what situation is an employer permitted to employ a minor? (2012 Bar
Question)
a. 16-year old child actor as a cast member in soap opera working 8

hours a day, 6 days a week;
b. A 17-year old in deep sea-fishing;
c. A 17-year old construction worker;
d. A 17-year old assistant cook in a family restaurant.
SUGGESTED ANSWER:
d. A 17-year old assistant cook in a family restaurant [Sec. 12, RA 7610, as

amended by Sec. 2, RA 9231, Dec. 19, 2003]
L. 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)
Q: In the case of a househelper, reinstatement is not a statutory relief for unjust

dismissal because of the confidentiality of his or her job. Instead, the
househelper shall be paid (2011 BAR)
(A) an indemnity equivalent to 15 days' pay plus compensation already earned.

(B) a separation pay equivalent to one month's pay per year of service.
(C) a separation pay equivalent to one-half month's pay per year of service.
(D) 15 days' pay as indemnity plus wages lost from dismissal to finality of
decision.
Q: Soledad, a widowed school teacher, takes under her wing one of her students,
Kiko, 13 years old, who was abandoned by his parents and has to do odd jobs in
order to study. She allows Kiko to live in her house, provides him with clean
clothes, food, and a daily allowance of 200 pesos. In exchange, Kiko does routine
housework, consisting of cleaning the house and doing errands for Soledad. One
day, a representative of the DOLE and the DSWD came to Soledad's house and
charged her with violating the law that prohibits work by minors. Soledad objects
and offers as a defense that she was not requiring Kiko to work as the chores
were not hazardous. Further, she did not give him chores regularly but only
intermittently as the need may arise. Is Soledad's defense meritorious? (2015 Bar
Question)
SUGGESTED ANSWER:
Soledads defense is meritorious. Sec. 4(d) of the Kasambahay Law (RA 10361)
provides that the term Domestic Worker shall not include children who are under foster
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family arrangement, and are provided access to education and given an allowance
incidental to education, i.e. baon, transportation, school projects and school activities.
Q: Which of the following statements is the most accurate? (2012 Bar Question)
a. Domestic helpers with monthly income of at least P3,000.00 are

compulsory members of the SSS Law;
b. House helpers with monthly income of at least P2,000.00 are compulsory
members of the SSS Law;
c. Domestic helpers, 55 years of age and who worked for at least five (5)
years, are covered by the Retirement Pay Law under optional retirement,
in the absence of a CBA;
d. Domestic helpers in the personnel service of another are not entitled to
13th month pay.
SUGGESTED ANSWER:
d) Domestic helpers in the personnel service of another are not entitled to 13th
month pay.
Q: What is the nature of employment of househelpers? (2012 Bar Question)
a. Seasonal;
b. Fixed-term;
c. Regular;
d. Probationary.
SUGGESTED ANSWER:
a) Fixed-Term [Not to exceed 2 years but renewable for such periods as may be
agreed upon by the parties [Art. 242, Labor Code]
Q: Is it correct to say that under Philippine law a househelper has no right to

security of tenure? (2011 BAR)
(A) No, since a househelper can be dismissed only for just cause or when his
agreed period of employment ends.
(B) Yes, since it is the employer who determines the period of his service.
(C) Yes, since a househelper can be dismissed with or without just cause.
(D) No, since a househelper can be dismissed only for just cause, except when
he has been employed for a definite period not exceeding one year.
Q: Linda was employed by Sectarian University (SU) to cook for the members of a
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.
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Linda filed a complaint for illegal dismissal, but her employer SU contended that
Linda was not a regular employee but a domestic househelp. Decide. (2014 Bar
Question)
SUGGESTED ANSWER:
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
employers home to minister exclusively to the personal comfort and enjoyment of the
employers 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., Inc. 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.
The complaint for illegal dismissal should be dismissed. There was no showing that in
hiring the 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: Albert, a 40-year old employer, asked his domestic helper, Inday, to give him a
private massage. When Inday refused, Albert showed her Article 141 of the Labor
Code, which says that one of the duties of a domestic helper is to minister to the
employers personal comfort and convenience.
[a] Is Indays refusal tenable? Explain. (3%) (2009 Bar Question)
xxx
SUGGESTED ANSWER:
Yes. Indays refusal to give her employer a private massage is in accordance with law
because the nature of the work of a domestic worker must be in connection with
household chores. Massaging is not a domestic work.
Q: May a househelp be assigned to non-household work? (2007 Bar Question)
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SUGGESTED ANSWER:
A househelp may be assigned to non-household work' but a househelper assigned to

work in a commercial, industrial or agricultural enterprise should have a wage or salary
rate not lower than that provided for agricultural or non-agricultural workers as
prescribed by law.
No. Pursuant to Article 141 of the Labor Code, a househelper is defined as a person
who renders domestic or household services exclusively to a household employer.
Domestic or household service is defined as service in the employers home, which is
usually necessary or desirable for the maintenance and enjoyment thereof, and includes
ministering to the personal comfort and convenience of the members of the employers
household, including services of family drivers. (Rule XIII, Section 1(b), Book 3 of the
Labor Code)
A househelper cannot be assigned non-household work because to do so would place

that person outside the ambit of the special Labor Code provisions on househelpers. In
such a situation, terms and conditions of employment would differ.
Q: Inday was employed by mining company X to perform laundry service at its

staffhouse. While attending to her assigned task, she slipped and hit her back on
a stone. Unable to continue with her work, she was permitted to go on leave for
medication, but thereafter she was not allowed to return to work. She filed a
complaint for illegal dismissal but her employer X contended that Indav was not a
regular employee but a mere househelp. Decide. (2007 Bar Question)
SUGGESTED ANSWER:
Inday is a regular employee. Under Rule XIII, Section 1(b), Book 3 of the Labor Code,
as amended, the terms househelper or domestic servant are defined as follows:
The term househelper as used herein is synonymous to the term domestic servant
and shall refer to any person, whether male or female, who renders services in and
about the employers home and which services are usually necessary or desirable for
the maintenance and enjoyment thereof, and ministers exclusively to the personal
comfort and enjoyment of the employers family.
The foregoing definition clearly contemplates such househelper or domestic servant

who is employed in the employers home to minister exclusively to the personal comfort
and enjoyment of the employers family. The definition cannot be interpreted to include
househelp or laundrywomen working in staffhouses of a company, like Inday who
attends to the needs of the companys guest and other persons availing of said facilities.
The criteria is the personal comfort and enjoyment of the family of the employer in the
home of said employer. While it may be true that the nature of the work of a
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househelper, domestic servant or laundrywoman in a home or in a company staffhouse
may be 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 staffhouses or within he
premises of the business of the employer. In such instance, they are employees of the
company or employed in the business concerned entitled to the privileges of a regular
employee.
The mere fact that the househelper or domestic servant is working within the premises
of the business of the employer and in relation to or in connection with its business, as
in its staffhouses for its guest or even for its officers and employees, warrants the
conclusion that such househelper or domestic servant is and should be considered as a
regular employee of the employer and not as a mere family househelper or domestic
servant as contemplated in Rule XIII, Section 1(b), Book 3 of the Labor Code, as
amended. (Apex Mining Company, Inc. v. NLRC, 196 SCRA 251(1991]).
Q: Nova Banking Corporation has a rest house 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 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? (3%)
SUGGESTED ANSWER:
No, they are not domestic employees. They are bank employees because the rest
house and recreational facility are business facilities as they are for use of the top
executives and clients of the bank. [Art. 141, Labor Code; Apex Mining Co., Inc. v.
NLRC, 196 SCRA 251 (1991)-, Traders Royal Bank v. NLRC, G.R. No. 127864,
December 22, 19991.
Q: The weekly work schedule of a driver is as follows:
Monday, Wednesday, Friday - Drive the family car to bring and fetch the children
to and from school.
Tuesday, Thursday, Saturday- Drive the family van to fetch merchandise from
suppliers and deliver the same to a boutique in a
mall owned by the family.
Is the driver a househelper? [3%)
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The same driver claims that for work performed on Tuesday. Thursday and
Saturday, he should be paid the minimum daily wage of a driver of a commercial
establishment.
Is the claim of the driver valid? [2%] (1998 Bar Question)
SUGGESTED ANSWER:
The driver is a househelper. A person is a househelpers or is engaged in domestic or

household service if he/she renders services in the employer's home which are usually
necessary or desirable for the maintenance and enjoyment thereof and includes
ministering to the personal comfort and convenience of the members of the employer's
household including the services of family drivers.
A family driver who drives the family van to fetch merchandise from suppliers and
delivers the same to a boutique in a mall owned by the family for whom he works should
be paid the minimum daily wage of a driver in a commercial establishment.
The Labor Code (in Article 143) provides that no househelper shall be assigned to work
in a commercial, industrial or agricultural enterprise at a wage or salary rate lower than
that provided by law for agricultural or non-agricultural workers.
The weekly work schedule of a driver is as follows: Monday, Wednesday, Friday -

drive the family car to bring and fetch the children to and from school. Tuesday,
Thursday, Saturday - drive the family van to fetch merchandise from suppliers
and deliver the same to a boutique in a mall owned by the family.
a. Is the driver a house helper? (5%) (2012 BAR)
Suggested Answer:
Yes, insofar as concerns his work on Monday, Wednesday and Friday, as he
ministers to the personal comfort and enjoyment of his employers family during
those days. [Apex Mining Company, Inc. v. NLRC (G.R. No. 94951, April 22,
1991, 196 SCRA 251, 254-255)].
b. The same driver claims that for work performed on Tuesday, Thursday and
Saturday, he should be paid the minimum daily wage of a driver of a
commercial establishment. Is the claim of the driver valid? (5%) (2012 BAR)
Suggested Answer:
Yes, as during said days, he already works not as a domestic servant but as a
regular employee in his employers boutique in a mall [Apex Mining Company,
Inc. vs. NLRC (supra)].
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Q: Rosa Cartagena, a 14-year-old orphan, was hired as a domestic helper by
Elvira Pacheco, a friend of Rosas aunt, who could no longer support her. The
aunt and Elvira agreed that Rosa would serve the Pachecos for three years, with
the clear understanding that the Pachecos would see her through high school.
The Pachecos never sent Rosa to high school. After two years of unfulfilled
promises for her education, Rosa went back to her aunt, who confronted Elvira
about her breach of their agreement. The aunt demanded that Rosa be paid the
cash equivalent of the three years of high school education that Rosa was
denied. Elvira contended that Rosa quit before the end of the fixed employment
period and, therefore, is not entitled to anything. The aunt filed a complaint
against the Pachecos.
If you were the labor arbiter, how would you decide the case? (1987 Bar Question)
SUGGESTED ANSWER:
As the Labor Arbiter, assuming Rosas aunt as her guardian, I will hold that Rosas
quitting was justifiable and that the Pachecos should pay the cash equivalent of at least
two (2) years of high school education.
Rosas quitting is justifiable. The Labor Code (in Art. 142) provides that the original
contract of domestic service shall not last for more than two (2) years. The original
contract of Rosa with the Pachecos was fixed for three (3) years. Thus, this contract
should be considered as only for two (2) years. Rosa, therefore, may not be considered
as terminating the contract before the expiration of its term. She left after two (2) years.
She also left for a justifiable reason. Her employers were not complying with what they
agreed they shall do under the contract, namely, to see her through high school.
Under the Labor Code (in Art. 146), it is the legal obligation of the employer to give to
his househelper who is under the age of eighteen (18) years (Rosa is fourteen (14)
years old) an opportunity for at least elementary education. Further, the Code (in the
same Art.) provides that the cost of such education shall be part of the househelpers
compensation, unless there is a stipulation to the contrary.
But what Rosa here is claiming is the cost of high school and not just elementary
education. There is no law prohibiting the employer from obligating himself to give more
than just elementary education, which the employer did in the case. Thus, the employer
should comply with what he agreed to do under the contract he entered into.
Q: Under the Labor Code, its provisions on working conditions, including the
eight-hour work day rule, do not apply to domestic helpers. Does it follow from
this that a domestic helper's workday is not limited by law? (2011 BAR)
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(A) No, since a domestic helper cannot be required to work more than ten hours
a day.
(B) Yes, since a domestic helper's hours of work depend on the need of the
household he or she works for.
(C) No, because a domestic helper is legally entitled to overtime pay after ten
hours of work.
(D) Yes, a domestic helper may be required to work twelve hours a day or
beyond.
M. Employment of Homeworkers
Q: In industrial homework, the homeworker does at his home the work that his
employer requires of him, using employer-supplied materials. It differs from
regular factory work in the sense that (2011 BAR)
(A) the workers are not allowed to form labor organizations.

(B) the workers' pay is fixed by informal agreement between the workers and
their employer.
(C) the workers are under very little supervision in the performance or method of
work.
(D) the workers are simply called homeworkers, not employees, hence not
covered by the social security law.
Q: Albert, a 40- year old employer, asked his domestic helper, Inday, to give him a
private massage. When Inday refused, Albert showed her Article 141 of the Labor
Code, which says that one of the duties of a domestic helper is to minister to the
employers personal comfort and convenience.
xxx
[b] Distinguish briefly, but clearly, a househelper from a homeworker. (2%)

(2009 Bar Question)
SUGGESTED ANSWER:
Art. 141. - Domestic Helper - one who performs services in the employers house which
is usually necessary or desirable for the maintenance and enjoyment thereof and
includes ministering to the personal comfort and convenience of the members of the
employers household, including the services of a family driver.
Art. 153.- Homeworker -is an industrial worker who works in his/her home processing
raw materials into finished products for an employer. It is a decentralized form of
production with very limited supervision or regulation of methods of work.
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
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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. (3%) (2000 Bar Question)
SUGGESTED ANSWER:
No, she is actually an office worker. She is not an industrial homeworker who accepts
work to be fabricated or processed at home for a contractor, which work, when finished,
will be returned to or repurchased by said contractor. [Art. 155, Labor Code)
Q: Ngipin Toothpaste Co., Inc. manufactured and sold toothpaste in the market.' It
considered labor contracting as a cost reduction move. The plan was for the
company to con-tinue manufacturing the toothpaste in its facilities up to the
stage where it was already packed in labelled plastic tubes and capped. These
would then be taken to the homes of women in a militant squatter area near the
plant. The women would be given the filled tubes and flat, die-cut cardboard
pieces with indented folds printed with the label. These flats cost P0.30 per
piece. The women would form the boxes, apply paste to one side so it would hold
together as a box, and then put the filled tubes into it. Management thought it was
a good idea as it would give employment and help bring the women into the
money economy. The job was not hard to learn. The women would do all the work
at home in their free time.
The companys personnel staff took up the concept with the leader of the
squatter womens group who agreed it was a good idea. They showed her how
the job was to be done. She learned the work immediately. She said that the
women would be willing to accept the home work, but they would insist on being
paid in accord with the law. She also told the companys representatives that to
help reduce their headaches in the operation, she was willing to be their main
contractor and she would sub-contract the work to her neighbors. She also said
that she wants that the housewives whom she engages be allowed to use the
labor of the children in their homes to increase the number of the boxes that they
can assemble, and the tubes that they can box.
Management was concerned about boxes that would be very dirty as these would
be spoils.
They had no idea what sort of legal problems they should resolve, and
compensation arrangements they must make with the women or the lady
volunteering to be the main contractor, so they consulted you as a lawyer. (1988
Bar Question)
Management asks for your advice on the following matters:
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(a) Would the women who are engaged to form the boxes and pack toothpaste
tubes into them be considered employees of the company? Reasons.
(b) Can the woman workers use their children regardless of age, to help them
perform their tasks? Reasons.
(c) May the company deduct spoilage costs ofT0.30 per very dirty box and the
value of tubes lost or not accounted for it is provided for in the contract for piece
work?
Answer:
(a) The more specific name of the women here could be industrial homeworkers.
In here, the workers receives articles or materials to be processed or fabricated in or
about a house and thereafter, these articles and materials are returned after they
processed or fabricated. (Art. 153). As such industrial homeworkers, they are not
employee because their so-called employer does not have control over those they (the
industrial homeworkers) will do their work. But the Labor Code (Art. 154) provides that
regulations or orders should be issued to assure the minimum terms and conditions of
employment applicable to industrial homeworkers.
(b) If the child here works directly under the sole responsibility of his parent or
guardians, and their employment does not in any way interfere with their schooling, they
could work regardless of their young age.
(c) The Labor Code (in Art. 114) provides that no employer shall require his worker
to make deposits from which deductions shall be made for the reimbursement of loss or
damage to tools, materials or equipment supplied by the employer, except where the
employer is engaged in such trades, occupation or business where the practice of
making deduction or requiring deposits is a recognized one or is necessary or desirable
as determined by the Secretary of Labor in appropriate rules and regulations. Thus, if
the Secretary of Labor has adopted the necessary rules and regulations mentioned
above, the deduction for spoilage will be legal.
N. Apprentices and Learners
Q: A handicapped worker may be hired as apprentice or learner, provided (2011

BAR)
(A) he waives any claim to legal minimum wage.

(B) his work is limited to apprenticeable job suitable to a handicapped worker.
(C) he does not impede job performance in the operation for which he is hired.
(D) he does not demand regular status as an employee.
Q: The apprenticeship program should be supplemented by theoretical

instruction to be given by
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(A) the apprentice's school only where the apprentice is formally enrolled as a
student.
(B) the employer if the apprenticeship is done in the plant.
(C) the civic organizations that sponsor the program.
(D) the Department of Labor and Employment.
Q: What is not a prerequisite for a valid apprenticeship agreement? (2012 Bar

Question)
a. Qualifications of an apprentice are met;

b. A duly executed and signed apprenticeship agreement;
c. The apprenticeship program is approved by the Secretary of Labor;
d. Included in the list of apprenticeable occupation of TESDA.
SUGGESTED ANSWER:
c. The apprenticeship program is approved by the Secretary of Labor. [Sec 18, RA 7796
The apprenticeship Program of DOLE shall be transferred to TESDA which shall
implement and administer said program].
Q: Which is a characteristic of the learner? (2012 Bar Question)
a. A person is hired as a trainee in an industrial occupation;

b. Hired in a highly technical industry;
c. Three (3) months practical on-the-job training with theoretical instruction;
d. At least 14 years old.
SUGGESTED ANSWER:
a) A person is hired as a trainee in an industrial occupation. [Art. 73, Labor Code]
Q: Both apprenticeship and learnership are government programs to provide

practical on-the-job training to new workers. How do they differ with respect to
period of training? (2011 BAR)
(A) In highly technical industries, apprenticeship can exceed 6 months;

learnership can exceed one year.
(B) Apprenticeship cannot exceed 6 months; learnership can.
(C) Apprenticeship shall not exceed six months; while learnership shall not
exceed three months.
(D) The law lets the employer and the apprentice agree on the apprenticeship
period; but the law fixes learnership period at six months in non-technical
industries.
Q: Although both are training programs, apprenticeship is different from

learnership in that (2011 BAR)
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(A) a learner may be paid 25% less than the legal minimum wage while an
apprentice is entitled to the minimum wage.
(B) apprenticeship has to be covered by a written agreement; no such formality is
needed in learnership.
(C) in learnership, the employer undertakes to make the learner a regular
employee; in apprenticeship, no such undertaking.
(D) a learner is deemed a regular employee if terminated without his fault within
one month of training; an apprentice attains employment status after six
months of apprenticeship.
O. Persons with disability (R.A. No. 7277, as amended by R.A. No. 9442)
a. Definition
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. (5%) (2000 Bar Question)
SUGGESTED ANSWER:
No, low IQ or low efficiency does not make the worker handicapped in the
contemplation of law.
Handicap means such physical or mental infirmity that impairs capacity to work. The
deficiency may also be due to age or injury. (Art. 78, Labor Code).
Q: According to Article 78 of the Labor Code, a handicapped worker is one whose

earning capacity is impaired by the following, except: (2012 Bar Question)
a. Age;
b. Physical Deficiency;
c. Mental Deficiency;
d. Psychological Deficiency.
SUGGESTED ANSWER:
d) Psychological Deficiency [Art. 78, Labor Code]
b. Rights of persons with disability
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.
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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? [5%]
SUGGESTED ANSWER:
No, the employer cannot classify the lady worker as a handicapped worker because
according to the facts in the question, her deficiencies do not impair her working ability.
If her earning capacity is therefore not also impaired, then she cannot be considered a
handicapped worker.
Because of the above fact, the employer shall not pay her less than the applicable daily
minimum wage. (See Article 78 of the Labor Code)
Q: Which of the following is not a privilege of a person with disability under the
Magna Carta for disabled persons? (2012 Bar Question)
a. At least 20% discount on purchase of medicines in all drugstores;

b. Free transportation in public railways;
c. Educational assistance in public and private schools through scholarship
grants;
d. A and C.
SUGGESTED ANSWERS:
a) At least 20% discount on purchase of medicines in all drugstores [Magna

Carta of PWDs]
b) Free transportation in public railways.
c) Prohibition on discrimination against persons with disability
d) Incentives for employers
Q: The minimum wage prescribed by law for persons with disability is

__________. (2013 Bar Questions)
(A) 50% of the applicable minimum wage

(B) 75% of the applicable minimum wage
(C) 100% of the applicable minimum wage
(D) the wage that the parties agree upon, depending on the capability of the disabled.
(E) the wage that the parties agree upon, depending on the capability of the disabled,
but not less than 50% of the applicable minimum wage
SUGGESTED ANSWER:
(B)
Note: This is the general rule. As an exception, if the employee is qualified to work and
the disability has nothing to do with the work, the employee is entitled to 100%.
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Q: What is the financial incentive, if any, granted by law to SPQ Garments whose
cutters and sewers in its garments-for-export operations are 80% staffed by deaf
and deaf-mute workers? (2013 Bar Questions)
(A) Additional deduction from its gross income equivalent to 25% of amount paid as
salaries to persons with disability.
(B) Additional deduction from its gross income equivalent to 50% of the direct costs of
the construction of facilities for the use of persons with disability.
(C) Additional deduction from its net taxable income equivalent to 5% of its total payroll
(D) Exemption from real property tax for one (1) year of the property where facilities for
persons with disability have been constructed.
(E) The annual deduction under (A), plus a one-time deduction under (B).
SUGGESTED ANSWER:
(A)
Basis: Magna Carta for Disabled Persons.
c. Prohibition on discrimination against 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? 5% (2006 Bar Question)
SUGGESTED ANSWER:
Yes, their action will prosper. They are doing necessary or desirable jobs and are
qualified for the job, and therefore they should be treated like other qualified able-bodied
employees (Bernardo v. NLRC and Far East Bank, 310 SCRA 186 [1999]). They cannot
be terminated simply because of the expiration of the contract. The nature of their work
gives them the status of regular employees. What determines regularity is not the
employment contract but the nature of the job (A.M. Oreta and Co. Inc. v. NLRC, 176
SCRA 218 [1989]).
No. their action will not prosper. The employment contract in this case is an example of
a fixed-term employment contract, i.e. one to which the parties by free choice have
assigned a specific date of termination. It is not per se illegal or against public policy. To
be valid, it must be shown that the fixed period was knowingly and voluntarily agreed
upon by the parties. There should have been no force, duress, or improper pressure
brought to bear upon the employee. Neither should there be any other circumstance
that vitiates the employees consent. Moreover, the employer and employee must have
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dealt with each other on more or less equal terms with no moral dominance being
exercised by the employer over the employee. Should the contract in the case at bar be
shown to comply with the aforementioned requirements, the action for illegal dismissal
will not prosper; otherwise, it should (Brent School v. Zamora, 181 SCRA 702 [1990]).
Yes, the employer can classify the lady worker as a handicapped worker because her
earning capacity maybe impaired by her physical deficiencies. As such handicapped
worker, the employer may enter into an employment agreement with her whereby the
rate to be paid to her may be les* than the applicable legal minimum wage but not less
than 75% of such wage.
For humanitarian reasons, a bank hired several handicapped workers to count

and sort out currencies. The handicapped workers knew that the contract was
only for a period of six-months and the same period was provided in their
employment contracts. After six months, the bank terminated their employment
on the ground that their contract has expired. This prompted the workers to file
with the Labor Arbiter a complaint for illegal dismissal. Will their action prosper?
Why or why not? (5%) (2012 BAR)
Suggested Answer:
No. An employment contract with a fixed term terminates by its own terms at the end of
such period. The same is valid if the contract was entered into by the parties on equal
footing and the period specified was not designed to circumvent the security of tenure of
the employees. (Brent School v. Zamora, 181 SCRA 702).
IV. Termination of Employment
Q: FACTS: 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 resignation 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. (1999 Bar Question)
1. Is the company guilty of illegal dismissal? Why? (3%)
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SUGGESTED ANSWER:
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.
ALTERNATIVE ANSWER:
The company is not guilty of illegal dismissal.
According to the facts of the case, the employees opted to resign voluntarily,
considering the generous benefits given to them in connection with such resignation.
Voluntary resignation cannot be considered as illegal dismissal. (Samaniego v. NLRC,

198 SCRA 111)
2. Can the quitclaim be annulled on the ground of dire necessity? Why?

(2%)
SUGGESTED ANSWER:
A quitclaim case can be annulled on the ground of its being entered into involuntarily by
employees because of dire necessity. Thus, if it was dire necessity that forced a
worker tc sign a quitclaim even if the amount of money given to him by the employer
was very much less than what the workers was entitled to receive, then the quitclaim
was not voluntary, and thus, the said quitclaim Is null and void. In a case (Veloso v.
DOLE, 200 SCRA 201) the Supreme Court held that dire necessity" is not an
acceptable ground for annulling the releases, especially since it has not been shown
that the employees had been forced to execute them. It has not been proven that the
considerations for the quitclaims were unconscionably low and that the petitioners had
been tricked into accepting them.
Q: When the employer or his representative hurls serious insult on the honor or
person of the employee, the law says that the employee (2011 BAR)
(A) may leave work after at least a five-day notice to the employer.
(B) may leave work at any time and file for constructive dismissal.
(C) may leave work without giving a 30-day notice to the employer.
(D) may abandon his job at once.
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A. Employer-employee relationship
Juicy Bar and Night Club allowed by tolerance fifty (50) Guest Relations Officers
(GROs) 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, were free to ply their trade elsewhere
at anytime, but once they enter the premises of the night club, they Were 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 lnaapi (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. Juicy Bar and Night Club opposed the petition for Certification
Election on the singular ground of absence of employer-employee 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. (5%) (2012 BAR)
Suggested Answer:
Yes. The GROs worked under the direct supervision of the Nite Club Manager for a
substantial period of time. Hence, under Art. 138, with or without compensation, the
GROs are to be deemed employees. As such, they are entitled to all the rights and
benefits granted to employees/workers under the Constitution and other pieces of labor
legislation including the right to form labor organizations for purposes of collective
bargaining. [Const., Art. XIII, Sec. 3; Labor Code, Art. 243).
Another Alternative Answer:

No. While the GROs are considered employees of Juicy Bar and Night Club by fiction of
law for purposes of labor and social legislation (ART. 138, Labor Code), Art. 243 of the
Labor Code however excludes ambulant, intermittent and itinerant workers xxx ad
those without any definite employers such as the GROs here, from exercising the right
to self-organization xxx for purposes of collective bargaining. They can only form labor
organization for their mutual aid and protection.
Q: What are the rights of an employer and an employee? (1996 Bar Question)
SUGGESTED ANSWER:
The Constitution in Art. XIII, Section 3 provides for the following rights of employers and
employees:
a) Employers Right to a reasonable return on investments, and to expansion and
growth.
b) To a just share in the fruits of production;
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c) Right to self organization, collective bargaining and negotiations and peaceful
concerted ac-tivities, including the right to strike in accordance with law;
d) To security of tenure, humane conditions of work, and a living wage; and
e) To participate in policy and decision-making processes affecting their rights and
benefits as may be provided by law.
ALTERNATIVE ANSWER:
In an employer-employee relationship, it is the right of the employer to use the services

of an employee who is under his (employers) orders as regards the employment. On
the other hand, it is the right of the employee to receive compensation for the services
he renders for the employer.

[a] The relations between employer and employee are purely contractual in
nature. (2%) (2010 Bar Question)
SUGGESTED ANSWER:
FALSE. Some aspects of the relations between employer and employee are determined
by certain labor standards.
ALTERNATIVE ANSWER:
FALSE. The Constitution, Labor Code, Civil Code and other social legislations are
replete with provisions that define employment relationship even without contract, with
the intention of insuring that all the rights of labor are protected.
Article 1700 of the Civil Code provides that [T]he relations between capital and labor
are not merely contractual. They are so impressed with public interest that labor
contracts must yield to the common good.
In Article 106 of the Labor Code, the principal is deemed as a direct employer in labor-
only contracting, despite absence of contractual relationship between the worker and
the principal reduced in writing.
Equity likewise affords the aggrieved party relief in a case where an agent was given
apparent authority by the employer to represent it to third persons, such as in a
relationship between hospitals and doctors practicing medicine in its establishment
(Nogtales v. Capitol Medical Center, 511 SCRA 204 [2006]).
Q: Banco de Manila and the Ang Husay Janitorial and Pest Control Agency
entered Into an Independent Contractor Agreement with the usual stipulations;
specifically, the absence of employer-employee relationship, and the relief from
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liability clauses. Can the Bank, as a client, and the Agency, as an independent
contractor, stipulate that no employer-employee relationship exists between the
Bank and the employees of the Agency who may be assigned to work in the
Bank? Reason. (5%) (2000 Bar Question)
SUGGESTED ANSWER:
They can so stipulate if the relationship is indeed job contracting. Yet the stipulation
cannot prevail over the facts and the laws. The existence of employer-employee
relationship is determined by facts and law and not by stipulation of the parties. [Insular
Life Assurance Co., Ltd. u. NLRC, 287 SCRA 476 (1998); Tabas v. California
Manufacturing Co.. Inc.. 169 SCRA 497 (1989)).
ALTERNATIVE ANSWER:
Yes, they can stipulate provided that the contract of independent contractor is valid in
accordance with Art. 106 of the Labor Code.
Q: Richie, a driver-mechanic, was recruited by Supreme Recruiters (SR) and its

principal, Mideast Recruitment Agency (MRA), to work in Qatar for a period of two
(2) years.
However, soon after the contract was approved by POEA, MRA advised SR to
forego Richies deployment because it had already hired another Filipino driver-
mechanic, who had just completed his contract in Qatar. Aggrieved, Richie filed
with the NLRC a complaint against SR and MRA for damages corresponding to
his two years salary under the POEA- approved contract.
SR and MRA traversed Richies complaint, raising the following arguments: x x x
[b] Because Richie was not able to leave for Qatar, no employer-employee
relationship was established between them; (2%) and
xxx
Rule on the validity of the foregoing arguments with reasons.
SUGGESTED ANSWER:
An employer-employee relationship already existed between Richie and MRA. MRA

and SR, as an agent of MRA, already approved and selected and engaged the services
of Richie.
Q: What property right is conferred upon an employee once there is an employer-

employee relationship? Discuss briefly. 5% (2006 Bar Question)
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SUGGESTED ANSWER:
The right to employment and the right to continue in one's employment constitute the
property right conferred upon an employee once there is an employer- employee
relationship. Thus, the very important constitutional right that "no person may be
deprived of life, liberty or property without due process of law is violated when an
employer terminates the employment of an employee without due process of law
because said employment is a property right of the latter.
In Callanta. v. NLRC, 145 SCRA 270 (1986), the Court ruled: It is a principle in
American jurisprudence which, undoubtedly, is well-recognized in this jurisdiction that
ones employment, profession, trade or calling is a property right," and the wrongful
interference therewith is an actionable wrong. The right is considered to be property
within the protection of a constitutional guaranty of due process of law.
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 solidarity with CMI for the payment of salary differentials due the
complainants? Cite the legal basis of your answer. (5%) (2005 Bar Question)
SUGGESTED ANSWER:
NEDA shall be held solidarity liable with CMI for the payment of salary differentials due
to the complainants, because NEDA is the indirect employer of said complainants. The
Labor Code provides that xxx (A) person, partnership, association or corporation which,
not being an employer, contracts with an independent contractor for the performance of
any work, task, job or project" xxx shall be jointly and severally liable with his contractor
or subcontractor to such employees (of the contractor or subcontractor) to the extent of
work performed under the contract xxx," (Arts. 106 and 107, Labor Code)
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 schoo lday, Ruben got into a fistfight with a classmate, Victor Monteverde,
as a result of which the latter sustained a fractured arm Victor Monteverde held a
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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 Bar Question)
SUGGESTED ANSWER:
Gomburza College is not liable for the acts of Ruben Padilla because there is no
employer-employee relationship between them. As provided in the Rules and
Regulations implementing the Labor Code "there is no employer-employee relationship
between students on one hand, and schools, colleges, or universities on the other,
where students work with 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
reasonable and necessary to finish their chosen courses under such arrangement."
ALTERNATIVE ANSWER:
Gomburza College canbe held liable by Victor Monteverde as an employer of Ruben

Padilla.
Applying the control test, the College is the employer of Padilla because in the latter's
work of keeping clean the lavatory facilities of the school, he is under the control of the
College as regards his employment.
However, Ruben Padilla was not acting within his assigned tasks. Art. 2180. New Civil
Code provides: The obligation imposed by Art. 2176 (Quasi-delicts) is demandable xxx
(also from) employers (who) shall be liable for the damages caused by their employees
xxx acting within the scope of their assigned tasks, even though the former are not
engaged in any business or industry." It could be argued that Ruben Padilla was not
acting within the scope of his assigned tasks; thus, his employer, Gomburza College is
not liable.
Q: FACTS: 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) entitles 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.
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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 entities with
distinct and separate personalities from LBM Construct ion 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? (5%) (1999
Bar Question)
SUGGESTED ANSWER:
It is very clear that even If LBM Construction Company, Lastimoso Construction

Company, Inc. and RL Realty & Development Corporation all belong to the Lastimoso
family and are engaged In the same line of business under one management and used
the same equipment including manpower services, these corporations were separate
juridical entities.
Thus, only the LBM Construction Corporation is the employer of Teofilo Lacson. The
other corporation do not have any employer-employee relations with Lacson.
The case in question does not include any fact that would justify piercing the veil of
corporate fiction of the other corporations in order to protect the rights of workers.
In a case (Concept Builders, Inc. v. NLRC, 257 SCRA 149), the Supreme Court ruled
that it is a fundamental principle of corporation law that a corporation is an entity
separate and distinct from its stockholders and from other corporations to which it
maybe connected.
But this separate and distinct personality of a corporation is merely a fiction created by
law for convenience and to promote justice. So, when the notion of separate juridical
personality is used to defeat public convenience, justify wrong, protect fraud or defend
crime, or is used as a device to defeat the labor laws, this separate personality of the
corporation may be disregarded or the veil of corporate fiction pierced.
ALTERNATIVE ANSWER:
Motion to Dismiss should be denied. In the case at bar, the Labor Arbiter would be
justified in piercing the corporate veil and considering the three (3) corporations as one
and the same entity as the employer of Teofilo Lacson because based on the facts "the
three corporations were owned and controlled by members of the Lstimoso 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
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used the same equipment including manpower services. The facts show that "the
notion of legal entity is used to defeat public convenience, justify wrong, protect fraud,
or defend crime, the law will regard the corporation as an association of persons, or in
the case of two corporations, will merge them into one."
Q: Is it required that an employer-employee relationship exists between an

employer and the employees in the appropriate bargaining unit before a
certification election can be ordered? If so why? (5%) (1998 Bar Question)
SUGGESTED ANSWER:
Yes, it is required that an employer-employee relationship is existing between the

employer and the employees in the appropriate bargaining unit before a certification
election can be ordered for the simple reason that a certification election is held for the
purpose of determining which labor organization shall be the exclusive collective
bargaining representative of the employees in an appropriate bargaining unit. There
could be no collective bargaining between persons who do not have any employer-
employee relationship.
Yea, the Supreme Court has ruled that the existence of an employer-employee
relationship is required before a certification election can be held.
The Supreme Court in Allied Force Waters Union v. Compania Maritima, 19 SCRA 258
(1967), ruled-
xxx There being no employer-employee relationship between the parties disputants,

there is neither a duty to bargain collectively" to speak of. And there being no such
duty, to hold certification elections would be pointless. There is no reason to select a
representative to negotiate when there can be no negotiations in the first place. Where
there is no duty to bargain collectively, it is not proper to hold certification elections in
connection therewith.
Q: Mr. Aristedes Epol was elected as President, Chief Executive Officer, and
Board Chairman of Transnational Insurance Corp. on May 31, 1988. At that time,
he owned 51% of the companys voting stock. Under the By-Laws of the company
he had a one-year term of office from June 1, 1988 to June 1, 1989. On July 15,
1988, Mr. Ramos agreed with the other stockholders to re-organize the
composition of officers by having the Board declare all positions of officers
vacant, elect a new set of officers, with himself as President and Chief Executive.
Mr. Epol would be re-elected only to the ceremonial post of Board Chairman, Mr.
Epol got a Notice of Special Meeting of the Board to elect a new set of corporate
officers. He consults you as lawyer.
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He asks if he is covered by the Labor Code and Constitutional guarantees of
security of tenure of workers. He theorizes that since he was elected for a fixed
one-year term, he enjoys tenure for the term.
(a) What is you view? Reasons.
Mr. Epol, despite your opinion, observes that the Constitutional issue was not
raised in those cases. He is adamant that you seek recourse to prevent his
removal as President and Chief Executive Officer before his term expires.
(b) Where will you file the case?
SUGGESTED ANSWER:
(a) Mr. Epol is not covered by the Labor Code and Constitutional guarantees of
security of tenure or workers. He is not an employee. He is a corporate officer and his
tenure is subject to the Constitution and by-laws of the corporation and of the
Corporation Code.
(b) I will file the case before the Securities and Exchange Commission which has
jurisdiction over the case. Whether or not Mr. Ramos and the other stockholders legally
re-organized out Mr. Epol is an intra-corporate dispute. Since it is an intra-corporate
dispute which is involved, it is the SEC which has jurisdiction.
Q: Employees-employer relationship exist under the following, except: (2012 Bar

Question)
a. Jean, a guest relations officer in a nightclub and Joe the nightclub owner;
b. Atty. Sin Cruz, who works part-time as the resident in-house lawyer of X
Corporation;
c. Paul, who works as registered agent on commission basis in an insurance
company.
d. Jack and Jill, who work in X Company, an unregistered Association.
SUGGESTED ANSWER:
c) Paul, who works as registered agent on commission basis in an insurance

company. [Great Pacific Life Assurance Corp. vs. Judico, G.R. No. 73887, Dec. 21,
1989].
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 10-month employment contract
everytime she left for Miami. Macapagal Shipping paid for Linas 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
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she has been illegally terminated and seeks separation pay. If you were the Labor
Arbiter handling the case, how would you decide? (2014 Bar Question)
SUGGESTED ANSWER:
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 the expiration of the contract (Millares, et al. v. NLRC, 385 SCRA
306, 318 [2002]).
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.
(a) Is there an employer-employee relationship between Nico and Ador?

(2015 Bar Question)
(b) Will Nico need to register Ador with the Social Security System
(SSS)? (2015 Bar Question)
SUGGESTED ANSWER:
(a) Yes. With Adors simply executing Nicos instruction, Nico, who now has
control over Adors 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.
(b) Yes, as under Section 9 of the Social Security Law (Art. 1161 as
amended), coverage in the SSS shall be compulsory upon all employees not over sixty
(60) years of age and their employers.
(b) If Ador is a purely casual employee:

No. Casual employees are not subject to the compulsory coverage of the SSS
by express provision of law. (Section 8(5) (3), RA 1161, as amended)
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(a) There is no employer-employee relationship. The case at hand pertains to

a civil law arrangement. There is no business undertaken by Lucia; what the parties
have is a contract for a specific service.
1. Four-fold test
Q: Reach-All, a marketing firm with operating capital of P100,000, supplied sales

persons to pharmaceutical companies to promote their products in hospitals and
doctors' offices. Reach-All trained these sales persons in the art of selling but it
is the client companies that taught them the pharmacological qualities of their
products. Reach-Alls roving supervisors monitored, assessed, and supervised
their work performance. Reach-All directly paid their salaries out of contractor's
fees it received. Under the circumstances, can the sales persons demand that
they be absorbed as employees of the pharmaceutical firms? (2011 BAR)
(A) No, they are Reach-Alls employees since it has control over their work
performance.
(B) Yes, since they receive training from the pharmaceutical companies regarding
the products they will promote.
(C) No, since they are bound by the agency agreement between Reach-All and
the pharmaceutical companies.
(D) Yes, since Reach-All does does not qualify as independent
contractoremployer, its clients being the source of the employees salaries.
Q: When does an employer-employee relationship exist? (1996 Bar Question)
SUGGESTED ANSWER:
The Supreme Court, in a long line of decisions has consistently ruled that the following
are the elements of an employer-employee relationship:
a. Selection and engagement of the employee:

b. Payment of wages;
c. Power of discipline and dismissal; and
d. Power to control the employees conduct as regards his employment.
ALTERNATIVE ANSWER:
An employer-employee relationship exists when a person (an employer) who carries on

a business, trade, industry, undertaking, or activity of any kind uses the services of
another person (an employee) who, receiving compensation, is under the employer's
orders as regards the employment.
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The receiver could be considered the employer of GFCs workers. According to the
Labor Code (in Art. 212(c) an employer includes any person acting in the interest of an
employer, directly or indirectly. The receiver here is acting in the interest of GFC.
Q: The Smarly Food Company is engaged in the restaurant and catering

business. Having invested a substantial amount of money to establish its
business, the company decided to avoid its legal responsibilities in connection
with the selection of employees, their social security and other labor relations
problems. To this end, the company engaged the services of Jack Perez, doing
business under the name of San Jacinto Manpower Agency, to supply it with
cooks, waiters, waitresses, dishwashers, and other workers. Jack Perez does not
have a separate regular business office. He operates his business from his own
house. Under this economic arrangement, Jack Perez pays the wages of the
workers assigned to the company directly and reports said workers to the Social
Security System as his own employees. He charges the Smarty Food Company a
monthly fee depending on the number of workers serving the company. After two
years, all the workers assigned by Jack Perez to the company Joined the United
Restaurant Workers Union. Soon thereafter, the labor union sought recognition
from the Smarty Food Company and requested for collective bargaining negotia-
tions. Thereupon, the company terminated its service contract with the San
Jacinto Manpower Agency and prevented the latter's workers from entering the
company premises. To keep its business going, the Smarly Food Company
secured its manpower needs from another service agency. The labor union then
filed a complaint for unfair labor practice under Article 248(a) of the Labor Code
against the Smarty Food Company.
Has the Smarty Food Company succeeded in avoiding its labor relations
obligations to the workers of San Jacinto Manpower Agency? Is the company
guilty of unfair labor practice? Give your reasons.
SUGGESTED ANSWER:
Smarty Food Company has not succeeded in avoiding its labor relations obligation to
the workers of San Jacinto Manpower Agency. Under the facts of the case in the
question, the cooks, waiters, waitresses, dishwashers and other workers supplied by
San Jacinto Manpower Agency are employees of Smarty Food Company and not of the
Agency because said workers are performing activities which are directly related to the
principal business of Smarty Food Company which is engaged in the restaurant and
catering business. It is also noted that the Agency does not have substantial capital or
investment in the form of tools, equipment machineries and work premises. It does not
have a separate regular business office and merely operates its business from the
house of the owner/operator of the Agency. Thus, under the above circumstances,
under the Labor Code (Art. 106) the Agency is engaged in "labor only" contracting arid
should therefore be considered merely as an agent of the employer, meaning Smarty
Food Company.
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Because of the fact that Smarty Food Company is the employer of the cooks, waiters,
waitresses, dishwashers and other workers, the Company was guilty of unfair labor
practice when it terminated their services by terminating its service contract with the
Agency. The Company thereby discriminated against its workers to discourage
membership in any labor organization which is an unfair labor practice. The Company
also committed an unfair labor practice when it violated its duty to bargain collectively by
refusing to meet with the United Workers Restaurant Workers Union which was
organized by the workers of the Company.
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, will exclusively supply PizCorp with a group of RSC motorcycle-
owning cooperative members who will henceforth perform PizCorps pizza
delivery service. RSC assumes - under the agreement - full obligation for the
payment of the salaries and other statutory 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 crew that violates PizCorps
directives and orders, PizCorp can directly impose disciplinary sanctions on,
including the power to dismiss, the erring RSC member/s.
a) Is the contractual stipulation that there is no employer-employee

relationship binding on labor officials? Why? Explain fully. (3%) (2008
Bar Question)
SUGGESTED ANSWER:
The contractual stipulation that there is no employer-employee relationship between

PizCorp and the RSC members is not binding on labor officials because what
determines the existence or non-existence of employer-employee relationship is the
actual factual situation between PizCorp and RSC members and not what is stipulated
in the contract.
The agreement between PizCorp and RSC, that there is, or will not be, an employer-
employee relationship between the RSC motorcycle-owning cooperative members
performing delivery services is not binding on labor officials because the test of
employer-employee relationship is law and not agreement between the parties (Insular
Life etc., v. NLRC, 287 SCRA 476[1998).
b) Based on the test/s for employer-employee relationship, determine the

issue of who is the employer of the RSC members. (4%) (2008 Bar
Question)
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SUGGESTED ANSWER:
Using the control test, the employer of the RSC members is PizCorp. 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.
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 services charges collected for food and drinks to the
extent of 75%. With respondents prior permission, they could sit with and
entertain guests inside the establishment and appropriate for themselves the tips
given by guests. After five (5) years, the complainants individual shares in the
collected service charges dipped to below minimum wage level as a consequence
of the lounges 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 or unlawful dismissal, with prayer for 85% of the
collected services or the minimum wage for the appropriate periods, whichever is
higher. Decide. (6%) (2008 Bar Question)
SUGGESTED ANSWER:
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 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.
Complainants are not employees of the cocktail lounge, hence, they are not entitled to
coverage of the Labor Code. There is no finding that they are under the effective
control or supervision of the employer for a substantial period time as determined by the
Secretary of Labor. The Labor Code reads
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Art. 138. Classification of certain workers. Any worker who is permitted to work, with or
without compensation, in any night clubs, 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
an employee, of such establishment for purposes of labor and social legislation.
Q: Don Jose, a widower, owns a big house with a large garden. One day, his
househelper and gardener left after they were scolded. For days, Don Jose, who
lives alone in compound to look for someone who could water the plants in the
garden and clean the house. He chanced upon Mang Kiko on the street and asked
him to water the plants and clean the house.
Without asking any question. Mang Kiko attended to the plants in the garden and
cleaned the house. He finished the work in two days.
a) Is there an employer-employee relationship between Don Jose and Mang

Kiko?
xxx
SUGGESTED ANSWER:
There is an employer-employee relationship between Don Jose and Mang Kiko

because Mang Kiko, assuming payment of compensation, was rendering services for
Don Jose and was under the orders of Don Jose as regards employment.
xxx
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? (3%)
b) What is the legal significance, if any, of the question of the concerned
workers as to who is their employer? (3%) (2000 Bar Question)
SUGGESTED ANSWER:
a) I will analyze the problem by applying the four-fold test of employer-employee

relationship. I will examine if Mr. Dado exercises power of control or supervision over
the workers manner and method of doing their work. Control is the most important
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factor in examining employer-employee relationship. The other factors are hiring,
payment of wages, and power to dismiss. I will also examine whether there was job
contracting or labor-only contracting.
ALTERNATIVE ANSWER:
a) My analytical framework will be an analysis of the law on Independent contractor and

labor only contracting.
If there is a valid independent contractor situation, Mr. Dado will be the direct employer,
and the Metro Grocery will be the Indirect employer.
If there is a labor-contractor only relationship, the Metro Grocery will be the employer as
it directly hired the employees.
SUGGESTED ANSWER:
b) The legal significance is the determination of employee-employer relationship, which

gives rise to certain rights and obligation of both employer and employee, such as SSS
membership, union membership, security of tenure, etc.
Q: Zapato Custom-made Shoes, Inc. (ZaCSI) made shoes to customer

specification and repaired them. As a service to customers, a shoe shine stand
was operated on its premises. There were 10 shoe shine boys at the stand. They
owned their shoe shine boxes with cleaning agent polish, brushes, and rags.
Walk- in customers willing to wait were led by the shoe shine boys to a seat at the
stand where he waited while the boy shined the shoes. After the shoes were
cleaned, the boy asked the customer to pay to the receptionist. Customers not
willing to wait left the shoes with the stands receptionist who gave a receipt with
the price for the service and pick-up date and time indicated. The boys were free
to get shoes to be shined from the receptionist when there were no waiting walk-
ins. For each pair shined, the boys got markers corresponding to the price for
their service. ZaCSIs staff did not interfere with, nor supervise, how the boys
went about their tasks. At days end, the markers held by each boy were tallied
and paid for. The boys signed a receipt to acknowledge full payment for work
done.
A labor federation organized ZaCSI and filed a petition for a consent election. The
boys, sympathizing with the workers, joined the union. At the pre-election
conference, the lawyer for ZaCSI moved to exclude the boys as voters.
(a) As Med-Arbiter handling the case, rule on the objection.
(b) Would your ruling be different if in this case, ZaCSI provided the boys with
the shoe shine boxes and their contents? Explain. (1988 Bar Question)
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Answer:
(a) As Med-arbiter, I will rule that the shoe shine boys should be excluded as voters
in the consent election. The shoe shine boy are not employees of ZaCSI and thus could
not be considered as employees belonging to bargaining unit who will designate or
select a bargaining representative. They are not empoloyees of ZACSI because
according to the given facts, they are not under the control of ZaCSI which is an
essential element for the existence of employer-employee relationship. In the statement
of facts, it is said that ZaCSIs staff did not interfere with, nor supervise how the boys
went about their task.
(b) My ruling will not be different even if ZaCSI provided the boys with the shoe
shine boxes and their contents. ZaCSI, by this act, is not yet exercising control over
them. It is the existence or non-existence of control that is determinative of the
existence of employer-employee relationship.
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. (5%)
SUGGESTED ANSWER:
Pandoy Is not correct.
He is not an employee because he does not meet the fourfold test for him to be an
employee of Perfect Triangle. Ail that he could claim is: he worked within the premises
of Perfect Triangle. Pandoy was NOT engaged as an employee by Perfect Triangle. He
was NOT paid wages by Perfect Triangle. Perfect Triangle does NOT have the power to
dismiss him although Perfect Triangle may not continue to allow him to work within its
premises. And most important of all, Pandoy was NOT under the control of Perfect
Triangle as regards the work he performs for customers.
The Supreme Court has ruled: In stark contrast to the Companys regular employees,
there are independent, free-lance operators who are permitted by the Company to
position themselves proximate to the Company premises. These independent operators
are allowed by the Company to wait on Company customers who would be requiring
their services. In exchange for the privileges of favorable recommendation by the
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Company and immediate access to the customers in need of their services, these
independent operators allow the Company to collect their service fee from the customer
and this fee is given back to the independent operator at the end of the week. In effect,
they do not earn fixed wages from the Company as their variable fees are earned by
them from the customers of the Company. The Company has no control over and does
not restrict the methodology or the means and manner by which these operators
perform their work. These operators are not supervised by any employee of the
Company since the results of their work is controlled by the customers who hire them.
Likewise, the Company has no control as an employer over these operators. They are
not subject to the regular hours and days of work and may come and go as they wish.
They are not subject to any disciplinary measures from the Company, save merely for
the inherent rules of general behavior and good conduct. [Ushio Marketing v. NLRC,
294 SCRA 673(1998)]
Inggu, an electronics technician, worked within the premises of Pit Stop, an auto
accessory shop. He filed a Complaint for illegal dismissal, overtime pay and other
benefits against Pit Stop. Pit Stop refused to pay his claims on the ground that
lnggu was not its employee but was an independent contractor . . It was common
practice for shops like Pit Stop 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 lnggu was like a partner who worked within its premises,
using parts provided by the shop, but otherwise lnggu was free to render service
in the other auto shops. On the other hand, lnggu insisted that he still was
entitled to the benefits because he was loyal to Pit Stop, it being a fact that he did
not perform work for anyone else. Is lnggu correct? Explain briefly. (5%) (2012
BAR)
Suggested Answer:
Yes. Inggu is an employee of the Pit Stop. Articles 1767 of the Civil Code states that in
a contract of partnership two or more persons bind themselves to contribute money,
property or industry to a common fund, with the intention of dividing the profits among
themselves. Not one of these circumstances is present in this case. No written
agreement exists to prove the partnership between the parties. Inggu did not contribute
money, property and industry for the purpose of engaging in the supposed business.
There is no proof that he was receiving a share in the profits as a matter of course.
Neither is there any proof that he had actively participated in the management,
administration and adoption of policies of the business. [Sy, et. al. v. Court of Appeals
G.R. No 142293, February 27, 2003].
Q: Malyn Vartan is a well-known radio-N talk show host. She signed a contract
with XYZ Entertainment Network to host a one -hour daily talk show where she
interviews various celebrities on topical subjects that she herself selects. She
was paid a monthly remuneration of P300.000.00. The program had been airing
for almost two years when sponsors' advertising revenues dwindled,
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constraining the network to cancel the show upon the expiration of its latest
contract with Ms. Vartan. The talk-show host protested the discontinuance of her
monthly talent fee, claiming that it was tantamount to her illegal dismissal from
the network since she has already attained the status of a regular employee.
(2005 Bar Question)
(a) As the network's legal counsel, how would you justify its decision to cancel
Ms. Vartan's program which in effect terminated her services in the process?
SUGGESTED ANSWER:
(a) As the network's legal counsel, I will argue that no employer employee
relationship exists between the network and Ms. Vartan. Reference has to be made to
the terms and conditions provided under the contract and the parties shall be governed
by the provisions of the New Civil Code. In the case of Jay Sonza v. ABS-CBN, 431
SCRA583 (2004) it was held that a TN and radio talent is not an employee of the
network company. Similarly in this case, Ms. Vartan cannot be considered an employee
of the network. Under the control test, the network had no control on the manner and
means through which Ms. Vartan will perform her work. She herself selects the topical
subjects in her interviews. She is also paid an extraordinary huge amount of P300,OOO
for her to be considered a mere employee.
(b) As counsel for the-talk-show host, how would you argue your case? (6%)
SUGGESTED ANSWER:
(b) As counsel for Ms, Vartan, I will argue that an employer-employee relationship
exists, and that she is a regular employee of the Network because of the nature of her
work in relation to the nature of the business of the Network. Her' work is usually
necessary or desirable in the usual, trade or business of the employer (Art. 280, Labor
Code). I will invoke the four-fold test of employer- employee relationship, i.e. (1)
selection and engagement of employee: (2) payment of wages; (3) power to dismiss;
and (4) power of control.
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 Ys 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, Ys services were
terminated by X. Y sued Z for illegal dismissal. May Ys case against Z prosper?
Why? (2%). (2001 Bar Question)
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SUGGESTED ANSWER:
Ys case against Z will not prosper, because Z is not the employer of Y. The employer of
"Y" is "X".
"Y" would be an employee of "Z" if "X" here is a labor-only contractor but X is not a
labor-only contractor. Re possesses the necessary capital and equipment needed to
effectively carry out its commitment as a service contractor.
Applying the control test, the fact that "Z's" supervisors and employees give verbal
instructions to Y as to how and where to perform his work does not necessarily mean
that thereby he is under the control of Z as regards his employment as long as X, as
service contractor, actually directs the work of Y. It should also be noted that X pays the
salary of Y as the employee of the former.
Yes, Ys case against Company "Z" will prosper. Company "Z" will be deemed the direct
employer because the Company directly and specifically controlled the manner by
which the work should be done and, and by doing so also the result/ (See Traders
Royal Bank vs. NLRC, December 2, 1999).
The presence of the element or factor of control, which is the most important factor in
determining the existence of an employer-employee relationship is present. In Religious
of the Virgin Mary vs. NLRC, G.R. No. 103606, October 13, 1999, the Supreme Court,
ruled:
As this Court has consistently ruled, the power of control is the most decisive factor in
determining the existence of employer- employee relationship.
Q: FACTS: Asia Security & Investigation Agency (ASIA) executed a one-year

contract with the Baron Hotel (BARON) for the former to provide the latter with
twenty (2,0) 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 Barons 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, promo-tions, suspensions, dismissals and award
citations for meritorious services were all done upon approval by Barons 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
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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. (1999 Bar Question)
1. Is there an employer-employee relationship between the Baron Hotel, on one

hand, and the Asia security guards, on the other hand? Explain briefly. (3%)
SUGGESTED ANSWER:
As a general rule, the security guards of a private security guard agency are the
employees of the latter and not of the establishment that has entered into a contract
with the private security guard agency for security services.
But under the facts in the question, Baron Hotel appear to have hired the security
guards, to have paid their wages, to have the power to promote, suspend or dismiss the
security guards and the power of control over them, namely, the security guards were
under orders of Baron Hotel as regard their employment.
Because of the above-mentioned circumstances, Baron Hotel is the employer of the

security guards.
2. Assuming that ASIA is the employer, is the act of ASIA in placing the security
guards on "floating status" lawful? Why? (2%)
SUGGESTED ANSWER:
It is lawful for a private security guard agency to place its security guard on a floating
status if it has no assignment to give to said security guards.
But if the security guards are placed on a floating status for more than six (6) months,
the security guards may consider themselves as having been dismissed.
Q: The most important factor in determining the existence of an employer-

employee relationship is the: (2012 Bar Question)
a. Power to control the method by which employees are hired and selected;
b. Power to control the manner by which employees are transferred from one
job site to another;
c. Power to control the results achieved by giving guidelines to the
employees;
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d. Power to control the results to be achieved and the employees method of
achieving the task.
SUGGESTED ANSWER:
d. Power to control the results to be achieved and the employees method of

achieving the task [Abante vs. La Madrid Bearing Part Corp., 430 SCRA
368 (2004]
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 to Don
Luiss garden and finished the job in three days. (2014 Bar Question)
(A) Is there an employer-employee relationship between Don Luis and

Lando?
SUGGESTED ANSWER:
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; and
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.
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)?
SUGGESTED ANSWER:
Yes. Coverage in the SSS shall be compulsory upon all employees not over sixty (60)
years of age .
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.
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2. Kinds of employment
Q: For ten (10) separate but consecutive yearly contracts, Cesar has been
deployed as an able-bodied seaman by Meritt Shipping, through its local agent,
Ace Maritime Services (agency), in accordance with the 2000Philippine Overseas
Employment Administration Standard Employment Contract (2000 POEA-SEC).
Cesar's employment was also covered by a CBA between the union, AMOSl.JP,
and Meritt Shipping. Both the 2000 POEA-SEC and the CBA commonly provide
the same mode and procedures for claiming disability benefits. Cesar's last
contract (for nine months) expired on July 15, 2013.
Cesar disembarked from the vessel M/V Seven Seas on July 16, 2013as a seaman
on "finished contract". He immediately reported to the agency and complained
that he had been experiencing spells of dizziness, nausea, general weakness, and
difficulty in breathing. The agency referred him to Dr. Sales, a cardio-pulmonary
specialist, who examined and treated him; advised him to take a complete rest for
a while; gave him medications; and declared him fit to resume work as a seaman.
After a month, Cesar went back to the agency to ask for re-deployment. The
agency rejected his application. Cesar responded by demanding total disability
benefits based on the ailments that he developed and suffered while on board
Meritt Shipping vessels. The claim was based on the certification of his physician
(internist Dr. Reyes) that he could no longer undertake sea duties because of the
hypertension and diabetes that afflicted him while serving on Meritt Shipping
vessels in the last 10 years. Rejected once again, Cesar filed a complaint for
illegal dismissal and the payment of total permanent disability benefits against
the agency and its principal.
Assume that you are the Labor Arbiter deciding the case. Identify the facts and
issues you would consider material in resolving the illegal dismissal and
disability complaint. Explain your choices and their materiality, and resolve the
case. (2013 Bar Questions)
SUGGESTED ANSWER:
1. Does the Labor Arbiter have jurisdiction to decide the case?

2. Did Cesar submit to a post-employment examination within 3 days upon his
return? This is a mandatory requirement; otherwise, Cesar will forfeit his right to
claim benefits.
3. Is Dr. Sales the company-designated physician? The company-designated
physician is the one who initially determines compensability.
4. Was Cesar assessed by Dr. Sales (if he is the company physician) within 120
days?
5. If the 120 days was exceeded and no declaration was made as to Cesars
disability, was this extended to 240 days because Cesar required further medical
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treatment?
6. Was the 240 days exceeded and still no final decision was reached as to
Ceasars disability? If so, Ceasar is deemed entitled to permanent total disability
benefits.
7. If the companys physician and Ceasars physician cannot agree, was a third
physician designated to determine the true nature and extent of the disability.
The third physicians finding under the law is final and conclusive.
8. In the matter of the complaint for illegal dismissal: There is none because Ceasar
disembarked on a finished contract.
9. Seafarers are contractual employees, for a fixed term, governed by the contract
they sign; exception to Article 280 (now Article 286) of the Labor Code. Hence,
the complaint for illegal dismissal will not prosper.
a. Probationary
Q: On January 3, 1988, Sea Breeze Restaurant, Inc. (SBRI) hired Juan Reyes as a
probationary kitchen helper. He received and cleaned food ingredients delivered
by suppliers and stored them in freezers, cleaned kitchenware and utensils, and
kept the kitchen tidy. On July 1,
1988, he was sent to the companys doctor for a complete medical examination.
Thereafter, he continued working. On July 8, 1988, the doctor submitted his
report finding Juan to have minimal pulmonary tuberculosis (TB).
The manager consults you as the labor adviser of the company, and asks if
Juans employment can be terminated as his presence was a hazard to the health
of other workers and customers of the restaurant.
(a) Within the time frame of the problem, was there any change in Juans
employment status?
(b) When did the change occur?
(c) Why did it occur?
(d) Can the company still terminate Juan as a probationer?
(e) Under what conditions may Juan be terminated considering his health?
Explain.
(f) Based on your analysis of the factual and legal situation, what course of
action would you advise the company to take?
SUGGESTED ANSWER:
(a) There was a change in the employment status of Juan, from probationary to
regular employment.
(b) July 4,1988, after his six-month probationary period.
(c) The Labor Code (Art. 281) provides that an employee who is allowed to work
after a probationary period shall be considered a regular employee.
(d) The company can terminate Juan, but no longer as a probationary employee, but
as a regular employee since his six (6) month probationary period has expired.
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(e) Juan may be terminated considering the fact that he has minimal pulmonary
tuberculosis. The Labor Code (Art. 284) provides that an employer may terminate
the services of an employee who has been found to be suffering from any
disease and whose continued employment is prohibited by law or is prejudicial to
his health as well his co-employees.
(f) Based on my analysis outlined above, I will advise the Company to dismiss the
employee but pursuant to the Rules and Regulations implementing the Labor
Code, the Company should not terminate the employment of its employee on the
ground of his disease unless there is a certification by a competent public health
authority that the disease is of such nature or at such a stage that it cannot be
cured within a period of six (6) months even with proper medical treatment.
Q: Mr. X was hired by Y Company on probation for six months as general utility
worker. On the expiration of the probationary period, Mr. X was informed by Y Co.
that his work was unsatisfactory and failed to meet the required standard. To give
him a chance to improve his performance, Y Co. instead of terminating Mr. Xs
services, extended, with Xs written consent, the probation period for another
three months. This extension notwithstanding, his performance did not improve,
on account of which, Y Co. terminated Mr. X's services at the end of the extended
period. Mr. X filed a case for illegal dismissal contending that he was already
regular at the time of his dismissal pursuant to Art. 281 of the Labor Code, the
particular portion of which provides:
xxx. An employee who is allowed to work after a probationary period shall be

considered a regular employee."
Therefore, he could not have been lawfully dismissed for failure to meet company
standards as a probationary worker. Decide with reason.
SUGGESTED ANSWER:
Mr. X could not argue that because his probationary period was extended beyond six
months he was now a regular employee and thus could no longer be terminated except
for Just cause or when authorized by law.
The fact is that the probationary period of Mr. X was extended beyond six months with
his consent. It was to give him an opportunity to improve his performance.
Thus, it was legal for Y Company to terminate Mr. X for his failure to meet company
standard as a probationary worker.
The Labor Code provides that probationary employment shall not exceed six (6)
months. But the Supreme Court has ruled that said probationary period could be
extended with the consent of the probationary employee lo give him an opportunity to
improve his performance. (Art. 281. Labor Code)
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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? 10% (2006 Bar Question)
SUGGESTED ANSWER:
I will rule in favor of management.
First of all, there was no abandonment because there was no intention not to return to
work. It was just that the 8 employees were berated and insulted and even told never to
report back to work. It was but natural for them to feel demoralized, but there was never
an indication to abandon their employment.
The probationary workers could, however, be terminated for failing to meet probationary
standards. If the reasons for the supervisors berating and insulting behavior were poor
or substandard performance on the part of the workers, their probationary employment
could be legally terminated.
I will rule against the employer. The probationary employees are entitled to security of
tenure and may not be dismissed except for cause, and are entitled to be hired as
regular employees if they are qualified for the position.
There is no abandonment, because the absence of the employees has valid and
justifiable cause, and they did not intend of severe employment or lose the intention to
return to work.
As Labor Arbiter, I will rule that the complaint for illegal dismissal is premature.
What the supervisor did - he told the eight (8) employees to go home and never to
report back to work - did not have the effect of terminating the employment of said
employees. As supervisor, he is not a managerial employee with the power, among
others, to discharge employees.
Q: The services of an employee were terminated upon the completion of the

probationary period of employment for failure to quality for the position. The
employee filed a complaint for Illegal Dismissal on the ground that the employer
failed to inform him in writing the reasonable standards for regular employment.
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Will the complaint for Illegal Dismissal prosper? [5%] (1998 Bar Question)
SUGGESTED ANSWER:
Yes, the Complaint for Illegal Dismissal will prosper. The Labor Code provides:
Art. 281. Probationary employment. - xxx The services of an employee who has been
engaged on 8 probationary basis may be terminated xxx when he falls to qualify as a
regular employee in accordance with reasonable standards made known to the
employee at the time of his engagement.
The Supreme Court in A.M. Greta and Co., Inc. v. NLRC, 176 SCRA 218 (1989), ruled:
The law is clear to the effect that in all cases involving employees engaged on
probationary basis, the employer shall make known to the employee at the time he is
hired, the standards by which he will qualify as a regular employee.
The failure of the employer to inform the employee of the qualification for regularization
is fatal. The failure violates the rules of fair play which is a cherished concept in labor
law.
The complaint for illegal dismissal will prosper.
The Labor Code (in Article 281) provides that a probationary employee may be
terminated 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 the
latters engagement. In the question, the probationary employee was not informed of
such reasonable standards at the time he was employed. Thus, if he is to be legally
terminated, it should be because of gross and habitual neglect of duties.
Q: Aleta Quiros was a faculty member at BM Institute, a private educational

institution. She was hired on a year-to-year basis under the probationary
employment period provision of the Manual of Regulations for Private Schools.
The terms and conditions of her engagement were defined under her renewable
yearly contract.
For reasons of its own, BM Institute no longer wanted to continue with Aleta's
teaching services. Thus, after the contract for her second year expired, BM
Institute advised Aleta that her contract would no longer be renewed. This advice
prompted Aleta to file a complaint for illegal dismissal against BM Institute.
Will the complaint prosper? (2013 Bar Questions)
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(A) Yes, because no just or authorized cause existed for the termination of her
probationary employment.
(B) Yes, because under the Labor Code, Aleta became a regular employee after 6
months and she may now only be dismissed for cause.
(C) No, because there was no dismissal to speak of. Her employment was automatically
terminated upon the expiration of her year-to-year fixed term employment.
(D) No, because BM Institute may dismiss its faculty members at will in the exercise of
its academic freedom.
(E) No, because Aleta was still on probationary employment.
SUGGESTED ANSWER:
(A) (Yolanda Mercado v. AMA Computer College, G.R. No. 183572 [2010])
b. Regular
Q: A was hired 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. (3%) (2010 Bar Question)
SUGGESTED ANSWER:
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, 534 SCRA 431 [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, 456 SCRA 300 [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,
513 SCRA 378 [2007]).
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ALTERNATIVE ANSWER:
It is management prerogative to determine what kind of worker is needed by the

plantation. Of course, if the prerogative is exercised and results in redundancy, there
must be payment of separation pay under Article 283 of the Labor Code.
Q: Kitchie Tempo was one of approximately 500 production operators at HlTEC

Semiconductors, Inc., an 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 labor
lawyer about her chances of getting her job back. What will our advice be? (5%)
(2005 Bar Question)
SUGGESTED ANSWER:
Kitchies "below average" rating will not matter. She was a regular employee from day 1
of her service as her work was evidently usually necessary or desirable to HITEC's
usual business. Under par. 1of Art. 280, Kitchie is a regular (not casual) employee.
Also, Kitchie obtained permanent regular employment .when she was repeatedly re
hired by HITEC. As a permanent regular employee, working for an indefinite period,
Kitchie is, entitled to the reliefs of reinstatement and full backwages as mandated in Art.
279 of the Labor Code.
A "below average" rating would matter if Kitchie was made to undergo probationary
employment, or was a probationary employee under Art. 281 of the Code. She was not
obviously, she was a qualified and competent production operator; She would not have
been repeatedly re-hired if she were not that qualified and competent.
I will thus, advise her to sue for illegal dismissal, with prayer for regularization in addition
to the reliefs of reinstatement and full backwages provided for in Art. 279 of the Labor
Code.
Q: Julius Lagat, a truck driver, was hired by Merdeka Trucking Company which is
engaged in the business of hauling farm produce, fertilizer and other cargo for an
agribusiness company on a non-seasonal and continuing basis. Lagats contract
stipulated that it was effective for six months from date of execution, renewable
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for the same period. Upon expiration of the renewed contract. Lagat was advised
by Merdeka that his services were terminated. Lagat filed a complaint for illegal
dismissal against Merdeka which contended that Lagat had no cause of action as
his employment was for a definite and specific period.
You are the Labor Arbiter. Decide with reasons.
SUGGESTED ANSWER:
As Labor Arbiter, I will decide in favor of Lagat. From the circumstances of the case, it is
apparent, that the six month period was imposed to preclude the employee from
acquiring security of tenure. The contract that Merdeka had with Lagat can be
considered as circumventing the law that gives to a worker the right to security of
tenure, considering that Lagat was a truck driver in a business that was not seasonal
and was on a continuing basis. If the work was seasonal, then he would have been
legally employed for a specific period, namely, per season. (Cielo vs. NLRC. 193 SCRA
410)
This should also be noted. Lagats contract was a renewed contract. This means that at
the veiy least, he was already employed for six months after which the contract was
renewed. So, if the first six months period was considered a probationary period, Lagat
has now worked after the probationary period. Thus, he is now a regular employee and
clearly with the right to security of tenure. (Article 281. Labor Code)
Q: Borloloy & Co. is engaged in the construction business which hired the
services of Ispongklong as mason and Agaton as carpenter in 1977. Every time
their services are needed, Ispongklong and Agaton are issued notices of
employment by Borloloy & Co. in the following tenor:
This is to inform you that you have been hired at Lahar Bldg., as mason and
carpenter respectively at a monthly salary/daily or hourly of PI2.40. Your
employment shall be deemed automatically terminated either at the completion of
the project or upon the completion of the work requiring your respective services
to start May 12, 1977.
ACCEPTED:
Such an arrangement continued wherein both Agaton and Ispongklong became

members of a work pool from where Borloloy & Co. draws manpower to work on
various projects. After each project they have been assigned to is completed,
Borloloy & Co. reported the names of Ispongklong and Agaton to the Social
Security System for registration.
In 1987 (or after ten years of service) they received a notice from Borloloy & Co.
informing them that their services are no longer needed. Ispongklong and Agaton
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immediately filed a case for illegal dismissal alleging that they are regular and
permanent workers of Borloloy & Co. having worked for it for ten (10) years hence
prayed for reinstatement and back wages. Borloloy & Co. on the other hand,
claims that Agaton and Ispongklong are project employees whereby their
employment is automatically terminated either at the completion of the phase of
work requiring their respective service as stated in their respective Notice of
Employment the sample test of which is quoted above. If you are the Labor
Arbiter assigned to the case, how will you decide the controversy?
SUGGESTED ANSWER:
As Labor Arbiter, I will promulgate a decision finding the dismissal of Agaton and
Ispongklong illegal. Ispongklong and Agaton ceased to be project employees when they
became members of a work pool from where their employer draws manpower to work
on various projects. Thus, as regular employees, they can be terminated only if there is
just cause or otherwise authorized by law. (Art. 280, Labor Code)
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? [5%] (1998 Bar Question)
SUGGESTED ANSWER:
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 completion of
which has been determined at the time of the engagement of the employee,
(underscoring supplied)
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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 has ruled as follows:
Manansag v. NLRC, 218 SCRA 722 (1993)

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 empl03'ees 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.
The claim of Engineer A is not correct. The fact that he has been working for
Construction Group for a total of ten (10) years does not make him a regular employee
when it is very clear from the Contracts of Employment he signed that he was always
being engaged as a project employee.
The tenure of a project employee is co -terminus with the project in connection with
which his services were engaged. Thus, after the end of the project, the employer-
employee relationship ceases to exist. Such project employee has no legal right to insist
that he should be employed by the Construction Group for a subsequent project of said
Group.
Q: Damian Damaso was one of 75 machinists of City Re- builders Machine Shop
(CRMS). He had worked as a lathe operator there since February 15, 1975. Lathe
men process metal to fine tolerances of thousandths of an inch. If tolerances are
not met, work is re-done at great cost. Defective work released to customers
cause breakdown on equipment in which they are used. Juan worked an average
of 300 days per year at a daily wage of 1*100.00 plus the COLA mandated by law.
If there are no rejects on what he processes, he got a15 bonus for each item
done right. In the last 2.months, 10% of his output either needed re-work or were
rejected. He claimed his lathe was defective. However, the second shift man
using the same machine produced work meeting standards. Damian did not earn
any bonuses, and received a written warning. Feeling oppressed, he went to the
Kamao ng Manggagawa, a registered labor federation to ask for advice on the
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mechanics of organizing a union, and worker rights and duties when they
organize.
You are a labor organization adviser of Kamao. x x x
A supervisor of the CRMS saw Damian leave Kamaos headquarters. Sensing that
Damian would organize a union, he reported what he saw to management.
Damian did not know he was seen. Management acted on the report. The next
day, his foreman found Damians work of unacceptable quality and below output
standards. He was given a second warning. The following day, work exceeding
allowed tolerances were again found. He was suspended for a week and thus,
was unable to start organizing a union. When he came back, his work was again
found deficient and 50% was rejected and condemned as waste. He was given a
15-day notice of termination on August 1, 1988, to take effect on August 16, 1988
and paid for 15 days of accumulated leave; banned from entering company
premises effective immediately; and given termination pay equal to 12 days
wages per year of service, computed on his daily wage for 13 years. He reported
what had happened to Kamao. The matter was referred to you again for
assistance. (1988 Bar Question)
(a) Damian wants to know if he was unlawfully terminated. Explain.

(b) Damian asks you if he had been given all his terminal
entitlements.
SUGGESTED ANSWER:
a) Damian was unlawfully terminated. There could be just cause for his termination if
his work is of unacceptable quality and below output standards which could be
considered as gross and habitual neglect of duties which is a just cause for
termination. But the facts show that CRMS was intent on terminating Damian not
because of his poor performance but because he was organizing a union. Thus, the
act of CRMS is an unfair labor practice. The dismissal is illegal.
b) If there is just cause for the termination of Damian, CRMS has no obligation to pay
him any terminal entitlement, like termination pay. But, he should be paid whatever
rights may have accrued, like, in this case, the pay to 15 days of accumulated leave.
If there is no just cause for the termination of Damian, he has the right to
reinstatement without loss of seniority rights and to his backwages computed from
the time his compensation was withheld from him up to the time of his reinstatement
(Art. 279).
Q: The workers worked as cargadors at the warehouse and ricemills of farm A for
several years. As cargadors, they loaded, unloaded and piled sacks of rice from
the warehouse to the cargo trucks for delivery to different places. They were paid
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by Farm A on a piece-rate basis. Are the workers considered regular employee?
(2012 Bar Question)
a) Yes, because Farm A paid wages directly to these workers without the
intervention of any third party independent contractor;
b) Yes, their work is directly related, necessary and vital to the operations of the
farm;
c) No, because Farm A did not have the power to control the workers with
respect to the means and methods by which the work is to be accomplished;
d) A and B
SUGGESTED ANSWERS:
d) A and B
Q: Mr. Ortanez has been in the building construction business for several years.
He asks you, as his new labor counsel, for the rules he must observe in
considering regular employment in the construction industry.
You clarify that an employee, project or non-project, will acquire regular status if
__________. (2013 Bar Questions)
(A) he has been continuously employed for more than one year
(B) his contract of employment has been repeatedly renewed, from project to project, for
several years
(C) he performs work necessary and desirable to the business, without a fixed period
and without reference to any specific project or undertaking
(D) he has lived up to the company's regularization standards
(E) All of the above.
SUGGESTED ANSWER:
(C)
Note: With all due respect to the examiner, the questions is ambiguous since it
mentions, project or non-project. This is confusing since the criteria in the determination
of regular status for project and non-project employees are different.
Q: Don Don is hired as a contractual employee of CALLHELP, a call center. His

contract is expressly for 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? (2015 Bar Question)
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SUGGESTED ANSWER:
As Labor Arbiter, I will decide the case in favor of Don Don. Given the nature of Don
Dons work, which consist of activities usually or desirable in the usual business of
CALLHELP, Don Don should be considered a regular employee.
CALLHELPs termination of Don Dons service in the guise of poor performance is not
valid. Whether for a probationary or regular employee, the requisites of dismissal on
that ground do not appear to have been complied with by the employer here.
Q: Under the Labor Code on Working Conditions and Rest Periods, a person
hired by a high company official but paid for by the company to clean and
maintain his staff house is regarded as (2011 BAR)
(A) a person rendering personal service to another.

(B) a regular company employee.
(C) a family member.
(D) domestic helper.
Q: Albert and four others signed employment contracts with Reign Publishers
from January 1 to March 31, 2011 to help clear up encoding backlogs. By first
week of April 2011, however, they remained at work. On June 30 Reigns manager
notified them that their work would end that day. Do they have valid reason to
complain? (2011 BAR)
(A) No, since fixed term employment, to which they agreed, is allowed.
(B) Yes, their job was necessary and desirable to the employers business and,
therefore, they are regular employees.
(C) Yes, when they worked beyond March without an extended fixed term
employment contract, they became regular employees.
(D) No, since the 3-month extension is allowed in such employment.
c. Project employment
Q: Distinguish the project employees from regular employees. (1996 Bar

Question)
SUGGESTED ANSWER:
A regular employee is one engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer. On the other hand, a project
employee is one whose employment is fixed for a specific project or undertaking the
completion or termination of which has been determined at the time of the engagement
of the employee. (See Art. 280 of the Labor Code)
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Q: How is a project worker different from a casual or contractual worker? Briefly
explain your answers, (6% )
SUGGESTED ANSWER:
A project worker is employed for a specific project or undertaking the completion or

termination of which is determined at the time of his engagement. His work need not be
incidental to the business of the employer. His employment may exceed 1 year without
necessarily making him a regular employee.
A casual employee is engaged to perform a job, work, or service which is incidental to

the business of the employer; moreover, the definite period of his employment is made
known to him at the time of his engagement, His continued employment after the lapse
of one year makes him a regular employee. Under the Social Security Law, employment
that is purely casual and not for the purpose of occupation or business of the employer
is not under the coverage of the aforesaid law.
A "project worker", on the other hand, is a specific term used to designate workers in
the construction industry hired to perform a specific undertaking for a fixed period which
is co-terminus with a project or phase thereof determined at the time of the engagement
of the employee (Policy Instruction No, 19. DOLE), and it is mandatorily required that a
termination report be submitted to the nearest public employment office upon the
completion of the construction project [Aurora Land Projects Corp. v. NLRC. 266 SCRA
48 (Jan, 2. 1997)]; There is no such requirement (or an ordinary contractual worker.
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. (5%)
SUGGESTED ANSWER:
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 projector 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, 312 SCRA 119 (1999)]
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Moreover, the re-hiring of Omar is sufficient evidence of the necessity or the
indispensability of his services to the companys business. [Aurora Land Projects Corp
v. NLRC, 266 SCRA 48(1997)]
Hence, Omar is correct in claiming that he is a regular employee of Design Consultants,

Inc.
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 that the contract of project
employment clearly specifies the project and the duration thereof. [Palomares v. NLRC,
277 SCRA 439 (1997))
Q: Aldrich Zamora, a welder, was hired on February 1972 by Asian Contractors

Corporation (ACC) for a project. He was made to sign a contract stipulating that
his services were being hired for the completion of the project, but not later than
December 30, 1972, whichever comes first.
After December 1972, Zamora, being a man of many talents, was hired for
different projects of ACC in various capacities, such as carpenter, electrician and
plumber. In all of these engagements. Zamora signed a contract similar to his first
contract except for the estimated completion dates of the project for which he
was hired.
What is Zamora's status with ACC? is he a contract worker, a project employee, a

temporary or a regular employee? State your reason.
SUGGESTED ANSWER:
Zamora could be a project employee if his work is coterminous with the project for which
he was hired.
But in the case, Zamora was rehired after the completion of every project throughout the
period of his employment with the company which ranged for quite a long time. Thus, he
should be considered a regular employee. (Philippine National Construction Corporation
vs. National Labor Relations Commission, et aL, G.R No. 95816, 27 October 1972. J.
Grlno-Aquino)
ALTERNATIVE ANSWER:
a) Zamora is a regular employee because he was engaged to work in various projects

of ACC for a considerable length of time, on an activity that is usually necessary
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desirable in the usual business or trade of ACC. (Mehitabel Furniture vs. NLRC, 220
SpRA 602)
b) Zamora is a regular employee. Article 280 of the Labor Code declares with
unmistakable clarity: THE PROVISIONS OF WRITTEN AGREEMENT TO THE
CONTRARY NOTWITHSTANDING, xxx 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.
He is not a CONTRACT or TEMPORARY WORKER because even the provisions of the

simulated contracts were not followed when his Job was used continuously. He is not a
project employee, as the term is understood in Art. 280 or under Policy Instruction No.
20.
Q: Martillo and other similarly-situated project workers demanded that the

increases be extended to them, inasmuch as they should now be considered
regular employees and members of the bargaining unit. (2006 Bar Question)
If you were ABC's legal counsel, how would you respond to this demand?
SUGGESTED ANSWER:
As legal counsel for ABC, I would argue that the employment of Martillo was fixed for a
specific project or undertaking, the completion or termination of which has been
determined at the time of his engagement. Rendering 14 months of work does not make
him a regular employee, when to begin with, he was employed for a specific project, i.e.,
which is the construction of a particular 40-storey building. The rule on more than 1 year
of service making the employment regular applies only to casual employees, hence,
Mariano does not belong to the bargaining unit of regular employees.
d. Seasonal
Q: Super Comfort Hotel employed a regular pool of extra waiters who are called
or asked to report for duty when the Hotels volume of business is beyond the
capacity of he regularly employed waiters to undertake. Pedro has been an extra
waiter for more than 10 years. He is also called upon to work on weekends, on
holidays and when there are big affairs at the hotel.
What is Pedros status as an employee under the Labor Code? Why? Explain
your answer fully. (6%) (2008 Bar Question)
SUGGESTED ANSWER:
Pedro has acquired the status of a regular employee. Pedro was engaged to perform
activities which are necessary or desirable in the usual business or trade of the
employer.
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Moreover, Pedro has been extra waiter for more than 10 years. Under the law, any
employee who has rendered service at least one year of service, whether such service
is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such activity
exists (Art. 280, Labor Code).
Pedro is a regular, but seasonal worker. He is regular because as waiter, he was

engaged to perform activities which are usually necessary or desirable in the usual
business or trade of employer Super Comfort Hotel. However, his security of tenure is
coterminous with the seasonal need for which he was hired (Art. 280, 1st par., Labor
Code).
e. Casual
Q: Savoy Department Store (SDS) adopted a policy of hiring salesladies on five-

month cycles.
At the end of a salesladys five-month term, another person is hired as

replacement.
Salesladies attend to store customers, wear SDS uniforms, report at specified

hours, and are subject to SDS workplace rules and regulations. Those who refuse
the 5-month employment contract are not hired.
The day after the expiration of her 5-month engagement, Lina wore her SDS white
and blue uniform and reported for work but was denied entry into the store
premises. Agitated, she went on a hunger strike and stationed herself in front of
one of the gates of SDS. Soon thereafter, other employees whose 5-month term
had also elapsed joined Linas hunger strike. (2008 Bar Question)
Lina and 20 other salesladies 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 a 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. Decide the dispute (4%)
SUGGESTED ANSWER:
I would rule in favor of Lina, et al. In Pure Foods Corporation v. NLRC (283 SCRA
135(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
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workers with the same employment status was found to have been designed to prevent
casual employees from attaining the status of a regular employee.
The Complaint of Lina and 20 other employees should be dismissed. Under existing
jurisprudence, there is no dismissal to speak of when the term of fixed-period
employments expires. As such, there is no violation of the right to security of tenure of
these fixed-period employees even if they performed activities usually necessary or
desirable in the usual trade of business, because they knew beforehand that their
contract is to expire after five (5) months.
I will resolve the illegal dismissal case in favor of SDS. In Brent, 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) 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 (2) the employer and employee
dealt with each other on more or less equal terms with no moral dominance on the
latter.
Since admittedly, 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 als fixed term employment is valid. No illegal
dismissal can take place upon expiration of such fixed term employment.
Q: A Carpenter is employed by a private university in Manila. Is the carpenter a

regular or a casual employee? Discuss fully. (2007 Bar Question)
SUGGESTED ANSWER:
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 schools 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 by law, with respect to the activity in which he is employed and
his employment shall continue while such activity exists. (Article 280, Labor Code; See
also Philippine Geothermal, Inc. v. NLRC, 189 SCRA 211 [1990]); Kimberly
Independent Labor Union, etc. v. Drilon, 185 SCRA 190 [1990]).
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ALTERNATIVE ANSWER:
A carpenter employed by a university is a casual employee. The carpenter is engaged

to perform a job, work or service which is mostly incidental to the business of the
employer, and such job, work or service is for a definite period made known to the
employee at the time of engagement: Provided, that any employee who has rendered
at least one year of service, whether such service is continuous or not, shall be
considered a regular employee with respect to the activity in which he is employed and
his employment shall continue while such activity exists.
f. Fixed-term

Seafarers who have worked for twenty (20) years on board the same vessel are
regular employees. (2009 Bar Question)
SUGGESTED ANSWER:
FALSE. Seafarers as overseas Filipino workers are fixed-term employees whose

continued rehiring should not be interpreted as a basis for regularization but rather as a
series of contract renewals sanctioned under the doctrine set by Millares vs. NLRC (Gu-
Miro v. Adorable, 437 SCRA 162 [2004]).
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 yet 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 Bar Question)
SUGGESTED ANSWER:
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, 517 SCRA 691 [2007]).
ALTERNATIVE ANSWER:
I will advise 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 contracts of
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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 observance of procedural due process prescribed under said
law. (Magsalin, et al. v. NOWM, G.R. No. 148492, May 9, 2003).
3. Job contracting
a. Articles 106 to 109 of the Labor Code
Distinguish Labor-Only contracting and Job-Only contracting. (5%) (2012 BAR)
Suggested Answer:
Labor-only contracting. The contractor does not have substantial capital or
investment in the form of tools, equipment, machineries, work premises, among
others, and the employees of the contractor are performing activities which are
directly related to the main business of the principal. [Sy, et al. vs. Fairland
Knitcraft Co., Inc., G.R. Nos. 182915 & 189658, December 12, 2011].
Legitimate Job Contracting. The contractor has substantial capital and

investment in the form of tools, equipment, etc. and carries a distinct and
independent business and undertakes to perform the job, work or service on its
own responsibility, according to its own manner and method, and free from
control and direction of the principal in all matters connected with the
performance of the work except as to the results thereof [Escasinas vs. Shangri-
las Mactan Island Resort, 580 SCRA 344 (2009].
Labor-Only Contracting. Contracting is prohibited while Job Contracting is

allowed by law.
1. Job-Only contracting is legal; whereas, Labor-Only contracting is prohibited

by law
2. In Job-Only contracting, the principal is only an indirect employer; whereas, in
Labor-Only contracting, the principal becomes the direct employer of the
employees of the labor-only contractor.
3. The liability of the principal in Job-Only contracting vis--vis employees of job-
contractor is for a limited purpose only, e.g. wages and violation of labor
standards laws; whereas, the liability of the principal in Labor-Only contracting
is for a comprehensive purpose and, therefore, the principal becomes
solidarily liable with the labor-only contractor for all the rightful claims of the
employees.
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In Job-Only contracting, no employer-employee relationship exists between the principal
and the employees of the job contractor; whereas, in Labor-Only contracting, the law
creates an employer-employee relationship between the principal and the employees of
the labor-only contractor.
Q: Of the four tests below, which is the most determinative of the status of a
legitimate contractor-employer? (2011 BAR)
(A) The contractor performs activities not directly related to the principal's main
business.
(B) The contractor has substantial investments in tools, equipment, and other
devices.
(C) The contractor does not merely recruit, supply, or place workers.
(D) The contractor has direct control over the employees manner and method of
work performance.
Q: Mario, an expert aircon technician, owns and manages a small aircon repair
shop with little capital. He employs one full-time and two part-time technicians.
When they do repair work in homes or offices, their clients do not tell them how
to do their jobs since they are experts in what they do. The shop is shabby,
merely rented, and lies in a small side street. Mario and the other technicians
regard themselves as informal partners. They receive no regular salary and only
earn commissions from service fees that clients pay. To what categories of
workers do they fall? (2011 BAR)
(A) Labor-only contractors

(B) Job contractors
(C) Pakyaw workers
(D) Manpower agency contractors
Q: K is a legitimate contractor hired by G for six (6) months. On the third month,
G remitted to K the salaries and wages of the employees. However, K absconded
with the money leaving the employees unpaid. The disgruntled employees
demanded from G the payment of their salaries. Is G liable? (2012 Bar Question)
a. No, because G has already remitted the employees salaries to K, validly

excusing G from liability.
b. Yes, because he is jointly and solidarily liable for whatever monetary claims
the employees may have against K;
c. Yes, because of the principle of a fair days wage for a fair days work;
d. B and C.
SUGGESTED ANSWER:
b. Yes, because he is jointly and severally liable for whatever monetary claims the
employees may have against K; [Art. 106, Labor Code]
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ALTERNATIVE ANSWER:
c. Yes, because of the principle of a fair days wage for a fair days work.
Q: Is the contractor a necessary party in a case where labor contracting is the

main issue and labor-only contracting is found to exist? (2012 Bar Question)
a. Yes, the contractor is necessary in the full determination of the case as he

is the purported employer of the worker;
b. Yes, no full remedy can be granted and executed without impleading the
purported contractor;
c. No, the contractor becomes a mere agent of the employer-principal in
labor contracting;
d. No, the contractor has no standing in a labor contracting case.
SUGGESTED ANSWERS:
a. Yes, the contractor is necessary in the full determination of the case as he

is the purported employer of the worker.
b. Yes, no full remedy can be granted and executed without impleading the
purported contractor.
Q: Which is a characteristic of a labor-only contractor? (2012 Bar Question)
a. Carries an independent business different from the employers;

b. The principals liability extends to all rights, duties and liabilities under labor
standards laws including the right to self-organization;
c. No employer-employee relationship;
d. Has sufficient substantial capital or investment in machinery, tools or
equipment directly or intended to be related to the job contracted.
SUGGESTED ANSWER:
c. No employer-employee relationship [Art. 106, Labor Code]
Q: What is not an element of legitimate contracting? (2012 Bar Question)
a. The contract calls for the performance of a specific job, work or service;
b. It is stipulated that the performance of a specific job, work or service must
be within a definite predetermined period;
c. The performance of a specific job, work or service has to completed either
within or outside the premises of the principal;
d. The principal has control over the performance of a specific job, work or
service.
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SUGGESTED ANSWER:
d. The principal has control over the performance of a specific job, work or service. [Art.
106, Labor Code]
Q: With respect to legitimate independent contracting, an employer or one who

engages the services of a bona fide independent contractor is (2012 Bar
Question)
a. An indirect employer, by operation of law, of his contractors employees;

he becomes solidarily liable with the contractor not only for unpaid wages
but also for all the rightful claims of the employees under the Labor Code;
b. Treated as direct employer of his contractors employees in all instances;
he becomes subsidiarily liable with the contractor in the event the latter
fails to pat the employees wages and for violation of labor standards laws;
c. An indirect employer, by operation of law, of his contractors employees;
he becomes solidarily liable with the contractor only in the even the latter
fails to pay the employees wages and for violation of labor standard laws;
d. Treated as direct employer of his contractors employees in all instances;
the principal becomes solidarily with the contractor not only for unpaid
wages but also for all the rightful claims of the employees under th Labor
Code.
SUGGESTED ANSWER:
c) An indirect employer, by operation of law, of his contractors employees; he

becomes solidarily liable with the contractor only in the even the latter fails
to pay the employees wages and for violation of labor standard laws. [Arts.
107 and 109, Labor Code]
Q: Linis Manpower, Inc. (LMI) had provided janitorial services to the Philippine
Overseas Employment Administration (POEA) since March 2009. Its service
contract was renewed every three months. However, in the bidding held in June
2012, LMI was disqualified and excluded. In 2013, six janitors of LMI formerly
assigned at POEA filed a complaint for underpayment of wages. Both LMI and
POEA were impleaded as respondents. Should POEA, a government agency
subject to budgetary appropriations from Congress, be held liable solidarily with
LMI for the payment of salary differentials due to the complainant? Cite the legal
basis of your answer. (2014 Bar Question)
SUGGESTED ANSWER:
Yes, but only to the extent of work performed under the contract. The second paragraph
of Article 106 of the Labor Code provide
Art. 106. Contractor or subcontractor. xxx

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In the event that the contractor or subcontractor fails to pay the wages of
his employees in accordance with this Code, 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 employees directly employed by
him. Xxx
The fact that POEA 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 functions.
Q: Luningning Foods engaged the services of Lamitan Manpower, Inc., a bona

fide independent contractor, to provide tasters that will check on food quality.
Subsequently, these tasters joined the union of rank-and-file employees of
Luningning and demanded that they be made regular employees of the latter as
they are performing functions necessary and desirable to operate the companys
business. Luningning rejected the demand for regularization. On behalf of the
tasters, the union then filed a notice of strike with the Department of Labor and
Employment (DOLE). In response, Luningning sought a restraining order from the
Regional Trial Court (RTC) arguing that the DOLE does not have jurisdiction over
the case since it does not have an employer-employee relationship with the
employees of an independent contractor. If you were the RTC judge, would you
issue a restraining order against the union? (2014 Bar Question)
SUGGESTED ANSWER:
Yes. There is no labor dispute in the instant case. Since Lamitan Manpower is a bona
fide independent contractor, there is no employee-employer relationship between the
Luningning and the tasters.
ALTERNATIVE ANSWER:
No. Article 254 of the Labor Code is clear that no temporary or permanent injunction or
restraining order in any case involving or growing out of labor disputes shall be issued
by any court or other entity, except as provided in Article 218 and 264 of the same
Code.
Q: Constant Builders, an independent contractor, was charged with illegal

dismissal and non-payment of wages and benefits of ten dismissed employees.
The complainants impleaded as co-respondent Able Company, Constant
Builder's principal in the construction of Able's office building. The complaint
demanded that Constant and Able be held solidarily liable for the payment of their
backwages, separation pay, and all their unpaid wages and benefits.
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If the Labor Arbiter rules in favor of the complainants, choose the statement that
best describes the extent of the liabilities of Constant and Able. (2013 Bar
Questions)
(A) Constant and Able should be held solidarily liable for the unpaid wages and benefits,
as well as backwages and separation pay, based on Article 109 of the Labor Code
which provides that "every employer or indirect employer shall be held responsible with
his contractor or subcontractor for any violation of any provision of this Code."
(B) Constant and Able should be held solidarily liable for the unpaid wages and benefits,
and should order Constant, as the workers' direct employer, to be solely liable for the
backwages and separation pay.
(C) Constant and Able should be held solidarily liable for the unpaid wages and benefits
and the backwages since these pertain to labor standard benefits for which the
employer and contractor are liable under the law, while Constant alone as the actual
employer - should be ordered to pay the separation pay.
(D) Constant and Able should be held solidarily liable for the unpaid wages and
benefits, and Constant should be held liable for their backwages and separation pay
unless Able is shown to have participated with malice or bad faith in the workers'
dismissal, in which case both should be held solidarily liable.
(E) The above statements are all inaccurate.
SUGGESTED ANSWER:
(A)
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 I 00 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 Bar Question)
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SUGGESTED ANSWER:
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 present, Star Crafts becomes the employer of the supplied 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 job
contractor, still Star Crafts will be treated as a statutory employer for purposes of
paying the workers unpaid wages and benefits.
b. Effects of Labor-Only Contracting
c.Trilateral relationship in job contracting
a. XYZ Manpower Services (XYZ) was sued by its employees together with its
client, ABC Polyester Manufacturing Company (ABC). ABC is one of the many
clients of XYZ. During the proceedings before the Labor Arbiter, XYZ was able
to prove that it had substantial capital of Three Million Pesos. The Labor
Arbiter ruled in favor of the employees because it deemed XYZ as a labor only
contractor. XYZ was not able to prove that it had invested in tools, equipment,
etc. Is the Labor Arbiter's ruling valid? Explain. (5%) (2012 BAR)
Suggested Answer:
Yes. The presumption is that a contractor is a labor-only contractor unless it is shown
that it has substantial capital and substantial investment in the form of tools, equipment,
machineries, work premises and the like [Sy, et al. vs. Fairland Knitcraft Co., Inc., G.R.
Nos. 182915 & 189658, December 12, 2011]. Besides, what Art. 106 of the Code
defines is Labor-Only Contracting and not Job-Contracting. In mandating that (t)here is
labor-only contracting where the person supplying workers to an employer does not
have substantial capital OR investment in the form of tools, equipment, machineries,
work premises, among others, the law is therefore clear that the presence of either
handicap substantial capital OR (substantial) investment in the form of tools,
equipment, (etc.) is enough basis to classify one as a labor-only contractor.
a) No, the Labor Arbiters ruling is not valid. Art. 106 of the Labor Code provides that
the contractor has substantial capital or investment. The law did not say substantial
capital and investment. Hence, it is in the alternative; it is sufficient if the contractor
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has one of the other, i.e., either the substantial capital or the investment. And under
Department Order No. 18-A, Series of 2011, the amount of P3 million paid-up capital
for the company is substantial capital.
b. Does the performance by a contractual employee, supplied by a legitimate

contractor, of activities directly related to the main business of the principal
make him a regular employee of the principal? Explain. (5%) (2012 BAR)
Suggested Answer:
No. The element of an employees performing activities which are directly related to the
principal business of such employer does not actually matter for such is allowed by Art.
107 of the Labor Code. An independent contractor for the performance of any work,
task, job or project such as Security and Janitorial Agencies, naturally hire employees
whose tasks are not directly related to the principal business of the company hiring
them. Yet, they can be labor-only contractors if they suffer from either of the twin
handicaps of substantial capital. OR substantial investment in the form of tools, and
the like. Conversely, therefore, the performance by a job-contractors employee of
activities that are directly related to the main business of the principal does not make
said employee a regular employee of the principal.
Q:
1) What is a labor-only" contract?
2) Distinguish the liabilities of an employer who engages the services of a

bona fide independent contractor" from one who engages a labor-only"
contractor?
SUGGESTED ANSWER:
1) Labor-only" contract is a contract between an employer and a person who

supplies workers to such employer where the person supplying workers does not have
substantial capital or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business of such
employer. (Art. 106, Labor Code)
2) A person who engages the services of a bona fide Independent contractor" for
the performance of any work, task, job or project is the indirect employer of the
employees who have been hired by the Independent contractor to perform said work,
task, Job or project.
In the event that the independent contractor fails to pay the wages of his employees, an
indirect employer, in the same manner and extent that he is liable to employees directly
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employed by him, is jointly and severally liable with the independent contractor to the
employees of the latter to the extent of the work performed under the contract.
As for the person who engages the services of a "labor only" contractor, the latter is
considered merely as.an agent of the former who shall be responsible to the workers
hired by the labor only" contractor in the same manner and extent as if he directly
employed such workers.
a) An employer who engages the services of a bona fide independent contractor" is

solidarity liable with his contractor or sub-contractor only for non-payment or
underpayment of wages and other labor standards provisions of the Labor Code,
whereas an employer who engages a labor-only" contractor is liable for all benefits,
terms and conditions of employment that it normally grants to its regular or direct
employees.
b) An employer who deals with a bona-fide independent contractor shall be liable

only subsidiarity, if the contractor or sub-contractor fails to pay the wages to the workers
in accordance with the Labor Code.
Upon the other hand, an employer who deals with a labor-only" contractor shall be
primarily responsible to the workers in the same manner and extent as if the latter were
directly employed by him. (Arts 106-107, Labor Code)
Q: Distinguish between job contracting" and labor-only contracting." (1997

Bar Question)
SUGGESTED ANSWER:
When a person, not being an employer, contracts with an independent contractor for the
performance of any work, task, job or project, there is "job contracting. When the
independent contractor does the work that is contracted out, he is not under the control
of the person who contracted out the work to be done.
In "labor-only contracting", a person supplies workers to an employer. Said person does

not have substantial capital or Investments in the form of tools, equipment, machineries,
work premises, among others, and the workers recruited and placed by such person are
performing activities related to the principal business of the employer to whom the
workers are supplied.
Q: Jolli-Mac Restaurant Company (Jolli-Mac) owns and operates the largest food
chain in the country. It engaged Matiyaga Manpower Services, Inc. (MMSI), a job
contractor registered with the Department of Labor and Employment, to provide
its restaurants the necessary personnel, consisting of cashiers, motorcycle
deliver}' boys and food servers, in its operations. The Service Agreement
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warrants, among others, that MMSI has a paid-up capital of P2,000,000.00; that it
would train and determine the qualification and fitness of all personnel to be
assigned to Jolli-Mac; that it would provide these personnel with proper Jolli-Mac
uniforms; and that it is exclusively responsible to these personnel for their
respective salaries and all other mandatory statutory benefits.
After the contract was signed, it was revealed, based on research conducted, that
MMSI had no other clients except Jolli-Mac, and one of its major owners was a
member of the Board of Directors of Jolli-Mac. (2009 Bar Question)
[a] Is the Service Agreement between Jolli-Mac and MMSI legal and valid? Why or
why not? (3%)
SUGGESTED ANSWER:
No. It is not legal and valid because MMSI is engaged in labor-only contracting. For
one, the workers supplied by MMSI to Jolli-Mac are performing services which are
directly related to the principal business of Jolli-Mac. This is so because the duties
performed by the workers are integral steps in or aspects of the essential operations of
the principal. (Baguio, et al. v. NLRC, et al., 202 SCRA 465 [1991]; Kimberly
Independent Labor Union, etc. v. Drillon, 185 SCRA 190 [1990]. For another, MMSI was
organized by Jolli-Mac itself to supply its personnel requirements. (San Miguel
Corporation v. MAERC Integrated Services, Inc., et al., 405 SCRA 579 [2003]).
The Service Agreement is valid. The law, Art. 106, does not invalidate an Independent
Contractors Agreement because the Independent Contractor has only one (1) client, or
that the employer of the independent contractor is one of the major owners of the
employing establishment. MMSI, is an independent business, adequately capitalized
and assumed all the responsibilities of a legitimate Independent Contractor.
[b] If the cashiers, delivery boys and food servers are not paid their lawful
salaries, including overtime pay, holiday pay, 13,h month pay, and sendee
incentive leave pay, against whom may these workers file their claims? Explain.
(2%)
SUGGESTED ANSWER:
They may file their claims against Jolli-Mac. A finding that MMSI is a labor-only
contractor is equivalent to declaring there is an employer-employee relationship
between Jolli-Mac and the workers of MMSI. (Associated Anglo-American Tobacco
Corp. v. Clave, 189 SCRA 127 [1990], Industrial Timber Corp. v. NLRC, 169 SCRA 341
[1989]). The liability of Jolli-Mac vis-a-vis the workers of MMSI is for a comprehensive
purpose, i.e., not only for the unpaid wages but for all claims under the Labor Code and
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ancillary laws. (San Miguel Corp. v. Maerc Integrated Services, Inc., et al., 405 SCRA
579 [2003])
The employers can file their claims against Jolli- Mac pursuant to Art. 106 of the Labor
Code which reads: Contractor or .subcontractorx x x In the event that the contractor
or subcontractor fails to pay the wages of his employees in accordance with this Code,
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 employee directly employed by him.
Even if the RSC has a 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 formers motorcycle-owning members to deliver the
product of PizCorp in accordance with PizCorps directives and orders.
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, will exclusively supply PizCorp with a group of RSC motorcycle-
owning cooperative members who will henceforth perform PizCorps pizza
delivery service. RSC assumes - under the agreement - full obligation for the
payment of the salaries and other statutory 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 crew that violates PizCorps
directives and orders, PizCorp can directly impose disciplinary sanctions on,
including the power to dismiss, the erring RSC member/s.
xx
c) RSC is engaged in labor-only contracting.
SUGGESTED ANSWER:
It is not enough to show substantial capitalization or investment in the form of tools,

equipment, machinery and work premises. In addition, the following factors have to be
considered: (a) whether the contractor is carrying on an independent business; (b) the
nature and extent of the work; (c) the skill required; (d) the term and duration of the
relationship; (e) the right to assign the performance of specified pieces of work; (f) the
control and supervision of the workers; (g) the power of employer with respect to the
hiring, firing and payment of workers of the contractor; (h) the control and supervision of
the workers; (g) the power of employer with respect to the hiring, firing and payment of
workers of the contractor; (h) the control of the premises; (j) the mode, manner and
terms of payment (Alexander Vinoya v. NLRC, Regent Food Corporation and/or Ricky
See, 324 SCRA 469[2000]; Osiasl. Corporal, Sr., et al. v. NLRC, Lao Enteng Company,
Inc. and/or Trinidad IMO Ong, 341 SCRA 658[2000]).
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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 da~ 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; and
(b) x x x (2005 Bar Question)
SUGGESTED ANSWER:
(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 (Art. 109, Labor Code). By force of law, there is in reality no employer-
employee relationship between Yosi and Antonio. [Baguio, et al. v. NLRC,et al. 202
SCRA 465 (Oct. 4, 1991)].
(b) x x x
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,
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.
A. Is Arnold a job contractor? Explain briefly. (2%)
B. Who is liable for the claims of the workers hired by Arnold? Explain
briefly. (3%)
SUGGESTED ANSWER:
A. No. In two cases decided by the Supreme Court, it was held that there is job
contracting where (1) the contractor carries on an independent business and
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undertakes the contract work in 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. [Lim v. NLRC, 303 SCRA 432 (1999); Baguio v. NLRC,
202 SCRA 465(1991)]
In the problem given, Arnold did not have sufficient capital or investment for one. For
another Arnold was not free from the control and direction of Sta. Monica Plywood Corp.
because all work activities and schedules were fixed by the company.
Therefore, Arnold is not a job contractor. He is engaged in labor-only contracting.
B. Sta. Monica Plywood Corp. is liable for the claims of the workers hired by Arnold. A
finding that Arnold is a labor only contractor is equivalent to declaring that there exist an
Employer - employee relationship between Sta. Monica Plywood Corp. and workers
hired by Arnold. This is so because Arnold is considered a mere agent of Sta. Monica
Plywood Corp. [Lim v. NLRC, 303 SCRA 432, (1999); Baguio et. al. v. NLRC, 202
SCRA 465 (1991)]
Q: Tower Placement Agency supplies manpower to Lucas Candy Factory to do

work usually necessary for work done at its factory. After working there for more
than two years under the factory managers supervision, the workers demanded
that Lucas extend to them the same employment benefits that their directly hired
workers enjoyed. Is their demand valid? (2011 BAR)
(A) Yes, since it was Lucas that actually hired and supervised them to work at its
factory.
(B) No, since the agency workers are not employees of the client factory.
(C) Yes, since they have been working at the factory in excess of two years.
(D) No, since it was the placement agency that got them their jobs.
B. Dismissal from employment
Q: Rico has a temper and, in his work as Division Manager of Mata tag 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. Comment on
Matatag's action in relation to Rico's argument. (2015 Bar Question)
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SUGGESTED ANSWER:
Matatag 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, Ricos conviction need not
precede the employees dismissal.
Q: Under current jurisprudence, when the dismissal is for a just or authorized

cause but due process is not observed, the dismissal is said to be: (2012 Bar
Question)
a. Void for denial of due process; hence, the employee should be reinstated;
b. Void for lack of due process, the employee should be paid full backwages;
c. Valid, for the dismissal is with just/authorized cause, but the employer
shall be liable for nominal damages;
d. Valid, even if due process is not observed, hence reinstatement should
not be ordered.
SUGGESTED ANSWER:
c. Valid, for the dismissal is with just/authorized cause, but the employer shall be liable
for nominal damages. [Agabon vs. NLRC, G.R. No. 158693, November 17, 2004]
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 Morgans operations in Taguig City. Lionels 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 Bar Question)
SUGGESTED ANSWER:
(A) whether he has a cause of action
Lionel has a cause of action; he was illegally dismissed. Dismissal due to an

employees refusal of a promotion is not within the sphere of management
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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
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
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 employees
refusal to accept promotion cannot be considered as insubordination or willful
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, 544 SCRA 279 [2008]).
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, 325 SCRA 157 [2000]); Phil. Industrial Security Agency Corp. v.
Dapiton, 320 SCRA 124 [1999]).
1. Just Causes
Q: Marimar is a teacher in Santibanez High School. She is the class adviser of the
senior batch where Sergio is enrolled. Since it is the policy of the school to
extend remedial instructions to its students, Sergio is imparted such Instructions
in school by Marimar after regular class hours. In the course thereof. Marimar and
Sergio fell in love with each other and shortly after got married. Marimar is 31
years old while Sergio is only 16.
Santibanez High School thereafter seeks to terminate the employment of Marimar

for abusive and unethical conduct unbecoming of a dignified school teacher and
that her continued employment is Inimical to the best interest and would
downgrade the high moral values of the school. Marimar, according to the school,
recklessly took advantage of her position as a teacher by luring a graduating
student under her advisory section and 15 years her junior into an amorous
relationship, in violation of the Code of Ethics for teachers which states, among
others, that a school official or teacher should never take advantage of his/her
position to court a pupil or student." While no one directly saw Marimar and
Sergio doing any intimate acts inside the classroom, the school nonetheless
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maintains that the marriage between the two is the best proof which confirms the
suspicion that Marimar and Sergio indulged in amorous relations inside the
classroom after class hours.
Marimar, on the other hand, contends that there is nothing wrong with a teacher
falling in love with her pupil and consequently, contracting marriage with him.
How would you decide the case. Explain. (1996 Bar Question)
SUGGESTED ANSWER:
The fact that Marimar and Sergio got married is not by itself sufficient proof that
Marimar, as a 31 year old teacher, took advantage of her position to court Sergio, a 16-
year old student, whom she was tutoring after regular class hours. Thus, Marimar could
not be considered as violating the schools Code of Ethics which could have been a
valid cause for her termination. Marimars falling in love with her student cannot be
considered serious misconduct which is a Just cause for termination of employment.
Of course, if it is proven that Marimar and Sergio indulged in amorous relations inside
the classroom after class hours, this would constitute serious misconduct on the part of
Marimar as a teacher and could be just cause for the termination of her employment.
The case should be decided in favor of Marimar, the school teacher. The school failed
to adduce evidence in support of its claim of immoral conduct on the part of Marimar;
hence, its claim that the marriage between the two (teacher and student) is best proof
which confirm the suspicion that Marimar and Sergio indulged in amorous relations
inside the classroom after office hours" is a gratuitous statement. Furthermore, marriage
between two parties of disparate ages, even as between an older teacher and a
younger student is not an immoral act.
In Chua Qua v. Clave, 189 SCRA 117 (1990) a case which is exactly similar to the
problem, the Supreme Court ruled:
[Where] there is no substantial evidence of the imputed immoral acts, it follows that the
alleged violation of the Code of Ethics would have no basis. If the two eventually fell in
love, despite the disparity on their ages and academic levels, this only lends substance,
to the truism that the heart has reasons of its own which reason does not know. But,
definitely, yielding to this gentle and universal emotion is not to be casually equated with
immorality. The deviation of the circumstances of their marriage from the usual societal
pattern cannot be considered as a defiance of contemporary social norms.
Q: A was an able seaman contracted by ABC Recruitment Agency for its foreign
principal, Seaworthy Shipping Company (SSC). His employment contract
provided that he would serve on board the Almieda II for eight (8) months with a
monthly salary of US $450. In connection with his employment, he signed an
undertaking to observe the drug and alcohol policy which bans possession or
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use of all alcoholic beverages, prohibited substances and unprescribed drugs on
board the ship. The undertaking provided that: (1) disciplinary action including
dismissal would be taken against anyone in possession of the prohibited
substances or who is impaired by the use of any of these substances, and (2) to
enforce the policy, random test sampling would be done on all those on board the
ship.
On his third month of service while the Almieda Uwas docked at a foreign port, a
random drug test was conducted on all members of the crew and A tested
positive for marijuana. He was given a copy of the drug test result. In compliance
with the companys directive, he submitted his written explanation which the
company did not find satisfactory. A month later, he was repatriated to the
Philippines.
Upon arrival in the Philippines, A filed with the National Labor Relations
Commission (NLRC) a complaint against the agency and the principal for illegal
dismissal with a claim for salaries for the unexpired portion of his contract. (2010
Bar Question)
a) Was As dismissal valid? Explain. (3%)
SUGGESTED ANSWER:
NO, As dismissal was not valid. A was not found to be in possession of the prohibited
substance nor was he impaired by the use thereof. Being tested positive for
marijuana is not a ground for disciplinary action under the undertaking he signed.
ALTERNATIVE ANSWER:
YES, As dismissal was valid. He was tested positive for marijuana. This is in violation of
the drug and alcohol policy, which bans possession, or use of all alcoholic beverages,
prohibited substances and un-prescribed drugs on board the ship.
b) Is his claim for salaries for the unexpired portion of his contract tenable?
Explain. (3%)
SUGGESTED ANSWER:
YES. Section 10 of Rep. Act No. 8042 (as amended by Rep. Act No. 10022) provides
that in case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, or any unauthorized deductions from the migrant
workers salary, the worker shall be entitled to the full reimbursement of his placement
fee with interest at twelve percent (12%) per annum, plus his salaries for the unexpired
portion of his employment contract or for three (3) years for every year of the unexpired
term, whichever is less (cf. Serrano v. Gallant Maritime, 582 SCRA 254 [2009]).
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ALTERNATIVE ANSWER:
NO. Under Rep. Act No. 8042, money claim can be made only if there is dismissal
without just or authorized cause.
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 elses identification card (ID). Sergio flared up and shouted at Corazon
Wala kang pakialam! Kung gusto mo. itapon ko itong 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 files a complaint for illegal dismissal, arguing that his acts did not
constitute serious misconduct that would justify his dismissal.
SUGGESTED ANSWER:
The acts of Sergio constituted serious misconduct. Thus, there was just cause for his
termination. The fact that he was under the influence of liquor at the time that he did
what he did does not mitigate instead it aggravates, his misconduct being under the
influence of liquor while at work is by itself serious misconduct.
ALTERNATIVE ANSWER:
The dismissal is not justified because the serious misconduct committed by the
employee is not Ln connection with his work. Art. 282(g) of the Labor Code was
interpreted by the Supreme Court in Aris Philippines, Inc. v. NLRC, as follows:
"It is not disputed that private respondent has done, indeed he admitted to have
committed, a serious misconduct. I n 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."
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Q: Pepe Santos was an international Flight steward of FlySafe Airlines. Under
FSAs 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 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 send 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 Santoss service for violation of
company standards.
Santos Filed a complaint for illegal dismissal, arguing that the companys 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 s willful disobedience to
lawful employer orders. The Labor arbiter found the dismissal illegal for there
was neither gross and habitual neglect of duty nor willful disobedience.
Is the Labor Arbiter correct? Why or why not? Explain fully. (6%) (2008 Bar
Question)
SUGGESTED ANSWER:
The Labor Arbiter is correct. There is no gross and habitual neglect because it appears
that Pepe was trying to meet the weight limit, but just could not do so. His acts or
omissions were not willfully or intentionally done with conscious indifference to the
consequences of such acts or omissions.
There was no willful disobedience because Pepes actions or omissions were not
motivated by a wrongful or perverse attitude. Besides, the rigid requirement of meeting
the 170-pound maximum weight limit is not reasonable, considering a person who could
just be a few pounds over shall already be terminated. At worst, Pepe could be
suspended or reprimanded for his inability to reach the weight limit. Dismissal would be
too harsh a penalty to impose.
The Labor Arbiter is not correct in finding the dismissal of Santos illegal.
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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.
The FSA, through its Cabin Crew Administrative Manual, told Santos, that given his
height and body frame, he must maintain his weight between 130 and 170 pounds. This
pre -requisite is an exercise of management prerogative. When Santos became a flight
steward at FSA, he accepted his employment with this prerequisite 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: Atty. Renan, a CPA-lawyer and Managing Partner of an accounting firm,

conducted the orientation seminar for newly-hired employees of the firm, among
them, Miss Maganda. After the seminar, Renan requested Maganda to stay,
purportedly to discuss some work assignment. Left alone in the training room,
Renan asked Maganda to go out with him for dinner and ballroom dancing.
Thereafter, he persuaded her to accompany him to the mountain highway in
Antipolo for sight-seeing. During all these, Renan told Maganda that most, if not
all, of the lady supervisors in the firm are where they are now, in very productive
and lucrative posts, because of his favorable endorsement.
xxx
[b] The lady supervisors in the firm, slighted by Renans revelations about them,
succeeded in having him expelled from the firm. Renan then filed with the
Arbitration Branch of the NLRC an illegal dismissal case with claims for damages
against the firm. Will the case prosper? Reasons. (2%) (2009 Bar Question)
SUGGESTED ANSWER:
Yes, serious misconduct is a ground for termination of employment. The term

misconduct denotes intentional wrongdoing or deliberate violation of a rule of law or
standard of behavior.
No. The case for illegal dismissal with damages filed in the Office of Labor Arbiter will
not prosper. Renan was terminated for serious misconduct which is a just cause under
Art. 282 of the Labor Code. The act of Renan is grave and aggravated in character, and
committed in connection with his work (Echaverria v. Venutek Media, 516 SCRA 72
[2007], and indicates that he has become unfit to continue working for his employer.
(Torreda v. Toshiba Info. Equipment, Inc. Phils., 515 SCRA 133 [20007]).
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Q: Gabriela Liwanag has been working as 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? (5%) (2005 Bar Question)
SUGGESTED ANSWER:
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 public health authority that the disease is of such a nature
or such a stage that it cannot be cured within a period of six (6) months even with
proper medical treatment. (Implementing Rules, Book VI, Rule I, Sec. 8, Labor Code).
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 stall and students joined the peaceful prayer rally organized by
disgruntled employees to protest certain alleged abuses of the incumbent School
Director. Subsequently, the rank- and-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?

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SUGGESTED ANSWER:
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.
The dismissal of the managerial employees is invalid. The dismissal of the management
employees because of union activities, no matter how erroneous or tenous may be the
basis of the exercise, is a violation of the constitutional and statutory guaranteed rights
of self-organization, and an act of unfair labor practice. (Sec. 3, Art. XIII, Constitution;
Art. 243, Labor Code. See also Art. 248 (a), Labor Code).
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 drop-out 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. (2005 Bar Question)
SUGGESTED ANSWER:
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 employees assailed conduct must have been willful or intentional, the willfulness
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 willfully
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: May an ordinary rank-and -file employee be terminated for loss of trust and
confidence? If so, what proof is required? If not, why not? (2%) (1999 Bar
Question)
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SUGGESTED ANSWER:
An ordinary rank and file employee may be terminated for loss of trust and confidence
as long as loss of trust and confidence is brought about objectively due to a willful
breach by the employee of the trust reposed in him by his employer or duly authorized
representative, and said willful breach is proven by substantial evidence.
When adequately proven, the dual grounds of breach of trust and loss of confidence
constitute valid and ample bases to warrant termination of an errant employee. As a
general rule, however, employers are allowed a wider altitude of discretion in
terminating the employment of managerial personnel or those of similar rank performing
functions which by their nature requires the employer's full trust and confidence, than in
the case of an ordinary rank-and-file employee, whose termination on the basis of these
same grounds requires proof of involvement in the events in question; mere
uncorroborated assertions and accusations by the employer will not suffice. (Manila
Midtown Commercial Corporation v. Nuwhrain, 159 SCRA 212).
Q: Which is NOT a guideline for the dismissal of an employee on the ground of

loss of confidence? (2011 BAR)
(A) Loss of confidence may not be arbitrarily invoked in the face of overwhelming
evidence to the contrary.
(B) Loss of confidence as cause of dismissal should be expressly embodied in
written company rules.
(C) The employee holds a position of trust and confidence.
(D) Loss of confidence should not be simulated nor a mere afterthought to justify
earlier action taken in bad faith.
Q: A foreign guest in a luxury hotel complained that he lost certain valuable items
in his hotel room. An investigation by the hotel pointed to two roomboys as the
most probable thieves. May the management invoke loss of confidence as a
just cause for dismissing the roomboys? (2011 BAR)
(A) No, loss of confidence as reason for dismissal does not apply to rank and
file employees.
(B) No, loss of confidence applies only to confidential positions.
(C) Yes, loss of confidence is broad enough to cover all dishonest acts of
employee.
(D) RIGHT ANSWER Yes, loss of confidence applies to employees who are
charged with the care and custody of the employer's property.
Q: An employee is NOT entitled to financial assistance in cases of legal

dismissal when the dismissal (2011 BAR)
(A) is based on an offense reflecting the depraved character of the employee.

(B) is based on serious misconduct or breach of the employer's trust.
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(C) is grounded on any of the just causes provided by the Labor Code.
(D) when the employee has less than 10 years of service.
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. (2%) (2009 Bar Question)
SUGGESTED ANSWER:
Domingo as bus conductor holds a position wherein he was reposed with the
employers trust and confidence. In Bristol Mgers Squibb (Phils.) v. Baban (574 SCRA
198 [2008]), the Court established 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 (448 SCRA 516 [2005]), the Court held that where the amount involved
is miniscule, an employee may not be dismissed for loss of trust and confidence.
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 a ready 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 airconditioned 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 willful 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 Bar
Question)
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SUGGESTED ANSWER:
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 latters union
activities.
But in the 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 willful disobedience to do what management asked him to
do. This is just cause for his termination.
ALTERNATIVE ANSWER:
a) No. The existence-of an emergency situation is irrelevant to the charge of willful

disobedience; an opposite principle would allow a worker to shield himself under his
self-designed concept of non-emergency situation" to deliberately defy the directive of
the employer.
Roman was given adequate opportunity under the circumstances to answer the charge.
His explanation was taken into consideration in arriving at the decision to dismiss him.
b) If it can be established that the true and basic motive for the employer's act is derived
from the employee's union affiliation or activities, the allegation by the employer of
another reason whatever its substance of validity, is unavailing. Thus, the dismissal
could be considered illegal.
Q: Julie is a branch manager of Bangko Bangkarute National, rising from the

ranks through her 21 years of employment. On November 25. 1992, she filed an
application for a total 60 days leave of absence; 15 days with pay (regular annual
vacation leave), starting December 1 to 15. and 45 days without pay (personal
leave), starting December 16 to January 30. which she submitted to the Vice
President for Branch Banking Department, for approval. Unfortunately, the Vice
President for the Branch Banking Department, disapproved her request for
personal leave without pay of 45 days, citing as reason the anticipated heavy
work load brought about by the onset of the Christmas season. Nonetheless, he
approved her regular annual leave with pay of 15 days. Realizing that the leave
granted her (15 days) is not sufficient she filed a motion for reconsideration only
by way of formality since she is bent on taking a leave for 60 days, irrespective of
whether the bank management allows her personal leave without pay for 45 days.
Without waiting for the decision of the Vice President for branch banking
division, which denied her Motion for Reconsideration. Julie proceeded to take
her leave commencing on Dec. 1, 1992.
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Having exhausted her 60 days leave of absence, she reported back for work but
was presented a letter dated Dec. 16, 1992, from the Vice President for Branch
Banking Division, informing her of her termination effective December 16. 1992.
She filed a case for illegal dismissal and prayed for reinstatement and damages
against Bangko Bangkarute National.
1) Is the severance of Julies employment for a just cause? Explain.

2) Is she entitled to reinstatement? Why?
3) Are damages recoverable from Bangko Bangkarute National?
SUGGESTED ANSWER:
1) The severance of Julies employment is for a Just cause. She is guilty of willful
disobedience of the lawful order of her employer, or her representative in connection
with her work. As a branch manager of the Bank, Julie is a high official, who should be a
good example to the employees on how lawful orders of the employer are to be
observed and obeyed.
The refusal of the Bank to grant her request for personal leave without pay for 45 days
was not whimsical or arbitrary. There was reason for the refusal, that is, the anticipated
heavy workload brought about by the onset of the Christmas season.
There was willful disobedience on the part of Julie. Her filing a motion for
reconsideration was only by way of formality, since she was bent on taking a leave for
60 days irrespective of whether the Bank management allows her personal leave
without pay for 45 days.
a) There is basis for the Bank to terminate the services of Julie on the ground
of its loss of confidence in her. As a branch manager of the Bank, Julie should
show concern that the anticipated workload brought about by the onset of the
Christmas season is satisfactorily dealt with by the Bank. Yet, inspite of Julie
being told about this problem, she was still bent on taking a leave for 60 days
irrespective of whether the Bank allows her personal leave without pay for 45
days.
b) Basically, the problem is entitlement to personal leave of 45 days on the

part of the employee. If she is entitled by reason of company regulations or
company practice, the employer being a bank, the denial may have been
arbitrary and is invalid. If so, her dismissal is without a just cause, for availment
of a right cannot be a ground for discipline. She would therefore be entitled to
reinstatement. However, no damages should be due from the bank, unless it is
clear that it had ratified the action taken by the bank, vice-president. He should
shoulder the damages instead.
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On the other hand, if the claim of personal leave is entirely without legal
basis, then the employee was AWOL for 45 days which is serious misconduct,
hence, a just cause for dismissal. Even then, in the light of her long service plus
a valid justification for personal leave (such as urgent medical treatment abroad),
the dismissal would be for insufficient cause and would be too harsh, hence, she
would be entitled to reinstatement without back wages.
SUGGESTED ANSWER:
2) She is not entitled to reinstatement because her dismissal was legal, it being for
Just cause.
a) She would be entitled to reinstatement since her dismissal is considered

too harsh a penalty for the offense she committed.
b) Julie is not entitled to reinstatement. The strained relations" rule applies in

this case. Julie, a branch manager of the bank, occupies a highly responsible
and confidential position, which requires a consistent level of confidence.
3) She cannot claim damages from the Bank. There is no basis for a claim for damages.
It may be noted that she was not given the required due process by the Bank before her
dismissal. She Is therefore entitled to an indemnity of PI.000.
Q: A is an audit clerk in the Seafront Financing Company. One day he had an

argument with his immediate superior after the latter accused him of having failed
to record and check a certain transaction a week earlier which resulted in the loss
of P100, 000. The argument led to a fistfight with both protagonists sustaining
serious injuries that required hospitalization. One and a half months later, A
returned to work but was immediately given by the same superior a dismissal
letter on the ground of loss of confidence, grave misconduct and fighting with his
superior. A later sued the company for illegal dismissal. He also claimed for
reinstatement and backwages. Decide.
SUGGESTED ANSWER:
There may be just cause for the termination of the employment of A. After all, he is
guilty of a serious misconduct if he fought his superior after the latter accused him of
having failed to record and check a transaction which resulted in a loss of P100,000 for
the company. This is also a factual basis for loss of confidence since it is a willful breach
of trust by the employee of the trust reposed in him by his employer. The foregoing is a
just cause for the termination of employment.
However, the Company should first give A the ample opportunity to be heard and
defend himself with the assistance of his representatives if he so desires in accordance
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Labor Law

with company rules and regulations promulgated pursuant to the guidelines set by the
DOLE.
Unless the Company gives to A the ample opportunity to be heard and to defend
himself, its termination of A will be illegal, and A will be entitled to reinstatement and
backwages.
Q: Jose and Pedro were utility workers employed by Yellow Farms. Inc. On 13
January 1984, they were picked up by the company's guards in connection with
the theft of polyethylene bags belonging to the company. They were detained at
the Baybay Municipal Jail. Initial investigation of the police yielded no prima facie
case against them, resulting in their release. However, after further investigation.
an amended complaint was formally filed against them and two others, charging
them with theft before the Municipal Court. The Company terminated Jose and
Pedro due to loss of confidence. Consequently, the two filed a complaint of illegal
dismissal on the ground that their dismissal based on the criminal complaint did
not justify their termination. Is the filing of the criminal complaint against Jose
and Pedro sufficient ground for their termination? What is the quantum of proof
necessary to terminate an employee for loss of confidence? What if the criminal
complaint was dismissed on the ground of reasonable doubt?
SUGGESTED ANSWER:
The mere filing of the criminal complaint against Jose and Pedro would not be sufficient
ground for their termination. because while it is true that the criminal complaint could be
properly filed only if there was a prima facie case against said employees, this fact does
not in turn automatically mean that there is already substantial evidence to prove that
there is Just cause for their termination.
The quantum of evidence necessary to terminate an employee for loss of confidence is

that of substantial evidence.
Even if the criminal complaint was dismissed on the ground of reasonable doubt. Jose
and Pedro could still be dismissed as long as there is substantial evidence to prove that
they have committed acts that could be an objective basis for loss of confidence.
ALTERNATIVE ANSWER:
Yes, the filing of a criminal complaint is sufficient ground, since such complaint is
founded upon prima facie evidence of their guilt of theft. In dismissal for loss of
confidence, it is sufficient if there is substantial evidence to believe that the employee is
guilty of theft. This standard is equivalent to a prima facie finding of guilt in criminal
procedure.
Mere dismissal on the ground that proof beyond reasonable doubt was adduced, will
not entitle the employees to reinstatement. In criminal law the higher standard will not
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necessarily negative the existence of the lower standard of proof of substantial
evidence of guilt.
Q: Julian Ramos started with Philippine Mines, Inc. as a laborer in 1965. He rose
to become a shift supervisor. Company rules and regulations governing
employee conduct within its mine compound and the residential area and
barracks for workers provide that the commission of a third offense in any year,
even if the first two were merely punished with warning, reprimand, or
suspension, would result in dismissal.
By June 10, 1987, Julian had been warned once and reprimanded once. On July
15, 1987,
Julian quarreled with a company guard in the mines residential area. Investigated
by the personnel manager, Julian admitted the offense. He was dismissed on July
17, 1987 for violating company rules and regulations and gross misconduct. He
filed a case for illegal dismissal with backwages on July 22, 1987. The parties
stipulated on the above facts before the Labor Arbiter and submitted the case for
decision. (1988 Bar Question)
(a) You are the Labor Arbiter. Decide the case.

(b) If instead of quarreling with a guard, he was caught taking scrap lumber
from the premises of the mine and taking it home for fuel, would your answer be
the same? Explain
SUGGESTED ANSWER:
(a) I will decide the case, ruling that the dismissal is illegal, if the quarrel which Julian
had with a company guard was just a small quarrel, say, just an exchange of words,
after which Julian and the company guard parted as friends. It would be too harsh; it
could be violation of the security of tenure of an employee, especially in this case, of an
employee who has been with the Company for over 20 years, to punish him with
dismissal just because he has committed a third offense within a year. It should also be
noted that the quarrel was in the miners residential area and not in the working area of
the miners. This third offense rules of the company, rules and regulations should not
be literally implemented. It is serious misconduct that is a just cause for termination.
Thus, if the quarrel was a serious one: it was Julian who provoked the quarrel; he
inflicted physical injuries on the security guard, then the quarrel could be just cause for
termination.
(b) I would rule that the act of Julian taking scrap lumber from the premises of the Mine
and taking it home for fuel will be a just cause for terminating him. It is noted that Julian
is a shift supervisor. He should be a model for other employee. Thus, I will consider his
act of taking home scrap lumber as serious misconduct.
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Q:
1) Distinguish between the substantive and the procedural requirements for

the dismissal of an employee.
2) May a court order the reinstatement of a dismissed employee even if the
prayer of the complaint did not include such relief?
SUGGESTED ANSWER:
1) This is the substantive requirement for the valid dismissal of an employee: There
should be a just cause for the termination of an employee or that the termination is
authorized by law.
This is the procedural requirement: The employer 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)
2) So long as there is a finding that the employee was illegally dismissed, the court can
order the reinstatement of an employee even if the complaint does not include a prayer
for reinstatement, unless, of course, the employee has waived his right to reinstatement;
By law an employee who is unjustly dismissed is entitled to reinstatement, among
others.
The mere fact that the complaint did not pray for reinstatement will not prejudice the
employee, because technicalities of law and procedure are frowned upon in labor
proceedings. (General Baptist Bible College vs. NLRC, 219 SCRA 549).
Q: Diosdado, a carpenter, was hired by Building Industries Corporation (BIC), and

assigned to build a small house in Alabang. His contract of employment
specifically referred to him as a project employee, although it did not provide
any particular date of completion of the project.
Is the completion of the house a valid cause for the termination of Diosdados
employment?
If so, what are the due process requirements that the BIC must satisfy? If not,
why not? (3%) (2009 Bar Question)
SUGGESTED ANSWER:
The completion of the house should be valid cause for termination of Diosdados
employment.
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Although the employment contract may not state a particular date, but if it did specify
that the termination of the parties* employment relationship was to be on a day certain
- the day when the phase of work would be completed - the employee cannot be
considered to have been a regular employee (Filipinos Pre-Fabricated Building systems
v. Puente, 453 SCRA 820 [2005]).
To satisfy due process requirement, under DOLE Department Order No. 19, series of
1993, the employer is required to report to the relevant DOLE Regional Office the fact of
termination of project employees as a result of the completion of the project or any
phase thereof in which one is employed.
No. The completion of the house is not a valid cause for termination of employment of
Diosdado, because of the failure of the BIC to state the specific project or undertaking
the completion or termination of which has been determined at the time of the
engagement of the employee. (Labor Code, Art. 280). There being no valid termination
of employment, there is no need to comply with the requirements of procedural due
process.
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 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. 5% (2006 Bar
Question)
SUGGESTED ANSWER:
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 the ground or

grounds for termination and giving him reasonable opportunity within which to explain
his side:
b) A hearing or conference shall be conducted during which the employee

concerned, with the assistance of counsel if he so desires, is given an opportunity to
respond to the charge, present his evidence or rebut the evidence presented against
him; and
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c) A written notice of termination must be served on the employee indicating that
upon due consideration of all the circumstances, grounds have been established to
justify his termination.
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 As 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? (5%) (2001 Bar Question)
SUGGESTED ANSWER:
In the case of PLDT vs. NLRC, (G.R. No. 106947, February 11, 1999), the Supreme
Court ruled that the basic requisite for dismissal on the ground of loss of confidence is
that the employee concerned must be one holding a position of trust and confidence.
Rank-and-file employees may only be dismissed for loss of confidence if the same is
because of a willful breach of trust by a rank and file employee of the trust reposed in
him by his employer or duly authorized representative (Art. 282(c), Labor Code).
"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:
a. loss of confidence should not be simulated;

b. it should not be used as subterfuge for causes which are improper, illegal or
unjustified;
c. it may not be arbitrarily asserted in the face of overwhelming evidence to the
contrary; and
d. it must be genuine, not a mere after thought to justify their action.
Q: For misconduct or improper behavior to be a just cause for dismissal, the

following guidelines must be met, except: (2012 Bar Question)
a) It must be serious;
b) It must relate to the performance of the employees duties;
c) It should not be used as a subterfuge for causes which are improper, illegal or
unjustified;
d) It must show that the employee has become unfit to continue working for the
employer.
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SUGGESTED ANSWER:
c. It should not be used as a subterfuge for causes which are improper, illegal or
unjustified [Solid Development Corp. Workers Association vs. Solid Development Corp.,
530 SCRA 132 (2007)].
Q: The Supreme Court categorically declared that separation pay shall be allowed
as a measure of social justice only in those instances where the employee is
validly dismissed for cause other than: (2012 Bar Question)
a. Serious Misconduct;
b. Gross and habitual neglect of duties;
c. Willfull disobedience to lawful orders;
d. Fraud or willful breach of trust.
SUGGESTED ANSWER:
A) Serious Misconduct [Tirazona vs. PET, Inc., 576 SCRA 625]
But Apacible (G.R. No. 178903, May 30, 2011) disallows separation pay for employees
who are dismissed under any of 4 grounds in Art. 282, thus NO CORRECT ANSWER.
Q: Luisa was hired as a secretary by the Asian Development Bank (ADB) in

Manila. Luisas 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 Bar Question)
SUGGESTED ANSWER:
I will dismiss the case. ADB enjoys immunity from suit (DFA vs. NLRC, G.R. No.
113191, September 18, 1996).
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 just cause for dismissal. (Iluminada, Buiser, et. al. v. Leogardo, Jr., 131
SCRA 151 (1969)] Nonetheless, the employer's failure to comply with the procedure
prescribed by law in terminating the services of the employee warrants the payment of
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nominal damages of Php30,000.00, in accordance with the Supreme Court's ruling in
the case of Agabon v. NLRC (G.R. No. 158693, November 17, 2004).
Q: Lanz was a strict and unpopular Vice-President for Sales of Lobinsons Land.
One day, Lanz shouted invectives against Lee, a poor performing sales associate,
calling him, among others, a brown monkey. Hurt, Lee decided to file a criminal
complaint for grave defamation against Lanz. The prosecutor found probable
cause and filed an information in court. Lobinsons decided to terminate Lanz for
committing a potential crime and other illegal acts prejudicial to business. Can
Lanz be legally terminated by the company on these grounds? (2014 Bar
Question)
SUGGESTED ANSWER:
No. The grounds relied upon by Lobinsons are not just causes for dismissal under the
Labor Code. Defamation is not a crime against person which is a ground to dismiss
under Article 282, now Article 295, (d) of the Labor Code.
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 co-employee
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.
A) As lawyer for Magna, advise the company on whether just and valid
grounds exist to dismiss Jose. (2013 Bar Questions)
SUGGESTED ANSWER:
Jose can be dismissed for serious misconduct, violation of company rules and
regulations, and commission of a crime against the employers 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:
1. of grave and aggravated character and not merely trivial or unimportant and
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2. connected with the work of the employee.
Article 282(e) of the Labor Code talks of other analogous causes or those which are
susceptible of comparison to another in general or in specific detail as a cause for
termination of employment.
In one case, the Court considered theft committed against a co-employee as a case
analogous to serious misconduct, for which penalty of dismissal from service may be
meted out to the erring employee. (Cosmos Bottling Corp. v. Fermin, G.R. No.
193676/194303 [2012]). Similarly, Joses offense perpetrated against his co-employees,
Erica and Paolo, can be considered as a case analogous to serious misconduct.
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? (2013 Bar Questions)
SUGGESTED ANSWER:
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 employees duties; and (c) must show
that the employee has become unfit to continue working for the employer.
On the basis of the forgoing 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, G.R. No. 168637/170684 [2008])
Additionally, there was no compliance with the rudimentary requirements of due

process.
2. Authorized Causes
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.
(a) How would you decide this case? (4%)
(b) What is the "successor employer" doctrine? (2%) (2015 BAR)
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Suggested Answer:
(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 in ownership is done in bad faith or
is used to defeat the rights of labor. In such a case, the successor-employer is duty-
bound to absorb the displaced employees (Penafrancia Tours and Travel Transport,
Inc., v. Sarmiento, 634 SCRA 279).
Since the facts of the case do no show any bad faith in BLEACHs sale to BLANK,
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 stock. The
ruling in SME Bank v. De Guzman (G.R. No. 184517, Oct. 8, 2013), which reversed
Manlimos v. NLRC (312 Phil. 178), 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 sales, 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.
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.
(b)The successor employer doctrine refers to a sales 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.
X was one of more than one hundred (100) employees who were terminated from
employment due to the closure of Construction Corporation A. The Cruz family
owned Construction Company A. Upon the closure of Construction Company A,
the Cruzes established Construction Company B. Both corporations had the
same president, the same board of directors, the same corporate officers, and all
the same subscribers. From the General Information Sheet filed by both
companies, it also showed that they shared the same address and/or premises. .
Both companies also hired the same accountant who prepared the books for both
companies.
X and his co-employees amended their Complaint with the Labor Arbiter to hold
Construction Corporation 8 joint and severally liable with Construction Company
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A for illegal dismissal, backwages and separation pay. Construction Company 8
interposed a Motion to Dismiss contending that they are juridical entities with
distinct and separate personalities from Construction Corporation A 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? (5%) (2012 BAR)
Suggested Answer:
Denied. The factual circumstances that the businesses of Construction Company A
and Construction Company B are related, that all of the employees of Company A are
the same persons manning and providing for auxiliary services to units of Company B,
and that the physical plants, offices and facilities are situated in the same compound
justify the piercing of the corporate veil of Company B. [Indophil Textile Mill Workers
Union vs. Calica, 205 SCRA 697 (1992)]. The fiction of the corporate entity can be
disregarded when it is used to justify wrong or protect fraud. [Complex Electronics
Association v. NLRC, G.R. No. 121315 & 122136, July 19, 1999)].
Q: Distinguish between dismissal of an employee for just cause and termination

of employment for authorized cause. Enumerate examples of just cause and
authorized cause. (5%) (2000 Bar Question)
SUGGESTED ANSWER:
Dismissal for a just cause is founded on faults or misdeeds of the employee. Separation
pay, as a rule, will not be paid. Examples: serious misconduct, willful disobedience,
commission of crime, gross and habitual neglect, fraud and other causes analogous to
the foregoing. (Art. 282, Labor Code).
Termination for authorized causes is based on business exigencies or measures

adopted by the employer, not constituting faults of the employee.
Payment of separation pay at varying amounts is required. Examples: redundancy,

closure, retrenchment, installation of labor saving device and authorized cause. [Art.
283-284, Labor Code).
Q: Enumerate and discuss briefly:
1. xxx
2. What are the authorized causes for a valid dismissal by the employer of an
employee? Why are they distinct from the just causes? (5%) (2005 Bar Question)
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SUGGESTED ANSWER:
The authorized causes for a valid dismissal are distinct from just causes because where
the dismissal of an employee is based on just causes, these just causes are acts
committed by the employee which provide the basis for his dismissal. On the other
hand, where the dismissal is based on authorized causes, these authorized causes are
the results of the proper exercise by the employer of his management prerogatives. . If
a valid dismissal is based on just causes, there is no liability on the part of the employer,
although sometimes, financial assistance to be given to the dismissed employee is
asked of the employer. If a valid dismissal is based on authorized causes, the employer
has to pay separation pay except In case of closure or cessation of operation due to
serious business losses or financial reverses.
Q: Juan and Pedro were regular employees of Rose Manufacturing Company for
20 years. On May 31, 1984, both were dismissed by the company for dishonesty
and fraud. They sued for reinstatement and backwages. The labor arbiter ordered
the reinstatement of Juan and Pedro and the payment of their backwages. During
the pendency of its appeal to the National Labor Relations Commission (NLRC).
The company undertook a reorganization of its various departments where,
among others, the positions of Juan and Pedro were eliminated as redundant. On
April 30, 1989, the NLRC affirmed the labor arbiters award and ordered the
reinstatement of Juan and Pedro and payment of backwages covering five years.
You are asked by the company to question the ruling of the NLRC before the
Supreme Court. What would be your main arguments?
SUGGESTED ANSWER:
I will question the ruling of the NLRC before the Supreme Court with the following as my
main arguments:
1. The order to reinstate Juan and Pedro is no longer correct because of the
supervening event, namely, the reorganization at the company that included, among
others, the elimination of the positions of Juan and Pedro which were considered
redundant. Redundancy is an authorized cause for the termination of employment. (Art.
283, Labor Code).
2. The award of backwages covering five years is not correct. The Supreme Court has
been consistently applying the so-clled Mercury Drug ruling that limits the backwages to
a three year period.
ALTERNATIVE ANSWER:
I will charge the NLRC and the Labor Arbiter with abuse of discretion amounting to lack
of jurisdiction for ordering the reinstatement and the payment of back wages to them.
Assuming that the dishonesty and fraud of Juan and Pedro have been established as
facts, their dismissal is for just cause.
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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. (2006 Bar Question)
1. As counsel for the corporation, what steps will you take prior to its
closure? 2.5%
SUGGESTED ANSWER:
As counsel for the corporation, I will see to it that the corporation shall serve a written
notice on its intended date of closing or cessation of operation on the workers of the
corporation and the Department of Labor and Employment at least one month before
the intended date of the closure or cessation of operation.
2. Are the employees entitled to separation pay? 2.5%
SUGGESTED ANSWER:
The employees of the corporation are not entitled to separation pay because Article 283
of the Labor Code expressly provides that if the closure or cessation of operation of an
establishment is due to serious business losses or financial reverses, the employees
are not entitled to separation pay.
3. If the reason for the closure is due to old age of the brothers and sisters: 1.
Is the closure allowed by law? 2.5%
SUGGESTED ANSWER:
Yes, the closure is allowed by law. For a bona fide reason, an employer can lawfully
close shop at any time. Just as no law forces anyone to go into business, no law can
compel anybody to continue the same. It would be stretching the intent and spirit of the
law if the Court interferes with managements prerogative to close or cease its business
operations just because the business is not suffering from any loss or because of the
desire to provide workers continued employment (Alahang Country Club, Inc. vs. NLRC,
466 SCRA 329 [2005]).
4. Are the employees entitled to separation benefits? 2.5%
SUGGESTED ANSWER:
The employees of the corporation are entitled to separation pay because the Labor
Code expressly provides that the only time that they are not entitled to separation pay is
when the closure or cessation of operation is due to serious business losses or financial
reverses.
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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.
a. As counsel for the corporation, what steps will you take prior to its
closure? (3%) (2012 BAR)
Suggested Answer:
I will serve a written notice on both the workers and the Regional Office of the
Department of Labor and Employment, at least one (1) month before the
intended date of closure. (Art. 283, Labor Code); and (2) provide proof of ABCs
serious business losses or financial reverses [Balasbas v. NLRC, G.R. No.
85286, August 24, 1992]
b. Are the employees entitled to separation pay? (2%) (2012 BAR)
Suggested Answer:
No. Where closure is due to serious business losses, no separation pay is
required. [North Davao Mining Corp. v. NLRC, 254 SCRA 721; JAT General
Services vs. NLRC, 421 SCRA 78 (2004)]
If the reason for the closure is due to old age of the brothers and sisters:
c. Is the closure allowed by law? (2%) (2012 BAR)
Suggested Answer:
Yes. The determination to cease or suspend operations is a prerogative of

management that the State usually does not interfere with, as no business can be
required to continue operating to simply maintain the workers in employment. [San
Pedro Hospital of Digos v. Secretary of Labor, G.R. No. 104624, October 11, 1996;
Espina vs. CA, 519 SCRA 327 (2007)]
d. Are the employees entitled to separation benefits? (3%) (2012 BAR)
Suggested Answer:
Yes. In case of cessation of operations of establishment or undertaking not due
to serious business losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half (1/2) month ay for every year
of service, whichever is higher. A fraction of at least six (6) months shall be
considered as one (1) whole year [Art. 283, Labor Code].
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Q: What conditions must prevail and what requirements, if any, must an employer
comply with to justify/effect a valid retrenchment program? (2%) (2001 Bar
Question)
SUGGESTED ANSWER:
In the case of Asian Alcohol Corp. vs. NLRC, G.R. No. 131108, March 25, 1999, the
Supreme Court stated that the requirements for a valid retrenchment must be proved by
clear and convincing evidence: (1) 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; (2) 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; (3) that the employer
pays the retrenched employees separation pay equivalent to one month pay or at least
one month pay for every year of service, whichever is higher; (4) that the employer
exercises its prerogative to retrench employees in good faith for the advancement of its
interest and not to defeat or circumvent the employees' right to security of tenure; and
(5) that the employer used fair and reasonable criteria in ascertaining who would be
dismissed and who would be retained among the employees, such as status (i.e.,
whether they are temporary, casual, regular or managerial employees), efficiency,
seniority, physical fitness, age, and financial hardship for certain workers.
Q: What conditions must prevail and what requirements, If any, must an employer
comply with to justify/effect a valid redundancy program? (2%). (2001 Bar
Question)
SUGGESTED ANSWER:
In the case of Asian Alcohol Corp. (supra), 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 overhiring 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: (1) 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; (2) 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; (3) good faith in
abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining
what positions are to be declared redundant and accordingly abolished.
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Q: Is the seniority rule or "last in first out" policy to be strictly followed in
effecting a retrenchment or redundancy program? (1%). (2001 Bar Question)
SUGGESTED ANSWER:
Again, in Asian Alcohol Corp., 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 hoot 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
Q: Aside from the just causes enumerated in Article 282 of the Labor Code for the
termination of employment, state three (3) lawful or authorized causes for the
dismissal of an employee. (2%)
SUGGESTED ANSWER:
According to Art. 283 of the Labor Code, the lawful or authorized causes for the
termination of an employee are:
1. installation of labor saving devices

2. redundancy
3. retrenchment to prevent losses or;
4. closing or cessation of operation of the establishment or undertaking, unless the
closing Is for the purpose of circumventing the provisions of the Labor Code. Art 284
also provides that an employer may terminate the services of an employee who has
been found to be suffering from any disease and whose continued employment is
prohibited by law or is prejudicial to his health as well as to the health of his co-
employees.
Q: Soon after the Aslan 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. (3%). (2001 Bar Question)
SUGGESTED ANSWER:
The claim of the employees may or may not be correct.
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When the Corporation undertook its "downsizing" program, it may have terminated its
employees on either one of 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. (Article 283, Labor Code). In Atlantic Gulf
and Pacific Company vs. 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."
In Escareal vs. NLRC, 213 SCRA 472 (1992), the Supreme Court ruled that the law
does not require financial loss as a basis for redundancy.
a) Can redundancy exist where the same is due to the companys failure to
properly forecast its manpower requirements? (3%)
b) 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? (3%)
SUGGESTED ANSWER:
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, 193
SCRA 665 (1991)].
b) Yes, redundancy can exist where work efficiency has been improved
mechanically thus resulting in excessive or superfluous manpower. (Wiltshire File Co.,
Inc. v. NLRC, 193 SCRA 665 (1991)].
Q: The Company Legal Counsel advised the Board of Directors as follows: "A
company cannot retrench to prevent losses until actual losses occur. The
Company must wait until the end of the Business Year when its Books of
Accounts, Profit and Loss Statement showing the actual loss and Balance Sheet
have been audited by an independent auditing firm."
Is the legal advice of counsel correct? [5%] (1998 Bar Question)
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SUGGESTED ANSWER:
The legal advice is not correct. The Labor Code (in Article 283) provides that
retrenchment may be resorted to to prevent losses" Thus, there could be legal basis for
retrenchment even before actual losses as long as the losses are imminent and serious.
The advise of the Company Legal Counsel that an employer cannot retrench to prevent
losses until actual losses occur is not correct. The Labor Code provides:
Art. 283. Closure of establishment and reduction of personnel. - The employer may also
terminate the employment of any employee xxx retrenchment to prevent losses.
The Law does not require that retrenchment can be undertaken by an employer only
after an actual business loss occurs. The Supreme Court in Lopez Sugar Corporation v.
Federation of Free Workers, 189 SCRA 179 (1990), said:
In its ordinary connotation, the phrase to prevent losses" means that the retrenchment
or termination ot some employees is authorized to be undertaken by the employer
sometime before the losses anticipated are actually sustained or realized. It is not, in
other words, the intention of the lawmaker to compel the employer to stay his hand and
keep all his employees until sometime after losses shall have in fact materialized; if
such an Intent were expressly written into law, the law may well be vulnerable to
constitutional attack as taking property from one man to another, (un-derscoring
supplied)
Q: Coronet Records Phil. (CRP) manufactures audio/video record players,

compact discs, video discs, cassettes and the like. CRPs shareholdings is 40%
foreign and 60% domestic.
CRP signed a Collective Bargaining Agreement (CBA) with its rank-and-file

workers for three years starting from January 1, 1990 and ending on December
31. 1993.
Before the expiration of the CBA. CRP decided to sell all its assets to Lyra Music
Corporation effective September 30. 1993. In this regard, notice was sent on
August 30. 1993 to each employee advising them of the sale of the Company's
assets to Lyra Music Corporation and the closure of the companys operations
effective September 30. 1993. CRP, likewise, requested that each employee
receive his separation pay equivalent to one-and-one-half (1 & 1/2) months pay
per year of service, exclusive of all unused leaves which were also converted to
cash, and his 13th-month pay for 1993.
The employees received their respective separation pay under protest and
thereafter filed an action against CRP and Lyra Music Corporation for unfair labor
Page 206 of 450
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practice (ULP). The Arbiter ruled in favor of the workers and ordered Lyra Music
Corporation to absorb the former workers of CRP. Was the Labor Arbiter correct
in his decision?
SUGGESTED ANSWER:
No. The Labor Arbiter is not correct. As held in the case of San Felipe Neri School of
Mandaluyong vs. NLRC, when there is a legitimate sale of a companys assets, the
buyer in good faith cannot be legally compelled to absorb the employees of the seller in
good faith. In the case at bar, the employees of the CRP were validly terminated based
on Article 284. e.g. closure of operations and separation pay was paid at a rate much
higher than the law.
Furthermore, the case filed by the employees was UNFAIR LABOR PRACTICE. It is
highly irregular to order absorption of employees in a ULP case.
Q:
(1) Y Corporation suffered business reverses and it was forced to cease
operations and dismiss all its employees. Said employees filed a complaint
with the National Labor Relations Commission fob illegal dismissal and
payment of separation pay. Decide with reasons.
(2) Suppose it was found by the labor arbiter that the corporation did not
suffer business losses. It was also found that the corporation went on with
its operations. May an illegally dismissed employee be ordered reinstated
despite his strained relationship with the corporation? What may be
awarded to the employee? Explain your answers.
SUGGESTED ANSWER:
(1) When Y Corporation dismissed all its employees because it ceased operations, the
dismissal was legal. Cessation of operations of. an establishment or undertaking is one
of the authorized causes for the termination of employees. (Art. 283. Labor Code). But
considering the facts of the case in question, the employer is not under legal obligation
to pay separation pay since the cessation of operations was due to business reverses.
Nevertheless, the employer should serve a written notice on the workers at least one (1)
month before the intended date of the cessation of operation.
A POINT TO CONSIDER: The bar examinee may state that there shall be payment of
separation pay only if the cessation of operation is due to serious business losses or
financial reverses. The question did not describe the business reverses as serious. So.
the bar examinee may state that there should be payment of separation pay.
(2) There are some Supreme Court decisions ruling that even if there is no legal basis
for the termination of an employee, he may not be reinstated because of strained
relationship between the employer and the employee. Instead. he should be given
separation pay. (an example of these cases is Hernandez vs. National Labor Relations
Page 207 of 450
Labor Law

Commission, G.R. No. 84302, Aug. 10. 1989. where the Supreme Court said:
Inasmuch as the charge against petitioner has not been substantiated, the inevitable
result is that this Court must declare the dismissal as unwarranted and. therefore,
illegal. Considering, however, that the relationship between petitioner and private
respondent has been severely strained by reason of their respective imputation of bad
faith against each other, this Court believes that to order reinstatement at this juncture
will no longer serve any prudent purpose.")
Under the facts of the case given in the question, however, it is respectfully submitted
that the above ruling of the Supreme Court should not apply. In the case, the employer
acted in bad faith. He claimed business losses. It was found that there were no such
business losses. He said he will cease operations. Instead, he actually went on with the
operations. On the basis of these proofs of bad faith, the employer should reinstate the
illegally dismissed employee pursuant to the Labor Code which specifically provides for
the reinstatement of an unjustly dismissed employee.
A POINT TO CONSIDER: A bar examinee may state that there is need to prove serious
business losses or financial reverses so that thereby, there may be authorized cause for
termination. (Camara Shoes v. Kapisanan ng Manggagawa sa Camara Shoes. G.R. No.
63208-09, May 5. 1989)
Q: Buster Sison, a 55-year old employee of Telecom Facilities, Inc., wanted to

retire. He talked to the personnel manager, who agreed. The necessary papers
were drawn up, and Sison was paid retirement benefits equivalent to 75% of his
last basic monthly salary for every year of service. Sison enjoyed post-retirement
life for more than three years, until his retirement benefits were exhausted.
Expecting to get more from Telecom, Sison filed a complaint for recovery of
separation pay under the Labor Code. Decide. (1987 Bar Question)
SUGGESTED ANSWER:
Sison is not entitled to separation pay under the Labor Code. The Labor Code (in Arts.
283 ad 284) provides the instances when the employer is to pay separation pay,
namely, when he terminates the employment of an employee because of the installation
of labor saving devices, redundancy, retrenchment to prevent losses or the closing or
cessation of operation not due to serious business losses, or when an employee has
been found to be suffering from any disease and his continued employment is
prohibited by law or is prejudicial to his health as well as the health of his co--
employees.
Sisons termination was not brought by any of the above authorized causes. He
voluntarily retired, and he accepted what was paid him by the Company which paid
retirement benefits not because it was under legal obligation to do so, there being no
CBA or any agreement providing for such payment.
Because of all the above, he is not entitled to separation pay.

Page 208 of 450
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If he waited so that he retired at age 60, he could have taken advantage of a provision
in the Rules and Regulations for the payment of termination pay equivalent to at least
one-half month salary for every year of service, but this is even less than 75% he
received when he retired at age 55.
Q: Daisys Department Store hired Leo as a checker to apprehend shoplifters. Leo

later became Chief of the Checkers Section and acquired the status of a regular
employee By way of a cost- cutting measure, Daisy's decided to abolish the entire
Checkers Section. The services of Leo, along with those of his co-employees
working in the same section, were terminated on the same day. A month after the
dismissal of Leo, Daisys engaged the services of another person as an ordinary
checker and with a salary much lower than that which Leo used to receive. Given
the above factual settings (nothing more having been established), could the
dismissal of Leo be successfully assailed by him? (2005 Bar Question)
SUGGESTED ANSWER:
Yes. Given the factual setting in the problem, and since nothing more (have) been
established, the dismissal of Leo can be successfully assailed by him. This is so
because the burden of proof is upon the employer to show compliance with the
following requisites for reduction of personnel:
1. Losses or expected losses should be substantial and not merely de minimis;

2. The expected losses must be reasonably imminent, and such imminence can be
perceived objectively and in good faith by the employer.
3. It must be necessary and likely to prevent the expected losses. The employer
must have taken other measures to cut costs other than labor costs; and
4. Losses if already realized, or the expected losses must be proved by sufficient
and convincing evidence. (Lopez Sugar Corp. v. Federation of Sugar Workers. 189
SCRA 179 [19901]).
Moreover, the notice requirements to be given by Daisy's Department Store to DOLE

and the employees concerned 30 days prior to the intended date of termination, as well
as the requisite separation pay, were not complied with.
Yes. The authorized cause to dismiss due to redundancy or retrenchment under Art.
283 of the
Labor Code has been disproved by Daisys engaging the services of a substitute
checker at a^alary much lower than that which Leo used to receive. Also, it appears that
the one (1) month notice rule required in said law was not complied with. Such being the
case, the twin requirements for a valid dismissal under Arts. 277 (b) and 283 of the
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Code have clearly not been complied with. That no separation pay was paid Leo, in
violation of Art. 283 of the Code, his dismissal can all the more be successfully assailed.
Q: Bugoy, an employee with only six (6) months of service, was dismissed due to
redundancy. He is, under Art. 283 of the Labor Code, entitled to a separation pay
of: (2012 Bar Question)
a. One (1) month pay;

b. One (1) year pay. Art. 283 of the Labor Code being explicit that a fraction
of at least six (6) months shall be considered one (1) whole year;
c. Six (6) months pay;
d. One (1) year and six (6) months pay, as Art. 4 of the Labor Code
mandated that (a)ll doubts in the implementation and interpretation of this
Code xxx shall be resolved in favor of labor.
SUGGESTED ANSWER:
a) One (1) month pay [Art. 283, Labor Code]
Q: Luisa Court is a popular chain of motels. It employs over 30 chambermaids

who, among others, help clean and maintain the rooms. These chambermaids are
part of the union rank-and-file employees which has an existing collective
bargaining agreement (CBA) with the company. While the CBA was in force, Luisa
Court decided to abolish the position of chambermaids and outsource the
cleaning of the rooms to Malinis Janitorial Services, a bona fide independent
contractor which has invested in substantial equipment and sufficient manpower.
The chambermaids filed a case of illegal dismissal against Luisa Court. In
response, the company argued that the decision to outsource resulted from the
new managements directive to streamline operations and save on costs. If you
were the Labor Arbiter assigned to the case, how would you decide? (2014 Bar
Question)
SUGGESTED ANSWER:
I will decide in favor of Luisa Court, provided that all the requisites for a valid
retrenchment under the Labor Code are satisfied. It is management prerogative to farm
out any of its activities (BPI Employees Union-Davao City-FUBU (BPIEU-Davao City-
FUBU) v. Bank of the Philippine Islands, et al., G.R. No. 174912, July 23, 2013).
I will decide in favor of the chambermaids. Article 248 (c) of the Labor Code considers
as unfair labor practice on the part of Luisa Court its contradicting out the services or
functions being performed by union members. Luisa Court's abolition and act of
outsourcing the chambermaids' position are clearly acts of illegal dismissal.
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Q: After vainly struggling to stay financially afloat for a year, LMN Corp. finally
gave up and closed down its operations after its major creditors filed a petition
for LMN's insolvency and liquidation.
In this situation, LMN's employees are entitled to _________ as separation pay.

(A) one-half month pay for every year of service

(B) one month pay for every year of service
(C) one-half month pay
(D) one month pay
(E) no separation pay at all
SUGGESTED ANSWER:
See: Article 283 (now Article 289) of the Labor Code. (North Davao Mining Corp v.
NLRC, G.R. No. 112546 [1996])
Q: Venus Department Store decided to contract out the security services that its
10 direct-hired full-time security guards provided. The company paid the men
separation pay. With this move, the Store was able to cut costs and secure
efficient outside professional security services. But the terminated security
guards complained of illegal dismissal, claiming that regular jobs such as theirs
could not be contracted out. Will their complaint prosper? (2011 BAR)
(A) No. the management has the right to contract out jobs to secure efficient and
economical operations.
(B) Yes. They should be reinstated or absorbed by the security agency as its
employees.
(C) No. They are estopped from demanding reinstatement after receiving their
separation pay.
(D) Yes. The company cannot contract out regular jobs such as they had.
Q: A golf and country club outsourced the jobs in its food and beverage
department and offered the affected employees an early retirement package of 1
months pay for each year of service. The employees who accepted the
package executed quitclaims. Thereafter, employees of a service contractor
performed their jobs. Subsequently, the management contracted with other job
contractors to provide other services like the maintenance of physical facilities,
golf operations, and administrative and support services. Some of the separated
employees who signed quitclaims later filed complaints for illegal dismissal.
Were they validly dismissed? (2011 BAR)
(A) Yes. The jobs were given to job contractors, not to labor-only contractors, and
the dismissed employees received higher separation pay than the law
required.
Page 211 of 450
Labor Law

(B) No. The outsourcing and the employment termination were invalid since the
management failed to show that it suffered severe financial losses.
(C) No. Since the outsourcing of jobs in several departments entailed the
separation of many employees, the club needed the Secretary of Labors
approval of its actions.
(D) No. Since the outsourced jobs were held by old-time regular employees, it
was illegal for the club to terminate them and give the jobs to others.
Q: Sampaguita Company wants to embark on a retrenchment program in view of

declining sales. It identified five employees that it needed to separate. The human
resource manager seems to recall that she has to give the five employees and the
DOLE a 30-day notice but she feels that she can give a shorter notice. What will
you advise her? (2011 BAR)
(A) Instead of giving a 30-day notice, she can just give a 30-day advanced salary
and make the separation effective immediately.
(B) So long as she gave DOLE a 30-day prior notice, she can give the employees
a shorter notice.
(C) The 30-day advance notice to the employee and the DOLE cannot be
shortened even with a 30-day advance salary.
(D) She can give a shorter notice if the retrenchment is due to severe and
substantial losses.
Q: A sugar mill in Laguna, capitalized at P300 million, suffered a P10,000.00 loss

last year. This year it dismissed three young female employees who gave birth in
the last three years. In its termination report to DOLE, the sugar mill gave as
reason for the dismissal retrenchment because of losses. Did it violate any
law? (2011 BAR)
(A) Yes, the law on retrenchment, the sugar mills loses not being substantial.
(B) Yes, the law against violence committed on women and children.
(C) No, except the natural law that calls for the protection and support of women.
(D) No, but the management action confirms suspicion that some companies
avoid hiring women because of higher costs.
3. Due Process (Twin-notice requirement, Hearing; meaning of opportunity to be

heard)
Q: FACTS: Joseph Vilriolo (JV), a cashier of Seaside Sunshine Supremart (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.
Page 212 of 450
Labor Law

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 JVs 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.
xxx
2. If you were the Labor Arbiter, how would you decide the case? Explain briefly
SUGGESTED ANSWER:
I will decide that the termination of JV was legal. It was for just cause. JV's
misappropriation of company funds and various infractions detrimental to the business
of the company duly proven by substantial evidence constitute a willful breach by JV of
the trust reposed in him by his employer which is a just cause for termination. (See
Article 282)
But I will award him indemnity of, say PI, 000, for the failure of the employer to give him
due process.
Q: The general manager of Junk Food Manufacturing Corporation dismissed

Andrew Tan, a rank-and-file employee on the ground of insubordination. The
general manager served on Andrew Tan the letter cf termination effective upon
receipt which was on 08 March 1992. Shocked by his unexpected dismissal.
Andrew Tan confronted the general manager and hit the latter on the head with a
leap pipe.
Junk Food Manufacturing filed a complaint in court against Andrew Tan for less
serious physical injuries. Somehow, Andrew Tan was acquitted by the court
assigned to hear the criminal case. A few days following his acquittal, or on 01
March 1996, Andrew Tan filed complaint against the company for Illegal
dismissal, reinstatement and the payment of backwages and damages. (1997 Bar
Question)
(a) Was the complaint filed by Andrew Tan for illegal dismissal within the
reglementary period granted by law?
(b) What reliefs may Andrew Tan be entitled to if the Labor Arbiter finds Just
cause for termination but that the requirements of notice and hearing are not
complied with?
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SUGGESTED ANSWER:
(a) Yes. The complaint was filed within four (4) years from the date Andrew Tan was
dismissed by his employer. Illegal dismissal, as a cause of action, prescribes after four
(4) years from the time the cause of action, namely, illegal dismissal took place. This is
pursuant to the Civil Code which provides that actions upon an injury to the rights of a
person should be initiated within four years from the time the right of the action accrues.
(Art. 1146 of the Civil Code)
(b) Andrew Tan would be entitled to an Indemnity of PI.000 to P 10,000 from his
employer for the latter's non-compliance of the requirements of notice and hearing in
cases of termination of employment. (Wenphil Philippines v. NLRC, 176 SCRA 66)
Q: The employer must observe both substantive and procedural due process
when dismissing an employee. If procedural due process is not observed, the
dismissal will be regarded as
(A) defective; the dismissal process has to be repeated.

(B) an abuse of employer's discretion, rendering the dismissal void.
(C) ineffectual; the dismissal will be held in abeyance.
(D) legal and valid but the employer will be liable for indemnity.
Q: Juan Santos is a regular employee of Far East Development Company. During

office hours, he quarelled with a co-employee. Santos was holding a knife and
when his supervisor Olivia Garcia tried to pacify him, he chased her instead with
the knife but he was held back by cooler heads. On the ground of gross
misconduct and insubordination, he was dismissed from the service. He filed a
complaint for illegal dismissal with the labor arbiter. The labor arbiter required
Santos and his employer to file their position papers. On the basis of the position
papers submitted, the labor arbiter found that the dismissal was for lawful cause
and thus, the complaint was dismissed. On appeal to the National Labor
Relations Commission, the said decision was reversed on the ground that Santos
was not afforded due process by his employer before he was dismissed. Hence,
he was ordered reinstated with backwages from the date of his separation to the
date of his reinstatement without qualification or deduction.
The employer elevated the case lo the Supreme Court. He argued that even if
there was no due process in the dismissal of Santos, at the hearing before the
labor arbiter, it was found that the dismissal was for a just cause and therefore
Santos was not entitled to reinstatement. Santos, on the other hand, challenged
the proceedings before the labor arbiter on the ground that no hearing was
conducted and that the decision was reached only on the basis of position
papers submitted and hence, in violation of due process.
(1) Is the employer's contention valid? Explain.

(2) Is the contention of Santos correct? Explain.
Page 214 of 450
Labor Law

SUGGESTED ANSWER:
(1) The employer's contention is valid. It is true that under the facts of the case in the
question, the employer failed to give due process to Santos before the latter was
dismissed since the employer did not give Santos the required written notice of his
termination and the reason or reasons for his termination. The employer did not give
Santos the required opportunity to defend himself.
But on the basis of the position papers submitted, the labor arbiter found that the
dismissal was lawful cause since Santos was indeed guilty of serious misconduct and
willful disobedience which are just causes for termination.
The fact that Santos was not afford due process by the employer does not mean that
thereby the employer cannot dismiss Santos, if there is just cause for his termination.
(2) In Wenph.il Corporation v. National Labor Relations Commission et al, G.A. No.
80587, Feb. 8, 1989, the Supreme Court said: "By the same token, the conclusion of the
public respondent NLRC on appeal that private respondent was not afforded due
process before he was dismissed is binding on this Court. Indeed, it is well taken and
supported by the records. However, it can not justify a ruling that private respondent
should be reinstated with back wages as the public respondent NLRC so decreed.
Although belatedly, private respondent was afforded due process before the labor
arbiter wherein the just cause of his dismissal had been established. With such finding,
it would be arbitrary and unfair to order his reinstatement with back wages."
The contention of Santos is not correct. The Labor Codes provides (in Art. 221) that in
any proceeding before the National Labor Relations Commission or any labor arbiter,
the rules of evidence prevailing in courts oflaw or equity shall not be controlling and that
it is in the spirit and intention of the Code that the Commission and the labor arbiters
shall use every and all reasonable means to ascertain the fact in each case speedily,
and objectively, without regard to technicalities of law on procedure, all in the interest of
due process.
Considering the above provision in the Labor Code, in many decisions, the Supreme
Court has held that it is proper for a labor arbiter to decide a case on the basis of the
position papers submitted by the parties. (Example: Robusta Agro Marine Products Inc.
u. Corobalem. G.R. No.80500, July 5. 1989).
(1) The employer's contention is valid if a just cause was found by the labor arbiter
on the merits on the basis of admission in the pleadings, meaning the position papers.
(2) The contention of Santos is not correct if the pleadings meaning the position
papers did not tender any issue of fact. Such issue could be the subject of a hearing
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Labor Law

and presentation of evidence. If the pleadings tendered an issue of fact, then a hearing
would be required by due process.
Q: Alfredo was dismissed by management for serious misconduct. He filed suit

for illegal dismissal, alleging that although there may be just cause, he was not
afforded due process by management prior to his termination. He demands
reinstatement with full backwages.
[a] What are the twin-requirements of due process which the employer must
observe in terminating or dismissing an employee? Explain. (3%)
SUGGESTED ANSWER:
The twin requirements of due process are notice and hearing to be given to the worker.
There is likewise a two- notice requirement rule, with the first notice pertaining to
specific causes or grounds for termination and a directive to submit a written
explanation within a reasonable period.
The second notice pertains to notice of termination. Pursuant to Perez v. Philippine

Telegraph and Telephon Company (G.R. No. 152048, 7 April 2009), the Court held that
a hearing or conference is not mandatory, as long as the employee is given ample
opportunity to be heard, i.e. any meaningful opportunity (verbal or written) to answer
the charges against him or her and submit evidence in support of the defense, whether
in a hearing, conference, or some other fair, just and equitable way.
Q: Gary, a salesman of Astro Chemical Company (ASTRO), was reported to have

committed some serious anomalies in his sale and distribution of company
products. ASTRO designated its Chief Legal Officer to investigate Gary. Instead
of submitting to the investigation. Gary filed a petition to enjoin the investigation
on the ground that ASTRO would appear to be his accuser, prosecutor, and judge
at the same time.
Will the petition to enjoin the investigation prosper? Discuss fully. (1995 Bar
Question)
SUGGESTED ANSWER:
The petition to enjoin the investigation will not prosper. It is inevitable that in disciplinary
cases, the employer would appear to be accuser, prosecutor, andjudge at the same
time since it is the employer who charges an employee for the commission of an
offense; he is also the person who directs the investigation to determine whether the
charge against the employee is true or not and he is the one who will judge if the
employee is to be penalized or not. But if the employee is given ample opportunity to
defend himself, he could not validly claim that he was deprived of his right to due
process of law.
Page 216 of 450

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ALTERNATIVE ANSWER:
No. The employer is merely complying with the legal mandate to afford the employee
due process by giving him the right to be heard and the chance to answer the charges
against him and accordingly to defend himself before dismissal is effected-.
Q: FACTS: On September 3. 1998, the National Bureau of Investigation (NBI)

extracted from Joko Diaz without the assistance of counsel a sworn
statement which made it appear that Joko, in cahoots with another employee,
Reuben Padilla, sold ten (10) cash registers which had been foreclosed by North-
South Bank for P50.000.00 and divided the proceeds therefrom in equal shares
between the two of them.
On September 10, 1998, Joko was requested by Rolando Bato, the bank manager,
to appear before the Disciplinary Board for an investigation in the following tenor:
You are requested to come on Thursday, September 14, 1998, at 11:00 a.m. the
Board Room, without counsel or representative, in connection with the
investigation of the foreclosed cash registers which you sold without authority.
Mr. Bato himself conducted the investigation, and two (2) days thereafter, he
dismissed Joko. The bank premised its action in dismissing Joko solely on the
latter's admission of the offense imputed to him by the NBI in its interrogation on
September 3, 1998. Aside from this sworn statement, no other evidence was
presented by the bank to establish the culpability of Joko in the fraudulent sale of
the banks foreclosed properties. (1999 Bar Question)
1. Is the dismissal of Joko Diaz by North-South Bank legally justified? Explain

briefly. (3%)
SUGGESTED ANSWER:
The dismissal of Joko Diaz by North-South Bank is not legally justified.
Diaz was not given the required due process by the Bank. He should have been given a
written notice that he was being terminated and a statement of the causes for his
termination. He was instead given a just notice about an investigation relative to an
incident.
It was also contrary to law for the Bank to tell Diaz that he should attend the
investigation without counsel or representative. Instead, he should have been afforded
as provided In the Labor Code (in Article 277[b]) ample opportunity to be heard and to
defend himself with the assistance of his representative if he so desires.
If the evidence that was the basis for the termination of Joko Diaz was only his own
statement 'extracted from him by the NBI when Joko was without the assistance of
counsel, then the statement cannot be substantial evidence for Jokos termination.
Page 217 of 450
Labor Law

ALTERNATIVE ANSWER:
NO. Under Sec, 12 of Art. in of the 1987 Constitution any confession or admission
obtained in violation of Sec. 12 and 17 shall be Inadmissible in evidence against him.
Since the sole basis for his dismissal was the confession procured by the NBI in
violation of his right to counsel which is inadmissible for any purpose and any
proceeding including an administrative case, his dismissal is illegal. Diaz's termination is
likewise illegal because he was deprived of his light to due process since during the
investigation he was required to attend without counsel or representative.
2. Can Reuben Padillas participation in the fraudulent sale of the bank's

foreclosed properties be made to rest solely on the unilateral declaration of Joko
Diaz? Why? (2%)
SUGGESTED ANSWER:
No. The unilateral declaration of Joko, where Joko has not been subjected to cross-
examinations cannot be considered as substantial evidence; it is just hearsay.
ALTERNATIVE ANSWER:
No. The unilateral declaration of Joko is not enough. Such declaration must be
corroborated by other competent and convincing evidence. At the very least, what the
Bank should do should be to confront Reuben Padilla with the declaration of Joko
(Century Textile Mills, Inc. vs, NLRC, 161 SCRA 628).
Q: Mariano, Dondon and Pongpong were members of the United Labor

Organization, a duly registered local union. During a meeting, the union expelled
them for disloyalty. They were not notified of the specific accusations against
them or given any opportunity to refute the charges in any hearing or
investigation. The union immediately informed their employer, the XYZ
CORPORATION, of their expulsion from the union and recommended their
dismissal in accordance with the closed-shop agreement in the CBA.
a) May the XYZ CORPORATION look into the facts of the expulsion before
affecting termination of their employment?
SUGGESTED ANSWER:
Yes, XYZ Corporation may look, in fact, it should look into the facts of the expulsion
before effecting termination of their employment.
The Labor Code expressly provides that the employer should not only furnish the
worker whose employment is sought to be terminated a written notice containing a
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statement of the causes for termination. The employee should also be afforded the
opportunity to be heard and to defend himself.
b) If the corporation decided to investigate the circumstances of the expulsion

and found out that the union acted arbitrarily in expelling them from its ranks,
may it refuse to terminate their employment?
SUGGESTED ANSWER:
The employer may refuse to terminate the employment of Mariano, Dondon and
Pongpong. The closed-shop agreement in the CBA can be the basis for terminating an
employee only if the employees have been validly expelled from union membership.
Q: FACTS: Joseph Vilriolo (JV), a cashier of Seaside Sunshine Supremart (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 JVs 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. (1999 Bar Question)
Did SSS comply with the requirements of procedural due process in the dismissal
from employment of J'V? Explain briefly (2%)
SUGGESTED ANSWER:
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 and the causes of his termination.
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Q: Assuming the existence of valid grounds for dismissal, what are the
requirements before an employer can terminate the services of an employee?
[5%] (1998 Bar Question)
SUGGESTED ANSWER:
The employee being terminated should be given due process by the employer.
For termination of employment based on any of the just causes for termination, the
requirements of due process that the employer must comply with are:
A written notice should be served on the employee specifying the ground or grounds for
termination' and giving to said employee reasonable opportunity within which to explain
his side.
A hearing or conference should be held during which the employee concerned, with the
assistance of counsel if the employee so desires, is given the opportunity to respond to
the charge, present his evidence and present the evidence presented against him.
A written notice of termination, if termination is the decision of the employer, should be

served on the employee indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination.
For termination of employment based on authorized causes, the requirements of due

process shall be deemed complied with upon service of a written notice to the employee
and the appropriate Regional Office of the Department of Labor & Employment at least
thirty (30) days before the effectivity of the termination specifying the ground or grounds
for termination.
Assuming that there is a valid ground to terminate employment, the employer must
comply with the requirement of procedural due process - written notice of intent to
terminate stating the cause for termination; Hearing; and Notice of Termination.
The Labor Code reads: A. Notice and Hearing

Art. 277. Miscellaneous provisions. - xxx
(a) xxx The employer shall furnish the worker whose employment is sought to be
terminated a written notice containing a statement of the causes for termination and
shall afford the latter ample opportunity to be heard and to defend himself with the
assistance of his representative if he so desires ...
The Supreme Court ruled in Salaw v. NLRC, 202 SCRA 7 (1991)
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xxx Not only must the dismissal be for a valid or unauthorized cause as provided by law
xxx but the rudimentary requirements of due process - notice and hearing - must also
be observed before an employee must be dismissed.
B. Two (2) Notice Requirements -
The Supreme Court in Tanala v. NLRC, 252 SCRA 314 (1996), and in a long line of
earlier cases, ruled:
xxx This Court has repeatedly held that to meet the requirements of due process, the
law requires that an employer must furnish the workers sought to be dismissed with two
written notices before termination of employment can be legally effected, that is, (1) a
notice which apprises the employee of the particular acta or omissions for which his
dismissal is sought; and (2) subsequent notice, after due hearing, which informs the
employee of the employers decision to dismiss him.
Q: Juan Dukha, a bill collector of Ladies Garments Company, was dismissed

because he did not remit his collections. He filed a case against his company for
illegal dismissal. During the hearing, the President of the Company admitted that
Juan was never formally investigated for his dishonesty; neither was he informed
of the nature of the charge against him. He was simply barred from entering
company premises by the security guards upon instruction of management.
Juan Dukha asks for immediate reinstatement with full back wages and without
loss of seniority rights. (1995 Bar Question)
1. Will the complaint of Juan Dukha for illegal dismissal prosper? Explain.
SUGGESTED ANSWER:
Yes, there may be just cause for terminating Juan Dukha. But he was not accorded the
required due process of law.
ALTERNATIVE ANSWER:
The complaint of Juan Dukha for Illegal dismissal will prosper in the sense that the
complaint will be heard by a Labor Arbiter. His being barred from entering company
premises is tantamount to dismissal. In the hearings, the employer will have the burden
of proving that there is just cause for terminating Juan, possibly on the basis of willful
breach of trust. On the other hand, Juan will be given the opportunity to prove that his
failure to remit his collection is not because of dishonesty.
2. Assuming that he cannot be reinstated, what right can he immediately assert

against his employer? Explain.
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SUGGESTED ANSWER:
Assuming that Juan cannot be reinstated because there is Just cause for his dismissal,
he would nevertheless be entitled to an indemnity from his employer, because he was
denied due process of law by said employer.
ALTERNATIVE ANSWER:
Juan can pursue the case of illegal dismissal before a Labor Arbiter where he will assert
the right to defend himself i.e., to explain his failure to remit his collections.
3. Suppose Juan Dukha proved during the hearing that he was robbed of his
collections and, consequently, the Labor Arbiter decided in his favor. In the
meantime, the Ladies Garments Company appealed to the National Labor
Relations Commission (NLRC).
Pending appeal, what rights are available to Juan relative to the favorable
decision of the Labor Arbiter? Explain.
SUGGESTED ANSWER:
Juan can ask for immediate reinstatement pending resolution of the appeal filed by the
company with the NLRC. At the option of his employer, he may be admitted back to
work or merely reinstated in the payroll.
Q: Atty. Oliza heads the legal department of Company X with the rank and title of
Vice-President. During his leave of absence, his assistant took over as acting
head of the legal department. Upon his return, Atty. Oliza was informed in writing
that his services were no longer needed, it appearing that the Company had lost
so many cases by default due to his incompetence. Atty. Oliza filed a case for
illegal dismissal.
1) Will his case prosper?

2) Pending hearing, may Atty. Oliza ask the Secretary of Labor to suspend the
effects of the termination of the services of an employee and to order his
temporary reinstatement?
SUGGESTED ANSWER:
1) His case will prosper. He was not given procedural due process. He was not given
the required notice, namely, a written notice containing a statement of the causes for
termination, and he was not afforded ample opportunity to be heard and to defend
himself.
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But if, before the Labor Arbiter, in a hearing of the case of illegal dismissal that Atty.
Oliza may have filed, he is found to be grossly Incompetent, this is Just cause for his
dismissal. (Art. 277(b), Labor Code)
ALTERNATIVE ANSWER:
Yes. The examinee submits that Atty. Ollza's case will prosper. Well-settled is the rule
that even managerial employees are entitled to the constitutional guarantee of security
of tenure. In the case at bar, there was a clear deprivation of Atty. Olizas right to due
process. The blanket accusation of incompetence" hardly qualifies as compliance with
the substantive requirements for an employees dismissal. The written notice that his
services were no longer needed also fall short of the procedural requirements of notice
and opportunity to be heard, the twin ingredients of due process.
SUGGESTED ANSWER:
2) The Labor Code gives the Secretary of Labor and Employment the power to suspend
the effects of a termination made by an employer pending resolution of a labor dispute
in the event of a prima facie finding by the Department of Labor and Employment before
whom such dispute is pending that the termination may cause serious labor dispute or
is in implementation of a mass lay-off.
The termination of Atty. Oliza does not cause a serious labor dispute considering that
he is a managerial employee. It is not in implementation of a mass lay-off. Thus,
pending hearing, the Secretary of Labor and Employment may not suspend the effects
of the termination and order his temporary reinstatement. (Art. 277(b))
Q: The Company lawyer sent a memo to the employee informing him of the
specific charges against him and giving him an opportunity to explain his side. In
a subsequent letter, the employees was informed that, on the basis of the results
of the investigation conducted, his written explanation, the written explanation of
other employees as well as the audit report, the management has decided to
terminate his employment. The employee contended that his termination was
illegal for lack of procedural due process. Is the employees contention correct?
(2012 Bar Question)
a) No, the employees written explanation and written explanation of the other
employees were sufficient basis for the employer to terminate his
employment;
b) Yes, because the employer did not abide by the two-notice rule;
c) Yes, because he was not properly afforded the chance to explain his side in
a conference;
d) No, because he was not properly notice of the cause of dismissal afforded
him ample opportunity to be heard and defend himself, and the written
notice of the decision to terminate him which states the reasons therefore,
complies with the two-notice rule.
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SUGGESTED ANSWER:
d) No, because he was not properly notice of the cause of dismissal afforded
him ample opportunity to be heard and defend himself, and the written
notice of the decision to terminate him which states the reasons therefore,
complies with the two-notice rule.
Q: Which of the following is not a procedural due process requirement in the

termination of an employee for just cause? (2012 Bar Question)
a. A written notice to the employee specifying the grounds for his

termination;
b. A written notice to the DOLE at least thirty (30) days before the effectivity
of termination;
c. A written notice to the employee stating that upon consideration of the
circumstances, grounds have been established to justify his termination;
d. An opportunity for the employee to present his evidence.
SUGGESTED ANSWER:
a. A written notice to the DOLE at least thirty (30) days before the effectivity
of termination.
C. Reliefs for Illegal Dismissal
Q: What damages can an illegally dismissed employee collect from his employer?
SUGGESTED ANSWER:
An illegally dismissed employee may collect from his employer actual or compensatory
damages, moral damages and exemplary damages, aa well as attorney's fees as
damages.
Moral and exemplary damages are only proper where the employee has been harassed
and arbitrarily terminated by the employer. Nueva Ecija vs. Electric Cooperative
Employees Association (G.R. No. 116066, January 24, 2000; Cruz vs. NLRC, G.R. No.
16384, February 7, 2000; Philippine Aeolus etc., vs. Chua (G.R. No. 124617, April 28,
2000; and Lucas vs. Royo, G.R. No. 136185, October 30, 2000).
Q: Give at least five (5) instances when an illegally dismissed employee may not
be reinstated. (1995 Bar Question)
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SUGGESTED ANSWER:
Five (5) instances when an illegally dismissed employee may not be reinstated:
a) When the position held by the illegally dismissed employee has been abolished
and there is no substantially equivalent position for said employee;
b) When the employer has ceased to operate;
c) When the employee no longer wishes to be reinstated;
d) When strained relations between the employer and the employee have
developed and
e) When the employer has lost his trust and confidence in the employee who is
holding a position of trust and confidence.
In addition to the above, an illegally dismissed employee may not be reinstated:
a) When he is already entitled to retire at the time he is to be reinstated;

b) When he is already dead;
c) When reinstatement will not serve the interest of the parties; and
d) When he has obtained regular and substantially equivalent employment
elsewhere.
1. Reinstatement (Pending appeal (Art. 223, Labor Code), Separation pay in lieu of
reinstatement)
Q: Cite four (4) instances when an illegally dismissed employee may be awarded
separation pay in lieu of reinstatement. (3%) (2009 Bar Question)
SUGGESTED ANSWER:
These four instances are:
(i) in case the establishment where the employee is to be reinstated has closed or
ceased operations;
(ii) where the company has been declared insolvent;
(iii) former position no longer exists at the time of reinstatement for reason not
attributable to the fault of the employer; and
(iv) where the employee decides not to be reinstated as when he does not pray for
reinstatement in his complaint or position paper.
Q: A strike was staged in Mella Corporation because of a deadlock in CEA

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 Bar Question)
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Labor Law

SUGGESTED ANSWER:
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.
Q: Discuss briefly the instances when non-compliance by the employer with a

reinstatement order of an illegally dismissed employee is allowed. (2007 Bar
Question)
SUGGESTED ANSWER:
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; or (c) the existence of strained relations between the employer
and the illegally dismissed employee, provided the matter is raised before the Labor
Arbiter.
ALTERNATIVE ANSWER:
When reinstatement is not feasible due to the strained employer-employee

relationship; or that the reinstatement is rendered moot by the bona fide closure of
business; or when the position previously held by the employee no longer exists and
there is no equivalent position available; or that the employee is sick with an illness that
cannot be cured within 6 months, or that the employee has reached the age of
retirement; or that the employee himself refuses to be reinstated for one reason or
another; in view of the expiration of the 4-year prescriptive period; RA 8042 (Migrant
Workers and Overseas Act) does not allow reinstatement to overseas Filipinos workers
especially seamen. In these instances, separation pay in lieu of reinstatement may be
ordered at the rate of one month or one month for ever year of service, a fraction of at
least 6 months equivalent to one year, whichever is higher.
Q: What is meant by "payroll reinstatement" and when does it apply? (4%) (2005
Bar Question)
SUGGESTED ANSWER:
Payroll reinstatement is a form of reinstatement which an employer may opt to exercise

in lieu of an actual reinstatement. Here, the illegally dismissed employee is to receive
his basic pay without the obligation of rendering any service to the employer. This
Page 226 of 450
Labor Law

occurs when a Labor Arbiter decides that an employee was illegally dismissed and as a
consequence awards reinstatement, pursuant to Article 279 of the Labor Code. Such
award of reinstatement, according to Art. 223 of the Code, is immediately executory
even pending appeal.
Q: Juan Dukha, a bill collector of Ladies Garments Company, was dismissed

because he did not remit his collections. He filed a case against his company for
illegal dismissal. During the hearing, the President of the Company admitted that
Juan was never formally investigated for his dishonesty; neither was he informed
of the nature of the charge against him. He was simply barred from entering
company premises by the security guards upon instruction of management.
Juan Dukha asks for immediate reinstatement with full back wages and without
loss of seniority rights. (1995 Bar Question)
xx
xx
xx
4. Suppose Juan Dukha proved during the hearing that he was robbed of his
collections and, consequently, the Labor Arbiter decided in his favor. In the
meantime, the Ladies Garments Company appealed to the National Labor
Relations Commission (NLRC).
Pending appeal, what rights are available to Juan relative to the favorable
decision of the Labor Arbiter? Explain.
SUGGESTED ANSWER:
Juan can ask for immediate reinstatement pending resolution of the appeal filed by the
company with the NLRC. At the option of his employer, he may be admitted back to
work or merely reinstated in the payroll.
Q: Linder what circumstances or instances may an employee who is found to

have been illegally dismissed and, therefore, entitled to reinstatement, be
nevertheless, NOT ordered reinstated but merely awarded (a) separation pay in
lieu of reinstatement and (b) back wages? At what rate would the separation pay
be? What would be the maximum limit for the back wages?
SUGGESTED ANSWER:
In a number of Supreme Court decision, it has been ruled that an employee who is
found to have been illegally dismissed shall be awarded separation pay in lieu of
reinstatement if reinstatement is no longer viable in view of the strained relations
between the employee and his employer. In a case, the Supreme Court also ruled that
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since reinstatement was no longer feasible in view of the advanced age of the
employees who were illegally dismissed, they should instead receive separation pay.
The rate of separation pay is one month salary for every year of service. The Supreme
Court has also ruled that in the computation of separation pay account must be taken
not only of the basis salary of the employee but also his allowances.
In decisions applying the law before Rep. Act No. 6715, the Supreme Court ruled that
the maximum limit for back wages shall be three years.
The law has been changed by Rep. Act No. 6715. Back wages are now to be computed
from the time the compensation of the employee was withheld from him up to the time
of his actual reinstatement. Thus, in applying the amendment Introduced by Rep. Act
No. 6715, this means that back wages will now be paid for the entire period up to the
actual reinstatement of the employees, even if the period is over three years.
Q: Johnny Torres is an employee of M.C.U, hospital having worked therein as

janitor for 12 years. Sometime in March 1993, he was suspected of conniving with
some medical students in the theft of laboratory equipment for which reason, the
management of M.C.U Hospital ordered his employment terminated for loss of
confidence. Johnny Torres filed before the Arbitration Branch of the NLRC a case
of illegal dismissal against the hospital. After hearing, the Labor Arbiter cleared
Johnny Torres of any involvement in the theft and rendered a decision declaring
the order of dismissal illegal thereby ordering the hospital to reinstate Johnny
Torres to his former position and to pay him full backwages, which he would have
received were it not for the illegal dismissal.
MCU Hospital filed a Motion for Reconsideration alleging that the Labor Arbiter
gravely abused his discretion in ordering a reinstatement which is no longer
possible under the
strained relations" principle, a hostility that developed between the parties as a

result of the litigation. Is the legal argument poised by MCU Hospital tenable?
SUGGESTED ANSWER:
The legal argument poised by MCU Hospital is not tenable. An employer cannot use
strained relations" as a valid reason for not reinstating an employee who has been
illegally dismissed, if such strained relations arose from a worker filing a case of illegal
dismissal against his employer. When he filed the case, the employee was only
asserting his constitutional right to security of tenure.
ALTERNATIVE ANSWER:
The principle of strained relations" does not apply on this case, Johnny Torres a janitor,
does not occupy a confidential or responsible position. The rule cannot be applied
Page 228 of 450
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universally. Otherwise, reinstatement can never be possible simply because some
hostility is engendered between the parties as a result of litigation.
Q: The Septuagint Company, Inc., through its general manager, dismissed Juan
Suntok, a rank-and-file employee, on the ground of loss of confidence. The
company served on his the notice of termination effective on the date of receipt,
which was 8 September 1986. Taken aback by his sudden dismissal, Juan
confronted the general manager and hit him on the face with a cast of iron pipe.
The company filed a complaint against him for less serious physical injuries. On
1 September 1990, a week after he was acquitted by the court which tried the
criminal case, Juan filed a complaint for illegal dismissal, seeking reinstatement
and payment of back wages.
a) On the basis of the facts given, was the dismissal of Juan valid?
SUGGESTED ANSWER:
The dismissal of Juan was not valid. The ground for his dismissal is mere allegation of
loss of confidence." Such allegation is not sufficient unless there are facts that provide
the objective basis of loss of confidence. It should also be noted that Juan was not
given any opportunity to be heard and to defend himself.
b) If the Labor Arbiter finds that the dismissal was illegal for being without just
cause, what relief/s may be granted to Juan?
SUGGESTED ANSWER:
Juan is entitled to these reliefs, namely reinstatement without loss of seniority and other
privileges and full backwages, inclusive of allowances, and to other benefits or their
monetary equivalent computed from the time his compensation was withheld from him
up to the time of his actual reinstatement.
c) If the Labor Arbiter finds that there was just cause for the termination of
Juan's employment, but that the requirement of notice and hearing was not
complied with, what relief/s may be granted to Juan?
SUGGESTED ANSWER:
The relief to be granted to Juan is indemnity if the amount of PI.000.00.
d) Was the complaint for illegal dismissal filed within the reglementary
period?
SUGGESTED ANSWER:
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It was filed within the reglementaiy period. Juan filed his complaint for illegal dismissal
within four (4) years from the date of his dismissal which is the prescriptive period for
filing cases of illegal dismissal. An action for illegal dismissal prescribes in four years
under the Civil Code, It being an action predicated upon an injury to the rights of the
plaintiff."
Q: FACTS: 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 advise 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. (1999 Bar Question)
1. Can the company or any of its officials be cited for contempt for refusing to
reinstate Sharon Cometa? Why? (3%)
SUGGESTED ANSWER:
Yes. The company or any of its officials can be cited for contempt. It is rioted 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, 280 SCRA 806)
ALTERNATIVE ANSWER:
Yes. Under Art. 223 of the Labor Code, an employer has two options in order for him to
comply with an order of reinstatement, which is immediately executory, even pending
appeal. Firstly, he can admit the dismissed employee back to work under the same
terms and conditions prevailing prior to his dismissal or separation or to a substantially
equivalent position if the former position is already filled up. Secondly, the employer can
be reinstated in the payroll. Failing to exercise any of the above options, the employer
can be compelled under PAIN OF CONTEMPT, to pay instead the salary of the
employee effective from the date the employer failed to reinstate despite an executory
writ of execution served upon him. Under Art. 218 of the Labor Code, the NLRC has the
power to cite persons for direct and indirect contempt.
ANOTHER ALTERNATIVE ANSWER
In a case (Maranaw Hotel Corp. v. NLRC, 238 SCRA 1ST), the Supreme Court said that
although the reinstatement aspect of a Labor Arbiter's decision was immediately
executory, it does not follow that it is self- executory. There must still be a writ of
execution issued motu proprio or upon motion of the interested party. (See Article 224)
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2. May the NLRC order the payroll reinstatement of Sharon Cometa? Why?
(2%)
SUGGESTED ANSWER:
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 reinstated 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: Southseas Garments Corporation suspended its operations and laid off its 500
workers in December 1, 1986, after it received word that the contracts being
negotiated abroad did not materialize and the current work being done had been
finished.
On May 2, 1987, the company resumed operations. Most of the workers reported
for work after having been given notice to report. Clara Libunao, a sewing
machine operator, did not receive any notice but learned of the resumption of
work from a fellow worker. On May 16, 1987, she notified the company that she
would like to resume work. The company refused to accept her back, presumably
because she was already 60 years old.
Clara filed a complaint for illegal dismissal. Decide. (1987 Bar Question)
SUGGESTED ANSWER:
Clara was illegally dismissed. In the case, the suspension of operations of the
Corporation was for a period not exceeding six (6) months. It was actually only for five
(5) months. Thus, in accordance with the Labor Code (in Art. 286), there was no
termination of employment. In such a case, the em-ployer shall reinstate to his former
position without loss of seniority rights any employee who indicates his desire to resume
his work not later than one (1) month from the resumption of operations of his employer.
Clara notified the Corporation that she would like to resume work on May 16 or within
one (1) month from the resumption of the operations of the Corporation on May 2.
Clara cannot complain that she has been illegally dismissed, if the refusal of the
company to accept her back is because she was already 60 years old.
Implementing the Labor Code, the Rules and Regulation provides that in the absence of
a CBA or other applicable agreement concerning terms and conditions of employment
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which provides for a retirement age at an older age, an employee may be retired upon
reaching the age of sixty (60) years.
Thus, the company may consider her retired after she- became 60 years old. Therefore,
there is no illegal dismissal.
Q: The employees union in San Joaquin Enterprise continued their strike despite
a return to work order from the Secretary of Labor. Because of this defiance, the
employer dismissed the strikers. But the Labor Arbiter declared as illegal the
dismissal of those whose commission of unlawful acts had not been proved.
They were ordered immediately reinstated. The employer refused, however, to
reinstate them on the ground that the rule on immediate reinstatement applies
only to terminations due to just or authorized causes. Is the employers refusal
justified? (2011 BAR)
(A) No, every employee found to have been illegally dismissed is entitled to
immediate reinstatement even pending appeal.
(B) Yes. The employers refusal is legal and justified as a penalty for defying the
secretarys lawful order.
(C) Yes, the rule on immediate reinstatement does not apply to employees who
have defied a return-to-work order.
(D) No. The dismissal of the employees was valid; reinstatement is unwarranted.
Q: Despite a reinstatement order, an employer may choose not to reinstate an

employee if: (2014 Bar Question)
(A) there is a strained employer-employee relationship
(B) the position of the employee no longer exists

(C) the employers business has been closed
(D) the employee does not wish to be reinstated.
SUGGESTED ANSWER:
(D) the employee does not wish to be reinstated (DUP Sound Phils. v. CA,
G.R. No. 168317, Nov. 21, 2011).
Q: The decision of the Labor Arbiter in a labor dispute case is: (2012 Bar
Question)
a. Immediately executory;
b. Requires a writ of execution;
c. Is immediately executor insofar as the reinstatement of the employee is
concerned;
d. Is stayed by the appeal of the employer and posting of appeal bond.
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SUGGESTED ANSWER:
c. Is immediately executory insofar as the reinstatement of the employee is concerned.

[Art. 223, Labor Code]
Q: An employee proved to have been illegally dismissed is entitled to

reinstatement and full backwages computed on the basis of his (2011 BAR)
(A) basic salary plus the regular allowances and the thirteenth month pay.
(B) basic salary plus the salary CBA increases during the pendency of his case.
(C) basic salary plus the increases mandated by wage orders issued during the
pendency of his case.
(D) basic salary at the time of dismissal.
2. Backwages (Computation, Limited backwages)
Q: An employee was ordered reinstated with backwages. Is he entitled to the

benefits and increases granted during the period of his lay-off? Explain briefly.
(3%)
SUGGESTED ANSWER:
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, 224 SCRA 181 (1993)]
Q: Distinguish between an award for back wages and an award for unpaid wages.
SUGGESTED ANSWER:
An award for backwages is to compensate an employee who has been illegally

dismissed, for the wages, allowances and other benefits or their monetary equivalent,
which said employee did not receive from the time he was illegally dismissed up to the
time of his actual reinstatement.
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.
(Arts. 279 and 97(f). Labor Code)
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ALTERNATIVE ANSWER:
An award of backwages is given to an employee who is unjustly dismissed. The cause

of action here is the unjust dismissal. On the other hand, an award of unpaid wages is
given to an employee who has not been paid his salaries or wages for services actually
rendered. The cause of action here is non-payment of wages or salaries. (General
Baptist Bible College vs. NLRC 219 SCRA 549).
Q: Baldo was dismissed from employment for having been absent without leave
(AWOL) for eight (8) months. It turned out that the reason for his absence was his
incarceration after he was mistaken as his neighbors killer. Eventually acquitted
and released from jail, Baldo returned to his employer and demanded
reinstatement and full backwages. Is Baldo entitled to reinstatement and
backwages? Explain your answer. (3%) (2009 Bar Question)
SUGGESTED ANSWER:
Yes. Baldo is entitled to reinstatement. Although he shall not be entitled to backwages

during the period of his detention, but only from the time the company refused to
reinstate him. (Magtoto v. NLRC, 140 SCRA 58 [1985]).
No. Baldo is not entitled to reinstatement and backwages. The dismissal was for cause,
i.e., AWOL. Baldo failed to timely inform the employer of the cause of his failure to
report for work; hence, prolonged absence is a valid ground to terminate employment.
Q: May the general manager of a company be held jointly and severally liable for
backwages of an illegally dismissed employee? (2%)
SUGGESTED ANSWER:
Yes. If it is shown that he acted in bad faith, or without or In excess of authority, or was
motivated by personal ill-will in dismissing the employee, the general manager may be
held jointly and severally liable for the backwages of an illegally dismissed employee.
[ARB Construction C. v. Court of Appeals, 332 SCRA 427, (2000), Lim v. NLRC, 303
SCRA 432, (1999)]
Yes. The General Manager may be held jointly and severally liable for back wages of an
illegally dismissed employee if he or she actually authorized or ratified the wrongful
dismissal of the employee under the rule of respondent superior. In case of illegal
dismissal, corporate directors and officers are solidarily liable with the corporation where
termination of employment are done with malice or bad faith. {Bogo- Medellin Sugar
Planters Assoc., Inc. v. NLRC, 296 SCRA 108, (1998)]
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Q: What economic components constitute backwages for a rank and file
employee? Are these components equally applicable to a managerial employee?
SUGGESTED ANSWER:
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 his 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 are 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 sue
ineligible to join a labor organization.
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 A's reinstatement. The Arbiter's decision was
promulgated on April 29, 1995. B appealed claiming, among others, that the
award for backwages was excessive in that it went beyond three-year rule set
forth in Mercury Drug u. CIR (56 SCRA 696). Is B's contention tenable? Why? (5%)
(2001 Bar Question)
SUGGESTED ANSWER:
No, the contention of "B" is not tenable.
Rep. Act No. 6715, which was enacted in 1989, in effect set aside the three-year rule
set forth in Mercury Drug us. CLR (56 SCRA 696) when it provided that the full
backwages that an unjustly dismissed employee shall receive shall be computed from
the time his compensation was withheld from him. up to the time of his actual
reinstatement.
The word "actual" was inserted in the law by Rep. Act No. 6715. Thus, in accordance
with the aforesaid law, an unjustly dismissed employee shall receive his full backwages
computed from the time his compensation was withheld from him up to the time of his
actual reinstatement even if this period is more than three years.
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No, the contention of "B" is net tenable. The Supreme Court (In Ferrer vs. NLRC, July 5,
1993) abandoned the Mercury Drug Rule and in 1996 Bustamante vs. NLRC, 265
SCRA 61 the Supreme Court said:
[Quoting Article 279 of the Labor Code] Under the above quoted provision, it became
mandatory to award backwages to illegally dismiss regular employees. The law
specifically declared that the award of backwages was to be computed from the time
compensation was withheld from the employee up to the time of his reinstatement.
xxx
The clear legislative intent of the amendment in RJL No. 6715 is to give more benefits
to the workers than was previously given them under the Mercury Drug rule. In other
words, the provision calling for "full backwages" to illegally dismissed employees is
clear, plain and free from ambiguity, and, therefore, must be applied without attempted
or strained interpretation.
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 Bs computation was
erroneous in that A's allowances was not included. Is A correct in his claim? For
what reason(s)? (2%) (2001 Bar Question)
SUGGESTED ANSWER:
A is correct. After its amendment by Rep. Act No. 6715, the backwages that an
employee who has been unjustly dismissed is entitled to receive is not limited to bis full
backwages but also includes his allowances and the other benefits ox- their monetary
equivalent.
I& the ease of Consolidated Rural Bank vs. NLRC, G.R. No. 123810, January 20, 1999,
the Supreme Court .ruled that allowances of the employee should be included in the
computation of backwages.
D. 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
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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 30-day 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 Bar Question)
SUGGESTED ANSWER:
No. The preventive suspension of Karina is not valid.
The employer may place an employee under preventive suspension if his/her continued
employment would pose a serious and immientn threat to the life or property of the
employer or of his/her co-employees. These requirements are not present here.
E. Constructive Dismissal
Q: An accidental fire gutted the JKL factory in Caloocan. JKL decided to suspend
operations and requested its employees to stop reporting for work. After six (6)
months, JKL resumed operations but hired a new set of employees. The old set of
employees filed a case for illegal dismissal. If you were the Labor Arbiter, how
would you decide the case? (2014 Bar Question)
SUGGESTED ANSWER:
I will rule in favor of the employees. JKL factory merely suspended its operations as a
result of the fire that gutted its factory. Article 286 of the Labor Code states that an
employer may bona fide suspend the operation of its business for a period not
exceeding six (6) months. In such a case, there would be no termination of the
employment of the employees, but only a temporary displacement. Since, the
suspension of work lasted more than six months, there is now constructive dismissal
(Sebuguero v. NLRC, 245 SCRA 532 [1995]).
V. Management Prerogative
Q: Which takes precedence in conflicts arising between employerss

MANAGEMENT PREROGATIVE and the employees right to security of tenure?
Why?
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SUGGESTED ANSWER:
The employee's right to security of tenure takes precedence over the employer's
management prerogative. Thus, an employer's management prerogative includes the
right to terminate the services of an employee but this management prerogative is
limited by the Labor Code which provides that the employer can terminate an employee
only for a just cause or when authorized by law. This limitation on management
prerogative is because no less than the Constitution recognizes and guarantees an
employees right to security of tenure. (Art. 279. Labor Code: Art. XIII, Sec. 3.
Constitution)
Q: Harbor View Hotel has an existing Collective Bargaining Agreement (CBA) with
the union of rank-and-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 hotels public
areas. Over the protest of the Union, the Hotel contracted out the aforementioned
job to the City Service Janitorial Company, a bonafide 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?
SUGGESTED ANSWER:
The action of Harbor View Hotel is legal and valid.
The valid exercise of management prerogative, discretion and judgment encompasses

all aspects of employment, including the hiring, work assignments, working methods,
time, place and manner of work, tools to be used, processes to be followed, supervision
of workers, working regulations, transfer of employees, work supervision, lay-off of
workers, and the discipline, dismissal and recall of workers, except as provided for, or
limited by special laws.
Company policies and regulations are. unless shown to be gross oppressive or contrary
to law, generally binding and valid on the parties and must be complied with until finally
revised or amended unilaterally or preferably through negotiation or by competent
authority. (San Miguel Corporation us. Reynaldo R. Ubaldo and Emmanuel Noel A.
Cruz, Chairman and Member respectively ojthe Voluntary Arbitration Panel, et aL G.R.
No. 92859, 1 February 1993. J. Campos. Jr.. 218 SCRA.293)
ALTERNATIVE ANSWER:
a) The action of the Harbor View Hotel is legal and valid. Contracting out services or
functions being performed by union members is not illegal per se. In fact, it is the
prerogative of management to adopt cost-saving measures to ensure economy and
efficiency. Contracting out services or functions being performed by union members
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becomes illegal only when it interferes with, restrains or coerces employees in the
exercise of their right to self-organization.
b) The action of Harbor View Hotel would, at first glance, appear to be an unfair
labor practice under Article 248(c), e.g., to contract out services or functions being
performed by union members if such will interfere with, restrain or coerce employees in
the exercise of their right to self-organization.
Considering, however, that in the case at bar. there is no showing that the contracting
out of services would violate the employees right to self-organization, it is submitted that
the hotels action is a valid exorcise of its management prerogatives and the right to
make business judgments in accordance with law.
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 As
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. (3%) (2010
Bar Question)
SUGGESTED ANSWER:
NO. While the weight standards for cabin crew may be a valid company policy in light of
its nature as a common carrier, the airline company is now estopped from enforcing the
Manual as 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 occupations such as those
of flight attendants and the like. Weight standards for cabin crew is a reasonable
imposition by reason of flight safety [Yrasuegui v. PAL, 569 SCRA 467 [2008]).
However, A had already been employed for two (2) years before the airline company
imposed on her this weight regulation, and an incident did the airline company raise
which rendered her amiss of her duties.
Q: Bulacan Medical Hospital (BMH) entered into a Collective Bargaining

Agreement (CBA) with its Union, wherein it is expressly stipulated in the
Management Prerogative Clause that BMH shall, in the exercise of its
management prerogatives, have the sole and exclusive right to promulgate,
amend and modify rules and regulations for the employees within the bargaining
unit. A year after the contract was signed, BMH issued its Revised Rules and
Regulations and furnished a copy thereof to the Union for dissemination to all
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employees covered by the CBA. The Union wrote BMH demanding that the
Revised Rules and Regulations be first discussed with them before its
implementation. BMH refused. So. the Union filed an action for unfair labor
practice (ULP) against BMH.
1) Is the Union correct?

2) Assuming that the CBA was signed or executed before the 1987
Constitution was ratified, would your answer to the preceding question be
different?
SUGGESTED ANSWER:
1) The Union is correct. A provision in the collective bargaining agreement concerning

management prerogatives, may not be interpreted as cession of the employees right to
participate in the deliberation of matters which may affect their right and the formulation
of policies relative thereto, such as the formulation of a code of discipline.
A line must be drawn between management prerogatives regarding business operations

per se and those which affect the rights of the employees, and in treating the latter,
management should see to it that its employees are at least properly informed of its
decisions or modes of action.
The attainment of a harmonious labor-management relationship and the existing state

policy of enlightening workers concerning their rights as employees demand no less
than the observance of transparency in managerial moves affecting employees' rights.
(Philippine Airlines. Inc. vs. National Labor Relations Commission, et al, G.R. No.
85985, 13 August 1993. J. Melo. 225 SCRA 258. 301.)
ALTERNATIVE ANSWER:
a) The Union is correct. Workers have the right to participate in policy and decision-
making processes affecting their rights, benefits and welfare. (Art. 255).
b) Yes. The Union is correct in asking for discussion of the revised rules prior to
their effectivity. The reason is Art. XIII. Sec. 3 of the 1987 Constitution, allowing workers
the right to participate 'in policy and decision-making on matters related to their welfare
and benefits.
The Union's remedy however should not be to file a ULP case but to initiate a
GRIEVANCE proceeding, and if unresolved, submit the matter to voluntary arbitration.
SUGGESTED ANSWER:
2) The answer would be the same even if the CBA was signed or executed before the
ratification of the 1987 Constitution because it has always been the policy of the State to
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promote the enlightenment of workers concerning their rights and obligations as
employees. (Art. 211; PAL vs. NLRC, GR 85985. August 13. 1993)
Q: Bobby, who was assigned as company branch accountant in Tarlac where his
family also lives, was dismissed by Theta Company after anomalies in the
company's accounts were discovered in the branch Bobby filed a complaint and
was ordered reinstated with full backwages after the Labor Arbiter found that he
had been denied due process because no investigation actually took place.
Theta Company appealed to the National Labor Relations Commission (NLRC)

and at the same time wrote Bobby, advising him to report to the main company
office in Makati where he would be reinstated pending appeal Bobby refused to
comply with his new assignment because Makati is very far from Tarlac and he
cannot bring his family to live with him due to the higher cost of living in Makati.
(A) Is Bobby's reinstatement pending appeal legally correct? (2013 Bar

Questions)
SUGGESTED ANSWER:
No. it is not really correct. The transfer of an employee ordinarily lies within the ambit of
management prerogatives but like other rights, there are limits thereto. This managerial
prerogative to transfer personnel must be exercised without grave abuse of discretion,
bearing in mind the basic elements of justice and fair play. Thus, the transfer of Bobby
from Tarlac to Makati must be done in good faith, and it must not be unreasonable,
inconvenient or prejudicial to the employee. For another, the reinstatement of Bobby
ought to be to his former position, much akin to return to work order, i.e. to restore the
status quo in the work place. (Composite Enterprises v. Capamaroso, 529 SCRA 470
[2007]).
No. Under Article 223 of the Labor Code, the reinstatement order of the Labor Arbiter
which is immediately executory even pending appeal, should pertain to restoration to
status quo ante.
(B) Advise Bobby on the best course of action to take under the circumstances.
SUGGESTED ANSWER:
The best course of action for Bobby to take under the circumstances is to allege
constructive dismissal in the same case, and pray for separation pay in lieu of
reinstatement.
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A. Discipline
Q: Universal Milling Company (UNIVERSAL) and Maras Canteen (MARAS)

executed an agreement that UNIVERSAL employees patronizing MARAS could
buy food on credit and enjoy a 25% discount provided that they present their
Identification Card (ID) and wear their company uniform.
Nikko, an employee of UNIVERSAL, used the ID of Galo, a co-employee, in buying

food at MARAS. An alert employee of MARAS discovered the misrepresentation
of Nikko but not without engaging him Ln a heated argument. Nikko boxed
MARAS employee resulting in serious physical injuries to the latter. UNIVERSAL
dismissed Nikko from the company. Nikko sued UNIVERSAL for illegal dismissal.
As Labor Arbiter, how would you decide the case? Discuss fully. (1995 Bar
Question)
SUGGESTED ANSWER:
There is ground for disciplining Nikko. In presenting the ID of a co-employee to buy food
at Maras at a discount and engaging in a fist fight, these acts of Nikko constitute
misconduct. But it is not the kind of serious misconduct that could be the basis of
dismissal. It will be noted that the fight did not take place at the workplace.
ALTERNATIVE ANSWER:
The facts are not clear whether the canteen is within the company premises. If it is, then
the act of
Nikko in boxing Maras employee may be considered as a valid ground for disciplinary
action.
However, in this case, the penalty of dismissal is not commensurate to the misconduct
allegedly committed.
Q: Bulacan Medical Hospital (BMH) entered into a Collective Bargaining

Agreement (CBA) with its Union, wherein it is expressly stipulated in the
Management Prerogative Clause that BMH shall, in the exercise of its
management prerogatives, have the sole and exclusive right to promulgate,
amend and modify rules and regulations for the employees within the bargaining
unit. A year after the contract was signed, BMH issued its Revised Rules and
Regulations and furnished a copy thereof to the Union for dissemination to all
employees covered by the CBA. The Union wrote BMH demanding that the
Revised Rules and Regulations be first discussed with them before its
implementation. BMH refused. So. the Union filed an action for unfair labor
practice (ULP) against BMH.
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1. Is the Union correct?
2. Assuming that the CBA was signed or executed before the 1987
Constitution was ratified, would your answer to the preceding question be
different?
SUGGESTED ANSWER:
1. The Union is correct. A provision in the collective bargaining agreement concerning

management prerogatives, may not be interpreted as cession of the employees right to
participate in the deliberation of matters which may affect their right and the formulation
of policies relative thereto, such as the formulation of a code of discipline.
A line must be drawn between management prerogatives regarding business operations

per se and those which affect the rights of the employees, and in treating the latter,
management should see to it that its employees are at least properly informed of its
decisions or modes of action.
The attainment of a harmonious labor-management relationship and the existing state

policy of enlightening workers concerning their rights as employees demand no less
than the observance of transparency in managerial moves affecting employees' rights.
(Philippine Airlines. Inc. vs. National Labor Relations Commission, et al, G.R. No.
85985, 13 August 1993. J. Melo. 225 SCRA 258. 301.)
ALTERNATIVE ANSWER:
a. The Union is correct. Workers have the right to participate in policy and decision-
making processes affecting their rights, benefits and welfare. (Art. 255).
b. Yes. The Union is correct in asking for discussion of the revised rules prior to
their effectivity. The reason is Art. XIII. Sec. 3 of the 1987 Constitution, allowing workers
the right to participate 'in policy and decision-making on matters related to their welfare
and benefits.
The Union's remedy however should not be to file a ULP case but to initiate a
GRIEVANCE proceeding, and if unresolved, submit the matter to voluntary arbitration.
2) The answer would be the same even if the CBA was signed or executed before the
ratification of the 1987 Constitution because it has always been the policy of the State to
promote the enlightenment of workers concerning their rights and obligations as
employees. (Art. 211; PAL vs. NLRC, GR 85985. August 13. 1993)
B. Transfer of employees
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
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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 in 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 Bar
Question)
SUGGESTED ANSWER:
There is no constructive dismissal by the mere act of transferring an employee. The

employees contention cannot be sustained simply because a transfer causes
inconvenience. There is no constructive dismissal where, as in Philippine Japan Active
Carbon Corp., us. NLRC, 171 SCRA 164 (1989), the Court ruled that constructive
dismissal means:
A quitting because continued employment is rendered impossible, unreasonable or

unlikeable; as, an offer involving a 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 employers 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.
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Q: FACTS: 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. (1999 Bar Question)
1. Will Mariet Demetrios refusal to transfer constitute the offense of

insubordination? Explain briefly. (2%)
SUGGESTED ANSWER:
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 employees 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 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, 171 SCRA 164)
2. Rule on the Motion to Dismiss. Should it be granted or denied? Explain briefly

(3%).
SUGGESTED ANSWER:
The Motion to Dismiss should be denied.
It is a regular court and not a Labor Arbiter that has jurisdiction on the suit for damages.
The damages are not arising from the employer- employee relations which would have
placed the suit under the jurisdiction of a Labor Arbiter. The suit arises from the fact that
the President of the company shouted invectives at Mariet Demetrio in the presence of
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employees and visitors. Her complaint for damages is against an officer of the Company
based on slanderous language allegedly made by the latter. This falls under the
jurisdiction of the ordinary courts. There is here a simple action for damages for tortious
acts allegedly committed by the defendant. Such being the case, the governing statute
is the Civil Code and not the Labor Code. (Medina v. Castro- Bartolome, 116 SCRA
597)
ALTERNATIVE ANSWER:
The Motion to dismiss should be granted.
According to the Labor Code (in Article 217 (a) 4), the Labor Arbiter has original and
exclusive jurisdiction to hear and decide, among others, claims for actual, moral,
exemplary and other forms of damages arising from the employer-employee relations.
The claim for damages in the case in question arose from the fact that the President of
the Company shouted invectives at Mariet Demetrio in the presence of employees and
visitors for a minor infraction she committed. If the infraction has something to do with
her work, then, the claim for damages could be considered as arising from employer-
employee relations. Thus, the claim is under the exclusive jurisdiction of the Labor
Arbiter.
Q: George Clinton, an American, was hired as marketing assistant by Perot Drug

Company in its main office in Cleveland. Ohio. Because of his good performance,
Clinton was appointed manager of the Companys branch in Manila. After two
years in Manila, Clinton was advised of his promotion and transfer to Cleveland
as director for international marketing. Because of his refusal to be promoted and
transferred for family reasons", Clinton was dismissed by the Company. Clinton
sought your advice. As his counsel, answer the following:
a) What Clinton's cause of action, if any, against Perot Drug Company?
SUGGESTED ANSWER:
The course of action of Clinton against Perot Drug Company is that of illegal dismissal.
When the Company dismissed him for his refusal to be promoted and transferred for
family reason", he could claim he was being dismissed without just cause.
b) If he has a cause of action, where will you file the appropriate petition in the
U.S. or in the Philippines?
SUGGESTED ANSWER:
I will file the case of illegal dismissal in the Philippines where Clinton was working when
he was dismissed. The Company can be sued in the Philippines because it is doing
business in the country by having a branch in Manila.
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c) Will your petition, if you decide to file one, proper? Answer with reasons.
SUGGESTED ANSWER:
The petition will prosper. The refusal of Clinton to be promoted and transferred to
Cleveland is not just cause. His refusing a promotion - his refusing to receive the gift
that the Company was offering, namely, his promotion - cannot be considered as willful
disobedience of a lawful order of his employer. Thus, there is not just cause for the
dismissal of Clinton
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 Bar Question)
SUGGESTED ANSWER:
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 (645 SCRA
135), 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 Dins dismissal is illegal.
C. Productivity standard
Q: Union X is the majority union of the rank and file employees at Slipper Mart
Company. It amended its by-laws to include among the obligations of its
members to refuse to work with non-union members. Slipper Mart wants the
amendment to be declared null and void considering that not all its rank and file
employees belong to Union X and its enforcement will cause work stoppage in
the company. Give your opinion on the validity of the amendment.
SUGGESTED ANSWER:
The provision of the by-laws of the union that made it among the obligations of its
members to refuse to work with non-union members cannot be implemented at the
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Slipper Mart Company. It is managements prerogative to determine who shall work
together in a company.
ALTERNATIVE ANSWER:
The act is an unfair labor practice on the part of the union because it could have the
effect of compelling the employer to compel its employees to join Union X, thus, in
effect restraining or coercing employees in the exercise of their right to self-
organization.
D. Grant of bonus
Q: What is a bonus? When is it demandable as a matter of right? Explain.
SUGGESTED ANSWER:
A bonus is money given in addition to an employees usual compensation.
It may be given as a gratuity, as an act of liberality. But a bonus is demandable as a

matter of right if it is made a legal obligation by law or in a collective bargaining
agreement or in a contract of employment or by its having been given for such a long
time such that the receipt of a bonus has ripened into a right.
ALTERNATIVE ANSWER:
A bonus is an amount granted and paid to an employee for his industry and loyalty
which contributed to the employer's success and realization of profit.
(1) Grant of bonus is a prerogative, not an obligation of the employer; and

(2) It is entirely dependent on the employer's capacity to pay.
Normally discretionary, it becomes part of the regular compensation by reason of long

and regular concession or when the bonus is included as among the benefits granted in
a CBA.
Q: XYZ Employees Association filed a complaint against ABC Bank for wrongful
diminution of benefits. It alleged that the bank had been providing for a mid-year
bonus equivalent to one-month basic pay and a Christmas bonus equivalent to
one-month basic pay since 1971. Upon the effectivity of Presidential Decree (P.D.)
No. 851 in 1975 which granted the 13th month pay, the bank started giving its
employees a one-month basic pay as mid-year bonus, one-month basic pay as
Christmas bonus, and one-month basic pay as 13th month pay. In 1980, the bank
was placed under conservatorship and by virtue of a monetary board resolution
of the Central Bank, the bank only gave one month basic pay mandated by P.D.
851, and it no longer gave its employees the traditional mid-year and Christmas
bonuses. Could ABC Bank be compelled, given the circumstances, to continue
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paying its employees the traditional mid-year and Christmas bonuses in addition
to the 13th month pay? (2005 Bar Question)
SUGGESTED ANSWER:
No. The grant of a bonus is a prerogative, not an obligation, of the employer. (Traders
Royal Bank v. NLRC, 189 SCRA 274 PI9901). The matter of giving a bonus over and
above that which is required by law is entirely dependent on the financial capability of
the employer to give it. (Businessday v. NLRC. 221 SCRA 9 f19931).
Hence, given the circumstances, ABC Bank cannot be compelled to continue paying its
employees the traditional mid-year and Christmas bonuses in addition to the 13th month
pay.
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. (2%)
SUGGESTED ANSWER:
Yes. The granting of a bonus is a management prerogative, something given in addition

to what is ordinarily received by or strictly due the recipient.
An employer, like Suerte Co., cannot be forced to distribute bonuses when it can no
longer afford to pay. To hold otherwise would be to penalize the employer for his past
generosity. [Producers Bank of the Phil. V. NLRC, 355 SCRA 489, (2001)]
It depends. If there is a legal obligation on the part of Suerte Co. to pay a bonus of its
employees equivalent to 50% of their monthly compensation, because said obligation is
included in a collective bargaining agreement, then Suerte Co. cannot reduce the bonus
to 5% of their monthly compensation. But if the payment of the bonus is not a legal
obligation but only a voluntary act on the part of the employer, said employer,
unilaterally, can only reduce the bonus from 50% to 5% of the monthly compensation of
its employees; the employer can, in fact, not give any bonus at all.
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 co-employees 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 Litos employer legally allowed to reduce the bonus?
(2014 Bar Question)
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SUGGESTED ANSWER:
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 a bonus is a management prerogative, something given in
addition to what is ordinarily received by or strictly due 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 employee. It may, therefore, be withdrawn, unless they
have been made a part of the wage or 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. 155059, April 29, 2005).
No. Having been 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 or elimination by the employer of the
employees' existing benefits.
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-the-board to all its
employees:
(a) 13th month pay;

(b) 14th to 18th month pay;
(c) Christmas basket worth P6,000;
(d) Gift check worth P4,000; and
(e) Productivity-based incentive ranging from a 20o/o 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) 13th month pay;

(b) 14th month pay;
(c) Christmas basket worth P4,000; and
(d) 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 Bar Question)
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SUGGESTED ANSWER:
Katrinas 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,
535 SCRA 434)
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.
E. Rules on Marriage between employees of competitor-employers
Q: A was working as a medical representative of RX pharmaceutical company

when he met and fell in love with B, a marketing strategist for Delta Drug
Company, a competitor of RC. On several occasions, the management of RX
called As attention to the stipulation in his employment contract that requires
him to disclose any relationship by consanguinity or affinity with co-employees
or employees of competing companies in light of a possible conflict of interest. A
seeks your advice on the validity of the company policy. What would be your
advice? (3%) (2010 Bar Question)
SUGGESTED ANSWER:
The company policy is valid. However, it does not apply to A. As A and B are not yet
married, no relationship by consanguinity or affinity exists between them. The case of
Duncan v. Glaxo Wellcome (438 SCRA 343 [2004]) does not apply in the present case.
F. Post-employment ban

An employment contract prohibiting employment in a competing company within

one year from separation is valid. (2009 Bar Question)
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SUGGESTED ANSWER:
True. An employment contract prohibiting employment in a competing company within a

reasonable period of one year from separation is valid. The employer has the right to
guard its trade secrets, manufacturing formulas, marketing strategies and other
confidential programs and information.
G. Change of working hours
Q: Inter-Garments Co. manufactures garments for export and requires its

employees to render overtime work ranging from two to three hours a day to meet
its clients' deadlines. Since 2009, it has been paying its employees on overtime
an additional 35% of their hourly rate for work rendered in excess of their regular
eight working hours.
Due to the slowdown of its export business in 2012, Inter-Garments had to reduce
its overtime work; at the same time, it adjusted the overtime rates so that those
who worked overtime were only paid an additional 25%instead of the previous
35%. To replace the workers' overtime rate loss, the company granted a one-time
5% across-the-board wage increase.
Vigilant Union, the rank-and-file bargaining agent, charged the company with
Unfair Labor Practice on the ground that (1) no consultations had been made on
who would render overtime work; and (2) the unilateral overtime pay rate
reduction is a violation of Article 100 (entitled Prohibition Against Elimination or
Diminution of Benefits) of the Labor Code.
Is the union position meritorious? (2013 Bar Questions)
SUGGESTED ANSWER:
The allegation of ULP by the Union is not meritorious. The selection as to who would
render overtime work is a management prerogative.
However, the charge of the Union on the diminution of benefits (violation of Article 100
of the Labor Code) appears to be meritorious. Since three (3) years have already
lapsed, the overtime rate of 35% has ripened into practice and policy, and cannot
anymore be removed. (Sevilla Trading v. Semana, 428 SCRA 239 [2004]) This is
deliberate, consistent and practiced over a long period of time.
VI. Social Welfare Legislation (P.D. 626)
A. SSS Law (R.A. No. 8282)
Q: In 1960, Juan hired Pablo to drive for the formers lumber company. In 1970,
Pablo got sick and was temporarily laid-off. In 1972, Pablo recovered and
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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 Pablos
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 Companys contention correct?
Why? (3%). (2001 Bar Question)
SUGGESTED ANSWER:
The lumber company's contention is not correct.

The Social Security Law (in Sec. 22(b) 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.
1. Coverage
Q: State the respective coverages of (a) the Social Security Law; x x x (1997 Bar
Question)
SUGGESTED ANSWER:
(a) Coverage of SSS (Sec. 9, RA 8282) shall be compulsory upon all employees not
over sixty years of age and their employers.
Filipinos recruited in the Philippines by foreign-based employers for employment abroad

maybe covered by the SSS on a voluntary basis.
Coverage in the SSS shall also be compulsory upon all self-employed persons earning
PI, 800 or more per annum.
Q: Seventy (70) private security guards of TAPANG SECURITY AGENCY

CORPORATION, assigned to guard the mining area of DAVAO GOLD
CORPORATION, filed a complaint against both their direct employer. TAPANG
SECURITY, and their indirect employer. DAVAO GOLD, when they discovered
they could not avail of the benefits of the Social Security System law for the
failure of respondents TAPANG or DAVAO GOLD to remit its contributions to the
System.
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By way of answer to the complaint. TAPANG claims that there is no employer-
employee relationship, since it has only two (2) office employees whose duties
are to monitor their assignment and hours of work and to pay the salaries under
the agency contract of the security guards from the funds remitted by DAVAO
GOLD, keeping a certain percentage of the amount for office expenses and
supervisory fees, the true and real employer being DAVAO GOLD. On the other
hand, DAVAO GOLD maintains that it has no employer-employee relationship
with TAPANGs security guards assigned to secure its mining area since it has no
control over hiring/dismissal of its guards. TAPANG is a duly licensed security
agency and a bona fide independent contractor.
1) Who is deemed an employee" for purposes of coverage under the SSS

law?
2) Under the above facts whose duty is it to bring the security guards for
compulsory coverage pursuant to the SSS law? Discuss.
SUGGESTED ANSWER:
1) A person is deemed an employee" for purposes of coverage under the Social

Security Law if such person performs services for an employer in which either or both
mental and physical efforts are used and who received compensation for such services,
where there is an employer-employee relationship. Also, a self-employed person is both
an employee and employer at the same time. (Sec. 8(d). Social Security Law). It is the
duty of Tapang Security Agency Coip. to bring the security guards for compulsory
coverage pursuant to the SSS law. Said law expressly provides that employees of bona
fide independent contractors shall not be deemed employees of the employer engaging
the services of said contractors. (Sec. 8(j), Social Security Law)
a) The Social Security Law defines an employer as one who uses the services of
another person who is under his orders as regards the employment. Under the facts of
the case, it is very clear that it is Davao Gold that has control of the security guards. The
security guards are under the orders of Davao Gold as regards their employment,
meaning how they perform their work. It could be said that Tapang Security Agency
Corp. was acting only like a labor-only contractor and thus, was just an agent of Davao
Gold who is the real employer. (Sec. 8(e), Social Security Law and Art. 106, Labor
Code)
b) If a company enters into a contract of services with a security agency whereby

the latter htred security guards to work with the said company, then that company
becomes the indirect employer of the guards hired by said security agency. The
company and the security agency become jointly and severally liable to the security
guards. Hence, it is the duty, of both the direct and indirect employer to bring the
security guards for compulsory coverage pursuant to the SSS law.
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Q: Sapatilya Company, a manufacturer of wooden shoes started its operations on
January 1, 1989. As of June 15, 1989, the company had in its payroll a general
manager, an assistant general manager, three supervisors and forty rank and file
employees, all of whom started with the company on January 1, 1989. On July 1,
1989, the company also had ten casual employees who had been with the
company since February 16, 1989 and twelve contractual employees whose
contracts of employment with the company is for the period from August 1, 1989
to September 30, 1989,. Who among the aforementioned employees are under
coverage of the Social Security Law? When did their coverage under the said law
take effect?
SUGGESTED ANSWER:
All of the foregoing employees are covered by the Social Security Law, except the ten
(10) casual employees. The coverage of the Social Security System is very
comprehensive; it covers all employees not over sixty years of age except, among
others those whose employment is purely casual and not for the purpose of occupation
or business of the employer. But the casual employees in the question may not even
be casual under the Social Security Law because they have been with the company
since February 16, 1989. How could they be with the Company that long if their em-
ployment is not for the purpose of occupation or business of the employer?
The coverage of the Social Security Law takes effect on the day of the employment of
the employee.
Q: Can a member of a cooperative be deemed an employee for purposes of

compulsory' coverage under the Social Security Act? Explain. (2%) (2009 Bar
Question)
SUGGESTED ANSWER:
Yes, an employee of a cooperative, not over sixty (60) years of age is, under the SSS
Law, subject to compulsory coverage. The Section 8(d) SSS Law defines an employee
as - Sec. 8(d) any person who performs services for an employer in which either or
both mental and physical efforts are used and who receives compensation for such
service, where there is an employer- employee relationship.
Q: Don Jose, a widower, owns a big house with a large garden. One day, his
househelper and gardener left after they were scolded. For days, Don Jose, who
lives alone in compound to look for someone who could water the plants in the
garden and clean the house. He chanced upon Mang Kiko on the street and asked
him to water the plants and clean the house. Without asking any question. Mang
Kiko attended to the plants in the garden and cleaned the house. He finished the
work in two days.
xxx
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b) Are they compulsorily covered by the Social Security System?
SUGGESTED ANSWER:
No. In their employer-employee relationship, Don Jose and Mang Kiko are not
compulsory covered by the Social Security System because Mang Kiko is rendering
domestic sendees in a private home which is one of the kinds of employment excluded
from the compulsory coverage of the Social Security System.
Q: AB, single and living-in with CD (a married man), is pregnant with her fifth
child. She applied for maternity leave but her employer refused the application
because she is not married. Who is right? Decide (2007 Bar Question)
SUGGESTED ANSWER:
AB is right. The Social Security Law, which administers the Maternity Benefit Program
does not require that the relationship between the father and the mother of the child be
legitimate. The law is compensating the female worker because of her maternal function
and resultant loss of compensation. The law is morality free.
ALTERNATIVE ANSWER:
Neither party is correct. The employer cannot refuse the application on the ground that
she is only living with CD, as a legitimate marriage is not a precondition for the grant of
maternity leave. Neither is AB correct, since maternity leave is only available for the first
four deliveries or miscarriages.
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. Pablos 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 schedule of work hours, without any supervision from the company. If
proven, would this factual setting advanced by ABC & Co. be a valid defense
against the petition? (2005 Bar Question)
SUGGESTED ANSWER:
ABC & Co. has a valid defense.
Pablo should be an employee of ABC & Co. to be under the compulsory coverage of the
SSS. To be an employee, Pablo should be under the control of ABC & Co. as regards
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his employment. But the facts show that he was not under the control of ABC & Co. as
regards his employment. Among others, he had his own schedule of work hours,
without any supervision from the company. Thus, he is an independent contractor and
not an employee. An independent contractor is not under the compulsory coverage of
the SSS. He maybe covered as a self-employed person. But then as such, ABC & Co.
has no legal obligation to report Pablo for coverage under the SSS because ABC & Co.
is not Pablos employer.
It is not a valid defense, for Pablo could be considered an employee of ABC & Co. The
elements of hiring, payment of wages, power to dismiss and power to control are
presumed from the fact that Pabio is working 6 days a week, for * 5 years now. Pablo's
use of his plow, harrow, burrow, carabao and other implements and his having his own
schedule of work hours withoutany supervision from the company do not erase the
element of control on the part of ABC & Co. because under the
control test, it is enough that the employers right to control exists. It is not necessary
that the same be exercised by the employer, it is enough that such right to control
exists. (Religious of the Virgin Mary v. NLRC, 316 SCRA 614, 629 [9991]).
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. (5%) (2000 Bar Question)
SUGGESTED ANSWER:
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 net exemption from SSS law.
[Philippine Blooming Mills Co.,. Inc. v. Social Security System, 17 SCRA 107 (1966):
R.A. No. 1161 as amended by R.A. No. 8282].
Q: FACTS: Marvin Patrimonio is a caddy rendering caddying services for the

members and guests of the Barili Golf &I 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.
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Is Marvin within the compulsory coverage of the Social Security System? Why?
SUGGESTED ANSWER:
Because he is not an employee of the Barili Golf & Country Club, Marvin is not within
the compulsory coverage of the Social Security System. Marvin is not an employee of
the club because under the specific circumstances of his relations with the club, he is
not under the orders of the club as regards employment which would have made him an
employee of the club. (See Manila Golf 8t Country Club, Inc. v, LAC, 237 SCRA 207)
But Marvin is within the compulsory coverage of the SSS as a self-employed person.
(See Section 3-A, Social Security Law of 1957)
Q: Tito Paciencioso is an employee of a foundry shop in Malabon, Metro Manila.

He is barely able to make ends meet with his salary of P4.000.00 a month. One
day, he asked his employer to stop deducting from his salary his SSS monthly
contribution, reasoning out that he is waiving his social security coverage.
If you were Titos employer, would you grant his request? Why? (6%)
SUGGESTED ANSWER:
No. As Titos employer, I am bound by law to remit to SSS Titos monthly contribution.
The SSS law covers any person natural, juridical, domestic or foreign, carrying in the
Philippines trade, business, industry, undertaking or activity and uses the services of
another under his order as regards employment (Sec. 89[c]).
The compulsory coverage of employers and employees under the SSS law is actually a
legal imposition on the employers and employees, designed to provide social security to
workingmen. Membership in SSS is in compliance with a lawful exercise of the police
power of the State, and may not be Waived by agreement of any party (Phil. Blooming
Mills, Co., Inc. v. SSS, 17 SCRA 1077(1966]).
Q: Which of the following is not considered an employer by the terms of the

Social Security Act? (2012 Bar Question)
a. A self employed person;

b. The government and any of its political subdivisions, branches or
instrumentalities, including corporations owned or controlled by the
government;
c. A natural persons, domestic or foreign, who carries on in undertaking or
activity of any kind and uses the services of another person who is under
his orders as regards the employment;
d. A foreign corporation.
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SUGGESTED ANSWER:
b) The government and any of its political subdivisions, branches or

instrumentalities, including corporations owned or controlled by the
government. [Sec. 8 (c), RA 8282]
2. Exclusions from coverage
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 Huanlng."
Who among the aforementioned persons are compulsorily covered by the Social
Security Law and when should they be considered effectively covered? Discuss
fully. (195 Bar Question)
SUGGESTED ANSWER:
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. According to said law, workers are covered on the day of their employment.
But the five carpenters which 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.
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. (5%)
SUGGESTED ANSWER:
No. Under Section 8 (j) of RA 1161, as amended, employment of purely casual and not
for the purpose of the occupation or business of the employer are excepted from
compulsory coverage.
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An employment is purely casual if it is not for the purpose of occupation or business of
the employer.
In the problem given, Falcon Factory is a company engaged in the assembling of

automotive components.
The fifty (50) persons (engineers, architects and construction workers) were hired by
Falcon Factory to renovate its building. The work to be performed by these fifty (50)
people is not in connection with the purpose of the business of the factory. Hence, the
employ of these fifty (50) persons is purely casual. They are, therefore, excepted from
the compulsory coverage of the SSS law.
I agree with the contention that the employees hired by the owners of FALCON factory
as construction workers in the renovation of its building should be under the compulsory
coverage of the Social Security Law.
It is true that in connection with FALCON Factory, which is engaged in the assembling
of automotive components, the construction workers may be considered casual
employees because their employment is not for the purpose of occupation of business
of FALCON Factory. As such, In accordance with Section 8(j) of the Social Security
Law, they are excepted form the compulsory coverage of the Social Security System.
But they could also be considered project employees of FALCON Factory and as such
could be under the compulsory coverage of the SSS, applying Art 4 of the Labor Code
that provides that all doubts in the implementation and interpretation of the provisions of
Labor Law shall be resolved in favor of labor. The employees here therefore, should be
considered as under the compulsory coverage of the SSS.
3. Benefits
Q: Ms. Sara Mira Is an unwed mother with three children from three different
fathers. In 1999, she became a member of the Social Security System. In August
2000, she suffered a miscarriage, also out of wedlock, and again by a different
father. Can Ms. Mira claim maternity benefits under the Social Security Act of
1997? Reason. (5%) (2000 Bar Question)
SUGGESTED ANSWER:
Yes, she can claim maternity benefit. Entitlement thereto is not dependent on the
claimant's being legally married. (Sec. 14-A, Social Security Act of 1997).
Q: A, single, has been an active member of the Social Security System for the
past 20 months.
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She became pregnant out of wedlock and on her 7th month of pregnancy, she
was informed that she would have to deliver the baby through caesarean section
because of some complications. Can A claim maternity benefits? If yes, how
many days can she go on maternity leave? If not, why is she not entitled? (3%)
(2010 Bar Question)
SUGGESTED ANSWER:
YES. The SSS Law does not discriminate based on the civil status of a female member-
employee. As long as said female employee has paid at least three (3) monthly
contributions in the twelve-month period immediately preceding the semester of her
childbirth, she can avail of the maternity benefits under the law.
Since A gave birth through C-section, she is entitled to one hundred percent (100%) of
her average salary credit for seventy-eight (78) days, provided she notifies her employer
of her pregnancy and the probable date of her childbirth, among others (See Section
14-A, Rep. Act No. 8282).
The same maternity benefits are ensured by Sec. 22 (b)(2) of the Magna Carta of
Women (Rep. Act No. 9710).
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 employees
compensation with the Social Security System. Will the claim prosper? Why?
SUGGESTED ANSWER:
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, 197SCRA
44[1991]).
Carol died while going to her place of work. As held in the case of Alano v. Employees
Compensation Commission (158 SCRA 669(1988]), she was at the place where her job
necessarily required her to be if she was to reach her place of work on time. There was
nothing private or personal about Carols place being at the place of the accident. She
was there because her employment required her to be there.
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The claim will not prosper as a claim for employees compensation will prosper only in
the event of work- connected disability or death and the death of Carol dela Cruz will be
considered as work connected only if it was because of any accident arising out of and
in the course of employment.
This was not the case of Carol dela Cruz. She was not yet working when the accident
that caused her death took place.
Q: Samson Security Agency (SAMSON) undertook to provide 24 hours security

service to Jarillo Realty (JARILLO) in the latters construction operations. The
contract between SAMSON and JARILLO expressly stipulated that Samsons
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 (SAMSONs) guards may suffer or be exposed to suffer as guards of
JARILLOs 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.
SUGGESTED ANSWER:
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: The law involved, namely the law on employees compensation and State
Insurance Fund was expressly excluded from this years bar examination in Labor and
Social Legislation.
Q: Philippine Daily News prints and publishes The Daily News, copies of which
are circulated through dealers in Metro Manila. These dealers, who are single
proprietors exclusively distributing The Daily News but handling competing
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dailies for a fixed amount per copy sold, engage the services of newsboys. These
newsboys are given a specified number of copies to sell every day within a six
hour period in the morning. After this period, the newsboys are free to sell other
newspapers or go to school or engage in other activities. Each newsboy is paid
fifty centavos for every copy sold.
As counsel for Philippine Daily News, would you advise your client to report the
dealers and the newsboys as its employees pursuant to the Social Security Act?
(1987 Bar Question)
SUGGESTED ANSWER:
The System should not have denied the application for sickness benefits under the
Social Security Act.
The Act in Sec. 14(b) provides that sickness benefits shall begin to be paid only after all
sick leaves of absence with full pay to the credit of the employee shall have been
exhausted.
In the case, such sick leaves with full pay to the credit of the employee were exhausted
when the 10-day company sick leaves were exhausted.
The remaining five days of the 15-day sick leave under the CBA were to be
accumulated and convertible into cash when employment is terminated for any cause
although the accumulated sick leaves maybe used upon prior application with and
approval of the Company. These conditions means that the 5-day sick leaves cannot be
automatically used. Thus, it could not be first exhausted before the payment of sickness
benefits under the Social Security Act.
Q: Jennifer, a receptionist at Company X, is covered by the SSS. She was

pregnant with her fourth child when she slipped in the bathroom of her home and
had a miscarriage. Meanwhile, Company X neglected to remit the required
contributions to the SSS. Jennifer claims maternity leave benefits and sickness
benefits. Which of these two may she claim? (2012 Bar Question)
a. None of them;
b. Either one of them;
c. Only maternity leave benefits;
d. Only sickness benefits.
SUGGESTED ANSWER:
c. Only maternity leave benefits [Sec. 14-A (c), RA 1161 (SSS Law) as
amended by RA 8282]
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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?
(2015 Bar Question)
SUGGESTED ANSWER:
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 SSS is non-discriminatory.
4. Beneficiaries
Q: Pedro Tortilla and his employer were covered by the Social Security System.
Tortilla was legally married to Orpha de la Cruz, a plain housewife with whom he
had two minor, unmarried and unemployed children. But for two years, he had
been living with his common-law wife, Dora Tea, with whom he had two minor,
unmarried and unemployed chil-dren. His jobless father stayed with him. In his
SSS record, he designated as beneficiary his best friend, a 20- year-old student
who was totally dependent on him for support. In a car accident. Tortilla, Orpha
de la Cruz and their two children died.
Who are entitled to the death benefits?
SUGGESTED ANSWER:
The Social Security Law defines beneficiaries as the dependent spouse until he
remarries and dependent children, who shall be primary beneficiaries. In their absence,
the dependent parents and, subject to the restrictions imposed on dependant children,
the legitimate descendants and illegitimate children who shall be the secondary
beneficiaries. In the absence of any of the foregoing, any other person designated by
the covered employee as secondary beneficiary."
Applying the above provision, when Tortilla died, he died with the persons who are his
primary beneficiaries.
Thus, Tortilla's secondary beneficiaris namely, his dependent jobless father and
illegitimate children, who were minor, unmarried and unemployed are entitled to death
benefits under the Social Security Law.
Under the law, the common law wife is not among those who could be a beneficiary,
either as primary or secondary beneficiary;
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As for the 20-year old student who was Tortilla's best friend, because he was
designated by Tortilla as beneficiary, he could have been entitled to death benefits, in
the absence of either primary and secondary beneficiaries, which is not the case,
however, in the question given.
Q: Eduardo Serangco. an SSS member for 20 years, died on May 1, 1992. The
records of the SSS show that Serangco designated as his beneficiaries Marietta
Uy. wife; Gloria Serangco. daughter, bom June 30. 1979; and Jose Serangco, son,
bom July 16, 1981. On May 10. 1992, the SSS granted Marietta Uy funeral benefits.
On May 16, 1992. Josefa Costa filed a claim for death benefits alleging that she
was married to the late Eduardo Serangco on October 15, 1982 and depended
upon him for support. She attached to her claim, copy of a marriage contract duly
certified and sealed by the civil registrar of Pasig, Rizal. Marietta Uy opposed
Josefa Costas claim, contending that she and her children, Gloria and Jose
Serangco, are entitled to death benefits because they were the primary
beneficiaries designated by the deceased Serangco.
To whom shall the SSS award death benefits? Why?
SUGGESTED ANSWER:
The primary beneficiaries of a deceased employee are the dependent spouse until
he/she remarries and dependent children.
On the other hand, a dependent spouse is the legitimate spouse dependent for support
upon the employee and dependent children are legitimate, legitimated or legally
adopted children, who are unmarried, not gainfully employed and not over twenty one
years of age, or over twenty one years of age, provided that they are congenitally
incapacitated and incapable of self-support. (Article 8(e), (k). Social Security Law)
Considering the above provisions of the Social Security Law, Gloria and Jose Serangco
are dependent children because they are still not over twenty one years of age
assuming that they are also unmarried and are not gainfully employed.
The legitimate wife of the deceased employee is Marietta Uy and not Josefa Costa. The
marriage of the deceased employee to Costa is bigamous. Thus, Marietta is primary
beneficiary together with her children Gloria and Jose. As such primary beneficiaries,
the SSS should award to them the death benefits arising from the death of Eduardo
Serangco.
Q: A is an employee of B who in turn registered A with the Social Security System

as required by law. Unfortunately, B did not remit As contributions to the
System. In the course of his employment, A met a serious accident requiring his
hospitalization.
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(1) Suppose he decides to retire from the firm because of the accident, is he
entitled to recover retirement benefits under the System? Explain your answer.
(2) Suppose that he died because of the accident, are his heirs entitled to
death benefits under the System? Explain your answer.
SUGGESTED ANSWER:
(1) A is entitled to receive benefits from the Social Security System even if his employer
did not remit As contribution to the System because the Social Security Law provides
(in Sec. 22(b) that the failure or refusal of the employer to pay or remit contributions
shall not prejudice the right of the covered employee to the benefits of the coverage.
But A is not entitled to retirement benefits in the form of a monthly pension unless at the
time of the accident, he has reached the age of sixty years and has paid at least 120
monthly contributions prior to the semester of the accident. (Sec. 12-B, Social Security
Law).
(2) The heirs are not entitled, but his primary beneficiaries or in the absence of primary
beneficiaries, his secondary beneficiaries are entitled.
Q: Leonardo Marasigan started working for Madrid Development Corporation in

August 1984 when it was being organized and had no fixed offices. The company
did not ask for his Social Security registration number, nor did it report him to the
SSS. He died a year later, and his widow filed a claim for death benefits with the
Social Security System. While following up the claim, the widow discovered that it
was only in November 1985 when he was reported by his employer to the Social
Security System and the premiums covering the entire period from August 1984
were remitted.
Leonardos widow came to you for assistance. What would your legal advice be?
(1987 Bar Question)
SUGGESTED ANSWER:
I will advise Leonardos widow that as the primary beneficiary, she is entitled to receive
the death benefits from the Social Security System.
Leonardo may have died in August 1985, and it was only in November 1985 when he
was reported by his employer to the System. But premiums covering the entire period
from August 1984 when remitted. Besides, according to the Social Security Act (in Sec.
24), the fact that the SSS has not previously received a report about an employee from
his employer or a contribution paid in his name by his employer, is not fatal to his right
to benefits.
Leonardo had 12 monthly contributions in the 12 months that he was covered by the
System before he died. He, therefore, has not paid at least thirty six (36) monthly
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contributions prior to the semester of death which under the Social Security Act (Sec. B)
would have entitled the widow as primary beneficiary to a monthly pension.
Nevertheless, according to the same provision of the Act, the widow, as primary
beneficiary, is entitled to a lump sum benefit equivalent to thirty five times the monthly
pension.
B. GSIS Law (R.A. No. 8291)
Q: Is it necessary for an employee to litigate in order to establish and enforce his

right to compensation? Explain. (1995 Bar Question)
SUGGESTED ANSWER:
No. All that an employee does 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.
1. Coverage
Q: State briefly the compulsory coverage of the Government Service Insurance

Act. (2%) (2009 Bar Question)
SUGGESTED ANSWER:
The following are compulsorily covered by the GSIS pursuant to Sec. 3 of R.A. No.
8291.
1. All employees receiving compensation who have not reached the compulsory
retirement age, irrespective of employment status.
2. Members of the judiciary and constitutional commissions for life insurance policy
Q: State the respective coverages of x x x (b) the Revised Government Service

Insurance Act and the Employees Compensation Act. (1997 Bar Question)
SUGGESTED ANSWER:
(b) Membership in the Government Service Insurance System (Art. 3, RA8291) shall be
compulsory for all permanent employees below 60 years of age upon appointment to
permanent status, and for all elective officials for the duration of their tenure.
Any person, whether elected or appointed. In the service of an employer is a covered

employee if he receives compensation for such service.
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(c) 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
The Employees Compensation Commission shall ensure adequate coverage of Filipino

employees employed abroad, subject to regulations as it may prescribe. (Art. 170)
Any person compulsorily covered by the GSIS Including the members of the Armed
Forces of the Philippines, and any person employed as casual, emergency, temporary,
substitute or contractual, or any person compulsorily covered by the SSS are covered
by the Employees Compensation Program.
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. (5%) (2005
Bar Question)
SUGGESTED ANSWER:
The GSIS is not correct in denying the claim, because Odeck was on leave when he
was killed. The law only requires that the GSIS member was in the service at the time of
his death so that his beneficiaries may claim survivorship benefits. Odeck was still in the
service. He was just on leave. He intends to report back to work after his leave.
The GSIS is correct in denying the claim because Zhop was not the dependent spouse.
Though she may still be the legal spouse who at the same time may not have
remarried, she is no longer dependent of Odeck for support. Odeck left her years back.
The law defines as primary beneficiary the spouse who is a legal and dependent of the
member for support.
GSIS is wrong. Anent (a), for Zhop to be entitled to death benefit all that Sec. 21 (a).
par. l(i} of the GSIS law requires is that Odeck be "in the service at the time of his
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death". It does not require that death occurs while Odeck is on duty. A leave of absence
is in fact a benefit of an employee who is in service. Therefore, Odeck was "in service"
at the time of his death.
Regarding (b) what .section 21(a) provides is an entitlement of "primary beneficiaries",

not dependents. In this regard, Sec. 2 (g) defines a primary beneficiary to mean - "The
legal dependent spouse until he/she remarries xxx". Having been abandoned by Odeck
does not necessarily mean that Zhop no longer depends on Odeck's support. She in
fact, needs it all the more.
Q: Efrenia Reyes was a classroom teacher assigned by the Department of

Education. Culture and Sports (DECS) in Panitan, Capiz. She has been in the
government service since 1951 up to November. 1985 when she retired at 55 due
to poor health.
In March, 1982, while she was teaching her Grade 1 pupils the proper way of
scrubbing and sweeping the floor, she accidentally slipped. Herback hit the edge
of a desk. She later complained of weak lower extremities and difficulty in
walking. After an X-ray examination, she was found to be suffering from Pott's
disease and was advised to undergo an operation. In 1985, she filed with the GSIS
a claim for disability benefits under Presidential Decree No. 626, as amended. The
GSIS granted the claim and awarded Efrenia permanent partial disability benefits.
After she underwent a surgical operation on her spine in November. 1985, her
condition worsened.
In 1990, Efrenia filed with the GSIS a petition for conversion of her disability
status to permanent total disabilities with corresponding adjustment of benefits.
GSIS denied the claim stating that after Efrenia's retirement, any progression of
her ailment is no longer compensable.
Is the GSIS correct in denying the claim. Explain.
SUGGESTED ANSWER:
Considering that the disability of Reyes is work connected the provisions of the Labor
Code dealing with employees compensation should determine her right to benefits.
According to said provisions, if any employee under permanent partial disability suffers
another injury which results in a compensable disability greater than the previous injury,
the State Insurance Fund shall be liable for the income benefit of the new disability even
after her retirement.
Was Reyes still an employee for the purpose of applying the above provision of the
Labor Code?
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Liberally construing said provision, Reyes may be considered still as an employee so
that she could receive additional benefits for the progression of her ailment.
a) No. When an employee is constrained to retire at an early age due to his illness and
the illness persists even after retirement, resulting in his continued unemployment, such
condition amounts to total disability which should entitle him to the maximum benefits
allowed by law. Her disability which should entitle her to the maximum falls within the
definition of permanent total disability.
b) No, the GSIS erred in denying the claim. Note,.that the original claim and grant of
benefits was based on Presidential Decree No. 626, or Book IV, Title II of the Labor
Code: Employees Compensation and State Insurance Fund. The same law does not
provide for separation fee from employment as a basis for denial of benefits.
The worsening of the school teachers condition is a direct result, or a continuing result
of the first injury which was deemed work-connected by the GSIS and hence
compensable.
Diopenes vs. GSIS. 205 SCRA 331 (1992), the Supreme Court cautioned against a too
strict interpretation of the law which may be detrimental to claimants and advised the
GSIS of the constitutional mandate on protection to labor and the promotion of social
justice. Said the Court:
The GSIS and the ECC should be commended for their vigilance against unjustified
claims that will only deplete the funds intended to be disbursed for the benefit only of
deserving disabled employees. Nevertheless, we should caution against a too strict
interpretation of the rules that will result in the withholding of full assistance from those
whose capabilities have been diminished if not completely impaired as a compensation
of their service in the government. A humanitarian impulse dictated by no less than the
Constitution itself under the social justice policy, calls for a liberal and sympathetic
approach to the legitimate appeals of disabled public servants. Compassion for them is
not a dole but a right.
2. Exclusions from coverage
3. 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.
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What benefits could she claim from the GSIS? Cite at least five benefits. (5%)
(2005 Bar Question)
SUGGESTED ANSWER:
The benefits Atty. CLM could claim from the GSIS are:
1. Employees compensation which shall include both income and medical and
related benefits, including rehabilitation;
2. Temporary total disability benefit;
3. Permanent total disability benefit;
4. Separation benefit; and
5. Retirement benefit.
Q: Juan Sipay was elected councilor of the municipality of San Felipe. On the
second year of his term, he left his legitimate wife. Josefa Asuwa, and their three
minor, unmarried and unemployed children and lived with a common-law wife,
Maria Makupad, with whom he had two minor, unmarried and unemployed
children. Immediately after he completed his term. Juan was appointed cashier in
the office of the municipal treasurer of San Felipe. He was dishonorably
discharged from the service upon being convicted of malversation of public
funds. A year later, he died.
Who are entitled to the GSIS survivorship benefits?
SUGGESTED ANSWER:
None. When Sipay was dishonorably discharged from the service, having been
convicted of malversation of public funds, he automatically forfeited his right to the
benefits that he or his beneficiaries could have been entitled to received from the GSIS.
Thus, Sipays death did not give rise to any right to survivorship benefits.
Q: Gregorio Reposo, a 59-year-old government employee and member of the

Government Service Insurance System could not wait for his retirement benefits
and thought of enjoying them in advance of his retirement at age 60 by borrowing
80% of the retirement benefits from a friendly money lender, assigning to him the
entire amount of his expected benefits. He obtained the approval of the
assignment from the GSIS.
Reposo spent the proceeds on a business venture that failed. A supplier sued
Reposo for unpaid materials and attempted to proceed against his retirement
benefits.
Reposo seeks your assistance in an effort to shield his retirement benefits. What
legal advice would you give? (1987 Bar Question)
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SUGGESTED ANSWER:
I will advise him that because he had assigned the entire amount of his expected
benefits to a money lender from whom he borrowed money representing 80% of his
retirement benefits, and had obtained the approval of the assignment from GSIS, said
benefits are now duly assigned to said lender.
The Revised Government Service Insurance Act (in Sec. 33) provides that the benefits
granted by the Act shall not be subject, among others, to attachment, garnishment, levy
or other processes. This, however, shall not apply to obligations of the member to the
System, or to the employer, or when the benefits granted herein are assigned by the
member with the authority of the System.
But as the above provision of the Act states, the retirement benefit is not subject to
attachment, garnishment, levy or other processes that the supplier may ask for.
4. Beneficiaries
Q: FACTS: 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 or school the forthcoming Division Search for Outstanding
Improvised Secondary'Science Equipment forTeach- ers 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."
Mordero complied with his superiors 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
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 Mordero'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 Mordenos 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.
1. Is Pepay Palaypay entitled to file a claim for death benefits with the GSIS?
Why? (2%)
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SUGGESTED ANSWER:
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.
Not being a beneficiary, Pepay Palaypay is not entitled to receive survivorship benefits.
She is not a beneficiary because she is a common-law wife and not a legal dependent
spouse.
2. Is the cause of death of Pitoy Mordeno (cardiac arrest due to accidental

electrocution in his house) compensable? Why? (3%).
SUGGESTED ANSWER:
Yes. To be compensable under the GSIS Law, the death need not be work connected.
C. Limited Portability Law (R.A. No. 7699)
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 Bar Question)
SUGGESTED ANSWER:
Yes. Under RA 7699, otherwise known as the Portability 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 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.
Under the Limited Portability law, funds from the GSIS and the SSS maybe transferred
for the benefit of a worker who transfers from one system to the other. For this purpose,
overlapping periods of membership shall be (2011 BAR)
(A) credited only once.

(B) credited in full.
(C) proportionately reduced.
(D) equally divided for the purpose of totalization.
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D. Employees compensation coverage and when compensable
Q: What is the extent of an employers intervention in the compensation process

and the payment of benefits to employees under the State Insurance Fund?
SUGGESTED ANSWER:
The new law establishes a State Insurance Fund built up by the contributions of
employers based on the salaries of their employees. The employer does not intervene
in the compensation process and it has no control over the payment of benefits.
Unlike under the Workmens Compensation Act. employers are no longer directly liable
for the income and medical and related benefits that are to be paid to covered
employees if they should suffer from work connected injury or sickness or death. The
payment of employees compensation is now from the State Insurance Fund which is
constituted from the contributions collected from employers.
Q: State the respective coverages of x x x (b) the Revised Government Service

Insurance Act and the Employees Compensation Act. (1997 Bar Question)
SUGGESTED ANSWER:
xxx
(b) Membership in the Government Service Insurance System (Art. 3, RA8291) shall be
compulsory for all permanent employees below 60 years of age upon appointment to
permanent status, and for all elective officials for the duration of their tenure.
Any person, whether elected or appointed. In the service of an employer is a covered

employee if he receives compensation for such service.
(c) 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
The Employees Compensation Commission shall ensure adequate coverage of Filipino

employees employed abroad, subject to regulations as it may prescribe. (Art. 170)
Any person compulsorily covered by the GSIS Including the members of the Armed
Forces of the Philippines, and any person employed as casual, emergency, temporary,
substitute or contractual, or any person compulsorily covered by the SSS are covered
by the Employees Compensation Program.
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Q: Under employees compensation, the so-called Theory of Increased Risks is
irrelevant when: (2012 Bar Question)
a. There is a need to categorize a disability as permanent and total;

b. It is not clear as to how an injury was sustained;
c. The ailment or sickness is not classified as an occupational disease;
d. There is a prima facie finding that the employee had willful intention to hurt
himself.
SUGGESTED ANSWER:
c) The ailment or sickness is not classified as an occupational disease

[Jebsens Maritime, Inc., Dec. 14, 2011; Juala vs. ECC, G.R. No. 57623,
March 29, 1984]
Q: Which of the following injuries/death is not compensable? (2012 Bar Question)
a. Injuries sustained by a technician while at a field trip initiated by the Union

and sponsored by the Company;
b. Injuries received by a janitor at a Union election meeting;
c. Death of a bank teller because of a bank robbery;
d. Death of a professor who was hit by a van on his way home from work.
SUGGESTED ANSWER:
b. Injuries received by a janitor at a Union election meeting.
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 Bar Question)
SUGGESTED ANSWER:
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.
Q: Victor was hired by a local manning agency as a seafarer cook on board a

luxury vessel for an eight-month cruise. While on board, Victor complained of
chronic coughing, intermittent fever, and joint pains. He was advised by the
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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.
(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? (2015 Bar Question)
(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? (2015
Bar Question)
SUGGESTED ANSWER:
(a) TB is listed under Sec. 32-A of the POEA-SEC as a work-related disease.

It was also either contracted or aggravated during the effectivity of Victors 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 attorneys fees.
(b) No. Victors 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 (Jebsens Maritime Inc. v. Enrique Undag, 662 SCRA 670). The
effect of his omission is forfeiture by him of disability benefits (Coastal Safeway Marine
Services, Inc. v. Elmer T. Esguerra, 655 SCRA 300). In effect, the 120-day rule has no
application at all.
VII. Labor Relations Law
A. Right to self-organization
Q: What is the importance of labor organizations? (1996 Bar Question)
SUGGESTED ANSWER:
A labor organization exists in whole or in part for the purpose of collective bargaining or
of dealing with employers concerning terms and conditions of employment. Employees
may form labor organizations for their mutual aid and protection. (See Arts. 212(a) and
243 of the Labor Code)
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ALTERNATIVE ANSWER:
The importance of labor unions are:
a) The enhancement of democracy and the promotion of social Justice and

development.
b) As instrumentalities through which worker welfare may be promoted and
fostered. (Mactan Workers Union v. Aboitiz, 45 SCRA 577 (1972])
It is the instrumentality through which an individual laborer who is helpless as against a

powerful employer may, through concerted effort and activity, achieve the goal of
economic well-being. [Gullarno v. CIR. 52 SCRA307 [1993]).
Q: Of the four grounds mentioned below, which one has been judicially affirmed
as justification for an employees refusal to follow an employers transfer order?
(2011 BAR)
(A) A transfer to another location is not in the employee's appointment paper.

(B) The transfer deters the employee from exercising his right to self-
organization.
(C) The transfer will greatly inconvenience the employee and his family.
(D) The transfer will result in additional housing and travel expenses for the
employee.
Q: The Securities and Exchange Commission approved a merger that allowed

Broad Bank to absorb the assets and liabilities of EBank. Broad Bank also
absorbed EBanks rank-and-file employees without change in tenure, salary, and
benefits. Broad Bank was unionized but EBank was not. The Broad Bank
bargaining union requested the management to implement the union security
clause in their CBA by requiring the ex-EBank employees to join the union. Does
the union security clause in the Broad Bank CBA bind the ex-EBank employees?
(2011 BAR)
(A) No, since the ex-EBank employees were not yet Broad Bank employees
when that CBA was entered into.
(B) No, Broad Banks absorption of ex-EBank employees was not a requirement
of law or contract; hence, the CBA does not apply.
(C) Yes, Broad Banks absorption of ex-EBank employees automatically makes
the latter union members of Broad Banks bargaining union.
(D) Yes, since the right not to join a labor union is subordinate to the policy of
unionism that encourages collective representation and bargaining.
Q: How does the government employees' right to self-organization differ from that
of the employees in the private sector? (1996 Bar Question)
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SUGGESTED ANSWER:
There is no substantial difference of the right of self-organization 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."
ALTERNATIVE ANSWER:
In government, managerial employees shall not be eligible to join the organization of

rank-and-file employees per Executive Order No. 180 but said law does not provide that
they are not eligible to join, assist or form any labor organization, meaning, they could
join, assist or form any labor organization of their own. In the private sector, managerial
employees are not eligible to join, assist or fonn any labor organization. (See Art. 243 of
the Labor Code and Sec. 3 of Executive Order No. 180)
Q: A. Malou is the Executive Secretary of the Senior Vice- President 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. (3%)
B. Mang Bally, owner of a shoe repair shop with 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. (2%)
SUGGESTED ANSWER:
A. The following rules will govern the right of self- organization of Malou, Ana, and the
other Executive Secretaries;
1. No Right to Self-Organization Confidential employees who act in a

confidential capacity to persons who formulate, determine, and effectuate management
policies in the field of labor-management relation. The two criteria are cumulative and
both must be met. [San Miguel Corporation Union v. Laguesma, 277 SCRA 370 (1997)]
2. With Right to Self-Organization When the employee does not have access to
confidential labor relations information, there is no legal prohibition against confidential
employees from forming, assisting, or joining a labor organization. [Sugbuanon Rural
Bank, Inc. v. Laguesma, 324 SCRA 425 (2000)]
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No right of self-organization for Legal Secretaries Legal Secretaries fall under the
category of confidential employees with no right to self-organization. [Pier & Arrastre
Stevedoring Services, Inc. v. Confesser, 241 SCRA 29* (1995)]
B. None. First, Mang Ballys 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, 317
SCRA 420 (1899)]. Third, the employees right to self-organization is not delimited by
their number.
The right to self-organization covers all persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical, or educational institutions
whether operating for profit or not [Art. 243, Labor Code]
Q: It is defined as any union or association of employees which exists in whole or

in part for the purpose of collective bargaining with employers concerning terms
and conditions of employment. (2012 Bar Question)
a. Bargaining representative;
b. Labor organization;
c. Legitimate labor organization;
d. Federation.
SUGGESTED ANSWER:
c. Labor Organization [ Art. 212(g), Labor Code]
Q: Which of the following is a right and/or condition of membership in a labor

organization? (2012 Bar Question)
a. No arbitrary or excessive initiation fees shall be required of the members

of a legitimate labor organization nor shall arbitrary, excessive or
oppressive fine and forfeiture be imposed;
b. The members shall be entitled to full and detailed reports from their
officers and representatives of all financial transactions as provided for in
the constitution and by-laws of the organization;
c. No labor organization shall knowingly admit as members or continue in
membership any individual who belongs to a subversive organization or
who is engaged directly or indirectly in any subversive activity;
d. All of the above.
SUGGESTED ANSWER:
d. All of the above. [Art. 241, Labor Code]:
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(a) No arbitrary or excessive initiation fees shall be required of the members
of a legitimate labor organization nor shall arbitrary, excessive or
oppressive fine and forfeiture be imposed; [Art. 241 (a), Labor Code];
(b) The members shall be entitled to full and detailed reports from their
officers and representatives of all financial transactions as provided for in
the constitution and by-laws of the organization; [Art. 241 (b), Labor Code]
(c) No labor organization shall knowingly admit as members or continue in
membership any individual who belongs to a subversive organization or
who is engaged directly or indirectly in any in any subversive activity. [Art.
241 (c) Labor Code]
Q: At what particular point does a labor organization acquire a legal personally?

(2012 Bar Question)
a. On the date the agreement to organize the union is signed by the majority
of all its members;
b. On the date the application for registration is duly filed with the
Department of Labor;
c. On the date appearing on the Certificate of Registration;
d. On the date the Certificate of Registration is actually issued.
SUGGESTED ANSWER:
b) On the date the Certificate of Registration is actually issued [Art. 234,

Labor Code]
Q: Which of the following groups does not enjoy the right to self-organization?
(2014 Bar Question)
(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
SUGGESTED ANSWER:
D. those who work as legal secretaries (Tunay na Pagkakaisa v. Asia

Brewery, G.R. No. 162025, August 3, 2010]
Q: Our Lady of Peace Catholic School Teachers and Employees Labor Union
(OLPCS-TELU) is a legitimate labor organization composed of vice-principals,
department heads, coordinators, teachers, and non-teaching personnel of Our
Lady of Peace Catholic School (OLPCS).
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OLPCS-TELU subsequently filed a petition for certification election among the
teaching and non-teaching personnel of OLPCS before the Bureau of Labor
Relations (BLR) of the Department of Labor and Employment (DOLE). The Med-
Arbiter subsequently granted the petition and ordered the conduct of a joint
certification election for the teaching and non-teaching personnel of OLPCS.
May OLPCS-TELU be considered a legitimate labor organization? (2014 Bar

Question)
SUGGESTED ANSWER:
Yes. The facts of the case concede that OLPCS-TELY is a legitimate labor
organization.
1. Who may unionize for purposes of collective bargaining (Who cannot form, join
or assist labor organizations )
Q: A group of 15 regular rank-and-file employees of Bay Resort formed and

registered an independent union. On hearing of this, the management called the
officers to check who the union members were. It turned out that the members
included the probationary staff, casuals, and the employees of the landscape
contractor. The management contends that inclusion of non-regulars and
employees of a contractor makes the unions composition inappropriate and its
registration invalid. Is this correct? (2011 BAR)
(A) Yes, union membership should be confined to direct-hired employees of the

company.
(B) Yes, the community of interest criterion should be observed not only in the
composition of a bargaining unit but also in the membership of a union.
(C) Yes, a union must have community of interest; the non-regulars do not have
such interest.
(D) No, union membership may include non-regulars since it differs from
membership in a bargaining unit.
Q:
A. Distinguish managerial employees from supervisory employees. (3%)

B. Do employees of a cooperative have a right to form a union? Explain
briefly. (2%) SUGGESTED ANSWER:
A. A managerial employee is one who is vested with powers or prerogatives to lay down
and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or disciple employees. Supervisory employees, on the other hand,
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 [Art. 212 (m), Labor Code]
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In a case, the Supreme Court said: In the petition before us, a thorough dissection of
the job description of the concerned supervisory employees and section heads
indisputably show that they are not actually managerial but only supervisory employees
since they do not lay down company policies. PICOPs contention that the subject
section heads and unit managers exercise the authority to hire and fire is ambiguous
and quite misleading for the reason that any authority they exercise Is not supreme but
merely advisory In character. Theirs is not a final determination of the company policies
inasmuch as any action taken by them on matters relative to hiring, promotion, transfer,
suspension and termination of employees is still subject to confirmation and approval by
their respective superior. [See Atlas Lithographic Services, Inc. v. Laguesma, 205
SCRA 12, 17 (1992)] Thus, where such power, which is in effect recommendatory In
character, is subject to evaluation, review and final action by the department heads and
higher executives of the company, the same, although present, is not effective and not
an exercise of independent judgment as required by law. [Philippine Appliance Corp. v.
Laguesma, 226 SCRA 730, 737 (1993) citing Franklin Baker Company of the
Philippines v. Trajano, 157 SCRA 416, 422-433 (1988)]." (Paper Industries Corp. of the
Philippines v. Bienvenido E. Laguesma, 330 SCRA 295, (2000)]
B. 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, 173 SCRA 697 (1989)]
Q: Executive Order No. 180, which protects government employees, does NOT
apply to high-level employees, namely, (2011 BAR)
(A) presidential appointees.

(B) those performing policy-determining functions, excluding confidential
employees and supervisors.
(C) confidential employees and those performing policy-determining functions.
(D) elective officials.
Q: Government employees may elect a union as their exclusive representative but

this right is not available to (2011 BAR)
(A) regular employees in government instrumentalities and agencies.

(B) employees of government-owned and -controlled corporations without original
charters.
(C) employees of government-owned-or-conrolled corporations with original
charters.
(D) employees of provincial and local government units.
Q: Who are the managerial, supervisory and rank-and- file employees? (1996 Bar
Question)
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SUGGESTED ANSWER:
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 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. All employees who are neither managerial or supervisory employees are
considered rank- and-file employees. (Art. 212(m) of the Labor Code)
Q: Distinguish the rights of managerial employees from members of a managerial

staff.
SUGGESTED ANSWER:
Managerial employees have no collective bargaining rights because, they cannot join or
form any other labor organization while officers of a managerial staff are not prohibited
from joining, assisting or forming or arresting a supervisors union; hence, they can
bargain collectively. (Art. 245, Labor Code; National Sugar Refineries Corp. vs. NLRC.
220 SCRA 452).
ALTERNATIVE ANSWER:
Managerial employees, under Article 212(m) of the Labor Code are vested with the
prerogatives to lay down and execute management policies and/or to hire, fire, transfer,
promote, lay-off and discipline employees. They are not eligible for the right to self-
organization for purposes of collective bargaining.
Upon the other hand, members of managerial staff, under Article 82 of the Labor Code,
are not vested with the above-cited prerogatives. They are not entitled to overtime pay
and other benefits under Book III, Title I of the Code.
Q:
a) Do workers have a right not to join a labor organization? (3%)

b) Do the following workers have the right to self- organization?
Reasons/basis (2%)
i. Employees of non-stock, non-profit organizations?

ii. Alien employees? (2000 Bar Question)
SUGGESTED ANSWER:
a) Yes, workers decide whether they will or will not become members of a labor
organization.
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Thats why a unions constitution and by-laws need the members adoption and
ratification.
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, 209 SCRA 484 (1992)).
b)
(i) 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 employee- members of non-stock non-profit

cooperatives.
(ii) Alien employees with valid work permits in RP 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:
1) Can an employer legally oppose the inclusion of confidential employees in

the bargaining unit of rank-and-file employees?
2) Would your answer be different if the confidential employees are sought to be
Included in the supervisory union?
SUGGESTED ANSWER:
1) Yes. an employed can legally oppose the inclusion of confidential employees in the
bargaining unit of the rank -and-file. This issue has been settled in the case of Golden
Farms vs. Calleja, and reiterated in the case of Philips Industrial Dev. Inc. vs. NLRC.
Yes, an employer can legally oppose the inclusion of the confidential employees in the
bargaining unit of rank-and-file employees because confidential employees are
Ineligible to form, assist or join a labor union.
By the nature of their functions, they assist and act in a confidential capacity to, or have
access to confidential matters of, persons who exercise managerial functions in the field
of labor relations, and the union might not be assured of their loyalty in view of evident
conflict of interest.
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An employer can legally oppose the inclusion of confidential employees in the
bargaining unit of rank -and- file employees because confidential employees are
considered part of management. (Philtranco vs. BLR, 174 SCRA 388).
SUGGESTED ANSWER:
2) The answer would be the same if confidential employees are sought to be included in
the supervisory union because confidential employees, being a part of management
would not qualify to Join, much less form a labor union. (Philtranco vs. BLR. 174 SCRA
388).
ALTERNATIVE ANSWER:
My answer would remain the same, even If the confidential employees were sought to
be included in the supervisory union. Confidential employees would have the same
adverse impact on the bargaining unit of supervisors: Confidential employees' access to
highly sensitive information may become the source of undue advantage by the union
over the employer. [Philips Industrial Development Inc., vs. National Labor Relations
Commission, et.al, G.R. No. 88957, 25 June 1992)
Q: The existing collective bargaining unit in Company X includes some fifty

secretaries and clerks who routinely record and monitor reports required by
their department heads. Believing that these secretaries and clerks should not be
union members because of the confidential nature of their work, the management
discontinued deducting union dues from their salaries. Is the managements
action legal? (2011 BAR)
(A) No, only managers are prohibited from joining unions; the law does not bar
confidential employees from joining unions.
(B) No, confidential employees are those who assist persons who formulate,
determine, or enforce management policies in the field of labor relations.
(C) Yes, secretaries and clerks of company executives are extensions of the
management and, therefore, should not join the union.
(D) No, confidential employees are those who handle executive records and
payroll or serve as executive secretaries of top-level managers.
Q: The Labor Code treats differently in various aspects the employment of (i)
managerial employees, (ii) supervisory employees, and (iii) rank-and-file
employees. State the basic distinguishing features of each type of employment.
(2005 Bar Question)
SUGGESTED ANSWER:
Under Book Three of the Labor Code, a managerial employee refers to one whose
primary duty consists of the management of the establishment in which he is employed
or of a department or subdivision thereof, and to other officers or members of the
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managerial staff. A supervisor and a rank and file employee can be considered as
members of the managerial staff, and therefore, a managerial employee if their primary
duty consists of work directly related to management policies; if they customarily and
regularly exercise discretion and independent judgment; regularly and directly assist a
proprietor or a managerial employee whose primary duty consists of the management of
the establishment in which they are employed or a subdivision thereof; or execute under
general supervision work along specialized or technical lines requiring special training,
experience, or knowledge; or execute under general supervision special assignments
and tasks; and who do not devote more than 20 percent of their hours worked in a work-
week to activities which are not directly and closely related to the performance of the
work described above. AH others are rank and file employees under said Book (Art. 82,
Labor Code, Sec. 2 (c), Rule I, Bk. Ill, Omnibus Rules Implementing the Labor Code).
Under Book Five of the Labor Code, Managerial employee is one who is vested with
powers or prerogatives to lay down, and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign or discipline employees. A
supervisory employee is one who, in the interest of the employer, effectively
recommends such managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of independent judgment. All
employees not falling within any of the above definitions are considered rank-and-file
employees for purposes of this Book (Art. 212 (M), Labor Code).
On the matter of right to self-organization, a managerial employee cannot exercise such

right; while a supervisor and a rank and file employee can (Arts. 245, 243, Labor Code).
Q: Company XYZ has two recognized labor unions, one for its rank-and-file
employees (RFLU), and one for supervisory employees (SELU). Of late, the
company instituted a restructuring program by virtue of which A, a rank-and-file
employee and officer of RFLU, was promoted to a supervisory position along with
four (4) other colleagues, also active union members and/or officers. Labor Union
KMJ, a rival labor union seeking recognition as the rank-and-file bargaining
agent, filed a petition for cancellation of the registration of RFLU on the ground
that A and her colleagues have remained to be members of RFLU. Is the petition
meritorious? Explain. (3%) (2010 Bar Question)
SUGGESTED ANSWER:
No. Having been promoted to supervisory positions, A and her colleagues are no longer
part of the rank-and- file bargaining unit. They are deemed removed from membership
of RFLU (Art. 245-A, Labor Code as amended by Rep. Act No. 9481).
Q: A, an employee of XYZ Cooperative, owns 500 shares in the cooperative. He

has been asked to join the XYZ Cooperative Employees Association. He seeks
your advice on whether he can join the association. What advice will you give
him? (3%) (2010 Bar Question)
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SUGGESTED ANSWER:
A cannot join XYZ Cooperative Employees Association, because owning shares in XYZ
Cooperative makes him a co-owner thereof.
An employee-member of a cooperative cannot join a union and bargain collectively with

his cooperative for an owner cannot bargain with himself and his co-owners
(Cooperative Rural Bank, of Davao City, Inc. v. Calleja, 165 SCRA 725, 732 [1988]; San
Jose City - Electric Service Cooperative, Inc. v. Ministry of Labor, 173 SCRA697,701-
703 [1989]).
A. Should A be a member of the supervisory union? Explain.
SUGGESTED ANSWER:
YES, as long as A is not a confidential employee who has access to confidential matters
on labor relations (San Miguel Corporation Supervisors and Exempt Employees Union
v. Laguesma, 277 SCRA 370,374-375 [1997]).
If A performs supervisory functions, such as overseeing employees performance and

with power of recommendation, then A is a rightful member of the supervisory union.
Otherwise, he may not, because Samahang Manggagawa ng Terracota cannot
represent A, A being not part of SMTs bargaining unit.
B. Assuming that A is ineligible to join the union, should the registration of

Samahang Manggagawa ng Terracota be cancelled? Explain. (3%)
SUGGESTED ANSWER:
NO. Rep. Act No. 9481 introduced a new provision, Art. 245-A, which provides that
mixed membership is not a ground for cancellation of a union's registration, but said
employees wrongfully joined are deemed removed from said union.

(2009 Bar Question)
xxx
[b] All confidential employees are disqualified to unionize for the purpose of
collective bargaining.
SUGGESTED ANSWER:
False. Not all confidential employees are disqualified to unionize for the purpose of
collective bargaining. Only confidential employees, who, because of the nature of their
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positions, have access to confidential information affecting labor-management relations
as an integral part of their position are denied the right of self-organization for purpose
of collective bargaining (San Miguel Corporation Supervisors v. Laguesma, 277 SCRA
370 [1997]).

(2009 Bar Question)
xx
xx
xx
[c] Government employees have the right to organize and join concerted mass
actions without incurring administrative liability.
SUGGESTED ANSWER:
False. Government employees have the right to organize, but they may be held liable
for engaging in concerted mass actions, it being a prohibited activity under CSC Law
(E.O. 181). The right of government employees to organize is limited to the formation of
unions or associations without including the right to strike. (Gesite v. CA, 444 SCRA 51
[2004]).
Q: The Confederation of Free Workers (CFW), a national labor federation, has an

existing collective bargaining agreement with Tanawan Leather Company
covering the Companys rank-and-file employees who are direct members of
CFW. The supervisors of the Company organized themselves into a union which
they affiliated to CFW. CFW filed a petition in behalf of the supervisors for
certification election. The Company opposed the petition asserting that CFW
cannot represent the supervisors for collective bargaining purposes because it
also represents the rank-and-file employees.
You are the Med-Arbiter. Will you order the holding of a certification election?
Reasons.
SUGGESTED ANSWER:
I will not order the holding of a certification election if the supervisors of the Company
have been included by the existing CBA in the bargaining unit of the Companys rank-
and-file employees before the effectivity of Republic Act No. 6715 where the
supervisors may remain, in accordance with the pertinent Rules and Regulations
implementing the Labor Code.
But if the supervisors are not included by the existing CBA in the bargaining unit of the
Company's rank and file employees. I will order a certification election. But the Union
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that I will allow in the ballot of the certification election will not be CFW. the national
federation which has a direct members the Company s rank and file employees. On the
ballot of the certification election will instead be the local Union organized by the
supervisors. The Labor Code provides that supervisory employees shall not be eligible
for membership in a labor organization of the rank and file employees but may form 01
join a separate labor organization of their own. Thus. CFW of which the Company's rank
and file employees are members, cannot be the Union to represent the supervisors in
collective bargaining. [Atlas Lithographic Services, Inc. us. Laguesma. et al., 205 SCRA
12)
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. (2005 Bar Question)
SUGGESTED ANSWER:
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.
On the date appearing on the Certificate of Registration.
When the law provides that a labor organization xxx shall acquire legal personality xxx
upon issuance of the certificate of registration, the date appearing therein is legally
presumed under the rule on presumption of regularity - to be its date of issuance.
Actual issuance is a contentious evidentiary issue that can hardly be resolved, not to
mention that the law does not speak of actual issuance.
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? [5%] (1998 Bar Question)
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SUGGESTED ANSWER:
No, the opinion of counsel is not in accord with law.
The Labor Code (in Article 249 (a and b) provides that a labor organization has the light
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 self-organization. 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.
Yes, the legal opinion of counsel, on the nature of a Labor union and Its admission
policy is in accord with law, but must be qualified.
The Supreme Court ruled in Salunga v. CTR, 21 SCRA 216 (1967) as follows:
Generally, a state may not compel ordinary voluntary association to admit thereto any
given individual, because membership therein may be accorded or withheld as a matter
of privilege.
The same case further ruled that the law can compel a labor union to admit an applicant
for membership when the union is -
The rule is qualified in respect of labor unions holding a monopoly in the supply of labor,
either in a given locality or as regards a particular employer with which it has a closed-
shop agreement. The reason is that [union security provisions] cause the admission
requirements of trade unions to be affected with public interest.
Q: A supervisors 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, 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. (1995 Bar Question)
1. Is the contention of Farmers Bank correct? Discuss fully.
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Answer:
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.
But this may be noted: The Bank officials mentioned in the case, have control, custody
and/or access to confidential matters. Thus, they are confidential employees and in
accordance with earlier Supreme Court decisions, as confidential employees, the
Branch Manager, Cashier, Controller are disqualified from joining or assisting the
supervisors union of the Bank.
SUGGESTED ANSWER:
The contention of the Farmers Bank is partially correct. The Department managers and
Branch managers, if they In fact have the powers implied by their titles, are managerial
personnel. In accordance with the Labor Code, managerial personnel are not eligible to
join and form labor unions.
On the other hand, cashiers who are in charge of money received or expended, and
comptrollers who examine and supervise expenditures, are not managerial personnel,
and if they supervise personnel, they could be supervisors, and are therefore to be
Included in the bargaining unit of supervisors.
Is there any statutory basis for the petition of the union? Explain.
SUGGESTED ANSWER:
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: FACTS: 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.
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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
supervisoiy and rank-and-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-Lnclusion proceedings wherein those employees who are
occupying rank-and-file positions will be excluded from the list of eligible voters.
(1999 Bar Question)
1. Should the Motion to Dismiss filed by the Tabaco be granted or denied?

Explain. (3%)
SUGGESTED ANSWER:
The Motion to Dismiss filed by Tabaco should be granted.
According to the Labor Code (iri 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- and-file 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,
268 SCRA 573)
ALTERNATIVE ANSWER:
The Motion to Dismiss should be denied. In the first place, the general rule is that in a
certification election the employer is a mere bystander. An employer has no legal
standing to question a certification election as it is the sole concern of the workers. The
exceptions to the general rule of which are 1) when the existence of an employer-
employee relationship is denied; and 2) when the employer questions the legal
personality of the union because of irregularities in its registration are not present in this
case.
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2. Can the two (2) Managers be part of the bargaining unit? Why? (2%)
SUGGESTED ANSWER:
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 v/ages, hours, working conditions and other subjects of collective
bargaining. (San Miguel Corp. Supervisors and Exempt Employees Union v. Laguesma,
227 SCRA 370)
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.
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 the federation represents and to enter into
a CBA with 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 unions dissolution.
Is the argument of Puwersa tenable? Decide with reasons. (6%) (2008 Bar
Question)
SUGGESTED ANSWER:
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
two-thirds 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 law,
the argument of Puwersa is not tenable. This is so because Puwersa only had the
status of an agent, while the local union remained the basic unit of the association
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[Liberty Cotton Mills Workers Union v. Liberty Cotton Mills, Inc., 66 SCRA 52[1975J;
cited in Filipino Pipe and Foundry Corp. v. NLRC, 318 SCRA 68[1999]).
No. Local unions do not owe their creation and existence to the national federation to
which they are affiliated, but to the will of their members. The act of voluntary dissolution
already constitutes a ground for cancellation for union registration under Article 239 as
amended by Republic Act No. 9481. Hence, the collective bargaining agents legal
personality has been extinguished, with Puwersa reduced to being an agent without a
principal.
ALTERNATIVE SUGGESTED ANSWER:
Yes, Puwersa is right. Article 256 of the Labor Code mandates that the Labor union
receiving the majority of the valid votes cast shall be certified as the exclusive
bargaining agent of all the workers in the unit. On the assumption that it has been so
certified, Puwersa is then correct in its argument that since it won in the certification
election, it can validly perform its functions as a bargaining agent and represent the
rank- and-file employees despite the (local) unions dissolution. The refusal of the
company to bargain with Puwersa is violative of its duty to bargain collectively under
Arts. 251 and 252 of the Code, thereby subjecting it to the penalty of considering
Puwersas proposed CBA as the parties effective CBA. Such was the ruling of the
Supreme Court in Divine Word University of Tacloban vs. Secretary of Labor and
Employment (213 SCRA 759 [1992]).
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. (2014 Bar Question)
(A) Are the employees of Philhealth allowed to self-organize and form PEA and
thereafter demand Philhealth to enter into negotiations with PEA for better terms
and conditions of employment?
SUGGESTED ANSWER:
Yes. Employees of Philhealth are allowed to self-organize 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).
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(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?
SUGGESTED ANSWER:
No. Since the terms and conditions of government employment are fixed by law,
government workers cannot use the same weapons employed by workers in the private
sector to secure concessions from their employers. (Blaquera vs. Alcala, G.R. Nos.
109406, 110642, 111494, 112056, 119597, September 11, 1998).
Q: What is the rule on the "equity of the incumbent"? (2015 Bar Question)
SUGGESTED ANSWER:
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.
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 Bar Question)
SUGGESTED ANSWER:
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
increase its membership.
2. Bargaining unit
Q: Damian Damaso was one of 75 machinists of City Re- builders Machine Shop
(CRMS). He had worked as a lathe operator there since February 15, 1975. Lathe
men process metal to fine tolerances of thousandths of an inch. If tolerances are
not met, work is re-done at great cost. Defective work released to customers
cause breakdown on equipment in which they are used. Juan worked an average
of 300 days per year at a daily wage of 1,100.00 plus the COLA mandated by law.
If there are no rejects on what he processes, he got a15 bonus for each item
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done right. In the last 2.months, 10% of his output either needed re-work or were
rejected. He claimed his lathe was defective. However, the second shift man
using the same machine produced work meeting standards. Damian did not earn
any bonuses, and received a written warning. Feeling oppressed, he went to the
Kamao ng Manggagawa, a registered labor federation to ask for advice on the
mechanics of organizing a union, and worker rights and duties when they
organize. (1988 Bar Question) You are a labor organization adviser of Kamao.
(a) He asks how CRMS can be unionized.

(b) Outline to Damian the steps in forming a legitimate labor union. Damian
wants to know
If he can join the Kamao as a member;
What his obligations would be if he is accepted; and
If as a member, he can ask management to recognize Kamao as
bargaining of CRMS workers.
What will you tell Damian?
SUGGESTED ANSWER:
I will tell Damian the following:
(a) CRMS can be unionized by the machinists organizing a union and having this
union registered with the Bureau of Labor Relations or affiliated with a registered labor
organization so that the union could be a legitimate labor organization which has rights
under the Labor Code (Art. 242) including the right to act as the representative of its
members for the purpose of collective bargaining.
(b) The steps in forming a legitimate labor union are:
1. Workers form a union by adopting a Constitution and by-laws and later on

electing the officers provided for in the Constitution.
2. The union which is organized should be registered or affiliated with a
registered union so that it will be legitimate labor organization, acquires a 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
based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;

(b) The names of its officers, their addresses, the principal address of the
labor organization, the minutes of the organizational meetings and the list
of the workers who participated in such meetings;
(c) The names of all its members comprising at least twenty percent (20%) of
all the employees in the bargaining unit where it seeks to operate.
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(d) If the applicant union has been in existence for one or more years, copies
of its annual financial reports; and
(e) Four (4) copies of the constitution and by-laws of the applicant union,
minutes of its adoption or ratification, and the list of the members who
participated in it.
(f) Damian can join Kamao, if he wishes to join the labor federation. There is
no legal obstacle against a worker directly joining a labor federation, if the
labor federations Constitution and By-Laws provide in such direct
membership.
The obligations of Damian as a member of Kamao depend on what obligation the

Constitution and By-law's impose on its members which usually includes the payment of
union dues.
Kamao can be recognized as the bargaining agent of CRMS workers if Kamao is

designated or selected as such bargaining agent by the majority the bargaining unit
composed of the CRMS workers. But it is not Damian who can ask management to
recognize Kamao as bargaining agent; it should be Kamao.
Q: Explain: (2007 Bar Question)
a) The Globe Doctrine
SUGGESTED ANSWER:
Under the Globe doctrine the bargaining units may be formed through separation of new
units from existing ones whenever plebiscites had shown the workers desire to have
their own representatives (Globe Machine and Stamping Co. 3 NLRB 294, applied in
Democratic Labor Union v. Cebu Stevedoring Co., 103 Phil. 1103 [1958]).
b) The Community of Interest Rule.
SUGGESTED ANSWER:
The Community of Interest Rule - The Community of Interest Rule states that in
choosing the appropriate bargaining unit, there must be a determination of the
community of interests of employees. A bargaining unit under DO 40-03 refers to a
group of employees sharing mutual interests within a given employer unit, comprised of
all or less than all of the entire body of employees in the employer unit or any specific
occupation or geographical grouping within such employer unit. The test grouping is
community or mutuality of interests, such as substantial similarity of works and duties or
of compensation and working conditions, because the basic test of an asserted
bargaining units acceptability is whether or not it is fundamentally the combination
which will best assure to all employees the exercise of their collective bargaining rights.
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Q: On what ground or grounds may a union member be expelled from the
organization? (3%)
SUGGESTED ANSWER:
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.
Whenever appropriate for any violation of the rights as:
1. Refusal to pay union dues and special assessments;

2. Disloyalty to the union; and
3. Violation of the constitution and by-laws of the union.
Q: The modes of determining an exclusive bargaining agreement (agent) are:
a. voluntary recognition
b. certification election
c. consent election
Explain briefly how they differ from one another. 5% (2006 Bar Question)
SUGGESTED ANSWER:
a. There is voluntary recognition when in an unorganized establishment with only

one legitimate labor organization, the employer voluntarily recognizes the
representation status of such as a union. Within thirty (30) days from such recognition,
the employer and union shall submit a notice of voluntary recognition with the Regional
Office of the Department of Labor and Employment which issued the recognized labor
unions certificate of registration or certificate of creation of a chartered local.
b. Certification 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 of Labor and Employment, while a consent election is voluntarily agreed
upon by the parties, with or without the intervention by the Department.
c. When the process of determining through secret ballot the sole and exclusive
representative of the employees in an appropriate bargaining unit is not ordered by the
Department of Labor and Employment, but has been voluntarily agreed upon by the
parties with or without the intervention of the Department of Labor and Employment,
then the process is a consent election.
The modes of determining an exclusive bargaining agreement are:

1. voluntary recognition
2. certification election
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3. consent election
Explain briefly how they differ from one another. (5%) (2012 BAR)
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. Sec. 1, (bbb), Rule 1, Book V (Omnibus Rules Implmenting
the Labor Code).
1. Voluntary Recognition is possible only in unorganized establishments where

there is only one legitimate labor organization and the employer voluntarily
recognize the representation status of such a union; whereas,
2. Certification election is a process of determining the sole and exclusive
bargaining agent of the employees in an appropriate bargaining unit for
purposes of collective bargaining, which process may involve one, two or
more legitimate labor organizations. On the other hand,
3. Consent election is an agreed one, the purpose being merely to determine
the issue of majority representation of all the workers in the appropriate
bargaining unit.
Certification 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. [Sec. 1, (h), Rule 1, Book V, Omnibus
Rules Implementing the Labor Code].
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 consent election is
voluntary agreed upon by the parties, with or without the intervention by the
Department. [Sec. 1 (h), Rule I, Book V, Omnibus Rules].
Q: Samahang Tunay, a union of rank-and-file employees lost in a certification

election at Solam Company and has become a minority union. The majority union
now has a signed CBA with the company and the agreement contains a
maintenance of membership clause.
What can Samahang Tunay still do within the company as a union considering
that it still has members who continue to profess continued loyalty to it? (2013
Bar Questions)
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(A) It can still represent these members in grievance committee meetings.
(B) It can collect agency fees from its members within the bargaining unit.
(C) It can still demand meetings with the company on company time.
(D) As a legitimate labor organization, it can continue to represent its members on non-
CBA-related matters.
(E) None of the above.
(F) All of the above.
SUGGESTED ANSWER:
(D) Basis: Article 248 (formerly Art. 242) of the Labor Code.
Q: Differentiate a labor organization from a legitimate labor organization.

(2011 BAR)
(A) While the employees themselves form a labor organization, a legitimate

labor organization is formed at the initiative of a national union or federation.
(B) While the members of a labor organization consists only of rank and file
employees, a legitimate labor organization consists of both supervisory and
rank and file employees.
(C) While a labor organization exists for a lawful purpose, a legitimate labor
organization must, in addition, be registered with the labor department.
(D) While the officers in a labor organization are elected in an informal way, the
officers in legitimate labor organization are formally elected according to the
union's constitution and by-laws.
Q: During the CBA negotiation the management panel proposed a redefinition of

the rank-and-file bargaining unit to exclude HR Specialist in the human
resource department and Analyst in the research and development department.
The union panel objected since those affected have already been included in the
bargaining unit covered by the existing CBA and so could no longer be excluded.
Is the union correct in insisting that their exclusion would amount to bad faith on
the part of the management panel? (2011 BAR)
(A) No, efforts to modify an existing CBA do not constitute bad faith if such
modification does not diminish employment benefits.
(B) Yes, the proposed exclusion amounts to managements violation of its duty to
bargain because it disregards the bargaining history between the parties.
(C) Yes, once the coverage of the bargaining unit has been contractually defined,
it can no longer be redefined.
(D) No, bargaining history is not the only factor that determines the coverage of
the bargaining unit; seeking its redefinition is not negotiating in bad faith.
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a) Test to determine the constituency of an appropriate bargaining unit
Q: Porfirio, Estela, Crisostomo, Marita, and Jose Ramirez were brothers and
sisters. All were stockholders, directors, and officers of the Pagaspas Marketing
Co., Inc. *(PMCI). PMCI sold office machines and supplies. It employed 20 sales
persons, 10 delivery men, 20 service personnel, and 10 administrative employees.
On December 10, 1987, 45 rank and file workers of the company formed and
registered a labor union. They sent a letter to Pagaspas demanding recognition
as bargaining agent of all workers, enclosing check off authorization forms of the
union members, and a set of economic demands. PMCI refused to recognize the
union. The union president went to you, as labor adviser of the federation which
they were planning to affiliate with. (1988Bar Question)
(a) He wants your opinion on what the union may lawfully do to compel
management to come to the bargaining table at that point. What will your advice
be?
(b) The union president tells you that they prefer to go on strike. He wants to
know the legal requirements that the union must comply with so the strike will be
legal. What advice will you give?
SUGGESTED ANSWER:
(a) I will advise the union president to file a petition for certification so that after
being certified as the collective bargaining representative, the union could go back to
PMCI and ask it to bargain collectively with the Union. If PMCI persists in its refusal to
bargain collectively, I will advise the Union to file a case of unfair labor practice against
PMCI since a refusal to bargain collectively is a ULP.
(b) I will tell the Union president that these are the requisites that should be
complied with if a strike is to be legal: The union should file a notice of strike with the
Bureau of Labor Relations (assuming PMCI is in Metro Manila). A copy of the notice
should also be served upon PMCI. The Union should not actually go on strike until after
30 days (if the strikes is because of a deadlock) or 15 days (if the strike is because of
the ULP committed by PMCI, i.e., its refusal to bargain collectively) after filing a notice
of strike.
b) Voluntary recognition (Requirements)
c) Certification election
Q: What is the purpose of a certification election?
SUGGESTED ANSWER:
The purpose of a certification election is to determine the labor organization which shall
be the exclusive bargaining agent of the employees of an appropriate collective
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bargaining unit. A certification election may also determine whether or not the
employees wish to have a collective bargaining representative because in a certification
election, employees can vole for no union." Preliminarily. through a certification
election, the members of an appropriate collective bargaining unit may also be
authoritatively determined. (Arts. 255. 256, 257. Labor Code)
Q: There are instances when a certification election is mandatory. What is the

rationale for such a legal mandate? (2005 Bar Question)
SUGGESTED ANSWER:
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.
Q: Can a no-union" win in a certification election? 2.5% (2006 Bar Question)
SUGGESTED ANSWER:
Yes, because the objective in a certification election is to ascertain the majority

representation of the bargaining representative, if the employees desire to be
represented at all by anyone. Hence, no union is one of the choices in a certification
election.
No, a no-union" cannot win in a certification election. The purpose of a certification

election is to select an exclusive bargaining agent and a no union vote would precisely
mean that the voter is not choosing any of the contending unions. If the no union votes
constitute a majority of the valid votes cast, this fact will all the more mean that no union
won in the certification election. A one-year bar will consequently stop the holding of
another certification election to allow the employer to enjoy industrial peace for at least
one year.
Q:
(a) Distinguish and/or explain the following terms:
1. direct certification;
2. certification election;
3. consent election.
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SUGGESTED ANSWER:
1. There is direct certification if a Med-Arbiter certifies that a certain Union is the

exclusive collective bargaining representative of the employees of an appropriate
bargaining unit without the holding of a certification election, but merely on the basis of
evidence presented in support of the
Unions claim that it is the choice of the majority of the employees. Such evidence may
consist of affidavits made by a clear majority of the employees stating that they are
members of and are supporting the Union petitioning for direct certification to be their
exclusive collective bargaining representation.
2. A certification election is an election ordered by Med-Arbiter for the purpose of

determining the sole and exclusive bargaining agent of the employees in an appropriate
bargaining unit.
3. A consent election is an election agreed upon by the parties to determine the issue of
majority representation of all the workers of an appropriate collective bargaining unit.
Q: Where there is only one union claiming to be the bargaining representative, is

it proper to grant direct certification to said union?
SUGGESTED ANSWER:
(b) It is proper to grant direct certification to said Union, but in addition to its being the
only union claiming to be the bargaining representative, it should submit evidence that it
is the choice of a majority of the employees in an appropriate bargaining unit, as the
bargaining representative. The Labor Code (in Art. 255) provides that the labor
organization designated or selected by the majority of the employees in an appropriate
collective bargaining unit shall be the exclusive representative of the employees in such
unit for the purpose of collective bargaining.
ALTERNATIVE ANSWER:
It may not be proper to grant direct certification in view of the decision in the case of
Colgate-Palmolive where the Supreme Court said:
The constitutional mandate that the State shall assure the rights of the workers to self-
organiza-tion, collective bargaining, security of tenure and just and humane conditions
of work, should be achieved under a system of law such as the aforementioned
provisions of the pertinent statutes. When an overzealous official by-passes the law on
the pretext of retaining a laudable objective, the intendment or purpose of the law will
lose its meaning as the law itself is disregarded. When the Minister of Labor directly
certifies the union, he in fact disregards this procedure and its legal recruitment. There
is failure to determine with legal certainty whether the Union enjoyed majority
representation.
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The holding of a certification election at the proper time is not necessarily a mere
formality where there is a compelling legal reason not to directly and unilaterally certify a
union whose legitimacy is precisely the object of litigation in a pending cancellation case
filed by a group of employees who also claim majority status.
Even in a case where a union has filed a petition for certification elections, the mere fact
that no opposition is made does not warrant a direct certification. More so in a case
when the required proof is not presented in an appropriate proceeding and the basis of
the direct certification is the unions mere allegation in its position paper that it has 87
out of 117 regular employees. In other words, the Minister may not merely rely on the
self-serving assertion of a union that it enjoys the support of the majority of the
employees, without subjecting such assertion to the test of competing claims. Colgate
Palmolive Philippines, Inc. v. Bias Ople, G.R. 73681, 30 June 88, Second Division,
Paras, J.
Q: The Construction and Development Corporation has a total of one thousand

and one hundred (1,100) employees. In a certification election ordered by the
Bureau of Labor Relations to elect the bargaining representative of the
employees, it was determined that only one thousand (1,000) employees are
eligible voters. In the election a total of nine hundred (900) ballots was cast. There
were fifteen (15) spoiled ballots and five (5) blank ballots. A total of four hundred
(400) votes was cast for ABC Labor Union, a total of two hundred forty (240) votes
was cast in favor of JVP Labor Union, and a total of two hundred and forty (240)
votes was in favor of RLG Labor Organization.
(a) Is there a valid certification election? Why?

(b) You are called upon to decide the case. Which labor union will you certify
as the collective bargaining representative of the employees of the company?
Why?
SUGGESTED ANSWER:
(a) There is a valid certification election. In the facts of the case in question, there is no
bar to the holding of the certification election.
The Labor Code provides (in Art. 256) that to have a valid certification election, at least
a majority of all eligible voters in the bargaining unit must have cast their votes in the
election. In the facts of the case in the question, 1,000 employees are eligible voters
and 900 voters, which is very much more than the majority (501) of the eligible voters
cast their votes.
(b) As med-arbiter called upon to decide the case, I will not certify any labor union as
the collective bargaining representative of the company, because none of the labor
unions who participated in the certification election garnered a majority of the valid votes
cast. According to the Labor Code (in Art. 256), the labor union receiving the majority of
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the valid votes cast shall be certified as the exclusive bargaining agency of all the
workers in the unit. The valid votes cast in the certification election total 880 votes (900
votes cast minus 20 invalid votes. 15 of which were spoiled ballots and 5 blank ballots).
No labor union garnered at least 441 votes which is the majority of 880 votes.
Q: In what instance may a petition for certification election be filed outside the
freedom period of a current collective bargaining agreement? (3%). (1999 Bar
Question)
SUGGESTED ANSWER:
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.
ALTERNATIVE ANSWER:
A petition for certification election may be filed outside the freedom period of a current
CBA if such CBA is a new CBA that has been prematurely entered into, meaning, it was
entered into before the expiry date of the old CBA. The filing of the petition for
certification election shall be within the freedom period of the old CBA which is outside
of the freedom period of the new CBA that had been prematurely entered into.
Q: Llanas Corporation and Union X, the certified bargaining agent of its

employees, concluded a CBA for the period January 1, 2000 to December 31,
2004. But, long before the CBA expired, members of Union Y, the minority union,
showed dissatisfaction with the CBA under the belief that Union X was a
company union. Agitated by its members, Union Y filed a petition for a
Certification Election on December 1, 2002. Will the petition prosper? (2011 BAR)
(A) No, such a petition can only be filed within the freedom period of the CBA.
(B) No, since a petition for certification can be filed only upon the expiration of the
CBA.
(C) Yes, a certification is the right remedy for ousting a company union.
(D) Yes, employees should be allowed to cancel at the earliest opportunity a CBA
that they believed was obtained by a company union.
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Q: Are probationary employees entitled to vote in a certification election? Why?
(2%).(1999 Bar Question)
SUGGESTED ANSWER:
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 negoti-ated 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, 180 SCRA 749)
ALTERNATIVE ANSWER:
Probationary employees may not be entitled to vote in a certification election where only
regular employees belong to a bargaining unit and probationary employees do not
belong to such bargaining unit. It is the belonging to a bargaining unit that entitles an
employee to vote in a certification election.
ANOTHER ALTERNATIVE ANSWER:
Yes. Any employee, whether employed for a definite period or not, shall, beginning on
his first day of service, be considered an employee for purposes of membership in any
labor union (Art. 277(c)).
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.
1) Does the company have the standing to file the motion to dismiss?
Explain.
2) If you were the Med-Arbiter how would you resolve the petition.
3) What is the proper remedy of an employer to ensure that the employees
are qualified to hold a certification election? (1996 Bar Question)
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SUGGESTED ANSWER:
1) 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., us Torres, 211 SCRA 95 (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.
2) As the MedArbiter I will:
a. Deny, for lack of merit, the employer's Motion to dismiss the Unions Petition for
Certification Election.
b. Proceed to hear the merits of the petition, especially:

1. the appropriation of the claimed bargaining unit;
2. inclusion and exclusion of voters, or the proposed voter list; and
3. if the petition is in order, to set the date, time and place of the election.
3) 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, 211 SCRA 95
[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.
ALTERNATIVE ANSWER:
1) The company does not have the standing to file a motion to dismiss the petition for
certification election, but it could move for the exclusion of the employees it alleged to
be managerial employees from the bargaining unit for which a petition for certification
election has been filed.
As a general rule, an employer has no standing in a petition for certification election

because the purpose of a certification election is to determine who should be the
collective bargaining representative of the employees. Thus, a certification election is
the concern of the employees and not of the employer.
But in the case at bar, the employer may have a standing because the petition for
certification election involves personnel which the employer alleges to be managerial
employees. And managerial employees under the Labor Code are not eligible to form,
assist or join labor organizations, implying that they cannot be part of the bargaining unit
for which a petition for certification election has been filed.
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2) 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.
3) The proper remedy of an employer to ensure that only the employees are qualified to
hold a certification election is to move for the exclusion of those whom he alleges to be
managerial personnel.
Q: The Amalgamated Workers of the Philippines (AWP) was certified on July 1,

1992 as bargaining representative of the rank-and-file employees of Company
X". The employees are members of a local Company affiliated with AWP. On
September 1. 1992, X received a letter from the local union stating that it had
disaffiliated from AWP. The employees had disauthorized AWP as their
bargaining representative and it (local union) will negotiate a bargaining contract
with X" When AWP sent its bargaining proposals to X" on September 5, 1992,
X" informed AWP that it could not consider the proposals because the local
union had disaffiliated from AWP and the employees had disauthorized it to act
as their representative. AWP filed an unfair labor practice case against X for
refusaldo bargain. X" invoked good faith as a defense.
Will AWP's complaint prosper? Why?
SUGGESTED ANSWER:
AWPs complaint will prosper. AWP was certified on July 1, 1992 as bargaining
representative of the rank and file employees of Company "X". Under the one-year rule,
meaning that provided in the Rules and Regulations implementing the Labor Code
(Book V. Rule V, Sec. 3) which states that no certification election may be filed within
one year from the date of issuance of a final certification election result, there could be
no change of the collective bargaining representative within one year from the date of its
certification as such representative. Thus, the local union which disaffiliated with AWP
cannot take over from AWP the latter's status as collective bargaining representative.
(Balmar Farms, Inc. vs. NLRC. et al.. G.R. No. 73504. October 15. 1991)
It would be a different matter if the local union, as an affiliate of AWP. was certified as
the collective bargaining representative. Then. AWP cannot insist that it be the
collective bargaining representative after the local union disaffiliated from AWP. From
the beginning, it is the local union that was the collective bargaining representative and
not AWP. (Tropical Hut Employees Union-CGW, et al.. vs. Tropical Hut Food Market,
Inc.. et al. G.R. L-43495-99, January' 30. 1990)
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a) 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. (3%)
b) A Collective Bargaining Agreement was signed between the Ang Sarap

Kainan Company and the Ang Sarap Kainan Workers Union. Should the
Collective Bargaining Agreement be registered with, the Bureau of Labor
Relations? If so, why? (3%)
SUGGESTED ANSWER:
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)
b) So that the contract -bar rule may apply the CBA should be registered, assuming it
has been validly ratified and contains the mandatory provisions. (Art. 232, Labor Code).
Q: Is it required that an employer-employee relationship exists between an

employer and the employees in the appropriate bargaining unit before a
certification election can be ordered? If so why? (5%) (1998 Bar Question)
SUGGESTED ANSWER:
Yes, it is required that an employer-employee relationship is existing between the

employer and the employees in the appropriate bargaining unit before a certification
election can be ordered for the simple reason that a certification election is held for the
purpose of determining which labor organization shall be the exclusive collective
bargaining representative of the employees in an appropriate bargaining unit. There
could be no collective bargaining between persons who do not have any employer-
employee relationship.
Yea, the Supreme Court has ruled that the existence of an employer-employee
relationship is required before a certification election can be held.
The Supreme Court in Allied Force Waters Union v. Compania Maritima, 19 SCRA 258
(1967), ruled-
xxx There being no employer-employee relationship between the parties disputants,

there is neither a duty to bargain collectively" to speak of. And there being no such
duty, to hold certification elections would be pointless. There is no reason to select a
representative to negotiate when there can be no negotiations in the first place. Where
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there is no duty to bargain collectively, it is not proper to hold certification elections in
connection therewith.
Q: The Pinagbuklod union filed a Petition for Certification Election, alleging that it
was a legitimate labor organization of the rank-and-file employees of Delta
Company. On Delta's motion, the Med Arbiter dismissed the Petition, based on
the finding that Pinagbuklod was not a legitimate labor union and had no legal
personality to file a Petition for Certification Election because its membership
was a mixture of rank-and-file and supervisory employees.
Is the dismissal of the Petition for Certification Election by the Med-Arbiter

proper? (2013 Bar Questions)
(A) Yes, because Article 245 of the Labor Code prohibits supervisory employees from
joining the union of he rank and file employees and provides that a union representing
both rank and file and supervisory employees as members is not a legitimate labor
organization.
(B) No, because the grounds for the dismissal of a petition for certification election do
not include mixed membership in one umon.
(C) No, because a final order of cancellation of union registration is required before a
petition for certification election may be dismissed on the ground of lack of legal
personality of the umon.
(D) No, because Delta Company did not have the legal personality to participate in the
certification election proceedings and to file a motion to dismiss based on the legitimacy
status of the petitioning union.
Q: The following may file a Petition for Certification Election, except: (2012 Bar
Question)
a. The employer;
b. The legitimate labor organization;
c. The Federation on behalf of the chapter;
d. The Workers Association.
SUGGESTED ANSWER:
D) Workers Association [Arts. 258 {employer}, 242, 256 (legitimate labor organization}
and 257 (Federation which has issued a Charter Certificate) Labor Code]
Q: The following are grounds to deny the Petition for Certification Election,
except: (2012 Bar Question)
a. The petitioning union is illegitimate or improperly registered;

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b. Non-appearance for two consecutive schedules before the Med-Arbiter by
petitioning union;
c. The inclusion of members outside the bargaining unit;
d. Filed within an existing election bar.
SUGGESTED ANSWER:
c. The Inclusion of members outside the bargaining unit [Art. 245-A, Labor
Code, as amended]
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
Bar Question)
(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?
SUGGESTED ANSWER:
Yes. Rule IX, Section 5 of DOLE Department Order 40-03 provides that [a]ll 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 a 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.
(B) Was there a valid election?
SUGGESTED ANSWER:
Yes. To have a valid election, at least a majority of all eligible voters in the unit must
have cast their votes (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?
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SUGGESTED ANSWER:
No. The Labor Code provides that the Labor Union receiving the 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 only
received 200 votes.
(D) Suppose the election is declared invalid, which of the contending

unions should represent the rank-and-file employees?
SUGGESTED ANSWER:
None of them should represent the rank-and-file employees (Article 255, now Article
265, 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?
SUGGESTED ANSWER:
Yes. The Labor Code provides that the Labor Union receiving the 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 Bar Question)
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SUGGESTED ANSWER:
No. Under Article 258-A of the Labor Code, an employer is a mere bystander in
certification elections, whether the petition for certification election is filed by said
employer or a legitimate labor organization. The employer shall not be considered a
party thereto with a concomitant right to oppose a petition for certification election.
(i) In an unorganized establishment
Q: Where the petition for a certification election in an unorganized establishment

is filed by a federation, it shall NOT be required to disclose the
(A) names of the local chapter's officers and members.

(B) names and addresses of the federation officers.
(C) names and number of employees that initiated the union formation in the
enterprise.
(D) names of the employees that sought assistance from the federation in
creating the chapter.
Q: The PMG Stevedoring Company is a relatively new firm engaged in the

stevedoring business in the port of Cebu City. The company has 278 regular and
permanent employees, engaged in the loading and unloading of foreign and
domestic vessels docking at the said port. The Company also employs 55
supervisory personnel.
The AH Labor Organization filed a verified petition with the company stating, inter
alia, that it is a legitimate labor organization representing majority of the
employees, and that there is no bargaining agent in the unit. The union asked for
recognition as the bargaining agent of all the employees of the company.
The company replied that while it is not anti-union, it cannot, under the
circumstances, accede to the union demand on the ground that the petition is not
supported by the written consent of at least twenty-five percent (25%) of ail the
employees and also because the company-wide unit sought to be represented by
the union is not an appropriate collective bargaining unit.
After hearing, the med-arbiter ordered a certification election in the company-

wide unit. Not satisfied therewith, the company elevated the order to the
Secretary of Labor and Employment.
If you were the Secretary of Labor and Employment, how will you decide this
case? Give your reasons.
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SUGGESTED ANSWER:
As Secretary of Labor and Employment, I will affirm the order for a certification election
made by the Med Arbiter.
But I will amend the order. Instead of a certification election in a company wide unit, I
will order a certification election only for a bargaining unit composed of rank and file
employees, or only for a bargaining unit composed of supervisory employees, in
whichever bargaining unit are found the members of the petitioning labor organization.
The order for a certification election is proper even if the petition for certification election
filed by AH Labor Organization is not supported by at least 25% of the employees of the
appropriate collective bargaining unit. The petition for certification election is filed in an
unorganized establish-ment there being, as yet. no bargaining agent in PMG
Stevedoring Company. A petition for certification election in an unorganized
establishment does not require the consent of at least 25% of all the employees in the
bargaining unit (Art. 257. Labor Code). This is a requirement only for petitions filed in an
organized establishment. (Art. 256, Labor Code)
But the bargaining unit cannot be company wide. Rep. Act No. 6715, in reaffirming the
right of supervisory employees to form a union, provides that they can only be members
of unions whose members are all supervisory employees. This restriction means that,
unlike the situation before Rep. Act No. 6715. supervisory employees and rank and file
employees could no longer belong to one union. Thus, as a result, a bargaining unit
could no longer be composed of rank and file employees and supervisor employees.
A POINT TO CONSIDER: A bar examinee may. however, assume that the reference to
the bargaining unit being a companywide unit means either a companywide unit of all
rank and file employees or a companywide unit of all supervisory employees.
ALTERNATIVE ANSWER:
As Secretary, I would affirm the order of the med- arbiter. There is no bar to the
election, and the employees are entitled to a speedy determination of their bargaining
representative so that they could exercise their right to bargain collectively.
(ii) In an organized establishment
Q: The constituency of the bargaining unit in Complex Electronics Corporation

consisted of 800 employees. Four unions - A, B, C. and D - vied to represent the
employees for collective bargaining purposes. In a certification election ordered
by the Med-Arbiter, 700 employees voted. Union A obtained 200 votes; Union B,
150 votes, Union C, 70 votes; and Union D, 30 votes. 250 employees voted "no
union.
a) Was there a valid election? Why?

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SUGGESTED ANSWER:
Yes, There was a valid election. The Labor Code requires that for a certification election
to be valid, at least a majority of all eligible voters in the unit must have cast their votes.
(Article 256, Labor Code) Here, the number of eligible voters was 800. Seven hundred
(700) or more than a majority voted. Thus, the election was valid.
b) Which union should be certified as bargaining representative of tire

employees? Why?
SUGGESTED ANSWER:
No union could be certified as bargaining representative of employees. To be certified,

a labor union should receive a majority of valid votes cast of at least a majority of the
800 votes cast which should be 401 votes. (Article 256, Labor Code) The union
obtaining the highest number of votes is Union A. It obtained only 200 votes, short of
the majority by 201 votes.
c) Should a new election be conducted with all the four unions participating?
Reasons.
SUGGESTED ANSWER:
A new election should be conducted, but the Labor Code provides that it should be an
election not at all the four unions who participated in the election but a run-off election
where only the labor unions receiving the two highest numbers of votes will participate.
This run-off election can be held because in the earlier election, the total number of
votes for all the contending unions was at least fifty percent (50%) of the number of
votes cast. Here. 450 votes or more than a majority of the 800 votes cast, were votes
for all contending unions. (Article 256, Labor Code)
d) Suppose in the election. Union A obtained 300 votes. Union B, 30 votes.

Union C. 10 votes and Union D, no votes and 360 voted no union. Should Union A
be certified as bargaining representative? Reasons.
SUGGESTED ANSWER:
Here, the total number of votes cast was 700 votes. Union A can not be certified as
bargaining representative. It did not get the majority of the valid votes cast, namely 351
votes. Union A got only 300 votes.
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 the federation represents and to enter into
a CBA with the local union. Respondent Company replied that though it is willing,
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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 unions dissolution.
Is the argument of Puwersa tenable? Decide with reasons. (6%) (2008 Bar
Question)
SUGGESTED ANSWER:
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
two-thirds 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 law,
the argument of Puwersa is not tenable. This is so 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., 66 SCRA 52[1975J;
cited in Filipino Pipe and Foundry Corp. v. NLRC, 318 SCRA 68[1999]).
No. Local unions do not owe their creation and existence to the national federation to
which they are affiliated, but to the will of their members. The act of voluntary dissolution
already constitutes a ground for cancellation for union registration under Article 239 as
amended by Republic Act No. 9481. Hence, the collective bargaining agents legal
personality has been extinguished, with Puwersa reduced to being an agent without a
principal.
ALTERNATIVE SUGGESTED ANSWER:
Yes, Puwersa is right. Article 256 of the Labor Code mandates that the Labor union
receiving the majority of the valid votes cast shall be certified as the exclusive
bargaining agent of all the workers in the unit. On the assumption that it has been so
certified, Puwersa is then correct in its argument that since it won in the certification
election, it can validly perform its functions as a bargaining agent and represent the
rank- and-file employees despite the (local) unions dissolution. The refusal of the
company to bargain with Puwersa is violative of its duty to bargain collectively under
Arts. 251 and 252 of the Code, thereby subjecting it to the penalty of considering
Puwersas proposed CBA as the parties effective CBA. Such was the ruling of the
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Supreme Court in Divine Word University of Tacloban vs. Secretary of Labor and
Employment (213 SCRA 759 [1992]).
Q: Rank-and-file workers from Peacock Feathers, a company with 120 employees,

registered their independent labor organization with the Department of Labor and
Employment (DOLE) Regional Office. Management countered with a petition to
cancel the unions registration on the ground that the minutes of ratification' of
the union constitution and-by-laws submitted to the DOLE were fraudulent.
Specifically, management presented affidavits of ten (10) out of forty (40)
individuals named in the list of union members who participated in the
ratification, alleging that they were not present at the supposed January 1, 2010
meeting held for the purpose. The union argued that the stated date of the
meeting should have read January 11, 2010, instead of January 1, 2010, and
that, at any rate, the other thirty (30) union members were enough to register a
union. Decide with reason. (3%) (2010 Bar Question)
SUGGESTED ANSWER:
Petition for cancellation is dismissed for want of merit.
The date specified therein is purely a typographical error as admitted by the union itself.
There was no willful or deliberate intention to defraud the union members that will vitiate
their consent to the ratification. To be a ground for the cancellation of union registration
under the Labor Code, the nature of the fraud must be grave and compelling enough to
vitiate the consent of the majority of union members (Mariwasa Siam Ceramics v.
Secretary, 60S SCRA 706 [2009]).
Moreover, 20% of 120 is 24. So, even if the 10 union members disown their
participation to the ratification of the union constitution and by-laws, the union is correct
in arguing that the 30 union members suffice to uphold the legitimacy of its union (Art.
234, Labor Code).
d) Run-off election (Requirements)
Q: When does a "run-off election occur? 2.5% (2006 Bar Question)
SUGGESTED ANSWER:
A run-off or second election occurs when an election which provides for three (3) or
more choices results in no choice receiving a majority of the valid votes cast, and no
objections or challenges have been presented which, if sustained, can materially
change the results; the election officer shall motu proprio conduct a run-off election
within (10) calendar days from the close of the election proceedings between the labor
unions receiving the (2) highest number of votes; provided that, the total number of
votes for all contending unions is at least fifty per cent (50%) of the number of votes
cast (Rule X, Dept. Order 40-03).
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Q: Among the 400 regular rank-and-file workers of MNO Company, a certification
election was ordered conducted by the Med-Arbiter of the Region. The
contending parties obtained the following votes:
1. Union A - 70
2. Union B - 71
3. Union C 42
4. Union D - 33
5. No union - 180
6. Spoiled votes -4
There were no objections or challenges raised by any party on the results of the
election.
xx
xx
xx
[c] If you were the duly designated election officer in this case, what would you
do to effectively achieve the purpose of certification election proceedings?
Discuss. (3%)
SUGGESTED ANSWER:
I will conduct a run-off election between the labor unions receiving the two highest
number votes. To have a run-off election, all the contending unions (3 or more choices
required) must have garnered 50% of the number of votes cast. In the present case,
there are four (4) contending unions and they garnered 216 votes. There were 400 vote
cast. The votes garnered by the contending unions is even more than 50% of the
number of vote cast. Hence, a run-off election is in order.
Q: Distinguish between "Certification Election", Consent Election," and "Run-off

Election". (6%) (2000 Bar Question)
SUGGESTED ANSWER:
Certification election requires a petition for a Certification Election filed by a union or

employer. A med-arbiter grants the petition and an election officer is designated by the
regional director to supervise the election. (Art. 256, 257,258, Labor Code).
Consent election is held by agreement of the unions with or without participation of the
med-arbiter. [Warren Manufacturing Workers Union v. Bureau of Labor Relations, 159
SCRA 387 (1988)].
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Run-off election takes place between the unions who received the two highest number
of votes where not one of the unions obtained the majority of the valid votes cast,
provided that the total union votes is at least 50% of the votes cast. (Art. 256, Labor
Code).
Q: In a certification election, three (3) unions participated. The election results

were as follows: Union A got 100 votes; Union B got 80 votes; Union C got
120 votes. The NO-UNION got 150 votes. The aggregate number of votes cast
was 450; the total number of eligible voters was likewise 450.
(a) Which union, if any, should be certified?

(b) If a run-off election is necessary, which union(s) or choices should appear
in the ballot? Explain your answer.
SUGGESTED ANSWER:
(a) No union should be certified. No union got a majority of the valid votes cast,
which is 224 votes [Vi of 450 plus 1). The Labor Code (in Art. 256) provides that a
union, to be certified as the exclusive bargaining agent of the workers in a bargaining
unit, should receive a majority of the valid votes cast. '
(b) Since no union was certified, a run-off election should be held between Union A
which got 100 votes and Union C which got 120 votes. They are unions who got the
two highest number of votes. The Labor Code (in Art. 256) provides that when an
election which provides three or more choices results in no choice receiving a majority
of valid vote cast, a run-off election shall be conducted between the labor union having
the two highest number of votes.
ALTERNATIVE ANSWER:
NO-UNION which got 150 votes and Union C which got 120 votes were the choices
which got the two highest number of votes. Thus, the run-off election should be between
the NO-UNION and Union C. The provision in Republic. Act No. 6715 the limits a run-
off election to labor unions excluding thereby the NO-UNION choice is unconstitutional.
It violates the workers right to self-organization which also includes the right not to join
a labor union.
e) Re-run election
f) Consent election
Q: Distinguish clearly but briefly between:
xx
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xx
xx
xx
Consent election and certification election.
Social security and union security.
SUGGESTED ANSWERS:
"A certification election and a consent election are" both elections held to determine
through secret ballot the sole and exclusive representative of the" employees in an
appropriate bargaining unit for the purpose of collective bargaining or negotiations.
There is this difference, however. A certification election is ordered by the Department
of Labor and Employment while a consent election is voluntarily agreed upon by the
parties, with or without the intervention of the Social Security is the protection given by
social insurance programs such as the programs of the SSS, GSIS and PHIC
undertaken pursuant to their respective charters, including the employees
compensation program provided for in the Labor Code. The aforesaid programs provide
income benefits and/or medical care when contingencies like sickness, (also maternity
in the case of SSS) disability, death, or retirement, including in the case of the GSIS,
separation and unemployment benefits.
On the other hand, union security refers to a clause in a collective bargaining

agreement whereby the employer agrees to employ or continue in employment only
workers who are members of the exclusive collective bargaining representative of the
employees of said employer in a bargaining unit.
g) Affiliation and disaffiliation of the local union from the mother union
(i) Substitutionary doctrine

x x
x x
x x
xx
[d] In the law on labor relations, the substitutionary doctrine prohibits a new
collective bargaining agent from repudiating an existing collective bargaining
agreement. (2009 Bar Question)
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SUGGESTED ANSWER:
True. The existing collective bargaining agreement (in full force and effect) must be
honored by a new exclusive bargaining representative because of the policy of stability
in labor relations between an employer and the workers.
a) The Samahan ng Mga Manggagawa sa Pids and Co. Inc. lost its majority
status in the bargaining unit one year after the signing of the Collective
Bargaining Agreement. Bickering among all the three other unions in the
bargaining unit were a daily occurrence, with each union asserting majority
status. To resolve this pestering problem, the Company and the three other
unions agreed to hold a consent election under the supervision of the Bureau of
Labor Relations. In the consent election. Pids and Co. Workers Union won, and
was accordingly recognized by the Company as the exclusive bargaining
representative in the bargaining unit. Is the Pids and Co. Workers Union bound by
the Collective Bargaining Agreement signed between the Company and the Sam
ah an ng Mga Manggagawa Sa Pids and Co. Inc.? Explain. (3%)
b) Shortly after the consent election, Pids and Co. Inc. sold the Groceries
Division to Metro Manila Grocery Inc. The employees of the sold division formed
part of the bargaining unit described in the Collective Bargaining Agreement, and
all were absorbed by Metro Manila Grocery Inc. Is Metro Manila Grocery' Inc. as
the new employer, bound by the Collective Bargaining Agreement existing at the
time of the sale? Explain. (3%)
SUGGESTED ANSWER:
a) Yes, because the Collective Bargaining Agreement is not invalidated by the

change of the bargaining agent while the CBA is still effective. The substitutionary
doctrine" applies. [Benguet Consolidated Inc. v. BCI Employees. 23 SCRA 465 (1968)].
b) No. There are no indications that the sale is simulated or intended to defeat the
employees' right to organize. A bonafide sale terminates the employment relationship
between the selling company and its employees. The CBA does not bind the purchaser
in good faith because the CBA is a personam contract, unless the buyer agrees to be
bound. [Sundowner Dev. Corp. v. Drilon, 180 SCRA 14 (1989); Associated Labor Union
v. NLRC, 204 SCRA 913 (1993)].
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h) Union dues and special assessments
(i) Requirements for validity
Q: The union deducted P20.00 from Rogelios 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. (5%)
SUGGESTED ANSWER:
Yes. In order that the special assessment (death aid benefit) may be upheld as valid,
the following requisites must be complied 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) Secretarys 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, 304
SCRA 489(1999)]
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.
Q: What requisites must a Union comply with before it can validly impose special
assessments against its members for incidental expenses, attorneys fees,
representation expenses and the like? (3%) (2001 Bar Question)
SUGGESTED ANSWER:
The Labor Code (in Art. 241(n)) provides that "no special assessments or other
extraordinary fees may be levied upon the members of a labor organization unless
authorized by a written resolution of a majority of all the members at a general
membership meeting duly called for the purpose."
In the case of ABC-CBN Employees Supervisors Union vs. ABS-CBN Boardcasting

Corp., and Union Officers, G.R. No. 106518, March 11, 1999, the Supreme Court ruled
that the following are the requisites:
1) Authorization by a written resolution of the majority of all the members at the general,
membership meeting duly called for the purpose;
2} Secretarys record of the minutes of the meeting; and
3) Individual written authorization for check-off duly signed by the employee concerned.
(See also: Gabriel vs. Secretary of Labor, G.R. No. 115949, March 16, 2000).
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i) Agency fees (Requisites for assessment)

x x
x x
x x
xx
[e] Agency fees cannot be collected from a non-union member in the absence of a
written authorization signed by the worker concerned. (2009 Bar Question)
SUGGESTED ANSWER:
False. Agency fee can be collected from a union member even without his prior written
authorization as long as he receives the benefits of a CBA, and is a member of the
appropriate bargaining unit. (Arts. 248(e)& 241(o), Labor Code).
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'sfees and
another sum of PI00.00 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 Attorneys fees was valid.
(b) Whether or not the assessment of PI00.00 from the individual members of
the Welga
Labor Union for services rendered by the union officers In the CBA negotiations
was valid.
SUGGESTED ANSWER:
(a) The assessment of P 100.00 from each union member as attorney's fees - for union
negotiation, is not valid. Art. 222(b) of the Labor Code, reads:
"No attorneys fees, negotiation fees or similar charges of any kind arising from any
collective bargaining negotiations or conclusion of the collective agreement shall be
imposed on any individual member of the contracting union; Provided, however, that
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Labor Law

attorneys fees may be charged against union funds in an amount to be agreed upon by
the parties. Any contract, agreement or arrangement of any sort to be contrary shall be
null and void."
(b) The assessment of PI00.00 as negotiation fees charged to each individual union
member and payable to union officers is also not valid, for the same reason as stated
above. The assessment is an act violative of Art. 222(b).
ALTERNATIVE ANSWER:
(a) The collection of the amount assessed on the individual members to answer
for the attorney's fees would be valid if it was authorized by a written
resolution of a majority of all the members in a general membership meeting
called for the purpose.
(b) The assessment of PI00.00 from the individual members of the Welga Labor
Union for services rendered by the union officers in the CBA negotiations
would be valid if it was authorized by a written resolution of a majority of all
the members in a general membership meeting duly called for the purpose.
(Art. 241(N)].
Q: In the general assembly meeting held on September 5, 1992, a BANK UNION

with a majority of its 1,500 rank- and-file members attending, ratified and
confirmed the decision of its UNION OFFICERS to engage the sendees of one
ATTY. DAYOS to assist them in the negotiation of a new 3-year Collective
Bargaining Agreement (CBA). to replace the expiring CBA. A contractual
undertaking was signed by the UNION OFFICERS providing for the pay-ment of
attorneys fees to ATTY. DAYOS in the amount equivalent to ten (10%) percent of
the total package benefits that may be secured from the BANK. The BANK was
authorized to deduct or check-off said attorney's fees and to turn over the
proceeds directly to ATTY. DAYOS.
After the conclusion and signing of the new CBA between the BANK UNION and
the BANK MANAGEMENT, many of the members of the BANK UNION who
attended the general assembly meeting on September 5. 1992. objected to the
payment of ATTY. DAYOS' attorney's fees for various reasons: (1) Some claimed
that the UNION'S contract to pay attorney's fees, negotiation fees or similar
charges of any kind arising from any CBA negotiations or conclusion of the CBA,
imposed on the individual members of the contracting UNION, was null and void;
(2) Some also claimed that they never attended the UNION'S gen-eral assembly
meeting of September 5. 1992, and even if they were present, then they would
have opposed to the payment of attorney's fees to ATTY. DAYOS; (3) others
claimed that although they signed the resolution authorizing the payment of the
attorney's fees, they were withdrawing such authorizations. On the other hand,
the UNION OFFICERS insisted on paying UNION'S counsel 10% attorney's fees
alleging that its rank and file members in their general assembly meeting held on
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September 5. 1992, authorized and ratified their contractual undertaking to pay
10% to ATTY'. DAYOS for services rendered.
1) Discuss and justify the stand or position of the recalcitrant or opposition

UNION members.
2) Discuss and justify the stand or position of the UNION OFFICERS and
ATTY. DAYOS.
SUGGESTED ANSWER:
1) The opposition Union members could contend that the Labor Code (in Art. 222(b)
categorically provides that no attorneys fees, negotiation fees or similar charges of any
kind arising from collective bargaining negotiations or conclusion of the Collective
Agreement shall be imposed on any individual member of the contracting union and that
any contract, agreement or arrangement of any sort to the contrary shall be null and
void.
ALTERNATIVE ANSWER:
The opposition Union members could contend that the payment of attorneys fees to
Atty. Dayos equivalent to ten (10%) percent of the total package of benefits imposed on
the individual members of the contracting union is in the nature of a special assessment
that may not be levied upon members of a labor organization unless authorized by a
written resolution of a majority of all the members at a general membership meeting
called for the purpose. (Art. 241(n), Labor Code). Members can withdraw their earlier
authorization.
Re: the check-off for the attorneys fees, because the same is not for mandatory
activities, there could be no check-off without individual written authorization duly signed
by the employee. (Art. 241(0), Labor Code)
2) The Union officers and Atty. Dayos could contend that after a majority of the
members of the Union ratified and confirmed at a general assembly meeting the
decision of the Union officers to engage the services of Atty. Dayos to assist them in the
negotiation of a new CBA, and in implementation of such ratification and confirmation,
the Union officers entered into a contract for the purpose with Atty. Dayos, the contract
was legal and after his rendition of services, the union can pay Atty. Dayos his fees to
be paid from the funds of the Union which was raised by special assessment of Union
members.
The Labor Code provides that attorney's fees may be charged against union funds in an
amount to be agreed upon by the parties. (Art. 222 (b))
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B. Right to collective bargaining
Q: Which phrase most accurately completes the statement Members of

cooperatives: (2012 Bar Question)
a. Can invoke the right to collective bargaining because it is a fundamental

right under the Constitution;
b. Can invoke the right to collective bargaining because they are permitted
by law;
c. Cannot invoke the right to collective bargaining because each member is
considered an owner;
d. Cannot invoke the right to collective bargaining because they are
expressly prohibited by law.
SUGGESTED ANSWER:
c) Cannot invoke the right to collective bargaining because each member is considered
an owner. [Benguet Electric Cooperative vs. Pura Ferrer-Calleja, G.R. No. 79025, Dec.
29, 1989]
Q: The CBA for the period January 2007 to December 2009 granted the employees
a P40 per day increase with the understanding that it is creditable as compliance
to any future wage order. Subsequently, the regional wage board increased by
P20 the minimum wage in the employers area beginning January 2008. The
management claims that the CBA increase may be considered compliance even if
the Wage Order itself said that CBA increase is not creditable as compliance to
the Wage Order. Is the management's claim valid? (2011 BAR)
(A) Yes, since creditability of the CBA increase is the free and deliberate
agreement and intention of the parties.
(B) Yes, since the Wage Order cannot prejudice the managements vested
interest in the provisions of the CBA.
(C) No, disallowing creditability of CBA pay increase is within the wage board's
authority.
(D) No, the CBA increase and the Wage Order are essentially different and are to
be complied with separately.
Q: The employees rights to organize and to bargain collectively are means of

exercising the broader right to participate in policy or decision-making
processes. The employees' right to participate in policy and decision making
processes is available (2011 BAR)
(A) if a labor-management council exists.

(B) if a labor-management council does not exist.
(C) if a union exists and it agrees to the creation of a labor-management council.
(D) whether or not a labor-management council exists.
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1. Duty to bargain collectively
a) When there is absence of a CBA
Q: Upon the expiration of the first three (3) years of their CBA, the union and the
company commenced negotiations. The union demanded that the company
continue to honor their 30-day union leave benefit under the CBA. The company
refused on the ground that the CBA had already expired, and the union had
already consumed their union leave under the CBA.
Who is correct? (2013 Bar Questions)
(A) The company is correct because the CBA has expired; hence it is no longer bound
to provide union leave.
(B) The company is correct because the union has already consumed the allotted union
leave under the expired CBA.
(C) The union is correct because it is still the bargaining representative for the next two
(2) years.
(D) The union is correct because union leaves are part of the economic terms that
continue to govern until new terms are agreed upon.
(E) They are both wrong.
SUGGESTED ANSWER:
(B)
(D) Basis: Article 259 (formerly Article 253) of the Labor Code.
b) When there is a CBA
Q: Explain the automatic renewal clause of collective bargaining agreements.

SUGGESTED ANSWER:
The automatic renewal clause of Collective Bargaining Agreements means that

although a CBA has expired, it continues to have legal effects as between the parties
until a new CBA has been entered into (Pier 8 Arrastre & Stevedoring Services, Inc. v.
Roldan-Confessor, 241 SCRA 294 [1995]). This is so because the law makes it a duty
of the parties to keep the status quo and to continue in full effect the terms and
conditions of the existing agreement until a new agreement is reached by the parties
(Art. 253, Labor Code).
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Q: Company "A" and Union "B" negotiated the last two years of their five-year
CBA on April 1. 1990 to xpire 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. (5%) (2001 Bar Question)
SUGGESTED ANSWER:
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, G.R. 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."
With Art. 253 of the Labor Code as basis, the disgruntled employees should be paid the
annual salary increases and other related annual increases provided in the 1990-1992
CBA even after the expiration of said CBA as long as said CBA did not provide that said
increases were to be paid only for certain specific years.
Q: FACTS: 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.
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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
JEU-FAFLU until the representation issue within PAFLU shall have been resolved
with finality. JEU-PAFLU filed a Notice ot Strike. The Secretary of Labor
subsequently assumed jurisdiction over the labor dispute. (1999 Bar Question)
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. (3%)
SUGGESTED ANSWER:
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-in- interest 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), 127 SCRA 263 [1984]).
ALTERNATIVE ANSWER:
What is involved in the case in the question 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.
Q: ABC company and U labor union have been negotiating for a new Collective
Bargaining Agreement (CBA) but failed to agree on certain economic provisions
of the existing agreement. In the meantime, the existing CBA expired. The
company thereafter refused to pay the employees their midyear bonus, saying
that the CBA which provided for the grant of midyear bonus to all company
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employees had already expired. Are the employees entitled to be paid their
midyear bonus? Explain your answer. (3%) (2010 Bar Question)
SUGGESTED ANSWER:
YES, under Article 253 of the Labor Code, the parties are duty-bound to maintain the
status quo and to continue in full force and effect the terms and conditions of the
existing CBA until a new agreement is reached by the parties.
Likewise, Art. 253-A provides for an automatic renewal clause of a CBA. Although a
CBA has expired, it continues to have legal effects as between the parties until a new
CBA has been entered into.
The same is also supported by the principle of holdover, which states that despite the
lapse of the formal effectivity of the CBA, the law stills considers the same as continuing
in force and effect until a new CBA shall have been validly executed (MERALCO v.
Hon. Sec. of Labor, 337 SCRA 90 [2000] citing National Congress of Unions in the
Sugar Industry of the Philippines v. Ferrer-Calleja, 205 SCRA 478 [1992]).
The terms and conditions of the existing CBA remain under the principle of CBA
continuity.
Q: The Company and Triple-X Union, the certified bargaining agent of rank-and-
file employees, entered into a Collective Bargaining Agreement (CBA) effective
for the period January 1, 2002 to December 31, 2007.
For the 4th and 5th years of the CBA, the significant improvements in wages and
other benefits obtained by the Union were:
1. Salary increases of PI,000 and PI,200 monthly, effective January 1, 2006

and January 1, 2007, respectively;
2. Vacation Leave and Sick Leave were adjusted from 12 days to 15 days
annually for each employee;
3. Medical subsidy of P3,000 per year for the purchase of medicines and
hospitalization assistance of P10,000 per year for actual hospital
confinement;
4. Rice Subsidy of P600 per month, provided the employee has worked for at
least 20 days within the particular month; and
5. Birthday Leave with Pay and Birthday Gift of PI,500.
As early as October 2007, the Company and the Union started negotiations to
renew the CBA. Despite mutual good faith and earnest efforts, they could not
agree. However, no union filed a petition for certification election during the
freedom period. On March 30, 2008, no CBA had been concluded. Management
learned that the Union would declare a bargaining deadlock on the next
scheduled bargaining meeting.
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As expected, on April 3, 2008, the Union declared a deadlock. In the afternoon of
the same day, management issued a formal announcement in writing, posted on
the bulletin board, that due to the CBA expiration on December 31,2007, all fringe
benefits contained therein are considered withdrawn and can no longer be
implemented, effective immediately.
xx
xx
xx
[c] Is managements withdrawal of the fringe benefits valid? Reasons. (2%)

(2009 Bar Question)
SUGGESTED ANSWER:
No. Pending renewal of the CBA, the parties are bound to keep the status quo and to
treat the terms and conditions embodied therein still in full force and effect, until a new
agreement is reached by the union and management. This is part and parcel of the duty
to bargain collectively in good faith under Article 253, the Labor Code.
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 is stand valid or not? For what reason(s)? (2%) (2001
Bar Question)
SUGGESTED ANSWER:
The union's stand is not valid. It is part of management prerogative, to contract out any
work, task, job or project except that it is an unfair labor practice to contract out services
or functions performed by union members when, such will interfere with, restrain or
coerce employees in the exercise of their rights to self- organization. (Art. 248(c) of the.
Labor Code)
The union's stand that there must be a prior consultation by the employer with the union
before contracting out can be effected is valid. Article XJH, Section 3 of the Constitution,
and Article 255 of the Labor Code- guarantee the right of workers to participate. ID.
policy and decision making processes which affect their rights, and benefits. Job
contracting will undoubtedly and directly affect their rights, benefits and welfare.
Philippine Airlines vs. NLRC, 255 SCRA 301 (1993), and Manila Electric Company vs.
Quisumbing, 302 SCRA 173 (1999).
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2. Collective Bargaining Agreement (CBA)
Q: What is an appropriate bargaining unit for purposes of collective bargaining?

SUGGESTED ANSWER:
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, indicate to be the best
suited to serve reciprocal rights and duties of the parties under the collective bargaining
provisions of the law. (See, e.g.t University of the Philippines v. Ferrer-Calle/a, 211
SCRA 451 (1992).
Q: What jurisdictional pre-conditions must be present to set in motion the

mechanics of a collective bargaining? (1996 Bar Question)
SUGGESTED ANSWER:
To set in motion the mechanics of collective bargaining, these jurisdictional pre-

conditions must be present, namely:
a. The employees in a bargaining unit should form a labor organization:

b. The labor organization should be a legitimate labor organization:
c. As such legitimate labor organization, it should be recognized or certified as the
collective bargaining representative of the employees of the bargaining unit; and
d. 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)
ALTERNATIVE ANSWER:
The mechanics of collective bargaining are set in motion only when the following
jurisdictional pre-conditions are met: (1) possession of the status of majority
representation of the employees representative in accordance with any of the means of
selection or designation provided for by the Labor Code: 2) proof of majority of
representation: and (3) a demand to bargain under Art. 251(g), of the Labor Code. (Ktok
Loy v. NLRC, 141 SCRA 179 (1986))
Q:
What, if any, is the maximum term of a collective bargaining agreement under

R.A. 6715?
Company America and the union entered into a five (5) year collective bargaining
agreement (CBA). Three (3) years thereafter, the Company received a demand
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letter from the union for renegotiation of the terms and conditions of the CBA on
the ground that the cost of living and prices of the essential commodities have
gone up by 30% since the CBA was concluded.
1. Was the five-year term of the CBA legal?

2. Is the Company obligated to renegotiate the CBA as demanded by the
union? If your reply is in the affirmative, state the extent of the
Companys obligations.
3. What are the remedies available to the Union in the event the Company
refuses to renegotiate the CBA? Does it include the right to strike?
SUGGESTED ANSWER:
According to Republic Act No. 6715 (Article 253-A, of the Labor Code, as amended),
the maximum term of a collective bargaining agreement is 5 years, but except as to the
representation aspect, all other provisions of the agreement shall be renegotiated not
later than three (3) years after its execution.
1. The five year term of CBA is legal. This is provided for in Rep. Act No. 6715.
2. The company is obligated to renegotiate the CBA as demanded by the union. Rep.
Act. No. 6715 provides that all the provisions of a CBA shall be renegotiated not later
than three (3) years after its execution except the representation aspect of the CBA.
3. The refusal of the company to renegotiate not later than three (3) years after the
execution of the CBA is a refusal to bargain collectively and is, therefore, an unfair labor
practice. Thus, a case of unfair labor practice may be filed against the employer with a
Labor Arbiter.
The Union may go on an unfair labor practice strike considering that the employer is
guilty of an unfair labor practice if it refuses to renegotiate the CBA within three (3)
years after its execution.
Q: A group of employees in XYZFactory 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 te negotiate a substantial
wage increase in its collective bargaining agreement with management.
Aprovision 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. (2005 Bar Question)
(a) Is the CBA provision valid?
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SUGGESTED ANSWER:
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 & A.
Wed Industries Labor Union of the Philippines v. San Miguel Brewery, Inc., 8 SCRA 805
(1963).
(b) Should the company comply with the union's demand of terminating the
members of tile religious sect? [6%)
SUGGESTED ANSWER:
No, the company should not comply with the union's demand. In the case of [Victonano
v. Elizalde Rope Workers' Union, 59 SCRA 54 (1974)] religious freedom is superior to
the freedom to contract. In the hierarchy of values, religious freedom takes a preferred
position and the right to contract must yield; accordingly, the CBA provision which is
contractual in nature must not prevail over the duty to respect the workers' constitutional
right to religious freedom.
Q: Republic Drug Co. has 1,000 employees, including 50 managerial personnel,

90 supervisors and 150 sale representatives. The regular workday in the
Company is from 8:00 a.m. to 5:00 p.m. The sales representatives register their
presence with the timekeeper at 8:00 A.M. every day before they go to their
respective sales territories. They are paid a basic salary plus commission. Sixty
of the sales representatives are members of the Republic Salesmen Union which
sent to the Company a set of bargaining proposals, including a demand for
payment of overtime pay of the sales representatives for working beyond 5:00
P.M. everyday. The Company refused to consider the bargaining proposals and
rejected the demand for overtime pay for the reason that the sales
representatives are not entitled thereto. The Union filed an unfair labor practice
case against the Company for refusal to bargain, and after complying with the
legal requirements declared a strike.
xxx
b) Was the Company guilty of unfair labor practice? Was the Unions strike
legal? Reasons.
SUGGESTED ANSWER:
The Company is not guilty of unfair labor practice. The Republic Salesmen Union has a
members only 60 of the 150 sales representatives. This fact could mean that the Union
is not the majority union that is the collective bargaining representative of the sales
representatives. (Article 255. Labor Code)
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Because the Union is not the collective bargaining representative, the Company did not
commit an unfair labor practice when it refused to bargain with said union. The duty of
the employer to bargain collectively arises only as regards the bargaining representative
of the employees. (Article 252, Labor Code) Because the refusal to bargain under the
above described circumstances is not an unfair labor practice, the Union's strike was
not legal.
ALTERNATIVE ANSWER:
If the sales representatives constitute an appropriate collective bargaining unit in the

Company, and the Republic Salesman Union (SBU) was recognized or certified as the
collective bargaining representative in said bargaining unit, inspite of the fact that only
60 of the 150 sales representative are members of SBU. (because SBU is nevertheless
designated or selected by a majority of the sales representatives) then, the Company is
guilty of unfair labor practice when it refused, at the very least, j ust to consider the
bargaining proposals of the Union. The refusal to at least just consider the bargaining
proposals of the Union constitutes a refusal to bargain collectively; thus, it is an unfair
labor practice.
The strike, then, of the Union is legal because an unfair labor practice strike is legal.
a) Mandatory provisions of CBA (Grievance procedure, Voluntary arbitration, No

strike-no lockout clause, Labor management council)
Q: What matters are considered mandatory subjects of collective bargaining?

(1996 Bar Question)
SUGGESTED ANSWER:
Wages, hours of work and all other terms and conditions of employment including
proposals for adjusting any grievances or questions arising from the collective
bargaining agreement are considered mandatory subjects of collective bargaining. (See
Art. 252 of the Labor Code)
Q: A. 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 Bar
Question)
B. 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 Bar Question)
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SUGGESTED ANSWER:
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 authorizes a
voluntary arbitrator to hear and decide by agreement of the parties, all other labor
disputes.
(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) the parties dispute is heard and resolved by a person whom both parties
have chosen as their judge; hence, likely to be impartial.
(b) 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
(c) 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) 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
(b) in case of enforcement of judgment, the Voluntary Arbitrator has no sheriff to
enforce it.
The advantages of compulsory arbitration are:

(a) 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;
(b) a monetary award is secured with the employers appeal bond; and;
(c) there is a system of restitution in compulsory arbitration.
The disadvantages of compulsory arbitration are:

(a) State interference with the affairs of labor and management is maximized,
disregarding the inter-party nature of the relationship; and
(b) The system of appeals entails a longer process.
Q: This process refers to the submission of the dispute to an impartial person for
determination of the basis of the evidence and arguments of the parties. The
awards id enforceable to the disputants. (2012 Bar Question)
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a. Arbitration;
b. Mediation;
c. Conciliation;
d. Reconcilitation.
Q: The parties to a labor dispute can validly submit to voluntary arbitration

_________. (2013 Bar Questions)
(A) any disputed issue they may agree to voluntarily arbitrate

(B) only matters that do not fall within the exclusive jurisdiction of the Labor Arbiter
(C) any disputed issue but only after conciliation at the National Conciliation and
Mediation Board fails
(D) any disputed issue provided that the Labor Arbiter has not assumed jurisdiction over
the case on compulsory arbitration
(E) only matters relating to the interpretation or implementation of a collective
bargaining agreement
SUGGESTED ANSWER:
Basis: Article 262 (now Article 268) of the Labor Code. The Voluntary Arbitrator, upon
agreement of the parties, can assume jurisdiction over the dispute.
b) Duration
(i) For economic provisions
1) Salary increases of PI,000 and PI,200 monthly, effective January 1, 2006

2) Vacation Leave and Sick Leave were adjusted from 12 days to 15 days
3) Medical subsidy of P3,000 per year for the purchase of medicines and
confinement;
4) Rice Subsidy of P600 per month, provided the employee has worked for at
5) Birthday Leave with Pay and Birthday Gift of PI,500.
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As early as October 200*7, the Company and the Union started negotiations to

x x
x x
x x
xx
[d] If you were the lawyer for the union, what legal recourse or action would you
advise? Reasons. (3%)
SUGGESTED ANSWER:
I would recommend the filing of an unfair labor practice case against the employer for
violating the duty to bargain collectively under Article 248(g) of the Labor Code. This
arbitration case also institutes the deadlock bar that shall prevent any other union from
filing a petition for certification election.
I will advice the Union to continue negotiations with the aid of the NCMB (Art. 250,
Labor Code), and to file a complaint for unfair labor practice, i.e., violation of an
economic provision, gross and serious in character under Articles 248(i) and Art. 261 of
the Labor Code.
(ii) For non-economic provisions

(iii) Freedom period
- Salary increases of PI,000 and PI,200 monthly, effective January 1, 2006
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- Vacation Leave and Sick Leave were adjusted from 12 days to 15 days
- Medical subsidy of P3,000 per year for the purchase of medicines and
confinement;
- Rice Subsidy of P600 per month, provided the employee has worked for at
- Birthday Leave with Pay and Birthday Gift of PI,500.
As early as October 2007, the Company and the Union started negotiations to

When was the freedom period referred to in the foregoing narration of facts?
SUGGESTED ANSWER:
The freedom period or the time within which a petition for certification election to
challenge the incumbent collective bargaining agent may be filed is from 60 days before
the expiry date of the CBA.
3. Union Security
In the Collective Bargaining Agreement (CBA) between Dana Films and its rank-
and-file Union (which is directly affiliated with MMFF, 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 (MMFF) to hold Dana Films free
from any and all claims of any employee dismissed. During the term of the CBA,
MMFF discovered that certain employee-members were initiating a move to
disaffiliate from MMFF and join a rival federation, FAMAS. Forthwith, MMFF
sought the dismissal of its employee-members initiating the disaffiliation
movement from MMFF to FAMAS. Dana Films, relying on the provision of the
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aforementioned CBA, complied with MMFF's request and dismissed the
employees identified by MMFF as disloyal to it.
a. Will an action for illegal dismissal against Dana Films and MMFF prosper or
not? Why? (5%) (2012 BAR)
Suggested Answer:
Yes. While Dana Films, under the CBA, is bound to dismiss any employee who is
expelled by MMFF for disloyalty (upon its written request), this undertaking
should not be done hastily and summarily. Due process is required before a
member can be dropped from the list of union members of good standing. The
companys dismissal of its workers without giving them the benefit of a hearing,
and without inquiring from the workers on the cause of their expulsion as union
members, constitute bad faith. [Liberty Cotton Mills Workers Union, et. al vs.
Liberty Cotton Mills, Inc. et. al., G.R. No. L-33987, May 31, 1979].
b. What are the liabilities of Dana Films and MMFF to the dismissed
employees, if any? (5%) (2012 BAR)
Suggested Answer:
Dana Films is obliged (1) to reinstate the illegally dismissed employees to their
former positions without reduction in rank, seniority and salary; and (2) to jointly
and severally pay the dismissed employees backwages, without any reduction in
pay or qualification. [Amada Rice v. NLRC, G.R. No. 68147, June 30, 1988].
a) Union security clauses; closed shop, union shop, maintenance of membership

shop, etc.
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 Bar Question)
SUGGESTED ANSWER:
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.
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ALTERNATIVE ANSWER:
It could be argued that a closed shop provision in a Collective Bargaining Agreement,

because it requires that a person should first be a member of the bargaining union
before he is employed, is violative of the right to freedom of association, because said
right subsumes not only a right to Join, but also a right not to Join a union.
On the other hand, it could be argued that the exercise of the freedom of association
means that workers should Join unions. A closed shop agreement, as a union security
clause, encourages the joining of unions.
(a) Describe a closed shop agreement, does it differ from an agency shop
agreement."
(b) Are the above agreements legal?
SUGGESTED ANSWER:
(a) A "closed shop agreement" Ls that agreement embodied in a collective

bargaining agreement (CBA) whereby the employer binds itself not to hire any person
unless he Is first a union member of the collective bargaining representative. An
"agency shop agreement" is different from a closed shop agreement in that under the
former, the employer does not bind itself not to hire a person unless he is first a union
member of the collective bargaining representative. Instead, the employer binds itself to
check off from those who are not union members of the collective bargaining
representative a reasonable fee equivalent to the dues and other fees paid by union
members if the non-union members accept the benefits of the CBA.
(b) The above agreements are legal or they are expressly allowed by the Labor
Code.
Q: Explain the impact of the union security clause to the employees right to
security of tenure. (2%) (2009 Bar Question)
SUGGESTED ANSWER:
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, 545 SCRA 357 [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 is a valid ground to terminate employment. Union security clause
are designed to strengthen unions and valid law policy.
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
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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 owner-manager
threatened them with mass lay-off if the 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? (5%) (2005 Bar Question)
SUGGESTED ANSWER:
I would advise them to register the workers association with the Department of Labor
and Employment. Then, have the workers' association file a. ULP case against the
employer.
The workers are entitled to the constitutional (Art. XIII, Sec. 3, 1987 Constitution) and
statutory (Art. 279, Labor Code) guarantees of security of tenure. When this right to
security of tenure is violated, an action for illegal dismissal, is an available remedy.
If they are dismissed because of union activities, an action for unfair labor practice can
be filed (Sec. 3, Art. XIII, Constitution; Art. 243, Labor Code.) If successful, the workers
will be entitled to full backwages, including money value of benefits, and reinstatement
without loss of seniority (Art. 279, Labor Code).
Q: Distinguish clearly but briefly between:

xxx
2.Company union and union shop. (2005 Bar Question)
3. Lock-out and closed shop.
SUGGESTED ANSWERS:
2. A company union is a union of employees dominated or under the control of the

employer of said employees. A union shop, on the other hand, refers to a union security
clause in a collective bargaining agreement whereby the employer agrees to terminate
the employment of an employee who has not become a "member of the union which Is
the exclusive collective bargaining representative of the employees in a bargaining unit
within a certain period after the employment of said employee or has ceased to become
a union member.
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3. Lockout refers to the temporary refusal of an employer to furnish work as a result of a
labor or Industrial dispute. Closed shop, on the other hand, refers to a union security
clause in a collective bargaining agreement whereby the employer agrees not to employ
any person who is not a member of the exclusive collective bargaining representative of
the employees in a bargaining unit.
Q: MPH Labor Union is the duly certified bargaining representative of the rank-
and-file employees of MM Park Hotel since the 1970's. The collective bargaining
agreement contained union shop security provisions. After the signing of the
2000 - 2005 CBA, the Union demanded the dismissal of 3 employees, XX. YY and
ZZ, pursuant to the union security clause in the CBA.
The Hotel Management replied that it was legally impossible to comply with the
demand of the Union. It might even be construed as unfair labor practice. For it
appeared that XX, YY and ZZ had been recently promoted as supervisors and
resigned from the Union. But according to the Union. The three submitted their
resignations outside the freedom period after the 1996 - 2000 CBA expired on
June 30. 2000. The Union argued that the Hotel Management could not skirt its
obligation to respect and implement the union security clause by promoting the
three employees. That could be viewed as rewarding employees for their
disloyalty to the union, said the union officers. (2005 Bar Question)
A. Does the union security clause sufficiently justify the demand for
dismissal of the three employees or not? May the Hotel Management validly
refuse the Union's demand? (5%)
SUGGESTED ANSWER:
No. The Union Security Clause does not justify the dismissal of the promoted
supervisors who were formerly members of the rank- and-file union.
Yes. The Hotel Management may validity refuse to dismiss the supervisors.
As supervisors, they are no longer covered by the CBA of the employer and the rank-
and- file union. The law does not require a promoted supervisor to resign upon
promotion from their membership in the rank-and- file.1e union; rather, by operation of
law, they can no longer continue their membership with the rank-and-file union.
Art. 245. Of the Labor Code provides that supervisory employees shall not be eligible
for membership in a labor organization 'of the rank-and-file employees but, may join,
assist, or form separate labor organizations of their own.
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B. The CBA between the Company and the rank and- file Union contained
the following provision:
"Section 3. MEAL ALLOWANCE. The Company agrees to grant a MEAL,

ALLOWANCE of TEN PESOS (PIO.OO) to all employees who render at least TWO
(2) hours or more of actual overtime work on a workday, and FREE MEALS, as
presently practiced, not exceeding TWENTY FIVE PESOS (P25.00) after THREE (3)
hours of actual overtime work."
Dispute in the interpretation of the above provision arose as the Company

asserts that the phrase "after three (3) hours of actual overtime work " does not
mean after exactly three (3) hours of actual overtime work: it means after more
than three (3) hours of actual overtime work. The Union. On the other hand,
maintained that "after three (3) hours of actual overtime work" simply means after
rendering exactly, or no less than three (3) hours of actual overtime work.
Which interpretation do you think should prevail? (5%)
SUGGESTED ANSWER:
The interpretation of the union should prevail.
In a Supreme Court decision, it was ruled that the condition "after three (3) hours of
actual overtime work is satisfied after exactly three (3) hours of actual overtime work.
Q: Distinguish between contract bar rule" and dead lock bar rule". (3%) (1999
Bar Question)
SUGGESTED ANSWER:
Under the contract bar rule, a certification elec tion cannot be held if there is in force
and in effect a collective bargaining agreement that has been duly registered with the
Department of Labor and Employment except during the freedom period of such CBA
which is the 60-day period prior to the expiry date of said CBA. (See Articles 231, 253-A
and 256)
Under the deadlock bar rule" a certification elec tion cannot be held if a bargaining
deadlock to which an Incumbent or certified bargaining agent is a party had been
submitted to conciliation or mediation or had become the subject of a valid notice of
strike or lockout. (See Section 3, Rule XI, Book V of the Implementing Rules and
Regulations of the Labor Code)
Q: Yellow Bus Company has an existing collective bargaining agreement (CBA)

with Union X. During the 60-day freedom period, Union A filed a petition for
certification election claiming a majority of the rank and file employees of the
company had joined it. Pending the hearing of the petition, the company and
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Union X renegotiated and signed a new CBA which is admittedly better than the
previous one. In view of this supervening event, the med-arbiter dismissed the
petition of Union "A for being moot and academic. Is the dismissal of the petition
correct? Can the company and Union X claim the benefit of the contract bar
rule?
SUGGESTED ANSWER:
The dismissal of the petition is not correct. The Company and Union X cannot claim
the benefit of the contract bar rule.
The Labor Code (in Art. 256) provides: In organized establishments, when a verified
petition questioning the majority status of the incumbent bargaining agent is filed before
the Department of Labor and Employment within the sixty-day period before the
expiration of the collective bargaining agreement, the Med-Arbiter shall automatically
order an election by secret ballot when the verified petition is supported by the written
consent of at least twenty-five (25%) percent of all the employees in the bargaining unit
to ascertain the will of the employees in the appropriate bar-gaining unit.
Assuming that the petition of Union A was supported by at least 25% of the employees
in the bargaining unit, the Med-Arbiter should have automatically ordered a certification
election since the petition was duly filed during the freedom period.
But how about the supervening event, i.e. a new CBA has been signed? The Rules
implementing the Labor Code provides (in Book V, Rule V, Sec. 4) that the
representation case shall not x x x be adversely affected by a collective agreement
submitted before or during the last 60 days of a subsisting agreement or during the
pendency of a representation case.
Q: What is the automatic renewal clause" in a collective bargaining agreement?

(2%) %) (1999 Bar Question)
SUGGESTED ANSWER:
The automatic renewal clause1 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.
Q: FACTS: In a certification election conducted by the Department of Labor,

Associated Workers Organization in Laguna (AWOL) headed by Cesar Montanyo,
won over Pangkat ng mga Manggagawa sa Laguna (PML), headed by Eddie
Graciaa. Hence, AWOL was certified as the exclusive bargaining agent of the
rank-and-file employees of the Laguna Transportation Company (LTC).
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Shortly, thereafter, a Collective Bargaining Agreement was concluded by LTC and
AWOL which provided for a closed shop. Consequently, AWOL, demanded that
Eddie Graciaa 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.
1. Can Eddie Graciaa and all the PML members be required to become
members of the AWOL pursuant to the closed shop provision of the CBA? Why?
(3%)
SUGGESTED ANSWER:
Eddie Gracia and all the PML members can not 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,
2. Is the termination from employment of Francis Magallona by LTC lawful?

Why? (2%)
SUGGESTED ANSWER:
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.
Panel: The termination is unlawful (Ferrer v. NLRC).
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.
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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.
(a) xxxxxxx
(b) Distinguish between a "closed shop" clause and a "maintenance of
membership" clause. (2015 Bar Question)
(c) Distinguish between "union dues" and "agency fees." (2015 Bar Question)
SUGGESTED ANSWERS:
(b) 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 the execution of the CBA to maintain their membership of good standing,
as a condition of continued employment.
(c) 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.
b) Check-off; union dues, agency fees
Q: A is employed by XYZ Company where XYZ Employees Union (XYZ-EU) is the

recognized exclusive bargaining agent. Although A is a member of rival union
XYR-MU, he receives the benefits under the CBA that XYZ-EU had negotiated with
the company.
XYZ-EU assessed A a fee equivalent to the dues and other fees paid by its
members but A insists that he has no obligation to pay said dues and fees
because he is not a member of XYZ-EU and he has not issued an authorization to
allow the collection. Explain whether his claim is meritorious. (3%) (2010 Bar
Question)
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SUGGESTED ANSWER:
NO. The fee exacted from A takes the form of an AGENCY FEE. This is sanctioned by
Article 248 (e) of the Labor Code.
The collection of agency fees in an amount equivalent to union dues and fees from
employees who are not union members is recognized under Article 248(e) of the Labor
Code. The union may collect such fees even without any written authorization from the
non-union member employees, if said employees accept the benefits resulting from the
CBA. The legal basis of agency fees is quasi-contractual (Del Pilar Academy v. Del Pilar
Academy Employees Union, 553 SCRA 590 [2008]).
Q: During the open forum following your lecture before members of various
unions affiliated with a labor federation, you were asked the following questions:
May a rank-and-file employee, who is not a member of the union representing his
bargaining unit, avail of the wage increases which the union negotiated for its
members? (4%).
SUGGESTED ANSWER:
Yes. The beneficiaries of a Collective Bargaining Agreement include Non-Union

Members; other Wise, there will be discrimination which is prohibited by law. [New
Pacific Timber and Supply Co., Inc. v. NLRC, 328 SCRA 424 (2000)).
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 rank-and-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.
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?
SUGGESTED ANSWER:
No. Under Article 9481, violation of the Collective Bargaining Agreement, to be an unfair
labor practice, must be gross in character. It must be a flagrant and malicious refusal to
comply with the economic provisions of the CBA.
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No. Check-offs in the 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 latters 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 Davao College v. Joaquin, G.R. No. 110007 [1996])
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? (2013 Bar Questions)
SUGGESTED ANSWER:
No. The check-off clause in the CBA will not suffice. The law prohibits interference
with the disposition of ones salary. The law requires individual written authorization to
deduct union dues from Pablos 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 forcible
deduction from salaries does not constitute acts of disloyalty against the union.
(Tolentino v. Angeles, 52 O.G. 4262)
4. Unfair Labor Practice in collective bargaining
The negotiating panels for the CBA of X Company established a rule that only
employees of the company will seat in each panel. In the next session, the management
panel objected to the presence of the union counsel. Still the negotiation proceeded. At
the next session, the management panel again objected to the presence of the union
counsel as a non-observance of the no outsider rule. The negotiation nonetheless
proceeded. Does the management panel's objection to the presence of the union
counsel constitute unfair labor practice through bad-faith bargaining? (2011 BAR)
(A) Yes, the management is harping on a non-mandatory matter instead of

proceeding with the mandatory subjects of bargaining.
(B) No, there is no bargaining in bad faith since the bargaining proceeded
anyway.
(C) Yes, the management panel has no legal basis for limiting the composition of
the union negotiating panel.
(D) No, since it is the union that violates the ground rules fashioned by the
parties, it is the one negotiating in bad faith.
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Q: On 01 August 1992, Pro-Knit, a corporation engaged in the manufacture of
textile garments, entered into a collective bargaining agreement with the Kamao
Union in representation of the rank and file employees of the corporation.
The CBA was effective up to 20 June 1995. The contract had an automatic
renewal clause which would allow the agreement after its expiry date to still apply
until both parties would have been able to execute a new agreement.
On 10 May 1995 Kamao Union submitted to Pro-Knit's management their

proposals for the renegotiation of a new CBA. Tire next day, Pro-Knit suspended
negotiations while Kamao Union since Pro-Knit had entered into a merger with
Eagle Garments, a corporation also engaged in the manufacture of textile
garments. Eagle Garments assumed all the assets and liabilities of Pro-Knit.
Kamao filed a complaint with the Regional Trial Court for specific performance
and damages with a prayer for preliminary injunction against Pro-Knit and Eagle
Garments.
Pro-Knit and Eagle Garments filed a Motion to Dismiss based on lack of

jurisdiction. How would you rule on the Motion to Dismiss? (1997 Bar Question)
SUGGESTED ANSWER:
I will grant the Motion to Dismiss. The act of Pro-knit suspending negotiations with
Kamao Union could be an unfair labor practice. It could be a violation of the duty to
bargain collectively. As such, the case is under the jurisdiction of a Labor Arbiter and
not of a regular Court.
ALTERNATIVE ANSWER:
I will deny the Unions Motion to Dismiss. There is no labor dispute between the parties;
hence, the Regional Trial Court has Jurisdiction over the complaint. Art. 212 of the
Labor Code,reads
Labor dispute includes any controversy or matter concerning terms or conditions of

employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment regardless
of whether the disputants stand in the proximate relations of employer and employee.
In addition, the Company can claim that labor contracts are contracts in personam and
do not generally bind successors in interest except under special circumstances. In
Sundowner Development Corporation v. Drilon, 180 SCRA 14, the Court said:
The rule is that unless expressly assumed, labor contracts such as xxx collective
bargaining agreements are not enforceable against a transferee of an enterprise, labor
contracts being in personam thus binding only between the parties.
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a) Bargaining in bad faith
Q: Corporation X is engaged in a collective bargaining negotiation with the

Union of its employees. With respect to the demand for profit-sharing the
corporation patiently but consistently alleged that it cannot accept the said
demand. The corporation and the union several times to arrive at the proper
resolution of the issue but the corporation would not yield. Finally, the union filed
an unfair labor practice case accusing the corporation of bargaining in bad faith
and refusing to accede to its demand of profit-sharing. Decide.
SUGGESTED ANSWER:
Corporation X is not guilty of unfair labor practice.
The question gives as facts that the corporation and the union met several times to
arrive at the proper resolution of the issue as to whether or not there shall be profit
sharing at the corporation. In these meetings, the corporation patiently but consistently
stated that it cannot accept the demand for profit sharing. By these acts, the corporation
bargained in good faith; it was showing that it sincerely desired to reach an agreement
with the union. Its not yielding to the demand for profit sharing is not an unfair labor
practice because the Labor Code (in Art. 252) expressly provide that the duty to bargain
collectively does not compel any party to agree to a proposal or to make any
concession.
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 charged 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.
Was the company guilty of an unfair labor practice when it refused to negotiate
with the Kilusang Kabisig? (1997 Bar Question)
SUGGESTED ANSWER:
No. It is not an unfair labor practice (ULP) not to bargain with a union which has not
presented any proof of its majority status. The Labor Code imposes on an employer the
duty to bargain collectively only with a legitimate labor organization designated or
selected by the majority of the employees in an appropriate collective bargaining unit. It
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is not a ULP for an employer to ask a union requesting to bargain collectively that such
union first show proof of its being a majority union.
b) Refusal to bargain
Q: The Malipol Labor Union submitted to the management of the Malilito Co.. Inc.
a set of proposals for a collective bargaining agreement. A few days later, the
Kapuspalad Labor Union forwarded its own proposals, claiming to represent the
majority of the rank-and-file employees in the company. The company refused to
bargain with either Malipol Labor Union or Kapuspalad Labor Union.
Malipol Labor Union then filed a complaint for unfair labor practice, charging that
the Kapuspalad Labor Union is a company union. The company then filed with
the Med- Arbiter a petition for certification election.
a) Was the companys refusal to bargain with either Malipol Labor Union or
the Kapuspalad Labor Union an unfair labor practice?
SUGGESTED ANSWER:
The refusal of the Company to bargain with either Malipol Labor Union or the
Kapuspalad Labor Union is not an unfair labor practice. The refusal is justified. The
Company is not certain as to which of the two labor unions is the union representing the
majority of the employees of the employer belonging to the appropriate collective
bargaining unit. It is the duty of the employer to bargain collectively only with the labor
union which is the representative of the employees, which in turn the labor union
designated or selected by the majority of the employees in an appropriate collective
bargaining unit.
b) Was the companys petition for certification election proper? Will it

prosper?
SUGGESTED ANSWER:
The company's petition for certification election is proper. Under the Labor Code, an
employer may file a petition for certification election when there is a demand for
collective bargaining.
But the petition may not immediately prosper.
Malipol Labor Union has charged that Kapuspalad Labor Union is a company union.
This charge brings about a prejudicial question which should first be resolved, before
the certification election may be held. A company union cannot be certified as a
bargaining representative.
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Q: Porfirio, Estela, Crisostomo, Marita, and Jose Ramirez were brothers and
sisters. All were stockholders, directors, and officers of the Pagaspas Marketing
Co., Inc. *(PMCI). PMCI sold office machines and supplies. It employed 20 sales
persons, 10 delivery men, 20 service personnel, and 10 administrative employees.
On December 10, 1987, 45 rank and file workers of the company formed and
registered a labor union. They sent a letter to Pagaspas demanding recognition
as bargaining agent of all workers, enclosing check off authorization forms of the
union members, and a set of economic demands. PMCI refused to recognize the
union. The union president went to you, as labor adviser of the federation which
they were planning to affiliate with.
xxx
After complying with the legal requirements for a lawful strike, the union filed a
notice of strike. Conciliation produced no agreement. The workers struck and
picketed the companys stores for 3 months with no results. During the strike, the
Ramirezes formed a new corporation, Maharlika Distributors, Inc. It leased a new
store site, bought stocks from PMCI, and hired the 15 workers who did not join
the strike and 6 new workers. Later without filing an application to close PMCI, it
ceased operations.
The union filed a case for unfair labor practice, demanded the reinstatement of all
workers with backwages and sued PMCI and the members of the Ramirez family
as individual respondents for damages. The Ramirezes moved to dismiss the
case against them as PMCI was a corporate entity, so their inclusion as
respondents in their personal capacities violated the theory of independent
corporate personality since there was no basis for
piercing the corporate veil.
If you were Counsel for the union, what arguments would you use in your
Opposition to the Motion to Dismiss? (1988Bar Question)
SUGGESTED ANSWER:
The Ramirezes could be held personally liable because as members of the same family,
they were organizing another corporation to evade the liability that PMCI will have by
virtue of its commission of a ULP, i.e. refusing to bargain collectively with the union
which was the bargaining representatives of the employees. The act of Ramirezes is
evidence of bad faith on their part which in turn is a justification for piercing the
corporate veil to prevent injustice. (A.C. Ransom Case).
c) Blue sky bargaining

d) Surface bargaining
Q: Differentiate surface bargaining from blue-sky bargaining. (2%) (2010 Bar

Question)
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SUGGESTED ANSWER:
(1) SURFACE BARGAINING is defined as going through the motions of negotiating

without any legal intent to reach an agreement. The determination of whether a party
has engaged in unlawful surface bargaining is a question of the intent of the party in
question, which can only be inferred from the totality of the challenged partys conduct
both at and away from the bargaining table. It involves the question of whether an
employers conduct demonstrates an unwillingness to bargain in good faith or is merely
hard bargaining (Standard Chartered Bank Employees Union (NUBE)v. Confesor, 432
SCRA 308 [2004]).
(2) BLUE-SKY BARGAINING is defined as unrealistic and unreasonable demands in

negotiations by either or both labor and management, where neither concedes anything
and demands the impossible (Standard Chartered Bank Employees Union (NUBE) v.
Confesor, supra.).

xx
xx
xx
[a] A runaway shop is an act constituting unfair labor practice. (2009 Bar
Question)
SUGGESTED ANSWER:
False. A runaway shop is not automatically an unfair labor practice. It is an unfair labor
practice if the relocation that brought about the runaway shop is motivated by anti-union
animus rather than for business reasons.
True. The transfer 6f location of a strike bound establishment to another location (run-
away shop) can constitute an act of interference or restraint of the employees right to
self-organization. There is an inferred anti-union bias of the employer (Labor Code, Art.
248[a]). The provisions of Art. 248[a] should be broadly and liberally interpreted to
achieve the policy objective of the law, i.e., to enhance the workers right to self-
organization and collectively bargain (Constitution, Art. XIII, Sec. 3 & Art. Ill, Sec. 8;
Labor Code, Arts. 243, 244 8e 245; Caltex Filipino Managers, etc. v. C1R, 44 SCRA
350 [1972]).
Q: Ten sessions after the start of contract negotiations, the panel representatives
of Island Bank & Trust Company and the Island Bank Employees Association
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(IBEA) tacitly recognized a deadlock had been reached. That was when the TBEA
members started their daily noise barrage.
At a signal, usually a whistle blown by a union member in every floor of the 15-
storey offices of the bank, cacophony of sounds could be heard reverberating
throughout the building as union members rang small bells they brought with
them, hit metal pans and waste cans, or simply clapped their hands and shouted.
This exercise would last about five minutes. Depositors at the banks lobby would
get annoyed and leave; visitors at the other offices expressed irritation and
complained to management.
The bank wrote the IBEA that the noise barrage violated the current collective
bargaining agreements waiver of and prohibition against picketing and
interruptions in operations during the term of the agreement. The IBEA replied
that picketing is a protected concerted activity and that the agreement has
expired since negotiations for a renewal had been in progress.
The bank consulted you as its retained counsel. What would your legal advice be
and what legal action, if any, would you recommend? (1987 Bar Question)
SUGGESTED ANSWER:
As retained counsel, I will advise the bank to file a ULP charge against IBEA.
The IBEA, by its noise barrage is committing interruption in operations during the
term of the CBA.
The CBA which prohibits such interruptions is still in force and in effect in spite of the
fact that it has expired. According to the Labor Code (in Art. 253) it shall be the duty of
both parties 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 period prior to the expiration
date of the CBA during which the parties could negotiate a new CBA and/or until a new
CBA is reached by the parties. Thus, a CBA is violated when the IBEA undertakes its
noise barrage which are interruptions of operations prohibited by the CBA. Such
violation is a ULP.
IBEA is not engaged in picketing in its noise barrage? Picketing means giving publicity
to the existence of, or the facts involved in a labor dispute, whether by advertising,
speaking, patrolling or by any method not involving fraud or violation. A noise barrage,
therefore, cannot be considered picketing as a protected concerted activity.
5. Unfair Labor Practice (ULP)

a) Nature of ULP
Q: Which of the following acts is NOT considered unfair labor practice (ULP)?
(2011 BAR)
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(A) Restraining employees in the exercise of the right to self-organization.
(B) Union's interference with the employee's right to self-organization.
(C) Refusal to bargain collectively with the employer.
(D) Gross violation of the collective bargaining agreement by the union.
Q: Define unfair labor practice. (1996 Bar Question)
SUGGESTED ANSWER:
Unfair labor practice means any unfair labor practice as expressly defined by the Labor
Code (Arts. 248 and 249 of the Labor Code). Essentially, an unfair labor practice is any
act committed by an employer or by a labor organization, its officers, agents or
representatives which has the effect of preventing the full exercise by employees of
their rights to self-organization and collective bargaining. (See Arts 248 and 249 of the
Labor Code).
Q: Discuss in full the jurisdiction over the civil and criminal aspects of a case
involving an unfair labor practice for which a charge is pending with the
Department of Labor and Employment. (2007 Bar Question)
SUGGESTED ANSWER:
Unfair labor practices are not only violations of the civil rights of both labor and
management but are also criminal offenses against the State.
The civil aspect of all cases involving unfair labor practices, which may include claims
for actual, moral, exemplary and other forms of damages, attorneys fee and other
affirmative relief, shall be under the jurisdiction of the Labor Arbiters.
However, no criminal prosecution shall be instituted without a final judgment, finding

that an unfair labor practice was committed, having been first obtained in the
administrative proceeding. During the pendency of such administrative proceeding, the
running of the period for prescription of the criminal offense herein penalized shall be
interrupted. The final judgment in the administrative proceeding shall not be binding in
the criminal case nor be considered as evidence of guilt but merely as proof of
compliance of the requirements set forth by law. (Article 247, Labor Code.)
b) ULP of employers
Q: The Company has a renewed collective bargaining agreement (CBA) with the
Union, which covers the bargaining unit of rank-and-file employees, including
twenty (20) security guards and has a term of five years effective January 1, 1992.
In 1991. the Company had consultation meetings with the Union on the abolition
of the security guard section and the engagement of the sendees of an
independent security agency. On July 16. 1992, the Company abolished the
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security guard section, contracted the services of Edsa Security Agency, and
advised the Union that the guards will be transfered to other positions in the
Company with increase in pay and transfer bonus. The Union objected to the
abolition as it was in violation of the CBA. The Company asserted that its action
was an exercise of its management prerogatives after consultations with the
Union in 1991 and intended to promote efficiency and economy. After satisfying
all requirements, the Union declared a strike. There is a provision in the CBA
recognizing in general terms management prerogatives.
a) Did the Company violate the CBA? Explain.
SUGGESTED ANSWER:
The Company violated the CBA. It is noted that in the CBA, the bargaining unit covered
not only the rank and file employees. It also covered 20 security guards.
Yet, the Company was abolishing the security guard sector where these security guards
belonged. It may be noted that an employer commits an unfair labor practice if it
contracts and services or functions being performed by union members when such will
interfere with, restrain or coerce employees in the exercise of their rights to self-
organization. (Article 248(c), Labor Code)
It is true that in 1991, there were consultation meetings with the Union on the abolition
of the security guard section and the engagement of the services of an independent
security agency.
But yet, after these consultation meetings, the CBA that was entered into included the
20 security guards in the bargaining unit of the CBA. There was thereby, an agreement
to retain said security guards.
ALTERNATIVE ANSWER:
The Company did not violate the CBA. When it abolished the security guard section and
engaged the sendees of an independent security agency, the Company was merely
exercising its management prerogatives. It is an unfair labor practice for an employer to
contract services or functions being performed by union members, but only when such
interferes with, restrains or coerces employees in the exercise of their rights to self-
organization. Here, the Company exercised its prerogative Management ever in
consultation with the Union and its objective was to promote efficiency and economy.
b) Was the Union's strike legal? Explain.
SUGGESTED ANSWER:
If the Company is guilty of unfair labor practice, then the strike of the Union has legal
basis and thus is legal.
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ALTERNATIVE ANSWER:
If the Company is not guilty of unfair labor practice, then, the strike of the Union is
illegal, because there will be no legal ground for the strike.
Q: Article 248(d) of the Labor Code states that it shall be unlawful for an employer
to initiate, dominate, assist in or otherwise interfere with the formation or
administration of any labor organization, including the giving of financial or other
support to it or to its organizers or officers.
X Company, Inc. has been regularly contributing money to the recreation fund of
the labor union representing its employees. This fund, including the financial
assistance given by the employer, is used for refreshment and other expenses of
the labor union whenever the employees go on a picnic, on an excursion, or hold
a Christmas party. Is the employer liable for unfair labor practice under Article
248(d) of the Labor Code? Explain your answer.
SUGGESTED ANSWER:
No. If the contributions of the employer benefit all the employees and there is no
employee discriminated against, there is no unfair labor practice. The contributions may
be considered a fringe benefit given by the employer.
ALTERNATIVE ANSWER:
If the regular contributions are pursuant to a CBA provision, there is no unfair labor
practice. If not pursuant to a CBA violation, the assistance may constitute an unfair
labor practice.
ANOTHER ALTERNATIVE ANSWER:
If Art. 248(d) is strictly applied, the giving of money by the employer to the recreation
fund of the labor union is an unfair labor practice because said Article considers as an
unfair labor practice the giving of financial or other support to it (meaning a union) or to
its organizers or officers. The
Article does not provide for a situation where such giving is not an unfair labor practice.
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 Bar Question)
SUGGESTED ANSWER:
Any three (3) from the following enumeration in the Labor Code:
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ART. 248. Unfair labor practices of employers. It shall be unlawful for an employer to
commit any of the following unfair labor practice:
a) To interfere with, restrain or coerce employees in the exercise of their right to

self-organization;
b) To require as a condition of employment that a person or an employee shall not
join a labor organization or shall withdraw from one to which he belongs;
c) 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 rights
to self-organization;
d) 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 organizations, or supporters;
e) To discriminate in 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;
f) To dismiss, discharge, or otherwise prejudice or discriminate against an
employee for having given or being about to give testimony under this Code;
g) To violate the duty to bargain collectively as prescribed by this Code;
h) 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
i) To violate a collective bargaining agreement.
Q: The management and Union X in Atisan Mining entered into a CBA for 1997 to
2001. After 6 months, a majority of the members of Union X formed Union Y and
sought management recognition. The latter responded by not dealing with either
union. But, when the CBAs economic provisions had to be renegotiated towards
the end of the term of the CBA, the management chose to negotiate with Union Y,
the newer union. Thus, Union X which negotiated the existing CBA charged the
company with unfair labor practice (ULP). The company argued that it committed
no unfair labor practice since the supposed violation had nothing to do with
economic provisions of the CBA. Is the management right? (2011 BAR)
(A) No. Refusal to comply with the CBAs economic provisions is not the only
ground for ULP; a disregard of the entire CBA by refusing to renegotiate with
the incumbent bargaining agent is also ULP,
(B) Yes. No unfair labor practice was committed because the supposed violation
has nothing to do with economic provisions of the CBA.
(C) Yes. The management commits no ULP when it decided to renegotiate with
the numerically majority union.
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(D) Yes. A CBA violation amounts to ULP only if the violation is gross, meaning
flagrant or malicious refusal to comply with the CBAs economic provisions
which is not the case here.
Q: Unions A and B are competing with one another to organize the

employees of Ocean
Supermart. Inc. It was an uncertain contest until the President of Ocean

Supermart issued a written statement expressing the hope that the employees
refrain from joining a union but in the event they should decide to do so, stating
his preference for Union A. In the certification election Union B lost. Is there
an unfair labor practice? Reasons.
SUGGESTED ANSWER:
Ocean Supermart was guilty of unfair labor practice. The Labor Code (in Art. 248)
provides that it is unfair labor practice for an employer To interfere with, restrain or
coerce employees in the exercise of their right to self-organization and for an employer
to initiate, dominate, assist or otherwise interfere in the formation or administration of
any labor organization, including the giving of financial or other support to it or its
organizations or supporters.
In the question given, Ocean Supermart issued a written statement expressing the hope
that the employees refrain from joining a union. It also express a preference for Union
A. These statements could be considered interference with the exercise by employees
by the right to self-organize. Giving support to a particular union is an act of company
unionism therefore, was an unfair labor practice.
Q: After years of harmonious employer-employee relations, the Moonbeam

Textile Mfg. Co. had its first union, the mili tant Kapisanan Ng Mga Unyonista
(KMU). A certification election was a certainty. The aggressiveness of the
solicitation drive by the KMU was to be matched by the intensity of the
companys neutralization efforts.
The company developed a multipronged neutralization plan. This called for

department managers and supervisors to talk to their subordinates, individually
and in groups, telling them about the companys employee-oriented policies and
about the burdens of membership in a militant union. There would be posters on
the plant walls and on prominent places on the plant premises warning of the
dangers of communism and accusing KMU of being a communist front. Other
posters would contain such teasers as GO KMU AND LOSE YOUR FREEDOM,
MOONBEAM FILLS YOUR POCKETS, KMU EMPTIES IT, A VOTE FOR KMU IS
A VOTE FOR UNEMPLOYMENT. After two weeks of this kind of campaign, the
company would announce the payment of the traditional annual across-the-board
wage in-creases but advanced by two months, while the year-end bonus would be
increased by 50% over last years.
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The company sought your advice about its neutralization plan. As company
lawyer, what advice will you give about the legality of the neutralization plan.
Explain briefly. (1987 Bar Question)
SUGGESTED ANSWER:
I will advise the Company mat its neutralization plan and its implementation by the
Company is an unfair labor practice. The Company is there interfering with, restraining
or coercing its employees in the exercise of their right to self-organization, which is an
unfair labor practice under the Labor Code (in its Art. 248(a).
The right to self-organization does not only mean the right to form, join or assist labor
organizations. It also includes the right of employees to choose the labor organization
which is to represent them for purposes of collective bargaining and for mutual aid and
protection.
In its neutralization plan, especially in its economic inducements, e.g. advance payment
of wage increases and increased bonus, the Company is interfering with, restraining or
coercing its employees of their right to choose in a certification election who shall be the
collective bargaining representative of its employees. This is clearly an unfair labor
practice.
Q: The Bisig Ng Mga Manggagawa (BMM) and the Visayan Oil Mfg. Co. are parties
to a collective bargaining agreement containing a union security provision which
stipulates that all employees within the bargaining unit shall join the UNION
within 30 days from the signing of the agreement. On the date the agreement
was signed, and in fact even before the signing, the minority group of employees
in the bargaining unit were members of the Kapisanan Ng Mga Unyonista (KMU).
When the KMU members failed to join the BMM within the stipulated period of
thirty days, BMM demanded the termination of their employment. The company
acceded to the demand and dismissed the KMU members. The KMU filed a
complaint for unfair labor practice, alleging that the dismissals and the
application of the union-security clause were contrary to law.
SUGGESTED ANSWER:
When the Company acceded to the demand of BMM and dismissed the KMU members,
an unfair labor practice was committed.
A union security provision which stipulates that all employees within the bargaining unit
shall join the UNION (meaning BMM which is the collective bargaining representative)
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within 30 days from the signing of the agreement is not violation of the Labor Code. It is
authorized by the Code (in Art.
248(e) which provides that nothing in this Code or any other law shall stop the parties
(to a CBA) from requiring membership in a recognized collective bargaining agent as a
condition for employment. This is known as a union security clause.
This provision, however, also further provides that a union security clause cannot be
applied to those employees who are already members of another union at the time of
the signing of the collective bargaining agreement.
The union security clause cannot, therefore, be applied to KMU members who were
members of KMU on the date the CBA was signed, and in fact, even before the signing.
Q: Rolando Cordero, messenger of Fast Tract Company for the past ten years,
was investigated administratively for taking a snack in Cubao before delivering
an important document to a customer. The customer at first complained about
the delay but later forgave Cordero in a handwritten note to him by the
customer's manager.
Claiming that Fast Track, known nation-wide for its rapid delivery services, was
placed in an embarrassing position by Corderos conduct, the company insisted
on his dismissal in disregard of counsels advice. The personnel manager,
however, succeeded in getting
Cordero to sign a release and quitclaim and to accept separation pay.
Cordero filed a complaint for unfair labor practice against Fast Track. His
convincing evidence was a revelation: it showed that everything that he was
blamed for was a pretext to dismiss him because it was he who started the
organization of the Fast Track Employees Union among the hundred or so
messengers of the company. The company argued that the release and quitclaim
as well as acceptance of separation pay barred Corderos cause of action.
SUGGESTED ANSWER:
The Company is guilty of unfair labor practice if it is a fact that Cordero was dismissed,
not because at one time, he first took a snack and was therefore delayed in delivering a
document to a customer. It is noted: the customer forgave him and told the Company
about his being forgiven.
Thus, it is, therefore, evident that the above incident was only a pretext, that indeed the
real reason was because Cordero started to organize a union among his fellow
messengers of the Company.
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The dismissal is clearly a ULP. According to the Labor Code (in Art. 248(a) it is unlawful
for an employer to discriminate in regard to wages, hours or work and other terms and
conditions of employment in order to encourage or discourage membership in any labor
organizations.
The fact that Cordero signed a release and quitclaim and accepted separation pay does
not bar Corderos cause of action. Employees sometimes sign releases and quitclaim
and accept separation pay. They urgently need the money that the separation pay
represents their daily expenses. They should not, therefore, be considered as waiving
their right to complain against unfair labor practice committed by their employers.
Q: Which of the following is not true in unfair labor practices committed by an

employer? (2012 Bar Question)
a. Unfair labor practices cannot be committed unless the union has been
performed and registered;
b. The commission of unfair labor practice requires an employer-employee
relationship;
c. The offense of unfair labor practice prescribes in one (1) year;
d. The list of unfair labor practices is exclusive.
SUGGESTED ANSWER:
a. Unfair labor practices cannot be committed unless the union has been performed and
registered. [Art. 247 Labor Code]
Q: The following are unfair labor practice of employers, except: (2012 Bar
Question)
a. Interrogating its employees in connection with their membership in the

union or their union activities which hampers their exercise of free choice;
b. The grant of profit-sharing benefits to managers, supervisors and all rank-
and-file employees not covered by the CBA;
c. The cessation of a companys operations shortly after the organization of
a labor union and the resumption of business barely a month after;
d. Withdrawal by the employer of holiday pay benefits stipulated under a
supplementary agreement with the union.
SUGGESTED ANSWER:
b) The grant of profit-sharing benefits to managers, supervisors and all rank-and-file

employees not covered by the CBA [Art. 248, Labor Code]
Q: The Collective Bargaining Agreement (CBA) between Libra Films and its union,
Libra Films Employees' Union (LFEU), contains the following standard clauses:
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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.
(a) Are LFEU's claims correct? Explain. (2015 Bar Question)

(b) xxxxxxx
(c) xxxxxxx
SUGGESTED ANSWERS:
(a) LFEUs 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).
c) ULP of labor organizations
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 Bar Question)
SUGGESTED ANSWER:
Any three (3) from the following provisions of the Labor Code:
ART. 249. Unfair labor practices of labor organizations. It shall be unfair labor
practice for a labor organization. Its officers, agents or representatives:
a) To restrain or coerce employees in the exercise of their rights 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;
b) 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
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other than the usual terms and conditions under which membership or
continuation of membership is made available to other members;
c) To violate the duty, or refuse to bargain collectively with the employer, provided it
is the representative of the employees;
d) 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;
e) To ask for or accept negotiations of attorney's fees from employers as part of the
settlement of any issue in collective bargaining or any other dispute; or
f) To violate a collective bargaining agreement.
Q: Union X is the majority union of the rank and file employees at Slipper Mart
Company. It amended its by-laws to include among the obligations of its
members to refuse to work with non-union members. Slipper Mart wants the
amendment to be declared null and void considering that not all its rank and file
employees belong to Union X and its enforcement will cause work stoppage in
the company. Give your opinion on the validity of the amendment.
SUGGESTED ANSWER:
The provision of the by-laws of the union that made it among the obligations of its
members to refuse to work with non-union members cannot be implemented at the
Slipper Mart Company. It is managements prerogative to determine who shall work
together in a company.
ALTERNATIVE ANSWER:
The act is an unfair labor practice on the part of the union because it could have the
effect of compelling the employer to compel its employees to join Union X, thus, in
effect restraining or coercing employees in the exercise of their right to self-
organization.
Q: When there is no recognized collective bargaining agent, can a legitimate labor

organization validly declare a strike against the employer? (2013 Bar Questions)
(A) Yes, because the right to strike is guaranteed by the Constitution and cannot be
denied to any group of employees.
(B) No, because only an exclusive bargaining agent may declare a strike against the
employer.
(C) Yes, because the right to strike is a basic human right that the country's international
agreements and the International Labor Organization recognize.
(D) Yes, but only in case of unfair labor practice.
(E) No, in the absence of a recognized bargaining agent, the workers' recourse is to file
a case before the Department of Labor and Employment.
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SUGGESTED ANSWER:
Basis: Article 263(c) (now Article 269 (c)) of the Labor Code.
C. Right to peaceful concerted activities
Q: Freibourg Electronics Corporation which employs 400 rank-and-file

employees, 80 supervisors and 20 managerial personnel, negotiated a collective
bargaining agreement with the Modemo Labor Union (MLU), the bargaining
representative of the rank-and-file employees. Because of deadlocked
negotiations. MLU after complying with the legal re-quirements declared a strike
and picketed the Company's gates. The picketers obstructed the free ingress into
the engrees from the premises. Fearing that it might not meet its commitments to
European and American buyers, the Company appealed to the MLU to allow entry
of personnel who were willing to work. MLU rejected the appeal. On the tenth day
of the strike, a squad of policemen escorted the managerial and supervisory
personnel and 100 rank-and-file employees entering the Company's premises to
work. During the entry, 20 supervisors and 50 rank-and-file employees were
beaten by the picketers.
The MLU charged the Company and the policemen with violation of the anti-scab
law under the Labor Code. The Company, for its part, filed a petition to declare
the strike and picketing illegal.
As the Labor Arbiter, resolve MLU's charge and the Company's petition with
reasons.
SUGGESTED ANSWER:
The charge made by MLU that the Company and the policemen violated the anti-scab
law under the Labor Code has no basis. The Code provides that no public official or
employee, including officers and personnel of the New Armed Forces of the Philippines
and the Integrated National Police, or armed personnel, shall bring in, introduce or
escort in any manner any individual who seeks to replace strikers in entering or leaving
the premises of a strike area, or work in place of strikers. (Article 264(d), Labor Code)
The Company of the policemen did not violate the above provision of the Labor Code
when a squad of policemen escorted the managerial and supervisory personnel and
100 rank-and-file employees in entering the Companys premises to work because the
above personnel and employees are old employees, not new employees who will
replace the strikers.
The Companys petition to declare the strike and picketing illegal has basis. The
picketers committed an unlawful act when they obstructed the free ingress into and
egress from the Company premises. The beating up by the picketers of 20 supervisors
and 50 rank and file employees is also the basis for making the strike illegal.
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ALTERNATIVE ANSWER:
The Labor Code, (in Article 264(d). provides that "the police force shall keep out of the
picket lines unless actual violence or other criminal acts occur therein. In the case in the
question, when a squad of policemen escorted the personnel and employs in entering
the Company's premises to work, the policemen violated the above provision of the
Labor Code by crossing the picket lines, when as yet there was no actual violence,
other criminal acts were not occurring.
1. Forms of concerted activities
Q: Distinguish clearly but briefly between: Sympathy strike and general strike.
(2005 Bar Question)
SUGGESTED ANSWERS:
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: 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? [5%] (1998 Bar Question)
SUGGESTED ANSWER:
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 212(o) of the Labor Code)
No, slowdown in not a valid form of strike activity. The Supreme Court in Ilaw at Buklod
ng Manggagawa NLRC, 198 SCRA 586 (1991) ruled -
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The Court is in substantial agreement with the petitioner's concept of a slowdown as a
"strike on the installment plan, as a willful 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 alloted 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
(0) "Strike** means any temporary stoppage of work by the concerted action of
employees as a result of an industrial or labor dispute.
No. It is a prohibited activity. It can be said to be a violation of the duty to bargain

collectively. They union is guilty of bad faith. The workers should resume operations
under the same terms and conditions prevailing prior to the strike.
Q: The union filed a notice of strike due to a bargaining deadlock. But, because
the Secretary of Labor assumed jurisdiction over the dispute, the strike was
averted. Meanwhile, the employer observed that the union engaged in a work
slowdown. Contending that the slowdown was in fact an illegal strike, the
employer dismissed all the union officers. The union president complained of
illegal dismissal because the employer should first prove his part in the
slowdown. Is the union president correct? (2011 BAR)
(A) Yes, since the employer gave him no notice of its finding that there was a
slowdown.
(B) Yes. The employer must prove the union presidents part in slowdown.
(C) No. When a strike is illegal, the management has the right to dismiss the
union president.
(D) No. As the union president, it may be assumed that he led the slowdown.
Q: What do you understand by the improved offer balloting?
SUGGESTED ANSWER:
A strike may be an economic strike, namely, it is a strike caused by a deadlock at the

bargaining table. A deadlock may arise because the offer of the employer, e.g., its offer
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of a 20% across-the-board increase in wages and salaries, was not accepted by the
Union who wanted a 50% increase.
After considering the matter, the employer may improve its offer, e.g. it offers a 35%
increase.
This improved offer of the employer may be submitted to the union members on or
before the 30th day of the strike. The secret balloting that will determine whether a
majority of the union members accept the improved offer of the employer is the so-
called 'improved offer balloting."
In case it is a lockout, and not a strike, what may be the subject matter of a secret
balloting, this lime among the members of the Board of Directors of the employer, may
be the reduced offer of the union, i.e., instead of asking for 50% across the board
increase in wages and salaries, it may reduce its demand to 25 % .
a) What is the rationale for the State regulation of strike activity and what are
the interests involved that the State must balance and reconcile? (3%)
b) Cite two (2) examples on how the law regulates the use of strike as a form
of concerted activity. (2%)
SUGGESTED ANSWER:
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 rig Manggagawa v. NLRC, 198 SCRA. 586 (1991); Lapanday Workers
Union u. NLRC, 248 SCRA 96 (1995)].
b) 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: On the day that the Union could validly declare a strike, the Secretary of Labor
issued an order assuming jurisdiction over the dispute and enjoining the strike,
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or if one has commenced, ordering the striking workers to immediately return to
work. The retum-to-work order required the employees to return to work within
twenty-four hours and was served at 8 a.m. of the day the strike was to start. The
order at the same time directed the Company to accept all employees under the
same terms and conditions of employment prior to the work stoppage. The Union
members did not return to work on the day the Secretarys assumption order was
served, nor on the next day; instead, they held a continuing protest rally against
the companys alleged unfair labor practices. Because of the accompanying
picket, some of the employees who wanted to return to work failed to do so. On
the 3rd day, the workers reported for work, claiming that they do so in compliance
with the Secretarys retum-to-work order that binds them as well as the Company.
The Company, however, refused to admit them back since they had violated the
Secretarys retum-to-work order and are now considered to have lost their
employment status.
The Union officers and members filed a complaint for illegal dismissal arguing
that there was no strike but a protest rally which is a valid exercise of the
workers constitutio nal right to peaceable assembly and freedom of expression.
Hence, there was no basis for the termination of their employment.
You are the Labor Arbiter to whom the case was raffled. Decide, ruling on the
following issues:
a) Was there a strike? (4%) (2008 Bar Question)
SUGGESTED ANSWER:
Yes, there was a strike because of the concerted stoppage of work by the union
members.
Yes, there was a strike. No matter how they call it, the continuing protest rally against
the companys alleged unfair labor practices constitutes a temporary stoppage of work
by he concerted action of employees as a result of an industrial or labor dispute - a
case of strike as defined in Art. 212(o) of the Labor Code.
Recently, in SantaRos& Coca-Cola Plant Employees Union, etal. vs. Coca-Cola Bottlers
Phils., Inc. (512 SCRA 437 [2007]}, the Supreme Court clarified that a strike comes in
varied forms, from slowdowns, mass leaves, sit downs to other similar activities. A
protest rally which results in temporary stoppage of work by the concerted action of
employees, as a result of a labor or industrial dispute, is clearly a case of strike.
b) Were the employees simply exercising their constitutional right to

petition for redress of their grievances? (3%) (2008 Bar Question)
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SUGGESTED ANSWER:
No. After the issuance of a return to work order based on the assumption powers of the
Secretary of Labor under Art. 263(g) of the Labor Code, the strike was already taken
outside of the employees constitutionally protected right to engage in peaceful
concerted activities for redress of their grievances.
The employees were not simply exercising their constitutional right to petition for
redress of their grievances. Specifically, they were focusing on alleged unfair labor
practice which made the continuing protest rally a strike.
Q: On May 24, 1989, the UKM urged its member-unions to join a Welga ng
Bayan in support of its efforts to pressure Congress to increase the daily
minimum wage. Union X is a member of the UKM and represents all the rank
and file employees of the Puritan Mining Company. Following the call for a
nationwide strike, Union X staged a strike and put up a picket the following day.
As a result, the companys operations were paralyzed although company officials
and supervisory employees were allowed ingress and egress to and from the
company premises. The picket was likewise peaceful. On May 28, 1989, the UKM
leadership announced the end of the Welga ng Bayan. Union X immediately
lifted its picket and its members went back to work. The company sought our
legal advice on the legality of the strike and the liability, if any, of the union
officers and the participating members. What is your opinion? Explain.
SUGGESTED ANSWER:
The strike was illegal. For a strike to be legal, it should either be an economic strike, i.e.,
caused by a bargaining deadlock or an unfair labor practice strike, i.e., caused by the
commission of an unfair labor practice by an employer.
The strike of Union X was neither an economic strike or an unfair labor strike. Thus, it
was an illegal strike.
Because it was an illegal strike, any union officer who knowingly participated in it may
be declared to have lost his employment status, meaning such union officer could be
legally terminated.
As for the union members who participated in the strike, the facts show that no illegal
acts were committed. They allowed ingress and egress to and from the company
premises. The picket was peaceful. The mere participation of the union members,
without their committing illegal acts, does not constitute sufficient ground for the
termination of their employment.
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ALTERNATIVE ANSWER:
The strike is legal and the union officers and participating union members incur no
liability for calling and participating in the strike respectively. Applying the rule in
Philippine Blooming Mills to the effect that the workers only personally assembled to
influence the decision making process of the government which is a constitutionally
guaranteed right.
Note: Credit should be given to answer that focus on the procedural requirement for a
strike to be legal, i.e. strike vote, notice, cooling off period.
Q: On the first day of collective bargaining negotiations between rank-and-file

Union A and B Bus Company, the former proposed a P45/day increase. The
company insisted that ground rules for negotiations should first be established,
to which the union agreed. After agreeing on ground rules on the second day, the
union representatives reiterated their proposal for a wage increase. When
company representatives suggested a discussion of political provisions in the
Collective Bargaining Agreement as stipulated in the ground rules, union
members went on mass leave the next day to participate in a whole-day prayer
rally in front of the company building.
A. The company filed a petition for assumption of jurisdiction with the Secretary
of Labor and Employment. The Union opposed the petition, arguing that it did not
intend to stage a strike. Should the petition be granted? Explain. (2%)
SUGGESTED ANSWER:
YES. There was a strike. What the union engaged in was actually a work stoppage in
the guise of a protest rally.
Article 212(o) of the Labor Code defines strike as a temporary stoppage of work by the
concerted action of employees as a result of an industrial or labor dispute. The fact that
the conventional term
"strike was not used by the striking employees to describe their common course of
action is inconsequential. What is controlling is the substance of the situation, and not
its appearance. The term "strike encompasses not only concerted work stoppages, but
also slowdowns, mass leaves, sit-downs, attempts to damage, destroy or sabotage
plant equipment and facilities, and similar activities (Santa Rosa Coca- Cola Plant
Employees Union, Donrico v. Sebastian, et al. v. Coca-Cola Bottlers Phils., Inc., 512
SCRA 437 [2007]).
2. Who may declare a strike or lockout?
Q: Because of alleged unfair labor practices" by the management of GFI System,

a government-owned and controlled financial corporation, Its employees walked
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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. (5%) (2005 Bar Question)
SUGGESTED ANSWER:
The position taken by the walk-out leaders and participants is not legally correct. They
are government employees, and as such, they do not have the right to strike. According
to the actual wording of Section 3 of Article XIII of the Constitution, the State "shall
guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities including the right to strike in accordance
with law."
Thus, the last clause of the above-quoted provision of the Constitution makes it very
clear: the right to strike is not constitutional, it is statutory because the right should be
"in accordance with law.
And there is as yet no law giving government employees the right to strike.
No. What Art. XIII, Sec. 3 of the 1987 Constitution guarantees is "the right to strike in
accordance with law.
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 walk-out should be validly grounded on a (a) deadlock in collective
bargaining, or (b) unfair labor practice, either of which is not present here.
3. Requisites for a valid strike
Q: Discuss the legal requirements of a valid strike. (2007 Bar Question)
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SUGGESTED ANSWER:
The legal requirements of a valid strike are as follows:
1. No labor union may strike on grounds involving inter-union and intra-union

disputes.
2. In cases of bargaining deadlocks, the duly certified or recognized bargaining

agent may file a notice of strike with the Department of Labor and Employment 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 in 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 bargaining unit concerned, obtained by secret ballot in meetings or
referenda called for that purpose.
4. In every case, the union shall furnish the Department of Labor and Employment
the voting at least seven days before the intended strike subject to the cooling-off
period herein provided.
5. No labor organization shall declare a strike without first having bargained

collectively; without first having filed the notice required or without the necessary strike
vote first having been obtained and reported to the Department of Labor and
Employment.
6. No strike shall be declared after assumption of jurisdiction by the President or the

Secretary 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.
7. 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 employers
premises for lawful purposes, or obstruct public thoroughfares.
1) Valid and factual ground;
2) Notice of strike filed by the bargaining agent (if collective bargaining deadlock) or
a registered union in the affected bargaining unit (if unfair labor practice);
3) Notice of strike filed with the NCMB;

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4) Notice of strike filed at least 24 hours prior to taking a strike vote by secret
balloting, informing said office of the decision to conduct a strike vote, and the
date, place, and time thereof;
5) Strike vote where majority of union members approve the strike;
6) Strike vote report should be submitted to the NCMB at least 7 days before the
intended date of strike;
7) Except in cases of union busting, the cooling-off period prescribed (15 days,
unfair labor practice; 30 days, collective bargaining deadlock) should be fully
observed;
8) 7-day waiting period or strike bans after submission of the strike vote report to
NCMB should be fully observed;
9) Not on grounds of ULP in violation of no-strike clause in CBA;
10) Not visited with widespread violence;
11) Not in defiance of the Secretarys assumption of jurisdiction order;
12) Not prohibited by law (such as unions in the banking industry).
A valid strike requires compliance of both substantial and procedural grounds.

Substantially, a valid strike has to be grounded on either unfair labor practice or
deadlock in collective bargaining. Procedurally, the same must comply with the
requirements of: (1) notice of strike to filed at least 15 days before the intended ULP
grounded strike or at least 30 days prior to the deadlock in bargaining grounded strike;
(2) Must comply with the strike vote requirement, meaning, a majority of the union
membership in the bargaining unit must have voted for the staging of the strike, and
notice hereon shall be furnished NCMB at least 24 hours before the strike vote is taken;
and (3) the strike vote results must be furnished to the NCMB at least 7 days before the
intended strike. The dismissal of a duly elected officer excuses, however, the union
from the 15/30 days cooling off requirement in Art. 263 (c) of the Labor Code.
Q: Where there is a bargaining deadlock, who may file a notice of strike? (2011
BAR)
(A) The majority members of the bargaining unit.

(B) The recognized bargaining agent.
(C) Any legitimate labor organization in the employers business.
(D) The majority members of the bargaining union.
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Q: Enumerate and discuss briefly:
1. What are the statutory requisites for a valid strike by the workers? Should
these requisites be complied with substantially or strictly? (2005 Bar Question)
SUGGESTED ANSWER:
The statutory requisites for a valid strike are the following:
A strike may be declared only in cases of bargaining deadlocks or unfair labor practices.
Violations of collective bargaining agreements, except flagrant and/or malicious refusal
to comply with its economic provisions, shall not be considered unfair labor practice and
shall not be strikeable. No strike or lockout may be declared on grounds involving inter-
union and intra-union disputes.
No strike may be declared without first having filed a notice of strike or without the
necessary strike vote having been obtained and reported to the National Conciliation
and Mediation Board. A strike may actually take place only after a 3D-daywaiting period
after notice was filed for a strike arising from a bargaining deadlock or after a 15-day
waiting period for an unfair labor practice strike. Notice about a strike vote should be
given seven days before the intended strike.
No strike can be declared after assumption of jurisdiction by the Secretary of Labor and
Employment 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.
1. Statutory Requirements for a Valid Strike

a. Status of Striking Union For a ULP strike or bargaining deadlock strike, only a duly
certified or recognized bargaining representative may declare such strike.
b. Procedural Requirements
(1) Notice of Intent. Filing of Notice of Intent to Strike with NCMB.

(2) Cooling off Period.- Observance of Cooling-off Period.
(a) ULP - 15 days before intended date of strike
(b) Bargaining Deadlock - 30 days before intended date of strike.
(3) Strike Vote and Filing of the same with the NCMB and the observance of the
seven (7) days strike ban. [Art. 263 (c-f). Labor Code].
(4) Cause- The cause of a strike must be a labor or industrial dispute. [Art. 212(0],
Labor Code],
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Compliance with all legal requirements are meant to be and should be mandatory.
(National Federation of Sugar Workers v. Ovajera. 114 SCRA354 [1982].
Q: A is a member of the labor union duly recognized as the sole bargaining

representative of his company. Due to a bargaining deadlock, 245 members of the
500-strong union voted on March 13, 2010 to stage a strike. A notice of strike was
submitted to the National Conciliation and Mediation Board on March 16, 2010.
Seven days later or on March 23, 2010, the workers staged a strike in the course
of which A had to leave and go to the hospital where his wife had just delivered a
baby. The union members later intimidated and barred other employees from
entering the work premises, thus paralyzing the business operations of the
company.
A was dismissed from employment as a consequence of the strike. (2010 Bar

Question)
SUGGESTED ANSWER:
NO. The strike was not legal due to the unions failure to satisfy the required majority
vote of union membership (251 votes), approving the conduct of a strike (See Art.
263(f), Labor Code; Section 11, Rule XXII, Dept. Order No. 40-03).
Also, the strike was illegal due to the non-observance of the 30-day cooling off period by
the union (Art. 263(c), Labor Code). rights of employees to self-organization (Club
Filipino, Inc. v. Bautista, 592 SCRA 471 [2009]).
Q: On the first day of collective bargaining negotiations between rank-and-file

Union A and B Bus Company, the former proposed a P45/day increase. The
company insisted that ground rules for negotiations should first be established,
to which the union agreed. After agreeing on ground rules on the second day, the
union representatives reiterated their proposal for a wage increase. When
company representatives suggested a discussion of political provisions in the
Collective Bargaining Agreement as stipulated in the ground rules, union
members went on mass leave the next day to participate in a whole-day prayer
rally in front of the company building.
xxx
B. The Union contended that assuming that the mass leave will be considered as
a strike, the same was valid because of the refusal of the company to discuss the
economic provisions of the CBA. Rule on the contention. (2%)
SUGGESTED ANSWER:
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The Unions contention is wrong. A strike may be declared only in cases of deadlock in
collective bargaining negotiations and unfair labor practice (Article 263(c, Labor Code);
Section 1, Rule V, NCMB Manual of Procedures).
The proposal of the company to discuss political provisions pursuant to the ground rules
agreed upon does not automatically mean that the company refuses to discuss the
economic provisions of the CBA, or that the company was engaged in surface
bargaining in violation of its duty to bargain, absent any showing that such tend to show
that the company did not want to reach an agreement with the Union. In fact, there is no
deadlock to speak of in this case.
The duty to bargain does not compel either party to agree to a proposal or require the
making of a concession. The parties failure to agree which to discuss first on the
bargaining table did not amount to ULP for violation of the duty to bargain.
Besides, the mass leave conducted by the union members failed to comply with the
procedural requirements for a valid strike under the Rules, without which, the strike
conducted taints of illegality.
C. Union member AA, a pastor who headed the prayer rally, was served a notice
of termination by management after it filed the petition for assumption of
jurisdiction. May the company validly terminate AA? Explain. (2%)
SUGGESTED ANSWER:
NO. The company cannot terminate AA because the Labor Code provides mere
participation of a worker in a strike shall not constitute sufficient ground for termination
of his employment.
Q: Which of the following is not a valid reason for a strike? (2012 Bar Question)
a. There is a bargaining deadlock;

b. There is a prevailing intra-union dispute;
c. The company engaged in unfair labor practice;
d. Theirs is a flagrant violation of CBAs economic provisions.
SUGGESTED ANSWER:
b) There is a prevailing intra-union dispute [Art. 263(b), Labor Code].
Q: Union X staged a strike in front of Company B because of a CBA deadlock.

During the strike, Company hired replacement workers. Upon resuming their
employment, the strikers found that Company B obliged obliged to reinstate the
returning workers? (2012 Bar Question)
a. No, because the strike caused work stoppage;

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b. No, because it is a valid exercise of management prerogative;
c. Yes, because workers who go on strike do not lose their employment
status;
d. Yes, because workers are entitled to such retention every time during a
valid strike.
SUGGESTED ANSWER:
d) Yes, because workers are entitled to such retention every time during a
valid strike.
d. Yes, because workers who go on strike do not lose their employment

status [Art. 264(a), last par., Labor Code].
Q: In response to Company Xs unfair labor practices, a union officer instructed

its members to stop working and walk out of the company premises. After three
(3) hours, they voluntarily returned to work. Was there a strike and was it a valid
activity? (2012 Bar Question)
a. Yes, it was a strike; it was a valid activity;

b. Yes, it was a strike; No, it was not a valid activity;
c. No, Iit was not a strike; yes, it was a valid activity;
d. No, it was not a strike; no, it was not a valid activity.
SUGGESTED ANSWER:
b. Yes, it was a strike; no, it was not a valid activity [Airline Pilots Association of the
Phils. vs. CIR, 76 SCRA 274; and First City Interlinks Transportation vs. Roldan
Confessor, 272 SCRA 124]
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. (2014 Bar Question)
(A) Can Lazo Corporation refuse to admit the strikers?
SUGGESTED ANSWER:
No. The Commission of illegal acts during a strike does not automatically bring about
loss of employment status. Due process must be observed by the employer before any
dismissal can be made. {Stanford Marketing Corp. v. Julian, 423 SCRA 633 (2004]).
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(B) Assuming the company admits the strikers, can it later on dismiss
those employees who committed illegal acts?
SUGGESTED ANSWER:
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, 266
SCRA 713 (1997]).
(C) If due to prolonged strike, Lazo Corporation hired replacements, can

it refuse to admit the replaced strikers?
SUGGESTED ANSWER:
No. Sec. 3, Art. XIII of the Constitution guarantees workers the right to strike in
accordance with law, and prolonged strike is not prohibited by 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 employee-employer relationship.
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., 11 SCRA 589 [1964]).
Q: The procedural requirements of a valid strike include: (2014 Bar Question)
(A) a claim of either unfair labor practice or deadlock in collective bargaining

(B) notice of strike filed at least 15 days before a ULP-grounded 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
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SUGGESTED ANSWER:
(B) notice of strike filed at least 15 days before a ULP-grounded strike or at least 30
days prior to the deadlock in a bargaining-grounded strike (Art. 263 (c), Labor
Code).
(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 (Art. 263 (f), Labor Code).
(D) strike vote results must be furnished to the NCMB at least seven (7) days before
the intended strike (Art. 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 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.
(a) Was AILU justified in declaring a strike without a strike vote and a
notice of strike? Why or why not? (2015 Bar Question)
(b) Was the Secretary of Labor correct in declining to assume jurisdiction
over the dispute? (2015 Bar Question)
(c) Was LB justified in terminating all those who were members of AILU on
the two grounds cited? (2015 Bar Question)
SUGGESTED ANSWERS:
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 Sukothai that
while AILU may not exhaust the 15-day cooling-off period in case of dismissal
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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 AILUs 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,
AILUs strike is therefore illegal.
b) The refusal of the Secretary to assume jurisdiction is valid. Par. (g) of Art. 263
(old) of the Labor Code leaves 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) 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 acts during a strike.
4. 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 Bar Question)
SUGGESTED ANSWER:
There is no law that prohibits strikers to decide not to continue with a strike that they
have started.
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Thus, the company committed an illegal lockout in refusing to 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.
5. Requisites for lawful picketing
Q: President FX, head of a newly formed labor union composed of 1/3 of the total
number of rank-and-file employees in Super Stores, Inc., agitated his fellow
employees to demand from management pay increases and overtime pay. His
supervisor summoned him to explain his tardiness and refusal to obey
regulations. Feeling threatened, he gathered 20 of his members and staged a 2-
day picket in front of the shopping mall. Security staff arrived and dismantled the
placards and barricades blocking the employees' entry to the mall. In retaliation,
FX threw stones at the guards, but the other striking workers just stood by
watching him. Seven days after the picket, FX who had gone absent without leave
returned to the mall and announced that he had filed a complaint for illegal
dismissal and unfair labor practice against SSl.
SSI learned that FX's group was not registered. No strike vote and strike notice
were filed prior to the picket. The guards were told not to allow FX entry 10 the
company premises as management considered him effectively terminated. Other
union members were accepted back to work by SSl.
Was the dismissal of FX for a valid cause? Was due process observed? (5%)
(2005 Bar Question)
SUGGESTED ANSWER:
There is a valid cause for the dismissal of FX, but due process was not observed.
Peaceful picketing is part of the constitutional freedom of speech. The right to free
speech, however, has its limits, and picketing as a concerted activity is subject to the
same limitations as a strike, particularly as to lawful purpose and lawful means. But it
does not have to comply with the procedural requirements for a lawful strike, like the
notice of strike or the strike vote. However in the problem given, picketing became
illegal because of unlawful means, as barricades blocked the employees' entry to the
mill, and violence, ensued when FX threw stones at the guards. There was thus, valid
cause for the dismissal of FX, however, due process was not observed because SSI did
not comply with the twin requirements of notice and hearing.
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: Your 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
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officer immediately instructed its members to cease working and walk out. Two
hours after the walkout, the workers voluntarily returned to work. (2000 Bar
Question)
xxx
The workers engaged in picketing activity in the course of a strike.

a) Will picketing be legal if non-employees of the strike-bound employer
participate in the activity? (3%)
b) Can picketing activity be curtailed when Illegal acts are committed by the
picketing workers in the course of the activity? (3%)
SUGGESTED ANSWER:
Yes, the picketing is legal even though non-employees join it. Picketing is a form of the
exercise of freedom of speech. Picketing, provided it is held peacefully, is a
constitutional right. The disputants in a legal dispute need not be employer- employee of
each other. [De Leon v. National Labor Union, 100 Phil. 789 (1957); Cruz u. Cinema
Stage, etc.101 Phil. 1259 (1957)].
No, the picketing activity itself cannot be curtailed. What can be curtailed are the illegal
acts being done in the course of the picket. However, if this is a national interest" case
under Art. 263(g), the strike or work stoppage may be stopped by the power of
assumption of jurisdiction or certification of the case to the National Labor Relations
Commission. Nagkakaisang Mangagawa sa Cuison Hotel u. Libron, 124 SCRA 448
(1983); Free telephone Workers Union u. PLOT. 113 SCRA 662 (1982)].
Q: Following a deadlock in collective bargaining, the AC- AC Labor Union filed a

notice of strike with the Department of Labor and Employment and, thirty (30)
days later, went on strike and picketed the gates of the UP-UP Company,
paralyzing its operations. The company is engaged in telecommunications,
including the supply of cellular phone equipment, with a nationwide network of
facilities. In a petition with the DOLE, the company questioned the legality of the
strike and asked for compulsory arbitration. The Secretary of the DOLE certified
the dispute to the NLRC for compulsory arbitration and ordered the company to
readmit the workers pending the arbitration. The workers returned and were
readmitted by the company but five (5) technicians were temporarily reassigned
to the warehouse while five (5) others were reinstated on payroll only. The
company justified its acts as an exercise of management prerogative.
xx
xx
xx
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During the strike, may the striking union picket the company's outside outlets
although they are not company- owned but independent dealers? Was there a
valid strike?
SUGGESTED ANSWER:
The strike is not valid.
It is true that the Labor Code provides that if an employer violates a collective
bargaining agreement, the said employer commits an unfair labor practice act, which in
turn is a legal ground for a strike.
But Rep. Act No. 6715 amended the Labor Code by providing that 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. The violation involved in the question is not a gross
violation because there is no flagrant and/or malicious refusal to comply with the
economic provisions of such agreement which is how the Code defines a gross violation
of a collective bargaining agreement.
SUGGESTED ANSWER:
Peaceful picketing conducted by employees in a strike area during any labor

controversy is given protection by the Labor Code.
Thus, if the place being picketed is a strike area which is defined by the Labor Code as
the establishment, warehouses. depots, plants or offices, including the sites or
premises used as runaway shops, of the employer struck against, as well as the
immediate vicinity actually used by picketing strikers in moving to and fro before all
points of entrance to and exit from said establishment, then the - picketing is protected,
if it is peaceful.
In the question given, however, since the striking union is picketing the company's
outside outlets who are not company owned but independent dealers, the picketing is
not in a strike area, thus the picketing is not protected by the Code.
6. Assumption of jurisdiction by the DOLE Secretary or Certification of the labor

dispute to the NLRC for compulsory arbitration
Q: Which of the following may be considered among industries most vital to

national interest as to be the subject of immediate assumption of jurisdiction by
the Secretary of Labor and Employment or certification for compulsory arbitration
in case of strike or work stoppage arising from a labor dispute?
(1) Bulletin daily newspaper publishing company.

(2) Local franchise of Jollibee and Starbucks.
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(3) Shipping and port services in Cebu and Manila.
(4) Enchanted Kingdom, Elephant island and Boracay Resort,
(5) LBC, DHL and FedEx centers.
Justify your answer or choice. [5%) (2005 Bar Question)
SUGGESTED ANSWER:
Certification of labor dispute for immediate assumption of jurisdiction by the Secretary of

the Department of Labor and Employment, as Indispensable to national interest. (Art.
263 [g].Labor Code).
1. Bulletin Daily Newspaper. Access to Information. e.g. local, foreign, or otherwise

are requirements for an informed citizenry.
2. Shipping and port services in Cebu and Manila. The country needs domestic sea
transport due to our topography and for the smooth flow of business, and
government operations.
3. LBC, DHL, FEDEx Centers. Couriers are essential to foreign and domestic
business and government operations.
Q: The Secretary of Labor assumed jurisdiction over a strike in Manila Airlines

and eventually issued a return-to-work. The Manila Airlines Employees Union
defied the return-to-work order and continued with their strike. The management
of Manila Airlines then declared all the employees who participated in the strike
dismissed from employment.
xxx
What are the effects of an assumption of jurisdiction by the Secretary of Labor

upon the striking employees and Manila Airlines? (1997 Bar Question)
SUGGESTED ANSWER:
When the Secretary of Labor assumes jurisdiction over a strike, all striking employees
shall 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. (Art. 263(q)
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 Bar
Question)
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SUGGESTED ANSWER:
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: Calabarzon Transportation Company (CTC) and the Calabarzon Workers Union

(CWU) are parties to a collective bargaining agreement (CBA), which is effective
until December 31. 1992. The CBA provides for among others, a bipartite
committee composed of CTC and CWU representatives to evaluate all positions
in the CTC and detennine adjustment of wages and allowances. The Committee
members having failed to agree on the adjustments, the CWU filed a notice of
strike. Conciliation efforts by the National Conciliation and Mediation Board
failed. The CWU then declared a strike. The Secretary of Labor and Employment
assumed jurisdiction over the dispute and after proceedings issued an order (a)
awarding certain monetary benefits to the strikers, (b) declaring the strike legal
on the ground that CWU complied with all the requirements for a valid strike, and
(c) restraining CTC from taking retaliatory actions against the officers and
members of CWU who were responsible for the strike.
a) As lawyer for CTC what action should you take?
SUGGESTED ANSWER:
As lawyer of CTC, I will first file with the Secretary of Labor and Employment a Motion
for Reconsideration. If this Motion is denied, then I will file with the Supreme Court a
petition for certiorari under Rule 65 of the Rules of Court. I will assail the issuance by
the Secretary of Labor of his Order, and his refusal to reconsider said Order as a grave
abuse of discretion amounting to lack or excess of jurisdiction.
b) Was the assumption of the labor dispute by the Secretary of Labor and
Employment valid?
SUGGESTED ANSWER:
It is valid. Under the Labor Code, (in Article 263 (g)) the Secretary of Labor has the
power to assume jurisdiction over a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest. CTC, as a transportation
Company, is in an industiy indispensible to the national interest.
c) Was the Secretarys order granting monetary bene fits. declaring the strike of
CWU legal and restraining the CTC from penalizing CWU members valid?
Reasons.
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SUGGESTED ANSWER:
The Secretary's order declaring the strike of CWU legal and restraining the CTC from
penalizing CWU members on the basis of the finding of the Secretary that the strike is
legal, is illegal. He is acting in excess of his jurisdiction. It is a Labor Arbiter, not the
Secretary of Labor, that has the jurisdiction to determine the legality of a strike. (Article
217. Labor Code. Philippine Airlines, Inc. vs. Secretanj of Labor and Employment et al.,
193 SCRA 223) but in International Pharmaceuticals vs. Secretary of oj Labor, 205
SCRA 65, (Jan. 9, 1992), the Supreme Court that the Secretary of Labor, when he
assumes jurisdiction under Article 263(g) of the Labor Code could.deal with all the
incident of the labor dispute including the issue as to whether or not a strike is legal.
The Secretary's Order granting monetary benefits is valid. When the Secretary assumed
jurisdiction over the labor disputes, he assumed such jurisdiction for compulsory
arbitration, meaning, he could thereby determine the monetary benefits that CTC and
CWU cannot agree about.
Q: Following a deadlock in collective bargaining, the AC- AC Labor Union filed a

notice of strike with the Department of Labor and Employment and, thirty (30)
days later, went on strike and picketed the gates of the UP-UP Company,
paralyzing its operations. The company is engaged in telecommunications,
including the supply of cellular phone equipment, with a nationwide network of
facilities. In a petition with the DOLE, the company questioned the legality of the
strike and asked for compulsory arbitration. The Secretary of the DOLE certified
the dispute to the NLRC for compulsory arbitration and ordered the company to
readmit the workers pending the arbitration. The workers returned and were
readmitted by the company but five (5) technicians were temporarily reassigned
to the warehouse while five (5) others were reinstated on payroll only. The
company justified its acts as an exercise of management prerogative.
b) Was the certification of the dispute for compulsory arbitration proper?
SUGGESTED ANSWER:
The certification of the dispute for compulsory arbitration was proper.
The dispute was causing a strike in an industry indispensable to the national interest.
The company was engaged in telecommunication including the supply of cellular
equipment, with a nationwide network of facilities. All these activities are at present
indispensable to the national interest.
c) Were the temporary reassignment and payroll reinstatement valid?
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SUGGESTED ANSWER:
No. The temporary re-assignment and payroll reinstatement are not valid. According to
the Labor Code, when the Secretary of Labor assumes Jurisdiction, such assumption
has the effect of automatically enjoining the strike that is taking place and all striking
employees shall immediately return to work as the employer shall immediately resume
operations and readmit all workers under the same terms and conditions prevailing
before the strikes.
ALTERNATIVE ANSWER:
The temporary re-assignment and payroll reinstatement are valid, if they are made in
good faith, and are not for the purpose of discouraging membership in the union. It is
the prerogative of the management to assign its employees to where the management
believes their services could be best utilized. As for the payroll reinstatement, it is valid
if there is a valid reason to prevent the workers placed or payroll reinstatement from
actually returning to work, like a valid fear that they will sabotage equipment in the
company,
Q: Several employees and members of Union A were terminated by Western

Phone Co. on the ground of redundancy. After complying with the necessary
requirements, the Union staged a strike and picketed the premises of the
company. The management then filed a petition for the Secretary of Labor and
Employment to assume jurisdiction over the dispute. Without the benefit of a
hearing, the Secretary issued an Order to assume jurisdiction and for the parties
to revert to the status quo ante litem. (2010 Bar Question)
A. Was the order to assume jurisdiction legal? Explain. (2%)
SUGGESTED ANSWER:
YES. The Secretary of Labor and Employment has plenary power to assume jurisdiction
under Article 263(g) of the Labor Code. When in his opinion, there exists a labor dispute
causing or likely to cause a strike or lockout in an industry indispensable to the national
interest, the Secretary of Labor may assume jurisdiction over the dispute and decide it
or certify it to the NLRC for compulsory arbitration (Art. 263[g], Labor Code). This
extraordinary authority giyen to the Secretary of Labor is aimed at arriving at a peaceful
and speedy solution to labor disputes, without jeopardizing national interests (Steel
Corporation v. SCP Employees Union, 551 SCRA 594 [2008]). Such assumption shall
have the effect of automatically enjoining an impending strike or lockout, or an order
directing immediate return to work and resume operations, if a strike already took place,
and for the employer to re-admit all employees under the same terms and conditions
prevailing before the strike or lockout (Art. 263(g), Labor Code; Sec. 15, Rule XXII,
Dept. Order No. 40-G-03).
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7. Nature of assumption order or certification order
Q: In a labor dispute, the Secretary of Labor issued an "Assumption Order". Give

the legal implications of such an order.
SUGGESTED ANSWER:
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 return-to-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.
Q: Several employees and members of Union A were terminated by Western

Phone Co. on the ground of redundancy. After complying with the necessary
requirements, the Union staged a strike and picketed the premises of the
company. The management then filed a petition for the Secretary of Labor and
Employment to assume jurisdiction over the dispute. Without the benefit of a
hearing, the Secretary issued an Order to assume jurisdiction and for the parties
to revert to the status quo ante litem. (2010 Bar Question)
A. xxx
B. Under the same set of facts the Secretary instead issued an Order directing all
striking workers to return to work within 24 hours, except those who were
terminated due to redundancy. Was the Order legal? Explain. (3%)
SUGGESTED ANSWER:
NO. The Secretary of Labors order will be inconsistent with the established policy of the
State of enjoining the parties from performing acts that undermine the underlying
principles embodied in Article 263(g) of the Labor Code.
In this case, excepting the employees terminated due to redundancy from those who
are required to return- to-work, which was the very labor dispute that sparked the union
to strike, the Secretary of Labor comes short of his duty under Article 263(g) to maintain
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status quo or the terms and conditions prevailing before the strike. In fact, the Secretary
could be accused of disposing of the parties labor dispute without the benefit of a
hearing, in clear derogation of due process of law.
8. Effect of defiance of assumption or certification orders
Q: The Secretary of Labor assumed jurisdiction over a strike in Manila Airlines

and eventually issued a return-to-work. The Manila Airlines Employees Union
defied the return-to-work order and continued with their strike. The management
of Manila Airlines then declared all the employees who participated in the strike
dismissed from employment.
(b) Was the act of Manila Airlines' management in dismissing the participants in
the strike valid? (1997 Bar Question)
X.X.X
Answer:
Yes. The act of Manila Airlines' management in dismissing the participants in the strike
is valid. In a number of Supreme Court decisions, it has ruled that the defiance by
workers of a return to work order of the Secretary of Labor Issued when he assumes
jurisdiction over a labor dispute is an illegal act and could be the basis of a legal
dismissal. The return to work order imposes a duty; it must be discharged as a duty
even against the workers' will.
Q: On the day that the Union could validly declare a strike, the Secretary of Labor
issued an order assuming jurisdiction over the dispute and enjoining the strike,
or if one has commenced, ordering the striking workers to immediately return to
work. The retum-to-work order required the employees to return to work within
twenty-four hours and was served at 8 a.m. of the day the strike was to start. The
order at the same time directed the Company to accept all employees under the
same terms and conditions of employment prior to the work stoppage. The Union
members did not return to work on the day the Secretarys assumption order was
served, nor on the next day; instead, they held a continuing protest rally against
the companys alleged unfair labor practices. Because of the accompanying
picket, some of the employees who wanted to return to work failed to do so. On
the 3rd day, the workers reported for work, claiming that they do so in compliance
with the Secretarys retum-to-work order that binds them as well as the Company.
The Company, however, refused to admit them back since they had violated the
Secretarys retum-to-work order and are now considered to have lost their
employment status.
The Union officers and members filed a complaint for illegal dismissal arguing
that there was no strike but a protest rally which is a valid exercise of the
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workers constitutional right to peaceable assembly and freedom of expression.
Hence, there was no basis for the termination of their employment.
You are the Labor Arbiter to whom the case was raffled. Decide, ruling on the
following issues:
xx
xx
xx
c) What are the consequences, if any of the acts of the employees? (3%) (2008
Bar Question)
SUGGESTED ANSWER:
c) The consequences of defiance of the Return to Work Order is loss of employment of

all those who participated in the illegal activity. The workers continued their strike
activity after the issuance of the RTW.
The Supreme Court in Philcom Employees Union v. Philippine Global Communication

(495 SCA 214[2006]), ruled:
A strike undertaken despite the Secretary is issuance of an assumption or certification

order becomes a prohibited activity, and thus illegal, under Article 264(a) of the Labor
Code. The union officers who knowingly participate in that illegal strike are deemed to
have lost their employment status the union members, including union officers, who
commit specific illegal acts or who knowingly defy a return to work order arc also
deemed to have lost their employment status.
Q: The Secretary of Labor and Employment, after assumption of jurisdiction over

a labor dispute in an airline issued a Return to Work Order. The airline filed a
Motion for Reconsideration of the Order and pending resolution of the motion,
deferred the implementation of the Order.
Can the airline defer the implementation of the Return to Work Order pending
resolution of the motion for reconsideration? [5%] (1998 Bar Question)
SUGGESTED ANSWER:
The airline cannot defer the implementation of the Return To Work Order on the basis of
there being a pending Motion for Reconsideration re: the assumption of jurisdiction by
the Secretary of Labor and Employment of a labor dispute.
According to the Supreme Court, the Return to Work Order issued by the Secretary of
Labor and Employment upon his assumption of jurisdiction over a labor dispute in an
industry indispensable for the national Interest is immediately executory.
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No, the airline cannot defer the implementation of a return to work order pending
resolution of a Motion for Reconsideration.
The Labor Code reads -
Art. 263. Strikes, picketing, and lockouts. - xxx
(g) When, in his opinion, there exists a labor dispute causing or 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 Commission for compulsory arbitration. Such assumption or certification
shall have the effect of automatically enjoining the intended or impending strike ...as
specified in the assumption or certification order. If one has already taken place at the of
assumption or certification, all striking employee.... shall immediately return to work,
(underscoring supplied)
The Supreme Court, in Baguio Colleges Foundation . NLRC, 222 SCRA 604 (1995),
ruled
xxx 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.
Being executory in character, there was nothing for the parties to do but implement the
same, (underscoring supplied)
Q: The Secretary of Labor assumed jurisdiction over a strike under Art. 263(g) of
the Labor Code and issued a return-to-work order. The Union defied the return-to-
work order and continued the strike. The Company proceeded to declare all those
who participated in the strike as having lost their employment status.
1) Was the Companys action valid?
2) Was the Company still duty bound to observe the requirements of due
process before declaring those who participated in the strike as having lost their
employment status?
SUGGESTED ANSWER:
1) The Companys action is valid. Any declaration of a strike after the Secretary of Labor
has assumed jurisdiction over a labor dispute is considered an illegal act. and any
worker or union officer who knowingly participates in a strike defying a retum-to-work
order may consequently be declared to have lost his employment status and forfeited
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his right to be readmitted, having abandoned his position, and so could be validly
replaced.
For the moment a worker defies a return-to-work order, he is deemed to have

abandoned his job, as it is already in itself knowingly participating in an illegal act,
otherwise the worker will simply refuse to return to his work and cause a standstill in
company operations while returning the posi-tion he refuses to discharge or allow
management to fill. (SL Scholasticas College vs. Hon. Ruben Torres, Secretary of
Labor, etal., G.R. No. 100158, 29 June 1992.)
2) Considering that the workers who defied the return-to-work order are deemed to have
abandoned their employment, the only obligation required of an employer is to serve
notices declaring them to have lost their employment status at the worker's last known
address. ( Sec. 2 Rule XIV, Book V, Rules Implementing the Labor Code)
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 Secretarys 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 strikers failure to immediately return to work
terminated their employment.
In assailing the Labor Secretarys 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 Bar Question)
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SUGGESTED ANSWER:
1) The Supreme Court has already ruled that educational institutions are in 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. Juico, 162 SCRA 676 (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 options or voluntariness but of
obligation.
In Baguio Colleges Foundation u. NLRC, 222 SCRA 604 (1993) the Court ruled:
Assumption and certification ordes 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 I abor and Employment, hence, termination of employment of all those who
participated whether officer or member, is legal.
In Sta. Scholastica's College u. Torres, 210 SCRA 565 (1992), the Court ruled:
Any worker or union officer who knowingly participates in a strike defying a return to
work order may consequently, be declared to have lost his employment status in
accordance with Art. 246 of the Labor Code.
9. Illegal strike
a) Liability of union officers
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: Your 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. (2000 Bar
Question)
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a) Was the walkout a strike? And if so, was it a valid activity? (3%)
b) Can the union officer who led the short walk-out, but who likewise
voluntarily led the workers back to work, be disciplined by the employer? (3%)
SUGGESTED ANSWER:
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), (I) 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),-(J): Art. 264 (a), Labor Code].
b) Liability of ordinary workers
Q: Are the strikers in an illegal strike entitled to reinstatement under the Labor
Code? Explain. (1995 Bar Question)
SUGGESTED ANSWER:
No. Union officers and members who commit illegal acts lose their employment status.
Any union officerwho knowingly participates in an illegal strike, and 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. Participants (not a union officer and did
not commit any illegal act) may be entitled to reinstatement.
Q: If the strike is declared illegal, will the strikers be entitled to their wages for the
duration for the strike? Explain. (1995 Bar Question)
SUGGESTED ANSWER:
No. The applicable doctrine will be: No work, no pay, unless there is an agreement to
pay strike duration pay.
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 non -strikeable 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.
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1) Is the strike legal?
2) Can the employer unilaterally declare those who participated in the strike
as having lost their employment status?
3) What recourse do these employees (declared by the employer to have lost

their employment status) have, if any?
SUGGESTED ANSWER:
1) 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)
ALTERNATIVE ANSWER:
a) The strike is not legal, considering that it was declared after the NCMB dismissed the
Notice of Strike.
Hence, it is as if, no notice of strike was filed. A strike declared without a notice of strike
is illegal; (GOP-CCP vs. CIR, 93 SCRA 118).
b) No. The strike is illegal. It is already settled in the case of PAL us. Secretary of Labor
(Drilon) that the pendency of a mediation proceedings is a bar to the staging of a strike
even if all the procedural requirements were complied with,
2) 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.
ALTERNATIVE ANSWER:
a) The employer cannot unilaterally declare those who participated in the illegal strike
as having lost their employment status. Only the union officers who knowingly
participated in the strike and workers who knowingly participated in the commission of
illegal acts, if any, may be declared to have lost their employment status. (Art. 264).
b) The employer has two options:
i) It may declare the strikers as having lost their employment status pursuant to Art.
264 of the Labor Code, or
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ii) It may file a case before the Labor Arbiter, under Art. 217. to have the strike
declared illegal and after that proceed to terminate the strikers.
3) 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
contend that they did not commit any illegal acts during the strike. (Art. 264, Labor
Code)
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 supervisors? Decide. (6%) (2008 Bar
Question)
SUGGESTED ANSWER:
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 days wage for a fair days labor remains as the basic factor in
determining employees wages (Aklan Electric Cooperative, Inc. v. NLRC, 323 SCRA
258[2000]).
c) Liability of employer
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. (2005 Bar Question)
SUGGESTED ANSWER:
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
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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 employers 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: Some officers and rank-in- file members of the union staged an illegal strike.
Their employer wants all the strikers dismissed. As the lawyer, what will you
advise the employer? Discuss fully. (2007 Bar Question)
SUGGESTED ANSWER:
I will advise the employer that not all the strikers can be dismissed. Any union officer
who knowingly participates in an illegal strike maybe declared to have lost his
employment status but a worker who is not a union officer may be declared to have also
lost his employment status only if he commits illegal acts during a strike. (CCBPI
Postmix Workers Union v. NLRC 299 SCRA 410 [1998])
Q: As a result of bargaining deadlock between ROSE Corporation and ROSE

Employees Union, its members staged a strike. During the strike, several
employees committed illegal acts. The company refused to give in to the union's
demands. Eventually, its members informed the company of their intention to
return to work. 10% (2006 Bar Question)
1. Can ROSE Corporation refuse to admit all the strikers?
SUGGESTED ANSWER:
Article 264 of the Labor Code provides that mere participation of a worker in a lawful
strike shall not constitute sufficient ground for termination of employment even if a
replacement had been hired by the employer during such lawful strike."
1. On the other hand, the same Article of the Labor Code also provides: 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.
2. Because of the above-quoted provisions of the Labor Code, ROSE

Corporation cannot refuse to admit all the strikers who inform the company of
their intention to return to work, except those workers who may have
committed illegal acts during the strike who can be declared as having lost
their employment status."
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2. Assuming the company admits all the strikers, can it later on dismiss those
employees who committed illegal acts?
SUGGESTED ANSWER:
Even if as its initial response, the company admitted all the strikers, the company is not
estopped from afterwards dismissing those employees who committed illegal acts
during the strike. Article 264 of the Labor Code expressly states that "any worker xxx
who knowingly participates in the commission of illegal acts during a strike may be
declared to have lost his employment status."
3. If due to the prolonged strike. ROSE Corporation hired replacements, can it

refuse to admit the replaces strikers?
SUGGESTED ANSWER:
ROSE Corporation cannot refuse to admit the strikers if they did not commit any illegal
acts during a lawful strike. The Labor Code is very clear: Workers who went on strike
have not lost their employment status even if the company had hired their
replacements.
10. Injunctions (Requisites for labor injunctions, Innocent bystander rule)
Q: Professor Juan dela Cruz, an author of the textbook Commentaries on the

Labor Code of the Philippines, citing an American case, wrote: It is said that the
prohibition against the issuance of a writ of injunction in labor cases creates
substantive and not purely procedural law." Is there any statutory basis for the
statement/comment under Philippine law? (5%) (2000 Bar Question)
SUGGESTED ANSWER:
Yes. The statutory basis is Article 254 of the Labor Code. It prohibits issuance of
injunction, as a matter of policy, to resolve disputes except as otherwise provided in
Articles 218 and 264 of the Labor Code. [Caltex Filipino Managers and Supervisors
Association v. CIR, 44 SCRA 350 (1972)1.
Q: A food processing company (the Company) engaged the services of duly

licensed independent contractors in connection with the operation of its
business. The contractors deployed workers in the Company. The contractors
workers joined ABC the union of rank-and-file employees of the Company, and
later demanded that they be made regular employees because they are
performing functions necessary and desirable in the usual business of the
Company. The Company questioned the contractors' workers joining ABC and
rejected their demand for regularization. ABC filed a notice of strike with the
Department of Labor and Employment. In a petition filed with the Regional Trial
Court, the Company asked the court to enjoin ABC and the contractors workers
from declaring a strike, asserting that the workers are not employees of the
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Company and that there is no labor dispute between the workers and the
Company as its agreement is only with the contractors.
As trial judge, will you issue an injunction against ABC and the workers? Explain.
SUGGESTED ANSWER:
As trial judge, I will not issue an injunction against ABC and the workers.
The acts of ABC and the workers, namely, the workers joining ABC said workers
demanding that they be made regular employees, ABC filing a notice of strike with the
Department of Labor and Employment, all these acts brought about a labor dispute
which is not within the jurisdiction of the Regional Trial Court.
The fact that the Company is asserting that the workers are not employees of the
Company does not make the case between the Company, on one hand, and ABC and
the workers, on the other hand, not a labor dispute. The truth cr falsity of the assertion
of the Company is a matter that is within a Labor Arbiter, not a Regional Trial Court. to
decide. (San Miguel Corp. Employees Union-PTGWO-vs. Bersamina, 186 SCRA 496)
If an injunction is proper, it is the National. Labor Relations Commission that can enjoin
ABC and the workers from doing any unlawful act.
The Labor Code (in Article 254) is very clear: No temporary or permanent injunction or
restraining order involving or growing out of a labor dispute shall be enjoined by any
court or other entity except by the NLRC under Articles 218 and under 264.
VIII. Procedure and Jurisdiction
A. Labor Arbiter (Jurisdiction, Reinstatement pending appeal, Requirements to

perfect appeal to NLRC)
On August 01, 2008, Y, a corporation engaged in the manufacture of textile

garments, entered into a collective bargaining agreement with Union X in
representation of the rank and-file employees of the corporation. The CBA was
effective up to June 20, 2011. The contract had an automatic renewal clause
which would allow the agreement after its expiry date to still apply until both
parties would have been able to execute a new agreement. On May 10, 2011,
Union X submitted to Y's management their proposals for the negotiation of a
new CBA. The next day, Y suspended negotiations with Union X since Y had
entered into a merger with z, a corporation also engaged in the manufacture of
textile garments. Z assumed all the assets and liabilities of Y. Union X filed a
complaint with the Regional Trial Court for specific performance and damages
with a prayer for preliminary injunction against Y and Z and Z filed a Motion to
Dismiss based on lack of jurisdiction. Rule on the Motion to Dismiss. (5%) (2012
BAR)
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Suggested Answer:
The Motion to Dismiss must be granted. The claim against Y and Z consists mainly of
the civil aspect of the unfair labor practice charge referred to in Article 247 of the Labor
Code. Under Article 247 of the Code, the civil aspects of all cases involving unfair labor
practices, which may include claims for damages and other affirmative relief, shall be
under the jurisdiction of the labor arbiters. [National Union of Bank Employees vs.
Lazaro G.R. No. 56431, January 19, 1988]. Besides, what the parties have is a labor
dispute as defined in Art. 212 (1) of the Labor Code regardless of whether the
disputants stand in the proximate relation of employer and employee. Being so, the
RTC is prohibited by Art. 254 of the Code from exercising jurisdiction over the cases.
Q: Pedring, Daniel, and Paul were employees of Delibakery who resigned from
their jobs but wanted to file money claims for unpaid wages and 13th month pay.
Pedrings claim totals P20,000.00, Daniels P3,000.00, and Pauls P22,000.00.
Daniel changed his mind and now also wants reinstatement because he resigned
only upon the instigation of Pedring and Paul. Where should they file their
claims? (2011 BAR)
(A) With the DOLE regional director for Pedring and Pauls claims with no
reinstatement; with the labor arbiter for Daniels claim with reinstatement.
(B) With the Office of the Regional Director of the Department of Labor for all
claims to avoid multiplicity of suits.
(C) With a labor arbiter for all three complainants.
(D) With the DOLE Regional Director provided they are consolidated for
expediency.
Q: Quiel, a househelper in the Wilson household since 2006, resigned from his
job for several reasons. One reason was the daily 12-hour workday without any
rest day. When he left his job he had unpaid wages totaling P13,500.00 which his
employer refused to pay. He wants to claim this amount though he is not
interested in getting back his job. Where should he file his claim? (2011 BAR)
(A) He should file his claim with the DSWD, which will eventually endorse it to the
right agency.
(B) Since he has no interest in reinstatement, he can file his claim with the office
of the regional director of the Department of Labor.
(C) He should file his claim exceeding P5,000.00 with the office of the labor
arbiters, the regional arbitrators representing the NLRC.
(D) He should go to the Employees Compensation Commission.
Q: Give the original and exclusive Jurisdiction of Labor Arbiters. (1995 Bar
Question)
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Answer:
Labor Arbiters have original and exclusive Jurisdiction over:
a) unfair labor practices;

b) termination disputes;
c) cases accompanied with a claim for reinstatement, and Involving wages, rates of
pay, hours of work, and other terms and conditions of employment;
d) claims for actual, moral, exemplary and other forms of damages arising from
employer-employee relations;
e) cases arising from any violation of Article 264 of the Labor Code, including
questions involving the legality of strikes and lockout; and
f) except claims of Employees Compensation, Social Security. Medicare and
maternity benefits, all other claims arising from employer-employee relations
including those persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5.000.00) regardless of whether accompanied
with a claim for reinstatement.
Q: As the lawyer of Mr. Excelente, state the nature of your action or complaint to
be filed against the university, the proper body or court before which it may be
filed, the laws to be invoked, and the facts or evidence to be adduced.
SUGGESTED ANSWER:
As lawyer of Mr. Excelente, I will file a complaint questioning the legality of his
dismissal.
I will file the complaint with the Labor Arbiter in the Regional Arbitration Branch of the
NLRC having jurisdiction over the place where Mr. Excelente works.
I will invoke the provisions of the Labor Code which are found in its Book VI that
guarantee the right of workers to security of tenure.
I will adduce facts or evidence that will disprove the allegations of the University
President that have been given as reasons for dismissing Mr. Excelente. The fact that
he had served the University for twenty five years, was well known in his field and has
received many awards should disprove the allegation of gross incompetence. I will
content that the alteration over teaching loads of professors is not tantamount to
insubordination and dereliction of duty.
a) May the University President be impleaded as co-respondent? If so, what will

be the nature of his liability?
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SUGGESTED ANSWER:
The University President may not be impleaded if his acts in connection with the
termination of Mr. Excelente were official.
But he may be pleaded if he acted without or in excess of his authority or was motivated
by personal ill will towards Mr. Excelente. If he is thus impleaded, the University
President shall be personally liable for the payment of back wages and damages, if any
that Mr. Excelente will be entitled to receive if it is found that he has been unjustly
dismissed.
Q: A was dismissed from the service by his employer for theft of goods owned by
the company. He was also prosecuted for theft before the Regional Trial Court of
Pasay City. Meanwhile, A filed a complaint for illegal dismissal against the
employer before the labor arbiter. The trial court subsequently acquitted A and
ordered his reinstatement with backwages from the time of his separation to the
date of his actual reinstatement.
(1) Is the decision of the court correct? State your reasons.

(2) Even with such acquittal, may the labor arbiter still proceed to resolve the
complaint for illegal dismissal filed by A? State your reasons.
SUGGESTED ANSWER:
(1) The decision of the court is not entirely correct.
It is within the jurisdiction of the Regional Trial Court to acquit A. As a regular court, the
RTC has jurisdiction over criminal cases. But it is outside of the jurisdiction of the RTC
to order the reinstatement of A with backwages. A termination dispute, which could give
rise to a decision for the reinstatement of an illegally dismissed employee and the
payment of his backwages is outside the jurisdiction of the RTC. It is within the original
and exclusive jurisdiction of labor arbiters. (Art. 217, Labor Code).
(2) Even with As acquittal, the labor arbiier should still proceed to resolve the complaint
for illegal dismissal filed by A. An action for illegal dismissal is entirely separate and
distinct from a criminal action. (Pepsi Cola Bottling Company of the Philippines vs.
Guanzon, G.R. No. 81162, April 19. 1989).
In many decisions, the Supreme Court has ruled that the acquittal of an employee in a
criminal case does not mean that there could be no basis for legally dismissing the
employee for. say. willful breach of trust, which is a just cause for termination.
Conviction in a criminal case requires proof beyond reasonable doubt. In a termination
dispute, it is enough that there is substantial evidence to prove that there has been
willful breach of trust.
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Q: Richie, a driver-mechanic, was recruited by Supreme Recruiters (SR) and its
principal, Mideast Recruitment Agency (MRA), to work in Qatar for a period of two
(2) years.
However, soon after the contract was approved by POEA, MRA advised SR to
forego Richies deployment because it had already hired another Filipino driver-
mechanic, who had just completed his contract in Qatar. Aggrieved, Richie filed
with the NLRC a complaint against SR and MRA for damages corresponding to
his two years salary under the POEA- approved contract.
SR and MRA traversed Richies complaint, raising the following arguments:
[a] The Labor Arbiter has no jurisdiction over the case; (2%) (2009 Bar
Question)
xx
xx
xx
Rule on the validity of the foregoing arguments with reasons.
SUGGESTED ANSWER:
The Labor Arbiter has jurisdiction. Sec. 10, R.A. No. 8042, reads:
Money Claims.- Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing
of the complaint, the claims arising out of an employer-employee relationship or by
virtue of any law or contract involving Filipino workers for overseas deployment
including claims for actual, moral, exemplary and other forms of damages.
The Labor Arbiter has no jurisdiction over the case. The failure to deploy a worker within
the prescribed period without valid reason is a recruitment violation under the
jurisdiction of the POEA.
Q: Can a dispute falling within the exclusive jurisdiction of the Labor Arbiter be
submitted to voluntary arbitration? Why or why not? (3%). (2008 Bar Question)
SUGGESTED ANSWER:
Yes. A labor dispute falling within the exclusive jurisdiction of a Labor Arbiter may be
submitted to voluntary arbitration. Any or all disputes under the exclusive and original
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jurisdiction of the Labor Arbiter under Art. 217 of the Code, maybe submitted for
voluntary arbitration by a Voluntary Arbitrator by agreement of the parties.
Art. 262. Jurisdiction over labor disputes. The voluntary arbitrator or panel of voluntary
arbitrators, upon agreement of the parties, shall also hear and decide all other labor
disputes, including unfair labor practice and bargaining deadlocks.
Q: May non-lawyers appear before the NLRC or Labor Arbiter? May they charge
attorneys fee for such appearance provided it is charged against union funds
and in an amount freely agreed upon by the parties? Discuss fully. (2007 Bar
Question)
SUGGESTED ANSWER:
Yes. Non-lawyers can appear before the NLRC or Labor Arbiters
1. if they represent themselves,
2. if they represent their legitimate labor organization or members thereof,
3. if they are duly accredited members of the legal aid office recognized by the
DOJ or IBP (Art. 222, Labor Code).
Non-lawyers cannot charge attorneys fees because the latter presuppose the existence
of attorney-client relationship which exists only if the representative is a lawyer (PAFLU
v. BISCOM, 42 SCRA 302 [1997]).
Yes, non-lawyers may appear before the labor arbiter or the NLRC but only in the
following instances:
1. if they represent themselves, or
2. if they represent their organization or members thereof, (Article 222, Labor Code)
provided that he presents a verified certification from the said organization that he is
properly authorized;
3. he is duly accredited member of any legal aid office duly recognize by the DOJ or IBP
(Kanlaon Conxtruction Enterprises v. NLRC, 279 SCRA 337 [1997])
Yes, attorneys fees may be charged against union funds in an amount agreed upon by
the parties. Any stipulation to the contrary is void (Art. 222, 2(b). However, 3 requisites
must be complied with in order that a unions attorneys fees and representation
expenses may be valid and upheld:
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1. authorization by a written resolution of majority of all the members at the
general membership meeting duly called for the purpose;
2. secretarys record of the minutes of the meeting; and
3. individual written authorization for check-off duly signed by the employee

concerned (ABS- CBN Supervisors Employees Union Members v. ABS-CBN
Corp. et al., Article 241 (n) (o). 304 SCRA 489 [1999]).
Q: Procedurally, how do you stay a decision, award or order of the Labor Arbiter?
Discuss fully. (2007 Bar Question)
SUGGESTED ANSWER:
Decisions, awards, or orders of the Labor Arbiter may be stayed by the filing of an
appeal to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders.
In case of appeal of a LAs judgment involving a monetary award, it may only be stayed
upon the posting of a cash or surety bond issued by a reputable bonding company duly
accredited by the Commission in the amount equivalent to the monetary award in the
judgment appealed from. (Art. 223, Labor Code)
By perfecting an appeal, through the filing an Appeal Memorandum within 10 days from
receipt of such decision, verified by the appellant and accompanied by his Non- Forum
Certification, proof of service on the other party, proof of payment of the appeal fee and
cash or surety bond in the amount equivalent to the monetary award in the judgment
appealed from. Reinstatement is immediately executory. (Art. 223, Labor Code)
Q: May a decision of the Labor Arbiter, which has become final and executory be
novated through a compromise agreement of the parties? (2007 Bar Question)
SUGGESTED ANSWER:
Yes. Although Article 221 of the Labor Code requires the Labor Arbiter to exert all
efforts to amicably settle the case before him on or before the first hearing, it must be
noted that neither the
Labor Code nor its implementing rules as well as the NLRC Rules prohibit the amicable
settlement of cases during the pendency of the proceedings or after a judgment is
issued thereupon.
The established rule is that the compromise agreement or amicable settlement may still
be made even after the judgment has become final and executory. Settlement of cases
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Labor Law

is encouraged and authorized by law. Article 2040 of the Civil Code impliedly authorizes
this. It is even encouraged by express provisions of law.
Yes, provided that the same is not unconscionable, and the agreement was approved
by the Labor Arbiter, the NLRC or the Court of Appeals, before whom the case is
pending.
Yes, provided that the new agreement is not tainted with fraud, duress or undue
influence.
Q: P.D. 1508 requires the submission of disputes before the Barangay Lupong
Tagapamayapa prior to the filing of cases with the courts or other government
bodies. May this decree be used to defeat a labor case filed directly with the
Labor Arbiter? Discuss fully. (2007 Bar Question)
SUGGESTED ANSWER:
No. Requiring conciliation of labor disputes before the Barangay Lupong

Tagapamayapa would defeat the salutary purposes of the law. Instead of simplifying
labor proceedings designed at expeditious settlement or referral to the proper courts or
office to decide it finally, the conciliation of the issues before the Barangay Lupong
Tagapamayapa would only duplicate the conciliation proceedings and unduly delay the
disposition of labor cases (Montoya v. Escayo, 171 SCRA 446[1989]).
No, because under Article 217 of the Labor Code, the Labor Arbiter exercises original
and exclusive jurisdiction to hear and decide cases involving all workers, whether
agricultural or non- agricultural.
P.D. 1508 does not apply to labor dispute because labor cases have their own
grievance and mediation processes.
Q: Under a seaman's contract of employment with a local manning agent of a

foreign shipping company, Capt. TROY embarked on an ocean-going vessel in
good health, one stormy night at sea, he was drenched, with rainwater. The
following morning, he contracted fever which lasted for days. He suffered loose
bowel movement, lost his appetite, and eventually he died before a scheduled
airlift to the nearest port. Subsequently, the widow of Capt. TROY complained
against the local manning agent and its foreign principal before the Regional
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Labor Law

Arbitration, Branch of DOLE, for actual and exemplary damages and attorney's
fees. She invoke the Labor Code provision which requires the employer to
provide all necessary assistance to ensure the adequate and necessary medical
attendance and treatment of the injured or sick employee in case of emergency.
Respondents moved to dismiss the complaint on the ground that the Labor
Arbiter has no jurisdiction over the complaint for damages arising from illness
and death of Capt. TROY abroad. Resolve the motion with reasons. (5%). (2005
Bar Question)
SUGGESTED ANSWER:
In Tolosa v. NLRC, (G.R. 149578. April 10, 2003, the Supreme Court held that what we
have in this case is a claim arising from tort or quasi-delict. In such a situation; the
seaman who died on November 18, 1992, cannot sue before the Labor Arbiter. But this
will not apply now, as under Sec. 10, RA. 8042. [effective June 7.1995], what we have is
a claim "arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual,
moral, exemplary and other forms of damages, cognizable by the
"Labor Arbiters of the National Labor Relations Commission" (NLRC) who have the
original and exclusive jurisdiction thereon.
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? (5%) (2001
Bar Question)
SUGGESTED ANSWER:
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 a 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.
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The retroactive Order of the Labor Arbiter is void for want of jurisdiction. Jurisdiction is
conferred by law. Nowhere in the Labor Code, more specifically, Article 217, is the
Labor Arbiter given jurisdiction over unresolved issues in collective bargaining, including
determining the period or duration of a Collective Bargaining Agreement.
Q: "A" was able to obtain a Judgment against his former employer, Company "B",
for P750.000.00. In executing the Judgment in favor of A, the Labor Arbiter sought
to levy on B's office equipment. B filed an action for damages and injunction
against the Labor Arbiter before the Regional Trial Court of the province where
B's offices are located. Is B's action tenable? Why? (5%). (2001 Bar Question)
SUGGESTED ANSWER
B's action is not tenable.
In the case of Delta Ventures Resources vs. Hon. Fernando P. Labato, G.R. No.
118216, March 9, 2000, the Supreme Court ruled that the regular courts have no
jurisdiction to act on labor cases or various incidents arising therefrom, including the
execution of decisions, awards or orders.
ANOTHER SUGGESTED ANSWER
Yes, B's action before the Regional Trial Court is tenable if said action is limited to the
filing of a damage suit against the Labor Arbiter because there exists no employer-
employee relationship between "B" and the Labor Arbiter, and there is no labor dispute
between them. In Lapanday Agricultural Development Corporation vs. Court of Appeals,
G.R. No. 112139, January 31, 2Q00, the Supreme Court, ruled:
"It is well settled in law and jurisprudence that where NO employer-employee

relationship exists between the parties and no issue is involved which may be resolved
by reference to the Labor Code, other labor statutes or any collective bargaining
agreement, it is the Regional Trial Court that has jurisdiction."
Q: May the Labor Arbiter, NLRC or Court of Appeals validly award attorney's fees
in favor of a complainant even if not claimed or proven in the proceedings? Why?
SUGGESTED ANSWER:
A Labor Arbiter, NLRC and Court of Appeals may validly award attorney's fees in favor
of a complainant only if the claimant claimed and proved that he is entitled to attorney's
fees.
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Article 2208 of the New Civil Code allows the award of attorney's fees when the
defendant's act or omission has compelled the plaintiff to litigate or incur expenses to
protect his interest. Attorney's fees may be considered as a part of an equitable relief
awarded in the concept of damages.
Q: On May 2, 1988, General Finance Corp. (GFC) was placed under SEC
rehabilitation receivership as it was illiquid. Its 100 employees were kept on the
payroll until May 15, 1988, when 75 of them were placed on leave without pay by
the receiver. GFCs management met with its Board and stockholders to review a
rehabilitation plan so GFC could resume operations emphasizing collection
efforts, investors and creditors agreed to reschedule payments to them as GFC
was solvent. With these agreements, the management filed a rehabilitation plan
with the receiver, who endorsed it to the SEC. Under the plan, GFC would retain
all its workers and resume its operations as soon as it achieved adequate
liquidity. Because of the plan, the union asked that all its members be paid
salaries during the time that they were laid off and GFC was preparing to re-open,
whether or not they were at work. The company agree, endorsed the request to
the receiver who recommended its payment to the SEC. The SEC approved the
request. On August 1, 1988, the receiver paid all union members salaries from
May 16, 1988 up to July 31, 1988 whether or not they had worked during the
period. (1988 Bar Question)
(a) xxx
(b) xxx
(c) xxx
(d) If your demand is declined, where will you file the case on behalf of the
non-union members?
SUGGESTED ANSWER:
(a) xxx
(b) xxx
(c) xxx
(d) I will file the case before the Labor Arbiter. The case here is a money claim of
workers based on the nonpayment or underpayment of wages which is one of the cases
under the original and exclusive jurisdiction of Labor Arbiters, pursuant to the Labor
Code (Art. 212).
ALTERNATIVE ANSWER
I will file the case before the SEC which has jurisdiction over the case since it is against
a corporation under receivership.
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Q: Jun de Gracia, a second year law student and personnel assistant in the
Peoples Bank and
Trust Company, never liked his superior, the personnel manager, who was always
putting him down. When his patience ran out, he walked up to his boss during
office hours and slugged him to unconsciousness. He was dismissed. The
personnel manager filed a complaint for damages against de Gracia with the
Regional Trial Court of Quezon City. In retaliation, de Gracia filed a complaint for
illegal dismissal with the Department of Labor and Employment.
The counsel of de Gracia then filed a motion to dismiss the damage suit, alleging
that the labor arbiter before whom the illegal dismissal case is pending has
exclusive jurisdiction over the case for damages.
SUGGESTED ANSWER:
The Motion to Dismiss the complaint for damages against De Gracia filed with the
Regional Trial Court should not be granted. The fact that there is a complaint for illegal
dismissal with a Labor Arbiter filed by De Gracia is not ground for dismissal of the
damage suit filed with the Regional Trial Court.
The two cases can be considered distinct from each other.
The case before the Regional Trial Court is based on the slugging by De Gracia of his
superior, the personnel manager who filed the damage suit. This, therefore, is a case
based on the Civil Code, not on the Labor Code, and is thus, within the jurisdiction of
the regular courts.
On the other hand, the complaint of illegal dismissal in within the jurisdiction of the
Labor Arbiter. The Labor Arbiter could have included in the exercise of his jurisdiction
also the damages arising from the manner in which the employer dismissed an
employee. But it may be noted: The damage suit here arises from what the employee
did to the personnel manager, not what the employer did to the employee. This is an
added reason why the damage suit filed by the personnel manager against De Gracia is
properly within the jurisdiction of the Regional Trial Court.
The case arose from employer-employee relations and is therefore under the original
and exclusive jurisdiction of the Labor Arbiter.
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To avoid multiplicity of suits, the case which arose from employer-employee relations
should be heard by the Labor Arbiter who has jurisdiction of the case.
Q: Is a termination dispute a grievable issue? (2012 Bar Question)
a. Yes, if the dismissal arose out of the interpretation or implementation of

the CBA;
b. No, once theres actual termination, the issue is cognizable by a Labor
Arbiter;
c. Yes, it is in the interest of the parties that the dispute be resolved on the
establishment level;
d. No, a voluntary arbitrator must take cognizance once termination is made
effective.
SUGGESTED ANSWER:
c) No, once theres actual termination, the issue is cognizable by a Labor

Arbiter [Art. 217 (a), Labor Code; San Miguel Corporation vs. NLRC, G.R.
No. 108001, March 15, 1996]
Q: The jurisdiction of the National Labor Relations Commission does not include:
(2014 Bar Question)
(A) exclusive appellate jurisdiction over all cases decided by the Labor Arbiter
(B) exclusive appellate jurisdiction over all cases decided by Regional Directors or
hearing officers involving the recovery of wages and other monetary claims and
benefits arising from employer-employee relations where the aggregate money
claim of each does not exceed five thousand pesos (Php5,000)
(C) original jurisdiction to act as a compulsory arbitration body over labor disputes
certified to it by the Regional Directors
(D) power to issue a labor injunction
SUGGESTED ANSWER:
(C) original jurisdiction to act as a compulsory arbitration body over labor disputes
certified to it by the Regional Directors (Art. 129, Labor Code).
Q: Lincoln was in the business of trading broadcast equipment used by television

and radio networks. He employed Lionel as his agent. Subsequently, Lincoln set
up Liberty Communications to formally engage in the same business. He
requested Lionel to be one of the incorporators and assigned to him 100 Liberty
Page 413 of 450
Labor Law

shares. Lionel was also given the title Assistant Vice-President for Sales and
Head of Technical Coordination. After several months, there were allegations that
Lionel was engaged in under the table dealings and received confidential
commissions from Libertys clients and suppliers. He was, therefore, charged
with serious misconduct and willful breach of trust, and was given 48 hours to
present his explanation on the charges. Lionel was unable to comply with the 48-
hour deadline and was subsequently barred from entering company premises.
Lionel then filed a complaint with the Labor Arbiter claiming constructive
dismissal. Among others, the company sought the dismissal of the complaint
alleging that the case involved an intra-corporate controversy which was within
the jurisdiction of the Regional Trial Court (RTC).
If you were the Labor Arbiter assigned to the case, how would you rule on the
companys motion to dismiss? (2014 Bar Question)
SUGGESTED ANSWER:
I will deny the motion to dismiss. "Corporate officers" in the context of Presidential
Decree No. 902-A are those officers of the corporation who are given that character by
the Corporation Code or by the corporation's by-laws. Section 25 of the Corporation
Code enumerates three specific officers that in law are considered as corporate officers
the president, secretary and the treasurer. Lincoln is not one of them. There is
likewise no showing that his position as Assistant Vice-President is a corporate officer in
the company's by-laws. The Labor Arbiter therefore, has jurisdiction over the case (Art.
217 (a) (2), Labor Code).
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 the Labor Arbiter had no jurisdiction over the case as
it would properly be considered as an intra-corporate controversy cognizable by
the RTC. Further, Mario claimed that because Carlo's dismissal was a corporate
act, he cannot be held personally liable.
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(a) As the Labor Arbiter assigned to this case, how would you resolve the
jurisdiction question. (2015 Bar Question)
(b) What is the rule on personal liability of corporate officers for a

corporate act declared to be unlawful? (2015 Bar Question)
SUGGESTED ANSWER:
(a) The Labor Arbiter has jurisdiction over Carlos illegal dismissal complaint
as he was hired by Mario on a salary and commission basis. In Grepalife v. Judico
(180 SCRA 445) it was held that a worker who is paid on a salary plus commission
basis is an employee. While regular courts have jurisdiction over Marios corporate act
of severing ties with Carlo, the Labor Arbiter, pursuant to Art. 217 A-(2) of the Labor
Code, has jurisdiction over Carlos illegal dismissal complaint.
(b) 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).
(a) 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.
Q: A neighbors gardener comes to you and asks for help because his employer
withheld his salary for two (2) months amounting to P4,000.00. Where will you
advise him to file his complaint? (2012 Bar Question)
a. Labor arbiter;
b. DOLE Regional Director;
c. Conciliator/Mediator;
d. MTC Judge.
SUGGESTED ANSWER:
b. DOLE Regional Director [Art. 129, Labor Code]
Q: Who has jurisdiction over a money claim instituted by an overseas Filipino

workers? (2012 Bar Question)
a. Labor Arbiter;
b. National Labor Relations Commissions;
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c. Labor Arbiter concurrently with the regular courts;
d. National Labor Relations Commission concurrently with the regular courts.
SUGGESTED ANSWER:
a) Labor Arbiter [Sec. 10, Art. 8042]
Requirements to perfect appeal to NLRC
Q: In cases involving monetary award, why does the law require an employer to
post a cash or surety bond as an indispensable condition for the perfection of an
appeal?
SUGGESTED ANSWER:
An appeal stays the execution of a decision or award. Such decision or award could be
in the form of a monetary award made in favor of an employee. Thus, an appeal will
mean that a monetary award will not be executed. To ensure that an appealed
monetary award will be paid to the employee once such monetary award is affirmed and
has become final and executory, the Labor Code requires that the appeal by an
employer may be perfected only upon the posting of a cash or surety bond issued by a
reputable bonding company duly accredited by the NLRC in the amount equivalent to
the monetary award in the judgment appealed from. (Art. 223, Labor Code)
Q: The affected members of the rank and file elevated a labor arbiter's decision to
the NLRC via a petition for review filed after the lapse of the ten-day reglementary
period for perfecting an appeal. Should the NLRC dismiss the petition outright or
may the NLRC take cognizance thereof? (5%). (2001 Bar Question)
SUGGESTED ANSWER:
The NLRC should dismiss the appeal outright because the same was filed beyond the
reglementary period of appeal. Article 223 of the Labor Code reads:
"Decisions, awards, or orders of the Labor Arbiter are final and executory unless ,
appealed to the Commission by any or both parties within ten (10) calendar days from
receipt of such decisions, awards, or orders."
The NLRC could dismiss outright the appeal for being filed out of time. But if there are
good reasons that may justifiably explain why there was a delay in the filing of the
appeal, substantial justice may be the basis for the NLRC to take cognizance of the
appeal.
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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? (5%). (2001 Bar Question)
SUGGESTED ANSWER:
No, the NLRC should not entertain the appeal, as the same was not perfected for failure
to file a bond. Art. 223 of the Labor Code reads:
"In case of a judgment involving a monetary award, an appeal by the employer may be
perfected only upon the posting of cash or surety bond, in the amount equivalent to the
monetary award in the judgment appealed from."
In ABA vs. NLRC, G.R. No. 122627, July 18, 1999, the Supreme Court ruled:
"An appeal bond is necessary. the appeal may be perfected only upon the
posting of cash or surety bond issued by a reputable bonding company duly accredited
by the Commission in the amount equivalent to the monetary award in the judgment
appealed from."
The NLRC may still entertain the appeal.
It is true that the Labor Code (in Art. 223) provides that appeal is perfected only upon
the posting of a cash or surety bond. But if Company A filed a motion for the reduction
of the bond, and said motion was only acted upon after the reglementary period, then,
the NLRC, in the interest of substantial justice, may still take cognizance of the appeal.
Q: Cite two instances when an order of execution may be appealed. (2007

Bar Question)
SUGGESTED ANSWER:
An Order of Execution may be appealed:
1. Where the Order of Execution varies or goes beyond the terms of the judgment it
seeks to enforce or the terms of the judgment are ambiguous (DBP v. Union Bank, 419
SCRA 131 [2004]);
2. Where the implementation of the Order was irregular (Metrobank v. C.A. 356, SCRA
563 [2001]).
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1. When its execution becomes impossible or unjust, it may be modified or altered

on appeal or harmonize the same with justice and the facts. (Torres v. NLRC, 330
SCRA 311 [2000]).
2. Supervening events may warrant modification in the execution of the judgment,

as when reinstatement is no longer possible because the position was abolished as a
cost-cutting measure due to losses. (Abalos v. Philex Mining Corp., 393 SCRA 134
[2000]).
Q: The appeal to the NLRC may be entertained only on any of the following
grounds, except: (2012 Bar Question)
a. If there is a prima facie evidence of abuse of discretion on the part of the

Labor Arbiter
b. If the decision, order or award was secured through fraud or coercion,
including graft and corruption;
c. If made purely on questions of fact and law;
d. If serious errors in the findings of facts are raised which would cause
grave or irreparable damage or injury to the appellant.
SUGGESTED ANSWER:
c. If made purely on question of fact and law. [Art. 223, Labor Code]
Q: Cris filed a complaint for illegal dismissal against Baker Company. The Labor
Arbiter dismissed the complaint but awarded Cris financial assistance. Only the
company appealed from the Labor Arbiter's ruling. It confined its appeal solely to
the question of whether financial assistance could be awarded. The NLRC,
instead of ruling solely on the appealed issue, fully reversed the Labor Arbiter's
decision; it found Baker Company liable for illegal dismissal and ordered the
payment of separation pay and full backwages.
Through a petition for certiorari under Rule 65 of the Rules of Court, Baker
Company challenged the validity of the NLRC ruling. It argued that the NLRC
acted with grave abuse of discretion when it ruled on the illegal dismissal issue,
when the only issue brought on appeal was the legal propriety of the financial
assistance award.
Cris countered that under Article 218(c) of the Labor Code, the NLRC has the
authority to "correct, amend, or waive any error, defect or irregularity whether in
substance or in form" in the exercise of its appellate jurisdiction.
Decide the case. (2013 Bar Questions)
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SUGGESTED ANSWER:
The review power of the NLRC in perfected appeals is limited only to those issues
raised on appeal. Hence, it is grave abuse of discretion for the NLRC to resolve issues
not raised on appeal. (United Placement International v. NLRC, 221 SCRA 445 [1993])
In the exercise of its jurisdiction, the NLRC is empowered to determine even issues not
raised on appeal in order to fully settle the issues surrounding the case. [See: Art.
218(c), now Art. 224 (c)].
a) versus Regional Director
Q: Sara has been working as housemaid for the Bojilov spouses for three (3)
years. In the early morning of July 28, the spouses and Sara were watching the
live coverage of the finals of an Olympic boxing match between a Bulgarian and a
Filipino which the foreign fighter won on points. Peeved by Saras angrily
remarks that the scoring was unfair, the Bojilov spouses fired her on the spot.
Sara thereafter filed a complaint with the Regional Director of the DOLE for
unpaid salaries totaling P5.500.00. The Bojilov spouses moved to dismiss the
complaint on the belief that Sara's claim falls within the jurisdiction of the Labor
Arbiter. Sara, however, claimed that the Regional Director can decide on her
claim by virtue of his plenary visitorial powers under Art. 128 and of Art. 129 of
the Labor Code, as amended, which empowers the Regional Director to hear and
decide, among others, matters involving recovery of wages.
1) Whose position will you sustain? Explain.

2) Will your answer be the same if Saras claim is P4.500.00 with
reinstatement?
SUGGESTED ANSWER:
1) I will sustain the position of the Bojilov spouses. Art. 128 is not applicable because
the case did not arise as a result of the exercise of visitorial and enforcement powers by
the Regional Director, as the duly authorized representative of the Secretary of Labor
and Employment. Instead, the case is a simple money claim under Art. 129. which could
be under the Jurisdiction of the Regional Director if the claim does not exceed
P5.000.00.
But the claim exceeds P5.000.00. Thus, it is the Labor Arbiter who has jurisdiction
under Art. 217(a) of the Labor Code.
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2) I will still hold that it is the Labor Arbiter that has jurisdiction. It is true that the money
claim no longer exceeds P5.000.00. But there is a claim for reinstatement. Thus, this
claim is under the jurisdiction of a Labor Arbiter, per Art. 129 of the Labor Code.
Q: The Secretary of Labor and Employment or his duly authorized representative,

including labor regulations officers, shall have access to employer's records and
premises during work hours. Why is this statement an inaccurate statement of
the law? (2011 BAR)
(A) Because the power to inspect applies only to employer records, not to the
premises.
(B) Because only the Secretary of Labor and Employment has the power to
inspect, and such power cannot be delegated.
(C) Because the law allows inspection anytime of the day or night, not only during
work hours.
(D) Because the power to inspect is already delegated to the DOLE regional
directors, not to labor regulations officers.
B. National Labor Relations Commission (NLRC)
Q: Non-lawyers can appear before the Labor Arbiter if: (2014 Bar Question)
(A) they represent themselves

(B) they are properly authorized to represent their legitimate labor organization
or member thereof
(C) they are duly-accredited members of the legal aid office recognized by the
DOJ or IBP
(D) they appear in cases involving an amount of less than Php5,000
SUGGESTED ANSWER:
A. They represent themselves (Art. 222, Labor Code; Rule III, Section 6, 2011 NLRC
Rules of Procedure).
1. Jurisdiction
Q: What is the jurisdiction of the National Labor Relations Commission? (1995

Bar Question) Answer:
Jurisdiction of the NLRC:
a) exclusive appellate jurisdiction over all cases decided by Labor Arbiter;

b) exclusive appellate jurisdiction over all cases decided by Regional Directors or
hearing offic-ers involving the recovery of wages and other monetary claims and
benefits arising from employer-erpployee relations where the aggregate money claim of
each employee or househelper does not exceed five thousand pesos (P5.000.00);
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c) original jurisdiction to act as a compulsory arbitration body over labor disputes
certified to NLRC by the Secretary of Labor and Employment; and
d) power to issue a labor injunction.
Q: What matters may be taken up by the National Labor Relations Commission

(NLRC) En Banc?
SUGGESTED ANSWER:
The NLRC shall sit en banc only for purposes of promulgating rules and regulations
governing the hearing and disposition of cases before any of its divisions and regional
branches and formulating policies affecting its administration and operations. (Art. 213,
Labor Code)
Q: Mr. Esto Pido is employed as a medical representative of Taypa Laboratories.

By nature of his work, he was allowed to avail of the companys car loan policy
whereby the company advanced the purchase price of the car to be paid back by
the employee through monthly deductions from his salary with the company
retaining the ownership of the motor vehicle until it shall have been fully paid.
Six months after the availment by Mr. Esto Pido of Taypa Laboratories car loan
policy, he was dismissed from the service for having participated in an illegal
strike. In the Notice of Dismissal sent to him by his employer, he had been
directed to either return the car to the company or settle the remaining balance of
the cost of the car. Esto Pido filed an action against Taypa Laboratories for illegal
dismisssal before the Arbitration branch of the National Labor Relations
Commission (NLRC). The Labor Arbiter, however, upheld the legality of his
dismissal hence he appealed his case before the NLRC.
In the meantime. Taypa Laboratories filed before the Regional Trial Court a civil
suit to recover possession of the car which Esto Pido refused to return and/or
settle the remaining balance. The RTC thereafter directed the Deputy Sheriff to
take into his custody the motor vehicle from Esto Pido.
To counter the order of the RTC, Esto Pido sought a temporary restraining order
in the NLRC to stop the Taypa Laboratories from collecting their monthly
amortization pending final resolution of his appeal in the illegal dismissal case.
According to him, had he not been dis-missed he would not have defaulted in his
amortization. NLRC granted the relief prayed for by Esto Pido by restraining
Taypa Laboratories from collecting the monthly amortization pending resolution
by the NLRC of the illegal dismissal case. Taypa Laboratories filed a Petition for
Certiorari alleging that NLRC gravely abused its discretion in issuing the
temporary restraining order. NLRC argues that it has the power to issue an
injunction based on Art. 218 of the Labor Code. Decide the controversy with
reason.
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SUGGESTED ANSWER:
NLRC has no power to issue the injunction.
The powers of NLRC enumerated in Art. 218 of the Labor Code are powers that it could
exercise only in connection with labor disputes.
The case involving the contract on the car loan entered into by Taypa Laboratories and
Esto Pido is not a labor dispute. It is properly under the exclusive jurisdiction of the
RTC. Thus, the NLRC has no power to issue the temporary restraining order that it
issued.
Q: May the NLRC or the courts take jurisdictional cognizance over compromise
agreements/ settlements involving labor matters?
SUGGESTED ANSWER:
No. Any compromise agreement, including those involving labor standards laws,
voluntary agreed upon by the parties with the assistance of the Bureau or the regional
office of the Department of Labor, shall be final and binding upon the parties. The
National Labor Relations Commission or any court shall not assume jurisdiction over
issues involved therein except in case of non- compliance thereof or if there is prima
facie evidence that the settlement was obtained through fraud, misrepresentation, or
coercion. (Art. 227, Labor Code)
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
Directors decision to the NLRC. The union officers moved to dismiss on the
ground of lack of jurisdiction. Are the union officers correct? Why? (3%). (2001
Bar Question)
SUGGESTED ANSWER:
Yes, the union officers are correct in claiming that the NLRC has no jurisdiction over the
appealed ruling of the Regional Director. In Barles vs. Bitonio. G.R. No. 120220, June
16, 1999, the Supreme Court ruled:
"Appellate authority over decisions of the Regional Director involving examination of

union accounts is expressly conferred on the BLR under the Rule of Procedure on
Mediation- Arbitration,
xxx
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Section 4. Jurisdiction of the Bureau (b) The Bureau shall exercise appellate
jurisdiction over all cases originating from the Regional Director involving. Complaints
examination of union books of accounts.
The language of the law is categorical. Any additional explanation on the matter is
superflous."
Q: Mr. Jonathan Pe, a registered stockholder of New Wave Beauty Shop, Inc. was
elected Vice-President of New Wage at a regular monthly meeting.
At a subsequent meeting of the Board of Directors, it was resolved to dismiss

Jonathan as Vice-President due to loss of trust and confidence. Jonathan Pe filed
with the National Labor Relations Commission a complaint for illegal dismissal
with damages against New Wage claiming that he was dismissed without due
process. New Wage filed a Motion to Dismiss based on lack of Jurisdiction.
Resolve the motion.(1997 Bar Question)
SUGGESTED ANSWER:
The Motion to Dismiss should be granted. The election of Jonathan Pe as Vice

President of New Wave Beauty Shop, Inc., made him a corporate officer.
His subsequent dismissal as such corporate officer is considered an intra-corporate

matter. Thus, the dismissal of Pe is not a case of a termination dispute which is under
the jurisdiction of a Regional Branch of the NLRC. Instead, it is under the jurisdiction of
the Securities and Exchange Commission, it having jurisdiction over intra-corporate
matters.
Q: Diego, Executive Vice-President of Evergreen Development Corporation (EDC)

was dismissed by the Board of Directors for his involvement in irregularities
prejudicial to EDCs interests. He filed a complaint for illegal dismissal with the
Labor Arbiter, praying for reinstatement with backwages, P5 million pesos as
moral damages, P1 million pesos as exemplary damages and attorney's fees.
EDC questioned the Jurisdiction of the Labor Arbiter. Diego, in turn contended
that the Labor Arbiter has Jurisdiction over the case as it Involves the termination
of an employee and claims for backwages, benefits and damages.
SUGGESTED ANSWER:
The dismissal of an Executive Vice-President of a Corporation who is a corporate

officer, by the Board of Directors of the corporation is not a termination dispute under
the jurisdiction of a Labor Arbiter. It is an intra-corporate dispute that is under the
jurisdiction of the Securities and Exchange Commission.
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Q: The national council of X Union, the exclusive bargaining representative of all
daily paid workers of Z Corp., called a general meeting and passed a resolution
which provides that each union member was to be assessed P1,000.00 to be
deducted from the lump sum of P 10,000.00 which each employee was to receive
under the CBA. Sergio, a Union member, protested and refused to sign the
authorization slip for the deduction. X Union then passed a resolution expelling
Sergio from the union. Sergio filed a complaint before the Labor Arbiter for illegal
deduction and expulsion from the union.
Will the complaint prosper? Explain. (1996 Bar Question)
SUGGESTED ANSWER:
The complaint will not prosper before the Labor Arbiter because there is here an intra-
union conflict which is under the jurisdiction of the Med-Arbiter. (See Art. 226 and Rule
V of Book V of the Rules and Regulations Implementing the Labor Code).
Q: Jose Lovina had been member of the board of directors and Executive Vice
President of San Jose Corporation for 12 years. In 2008, the San Jose
stockholders did not elect him to the board of directors nor did the board
reappoint him as Executive Vice President. He filed an illegal dismissal complaint
with a Labor Arbiter. Contending that the Labor Arbiter had no jurisdiction over
the case since Lovina was not an employee, the company filed a motion to
dismiss. Should the motion be granted? (2011 BAR)
(A) No, the Labor Arbiter has jurisdiction over all termination disputes.
(B) Yes, it is the NLRC that has jurisdiction over disputes involving corporate
officers.
(C) No, a motion to dismiss is a prohibited pleading under the NLRC Rules of
Procedure.
(D) Yes, jurisdiction lies with the regular courts since the complainant was a
corporate officer.
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 Bar Question)
(b) What are the grounds for a labor injunction to issue? (2015 Bar Question)
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(c) Distinguish the jurisdiction of a Labor Arbiter from that of the NLRC. (2015
Bar Question)
SUGGESTED ANSWER:
(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 the Labor Code, other labor statutes, CBA or
employment contract. (Reference to Labor Law Rule)
(b) 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 Arbiters 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 complainants 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 complainants property
are unable or unwilling to furnish adequate protection
(c) As to jurisdiction, the LA 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 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.
2. Remedies
Q: An employee filed a complaint against his employer before the National Labor
Relations Commission (NLRC). The labor arbiter decided the case in favor of the
employee. The employer received a copy of the decision on April 10. 1984. April
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20 being a Good Friday and the following Saturday having been declared a non-
working public holiday by the President, the employer filed his appeal with the
NLRC from the said decision on April 23. 1984.
(1) Was the appeal filed on time? Explain your reason.

(2) Assuming the decision of the labor arbiter is affirmed by the NLRC. what is
the recourse of the employer? State the nature of the action, the court which has
jurisdiction over the action, and the period within which the same must be filed.
SUGGESTED ANSWER:
(1) The appeal was filed on time. The Supreme Court has ruled that in the counting
of the ten day period within which to file an appeal, if the tenth day is a holiday, then the
appeal may be filed on the day after said holiday. But if the day after said holiday is also
a non-working public holiday as in the case in the question, then the appeal cannot be
filed because government offices are closed. The appeal could then be filed on the day
after such non-working public holiday. But again, in the case, this day is a Sunday when
government offices are also closed. Thus, the filing on the following Monday. April 23. is
still within the ten-day period. (Pacana v. National Labor Relations Commission, et al..
G.R. No. 83513. April 18. 1989)
(2) According to the Labor Code (in Art. 223). in the exercise of its appellate
jurisdiction over decisions of labor arbiters, a decision of the National Labor Relations
Commission is final and executory after ten (10) calendar days from receipt thereof by
the parties.
In view of the above provision, the employer in the case in the question who is
aggrieved by the decision of the NLRC should file a petition for certiorari with the
Supreme Court under Rule 65 of the Rules of Court within a reasonable period from
receipt of the decision which is the subject of the petition for certiorari usually within 30
days. (Pacana, op.cit)
Q: FACTS: The Labor Arbiter dismissed the complaint for illegal dismissal filed
by Genevieve Cruz against Bulag Optical Inc. (BOI) which denied her prayer for
reinstatement but awarded Financial assistance in her favor. BOI appealed the
decision of the Labor Arbiter to the NLRC within the reglementary period.
Genevieve filed an opposition io the appeal. The NLRC affirmed in toto the
decision of the Labor Arbiter. Both the BOI and Genevieve are not satisfied with
the decision of the NLRC. (1999 Bar Question)
1. What is the remedy, if any, of BOI and before what forum? Explain briefly.
(3%)
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SUGGESTED ANSWER:
BOI can file a Motion for Reconsideration with the NLRC after ten (10) calendar days
from receipt of the decision.
If the NLRC denies the Motion for Reconsideration, BOI can file a petition for certiorari
with the Court of Appeals under Rule 65 of the Rules of Court since the decision of the
NLRC is final and executory.
2. Can Genevieve Cruz avail herself of the same remedy as that of BOI? Why?
(2%)
SUGGESTED ANSWER:
Genevieve Cruz can avail herself of the same remedy as that of the BOI. The remedies
described for the BOI are also the same remedies available to Genevieve Cruz as a
party to the case, pursuant to the Labor Code (Article 223) and the Rules of Court (Rule
65).
Panel: But the facts of the case indicates that Genevieve did not appeal. She therefore
cannot avail of the remedy.
C. Bureau of Labor Relations Med-Arbiters (Jurisdiction (original and appellate))
Q: Can the Bureau of Labor Relations certify a union as the exclusive bargaining
representative after showing proof of majority representation thru union
membership cards without conducting an election? [5%] (1998 Bar Question)
SUGGESTED ANSWER:
The Bureau of Labor Relations cannot certify a union as the exclusive collective
bargaining representative after showing of proof of majority representation thru union
membership cards without conducting a certification election.
The Labor Code (in Arts. 256,257 and 258) 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.
No, the Bureau of Labor Relations cannot certify a union as the exclusive bargaining
representative without conducting a certification election.
The Supreme Court, in Colgate Palmolive Philippines, Inc. v. Ople, 163 SCRA 323
(1988), ruled -
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The procedure for a representation case is outlined [in the] Labor Code ... the main
purpose of which is to aid in ascertaining majority representation. The requirements
under the law ... are all calculated to ensure that the certified bargaining representative
is the true choice of the employees against all contenders, xxx When an ... official by-
passes the law on the pretext of retaining a laudable objective, the Intendment or
purpose of the law will lose its meaning as the law itself is disregarded. When the
[Bureau of Labor Relations] directly [certifies] a union, he in fact disregarded this
procedure and its legal requirements. There was therefore failure to determine with
legal certainty whether the union indeed enjoyed majority representation.
Q: Which of the following is cognizable by the Bureau of Labor Relations Med-

Arbiters? (2012 Bar Question)
a. Unfair labor practice for violation of the CBA filed by the Workers Union of
Company X against Company X;
b. Claim for back wages filed by overseas contract worker Xena against her
Saudi Arabian employer;
c. Contest for the position of MG Union President brought by Ka Joe, the
losing candidate in the recent union elections;
d. G contesting his removal as Chief Executive Officer of Company Z.
SUGGESTED ANSWER:
c. Contest for the position of MG Union President brought by Ka Joe, the

losing candidate in the recent union elections. [Art. 226, Labor Code]
D. National Conciliation and Mediation Board
1. Nature of proceedings
2. Conciliation vs. Mediation
Q: Distinguish the terms conciliation, mediation and arbitration. (3%) (2010

Bar Question)
SUGGESTED ANSWER:
There is a DOLE official called a Conciliator Mediator. He is an officer of the NCMB

whose principal function is to assist in the settlement and disposition of labor -
management disputes through conciliation and preventive mediation. However, he does
not promulgate decisions that settle controversies about rights, which are demandable
and enforceable. The latter is called arbitration and is the function of a labor arbiter or a
voluntary arbitrator.
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ALTERNATIVE ANSWER:
(1) CONCILIATION is the process of dispute management whereby parties in

dispute are brought together for the purpose of: (1) amicably settling the case upon a
fair compromise; (2) determining the real parties in interest; (3) defining and simplifying
the issues in the case; (4) entering into admissions or stipulations of facts; and (5)
threshing out all other preliminary matters (Section 3, Rule V, 2005 NLRC Rules of
Procedure). In resolving labor disputes, this comes before arbitration, as a mandatory
process, pursuant to the State policy of promoting and emphasizing conciliation as
modes of settling labor disputes (Art. 211 (A)(a), Labor Code).
(2) MEDIATION is a voluntary process of settling dispute whereby the parties elect
a mediator to facilitate the communication and negotiation between the parties in
dispute for the purpose of assisting them in reaching a compromise (Sec. 3(q), Rep. Act
No. 9285 or the Alternative Dispute Resolution Law).
(3) ARBITRATION is a system of dispute settlement that may be compulsory or

voluntary, whereby the parties are compelled by. the government, or agree to submit
their dispute before an arbiter, with the intention to accept the resolution of said arbiter
over the dispute as final and binding on them (Luzon Development Bank v. Association
of Luzon Development Employees, 249 SCRA 162 [1995]).
In this jurisdiction, compulsory arbitration in labor disputes are submitted to a

labor arbiter, whose powers and functions are clearly defined under Article 217(a) of the
Labor Code; whereas in voluntary arbitration, the powers and functions of the voluntary
arbitrator or panel of voluntary arbitrators elected to resolve the parties dispute involve
the interpretation and implementation of the parties collective bargaining agreement,
pursuant to Articles 260-262 of the Labor Code.
Q: How sacrosanct are statements/data made at conciliation proceedings in the

Department of Labor and Employment? What is the philosophy behind your
answer? (2007 Bar Question)
SUGGESTED ANSWER:
It is sacrosanct as privilege communication. This is so because information and

statements at conciliation proceedings cannot be used as evidence in the NLRC.
Conciliators and similar officials cannot testify in any court or body regarding any matter
taken up at conciliation proceedings conducted by them. (Article 233, Labor Code.) This
is to enable the conciliator to ferret out all the important facts of the controversy which
the parties may be afraid to divulge if the same can be used against them.
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E. DOLE Regional Directors
1. Jurisdiction

x x
x x
x x
x x
x x
xx
[e] The visitorial and enforcement powers of the DOLE Regional Director to order
and enforce compliance with labor standard laws can be exercised even when the
individual claim exceeds P5,000.00. (2009 Bar Question)
SUGGESTED ANSWER:
True. The visitorial and enforcement powers of the DOLE Regional Director to order and
enforce compliance with labor standards laws can be exercised even when the
individual claims exceed P5,000.00 The authority under Article 128 may be exercised
regardless of the monetary value involved. Under Article 129, however the authority is
only for claims not exceeding P5,000.00 per claimant.

month cycles.

replacement.

had also elapsed joined Linas hunger strike.
xx
xx
xx
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c) Assume that no fixed-term worker complained, yet in a routine inspection a
labor inspector of the Regional Office of the DOLE found the 5-month term policy
of SDS violative of the Labor Codes security of tenure provisions and
recommended to the Regional Director the issuance of a compliance order. The
Regional Director adopted the recommendation and issued a compliance order. Is
the compliance order valid? Explain your answer. (3%) (2008 Bar Question)
SUGGESTED ANSWER:
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 5-month term policy.
The compliance order is not valid. Without any of the salesladies complaining, there
could be no basis for a finding that their employment contract for a fixed term was
invalid.
Q: Tina Aquino, a domestic helper in the household of Fidel Aldeguer, filed an

action in the Regional Office of the Department of Labor and Employment. (DOLE)
for recovery of unpaid wages amounting to P3.500.00 and PI.499.00 as moral
damages. Aquino claimed that the amount of P3, 500.00 is equivalent to the
P500.00 a month she failed to receive for the last seven months of her
employment with Aldeguer. based on their agreed P2.500.00 monthly salary.
Aldeguer moved to have Aquinos complaint dismissed, alleging that as a
domestic helper Ms. Aquino should have first brought the matter to the Lupong
Barangay.
If you were the Regional Director, how would you resolve the matter?
SUGGESTED ANSWER:
As Regional Director. I will assume jurisdiction. The provisions of P.D. No. 1508
requiring the submission of disputes before the Barangay Lupong Tagapayapa prior to
their filing with the court or other government offices are not applicable to labor cases.
Article 129 of the Labor Code empowers the Regional Director to hear and decide any
matter involving the recovery of wages and other monetary claims and benefits owing to
an employee or person employed in* domestic or household service, provided that the
money claim does not exceed P5.000.CX). (Montoya vs. Escayo, G.R Nos. 82211-12,
March 21. 1989)
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Q: In a letter to the Regional Director of Region VII of the Department of Labor
and Employment, employee Ricardo Malalang claims that his employer, the
Visayan Sea Products Corp., has not compensated him for various legal benefits,
including overtime pay, holiday pay, 13th month pay and other monetary benefits
totaling P6.000.00.
Despite the fact that the amount claimed exceeds P5.000 how may the Regional
Director exercise jurisdiction over the case? Why?
SUGGESTED ANSWER:
The power of the Regional Director over money claims may arise under either Article
128 or Article 129 of the Labor Code.
Under Article 129, for the Regional Director to exercise Jurisdiction, the aggregate
money claims of an employee should not exceed P5.000.00.
Under Article 128, as the duly authorized representative of the Secretary of Labor, the
Regional Director has the power to order and administer, after due notice and hearing,
compliance with the labor standards provisions of the Labor Code and other labor
legislation based on the findings of labor regulation officers made in the course of
inspection and issue writs of execution to the appropriate authority for the enforcement
of their orders, except in cases where the employer contests the findings of the labor
regulation officer and raises issues which cannot be resolved without considering
evidentiary matters that are not verifiable in the normal course of inspection.
Article 128 applies where the relationship of employer- employee relationship still exists.
Q: Kevin, an employee of House of Sports, filed a complaint with the DOLE

requesting the investigation and inspection of the said establishment for labor
law violations such as underpayment of wages, non payment of 13th month pay,
non payment of rest day pay, overtime day, holiday pay, and service incentive
leave pay. House of Sports alleges that DOLES has no jurisdiction over the
employees claims where the aggregate amount of the claims of each employee
exceeds P5,000.00, whether or not accompanied with a claim for reinstatement.
Is the argument of House of Sports tenable? (2012 Bar Question)
a. Yes, Article 129 of the Labor Code shall apply, and thus, the Labor Arbiter
has jurisdiction;
b. No, Article 128(b) of the Labor Code shall apply, and thus, the DOLE
Regional Director has jurisdiction;
c. Yes, if the claim exceeds P5,000.00, the DOLE Secretary loses
jurisdiction;
d. No, a voluntarily arbitrator has jurisdiction because the matter involved is a
grievable issue.
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SUGGESTED ANSWER:
b) No, Article 128(b) of the Labor Code shall apply, and thus, the DOLE
Regional Director has jurisdiction. [Art. 128 (b), Labor Code]
F. DOLE Secretary
1. Visitorial and enforcement powers
Q: The Bantay-Salakay Security Agency (BSSA) employed ten security guards

and assigned them to Surot Theater which contracted BSSA for its security
needs.
On November 3. 1988, the ten (10) security guards of BSSA addressed to the
Office of the President, a letter- complaint against their employer for non-
compliance with R.A. 6640 providing for an increase in the statutory minimum
wage and salary rates of employees and workers in the private sector. The letter
was endorsed to the Secretary of Labor who, in turn, referred the matter to the
Regional Director of Makunat City in Region XII where the ten (10) security guards
reside and where their employer conducts business. The Office of the Regional
Director conducted an investigation and called for a hearing with all the parties
present. Therefrom, the Regional Director found that there were indeed violations
commit-ted by BSSA against the ten (10) security guards, such as underpayment
of wages, non-integration of cost of living allowance, underpayment of 13th-
month pay and underpayment of five (5) days incentive pay BSSA and Surot
Theater were directed to comply with the labor standards and ordered BSSA and
Surot Theater to pay jointly and severally to the ten (10) security guards their
respective claim of P 10,000.00 each or an aggregate amount of PI00,000.00.
BSSA and Surot Theater filed a Petition for Certiorari before the Supreme Court
seeking to annul the decision of the Regional Director on the ground of grave
abuse of discretion in assuming jurisdiction over the case. Will the Petition for
Certiorari prosper? Decide with reason.
SUGGESTED ANSWER:
It is to be noted that the Regional Director assumed jurisdiction before the effectivity of
Rep. Act No. 6715 (which is March 21, 1989). Thus, applying Art. 128 of the Labor
Code, the petition for certiorari will not prosper.
Under said article of the Labor Code, the Secretary of Labor or his duly authorized
representatives - and Regional Directors are duly authorized representatives - have
visitorial and enforcement powers. Thus, a Regional Director not only has visitorial
powers, i.e., to visit the premises of an employer and examine his records, he also has
enforcement powers, i.e. based on the findings of labor regulation officers or industrial
safety engineers made in the course of inspection. A Regional Director has the power to
order and administer, after due notice and hearing compliance with the labor standards,
provisions of the Labor Code. Thus, he could issue writs of execution to the appropriate
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authority for the enforcement of his orders, except in cases where the employer
contests the findings of the labor regulation officer and raises issues which cannot be
resolved without considering evidentiary matters that are not verifiable in the normal
course of inspection.
Therefore, pursuant to Art. 128 of the Labor Code, the Regional Director was only
exercising his visitorial and enforcement powers in the case of BSSA and Surot
Theater. Thus, he has jurisdiction to do what he did.
In a dissenting opinion. Chief Justice Narvasa said that even after the effectivity of Rep.
Act No. 6715, the Regional Director has jurisdiction to act on claims exceeding
P5.000.00.
The petition for certiorari will prosper under Rep. Act No. 6715. its provision limiting the
power of Regional Directors to money claims not exceeding P5,000.00 per employee,
the Regional Director no longer has the power to act on money claims exceeding
P5.000.00 per employee, even if the same power i exercised pursuant to his visitorial
and enforcement power under the Labor Code (Art. 128) where the P5.000 limitation is
not found.
Note:
Chief Justice Narvasa dissents from the above majority view of the Supreme Court.
Q: FACTS: Polaris Drug Company had an existing Collective Bargaining

Agreement with Polaris Workers Union (PWU) which was due to expire on May 31.
1999. PWU had a total membership of one hundred (100) rank-and-file employees
of the company. Mike Barela, a militant member of the union, suspected that the
union officers were misappropriating union funds as no financial report was
given to the general membership during the unions general assembly. Hence,
Mike Barela prepared a sworn written complaint and filed the same with the Office
of the Secretary of Labor on May 10, 1999, petitioning for an examination of the
financial records of PWU. (1999 Bar Question)
1. Is the Secretary of Labor authorized by law to examine the financial records of

the union? If so, what power? If not, why not? (3%)
SUGGESTED ANSWER:
The Secretary of Labor is expressly authorized by the Labor Code (In Article 274) to
examine the financial records of the unions to determine compliance or non- compliance
with the pertinent provisions of the Labor Code and to prosecute any violation of the law
and the union constitution-and-by-Iaws. But this authority may be exercised only upon
the filing of a complaint under oath and duly supported by the written consent of at least
twenty percent (20%) of the total membership of the labor organization concerned.
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ALTERNATIVE ANSWER:
Among the rights and conditions of membership in a labor organization is the right
implied by the proviso in the Labor Code (Article 241 (m)) stating that the books of
accounts and other records of the financial activities of any labor organization shall be
open to inspection by any officer or member thereof during office hours.
As a union member, Mike Barela could file an intra-union case that may entail the act of
the Secretary of Labor examining the financial records of the union. (See La Tondeha
Workers Union v. Secretary of Labor and Employment, 239 SCRA 117)
2. Under the facts given above, could an examination or audit of the financial
records of the union be ordered? Why? (2%)
SUGGESTED ANSWER:
Under the facts given in the question, an examination or audit of the financial records of
the union cannot be ordered because for such examination or audit to take place, there
should be a complaint under oath and duly supported by written consent of at least
twenty (20%) per cent of the total membership of the labor organization concerned. In
this case, the aforementioned requirement was not fulfilled. It was only a sworn written
complaint by one union member that was filed.
Also, the Labor Code provides that an examination of the books of a union shall not be
conducted during the sixty (60) day freedom period nor within thirty (30) days
immediately preceding the date of election of union officials.
In the case, the complaint was filed on May 10, 1999 which is within the freedom period
of the current CBA which was to expire on May 31, 1999.
Q: An airline which flies both the international and domestic routes requested the
Secretary of Labor and Employment to approve the policy that all female flight
attendants upon reaching age forty (40) with at least fifteen (15) years of service
shall be compulsorily retired; however, flight attendants who have reached age
forty (40) but have not worked for fifteen (15) years will be allowed to continue
working in order to qualify for retirement benefits, but In no case will the
extension exceed four (4) years.
Does the Secretary of Labor and Employment have the authority to approve the
policy? [5%] (1998 Bar Question)
SUGGESTED ANSWER:
Yes, the Secretary of Labor and Employment has the authority to approve a policy
dealing with the retirement of flight attendants of airlines.
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Article 132 (d) of the Labor Code provides that the Secretary of Labor and Employment
shall establish standards that will ensure the safety and health of women employees,
including the authority to determine appropriate minimum age and other standards for
retirement or termination in special occupations such as those of flight attendants and
the like.
CAVEAT:
It could be argued that Article 132 (d) may be unconstitutional because this may
constitute discrimination in violation of the spirit of Section 14 of Article xni of the
Constitution which provides that the State shall protect working women by providing
safe and healthful working conditions, taking into account their maternal functions, and
such facilities and opportunities that will enhance their welfare and enable them to
realize their full potential in the service of the nation.
Q: The Manila Industrial Corp. has fifty (50) contract workers supplied by the
National Employment Agency. They joined the Novato Labor Union, the sole and
exclusive bargaining representative of the rank-and-file workers in the company.
In turn, the union demanded that the company consider the fifty new union
members as regular employees accordance with the Labor Code. When the
company refused to make their employment regular, the union, after complying
with the requirements, staged a strike. The Secretary of Labor and Employment
assumed Jurisdiction of the case.
Assuming that there is no employer-employee relationship between the company

and the fifty contract workers, is there a labor dispute between them that properly
falls under the jurisdiction of the Secretary of Labor and Employment?
SUGGESTED ANSWER:
Yes. There is a labor dispute that could properly fall under the jurisdiction of the
Secretary of Labor and Employment assuming that Manila Industrial Corp. is an industry
indispensable to the national interest, since the dispute between the corporation and the
contract workers is a labor dispute, even if there is no employer-employee relationship
between the corporation and the contract workers.
Under the Labor Code, a labor dispute includes any controversy or matter concerning
terms and conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging the terms and conditions of
employment, regardless of whether the disputants stand in the proximate relation of
employer and employee."
From the above definition, it is noted that there is a labor dispute regardless of whether
the disputants stand in proximate relation of employer and employee.
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The demand of the union that the company regularize the employment of the contract
worker is a controversy concerning terms and conditions of employment.
Q: Kevin, an employee of House of Sports, filed a complaint with the DOLE

requesting the investigation and inspection of the said establishment for labor
law violations such as underpayment of wages, non payment of 13th month pay,
non payment of rest day pay, overtime day, holiday pay, and service incentive
leave pay. House of Sports alleges that DOLES has no jurisdiction over the
employees claims where the aggregate amount of the claims of each employee
exceeds P5,000.00, whether or not accompanied with a claim for reinstatement.
Is the argument of House of Sports tenable? (2012 Bar Question)
a. Yes, Article 129 of the Labor Code shall apply, and thus, the Labor Arbiter
has jurisdiction;
b. No, Article 128(b) of the Labor Code shall apply, and thus, the DOLE
Regional Director has jurisdiction;
c. Yes, if the claim exceeds P5,000.00, the DOLE Secretary loses
jurisdiction;
d. No, a voluntarily arbitrator has jurisdiction because the matter involved is a
grievable issue.
SUGGESTED ANSWER:
b. No, Article 128(b) of the Labor Code shall apply, and thus, the DOLE Regional
Director has jurisdiction. [Art. 128 (b), Labor Code]
Q: The Regional Director or his representative may be divested of his

enforcement and visitorial powers under the exception clause of Article 128 of the
Labor Code and, resultantly, jurisdiction may be vested on the labor arbiter when
three (3) elements are present. Which of the following is not one of the three (3)
elements? (2012 Bar Question)
a. Employer contests the findings of the labor regulations officers and raises
issues thereon;
b. In order to resolve any issues raised, there is a need to examine
evidentiary matters;
c. The issues raised should have been verifiable during the inspection;
d. The evidentiary matters are not verifiable in the normal course of
inspection.
SUGGESTED ANSWER:
c. The issues raised should have been verifiable during the inspection. [SSK Parts
Corporation vs. Camas, 181 SCRA 675 (1990); Art. 128 (b), Labor Code]
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2. Power to suspend/effects of termination
Q: The Secretary of Labor and Employment, after receipt of a Notice to Terminate

Employment of one hundred (100) workers, enjoined the employer from
implementing their termination.
Has the Secretary of Labor and Employment the authority to enjoin the employer
from terminating the employment of the workers? If so on what grounds? (5%)
(1998 Bar Question)
SUGGESTED ANSWER:
The Secretary of Labor and Employment has the authority to enjoin an employer from
terminating the employment of workers.
The Labor Code (in Article 277(b) provides that the Secretary of Labor and Employment
may suspend the effectivity of the termination of workers pending the resolution of a
labor dispute in the event of a prima facie finding of an appropriate official of the
Department of Labor and Employment before whom such dispute is pending that the
termination may cause a serious labor dispute or is In Implementation of a mass lay off.
3. Assumption of jurisdiction
A deadlock in the negotiations for the collective bargaining agreement between

College X and the Union prompted the latter, after duly notifying the DOLE, to
declare a strike on November 5. The strike 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 1, 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 the reconsideration of his return to
work order and further noting the strikers' 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 College X 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 contentions.
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Suggested Answer:
The contention has no merit. There is no doubt that the on-going labor dispute at the
school adversely affects the national interest. The on-going work stoppage at the school
unduly prejudices the students and will entail great loss in terms of time, effort and
money to all concerned. More importantly, the school is engaged in the promotion of the
physical, intellectual and emotional well-being of the countrys youth, matters that are
therefore of national interest. [St. Scholasticas College v. Ruben Toress, G.R. No.
100158, 29 June 1992 citing Philippine School of Business Administration v. Noriel,
G.R. No. 80648, 15 August 1988, 164 SCRA 402].
1. The Secretary of Labor correctly assumed jurisdiction over the labor dispute
because the school (College X) is an industry indispensable to the national interest.
This is so because the administration of a school is engaged in the promotion of the
physical, intellectual and emotional well-being of the countrys youth (PSBA vs.
Noriel, 164 SCRA 402 [1988]).
2. An assumption order is executory in character and must be strictly complied with by
the parties even during the pendency of any petition (or Motion for Reconsideration)
questioning its validity (Baguio Colleges Foundation vs. NLRC, 222 SCRA 604
[1993]; Union of Filipro Employees vs. Nestle Philippines, Inc., 193 SCRA 396
[1990].
3. Article 264 of the Labor Code, as amended. (Solid Bank Corporation, etc. vs. Solid
Bank Union, G.R. No. 159641, 15 November 2010.) Thus, the union officers and
members who defied the assumption order of the Secretary of Labor are deemed to
have lost their employment status for having knowingly participated in an illegal act.
(Union of Filipro Employees vs. Nestle Philippines, supra).
Suggested Answer:
2. This position of the union is flawed. Article 263 (g) Labor Code provides that (s)uch
assumption xxx shall have the effect of automatically enjoining the intended or
impending strike xxx. If one has already taken place at the time of assumption, xxx all
striking employees shall immediately return to work. xxx" This means that by its very
terms, a return-to-work order is immediately effective and executory notwithstanding the
filing of a motion for reconsideration. [Ibid., citing University of Santo Tomas v. NLRC,
G.R. No. 89920, 18 October 1990; 190 SCRA 759].
Suggested Answer:
Responsibility of the striking members and officers must be on an individual and not
collective basis. Art. 264 (a) of the Labor Code mandates that No strike or lockout shall
be declared after assumption of jurisdiction by the President of the Secretary of Labor.
In Manila Hotel Employees Association vs. Manila Hotel Corporation [517 SCRA 349
(2007)], it was held that defiance of the Assumption Order or a return-to-work order by a
striking employee, whether a Union Officer or a plain member, is an illegal act which
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Labor Law

constitutes a valid ground for loss of employment status. It thus follows that the defiant
strikers were validly dismissed.
Q: Employees of ABC declared a strike after filing a Notice of Strike with the
DOLE. They barricaded company gates and damaged vehicles entering company
premises. On the second day of the strike, ABC filed a petition with the DOLE
Secretary to intervene through the issuance of an assumption of jurisdiction
order that the Secretary may issue when a strike or lock-out will adversely affect
national interest. ABC furnished the Secretary with evidence to show that
company vehicles had been damaged; that electric power had been cut off; and
equipment and materials were damaged because electric power was not
immediately restored. ABC forecast that the countrys supply of chlorine for
water treatment (which die company produces) would be affected adversely if
ABCs operations were closed down by the strikers.
Could the DOLE Secretary intervene, assume jurisdiction and issue a TRO
(Temporary Restraining Order)? Briefly justify your answer. (5%) (2005 Bar
Question)
SUGGESTED ANSWER:
Yes, the Secretary of Labor and Employment can assume jurisdiction over the dispute
because ABC could be considered as an industry indispensable to the national interest
since it produces the countrys supply of chlorine for water treatment.
The assumption of jurisdiction by the Secretary of Labor and Employment has the effect
of ending the strike. The strikers will be subject to a return to work order by the
Secretary of Labor and Employment upon her assumption of jurisdiction.
Q: FACTS: 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
JEU -FAFLU until the representation issue within PAFLU shall have been resolved
with finality. JEU-PAFLU filed a Notice ot Strike. The Secretary of Labor
subsequently assumed jurisdiction over the labor dispute. (1999 Bar Question)
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Labor Law

1. xxx
2. Can the Secretary of Labor decide the labor dispute by awarding the JEU
CBA Proposals as the Collective E3argaining Agreement of the parties? Explain
briefly. (2%)
SUGGESTED ANSWER:
Yes. The Secretary of Labor can decide the labor dispute by awarding the JEU CBA
proposals as the Collective Bargaining Agreement of the parties because when the
Secretary of Labor (under Article 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 Lai or 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 vs. Secretary of Labor, 213 SCRA 759)

month cycles.

replacement.

had also elapsed joined Linas hunger strike.
xxx
b) 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? (3%) (2008
Bar Question)
SUGGESTED ANSWER:
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
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deciding whether or not to assume jurisdiction over a labor dispute or certify the same to
the NLRC for compulsory arbitration, SDSs business is clearly not one which is
indispensable to the national interest. Moreover, the grounds relied upon by SDS, to wit:
eyesore and disruptive of its business, betrays the weakness of its case.
As Secretary of Labor, I could not assume jurisdiction over the hunger strike, simply
because there is no strike to speak of. Lina et al. had already been terminated when
they staged their concerted action, hence there was no temporary stoppage of work at
SDS.
Q: Under what conditions may the Secretary of Labor or his duly authorized
representative inquire into the financial activities or legitimate labor
organizations? (2%). (2001 Bar Question)
SUGGESTED ANSWER:
The Labor Code (in Art. 274), the Secretary of Labor and Employment or his duly
authorized representative is empowered to inquire into the financial activities of
legitimate labor organization upon the filing of a complaint under oath and duly
supported by the written consent of at least twenty (20%) percent of the total
membership of the labor organization concerned and to examine their books of
accounts and other records,
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
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own? (2013 Bar Questions)
SUGGESTED ANSWER:
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)
Q: Liwanag Corporation is engaged in the power generation business. A

stalemate was reached during the collective bargaining negotiations between its
management and the union. After following all the requisites provided by law, the
union decided to stage a strike. The management sought the assistance of the
Secretary of Labor and Employment, who assumed jurisdiction over the strike
and issued a return-to-work order. The union defied the latter and continued the
strike. Without providing any notice, Liwanag Corporation declared everyone who
participated in the strike as having lost their employment. (2014 Bar Question)
(A) Was Liwanag Corporations action valid?
SUGGESTED ANSWER:
Yes. A strike that is undertaken despite the issuance by the Secretary of Labor of an
assumption or certification order becomes an illegal act committed in the course of a
strike. It rendered the strike illegal. The Union officers and members, as a result, are
deemed to have lost their employment status for having knowingly participated in an
illegal act (Union of Filipro Employees v. Nestle Philippines, Inc., 192 SCRA 369 [1993]
) . Such kind of dismissal under Article 264 can immediately be resorted to as an
exercise of management prerogative (Biflex v. Filflex Industrial, 511 SCRA 247 [2006]).
No. Liwanag Corporation cannot outrightly declare the defiant strikers to have lost their
employment status. (A)s in other termination cases, the strikers are entitled to due
process protection under Article 277 (b) of the Labor Code. Nothing in Article 264 of
the Code authorizes immediate dismissal of those who commit illegal acts during a
strike (Stanford Marketing Corp. v. Julian, 423 SCRA 633 (2004); Suico v. NLRC, 513
SCRA 325 [2007]).
(B) If, before the DOLE Secretary assumed jurisdiction, the striking union
members communicated in writing their desire to return to work,
which offer Liwanag Corporation refused to accept, what remedy, if
any, does the union have?
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SUGGESTED ANSWER:
File a case for illegal dismissal [Art. 217 (a) (2), Labor Code].
G. Grievance Machinery and Voluntary Arbitration
Q: What issues or disputes may be the subject of voluntary arbitration under the
Labor Code? (4%) (2008 Bar Question)
SUGGESTED ANSWER:
Disputes or issues subject to Voluntary Arbitration:
1. all unresolved grievances arising from the implementation or interpretation of the

CBA after exhaustion of the grievance procedure
2. all unresolved grievances arising from the implementation or interpretation of

company personnel policies;
3. all wage distortion issues arising from the application of any wage orders in
organized establishments;
4. all unresolved grievances arising from the interpretation and implementation of

productivity incentive programs under R.A. 6971;
5. all other labor disputes including unfair labor practices and bargaining deadlocks,
upon agreement of the parties.
Q: Can a dispute falling within the jurisdiction of a voluntary arbitrator be

submitted to compulsory arbitration? Why or why not? (3%) (2008 Bar Question)
SUGGESTED ANSWER:
A dispute falling within the jurisdiction of a voluntary arbitrator can be submitted to

compulsory arbitration. This situation can arise when the Secretary of Labor and
Employment has assumed jurisdiction over a labor dispute in an industry indispensable
to the national interest. In the foregoing situation, in accordance with applicable
Supreme Court decisions, the Secretary of Labor and Employment shall also assume
jurisdiction over subsequent labor cases involving the same establishment, including
those that maybe resolved by a Voluntary Arbitrator.
No. A dispute falling within the jurisdiction of a Voluntary Arbitrator cannot be submitted
for compulsory arbitration. Under Art. 263(g) of the Code, only the following disputes
can be submitted for compulsory arbitration:
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Labor Law

1. Labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest; and
2. Strikes and lockouts in hospitals, clinics, and similar medical institutions.
1. Subject matter of grievance
Q: How are cases arising from the interpretation or implementation of collective

bargaining agreements handled and disposed? (1995 Bar Question)
SUGGESTED ANSWER:
Through the grievance machinery and if not resolved the grievance machinery, through
voluntary arbitration.
2. Voluntary Arbitrator
a) Jurisdiction
Q: When the Collective Bargaining Agreement (CBA) negotiations between

COMPUTER WORKERS UNION and COMPUTER TECH CORPORATION resulted in
a deadlock, both parties agreed to submit their dispute to voluntary arbitration
stipulating, among other things, that the decision of the Voluntary Arbitrator shall
be final unappealable and executory" conformable with the provisions of Art.
262 of the Labor Code.
The Voluntary Arbitrator rendered his decision or award worded as follows:
COMPUTER TECH CORP. to award a sum total package benefits to COMPUTER

WORKERS UNION in the amount of TWENTY MILLION (P20.000.000.00) PESOS
for the three-year period of the CBA, the distribution and availment per year to be
suggested by the UNION subject to the approval of the CORPORATION, seeing to
it that the decretal benefits shall first be satisfied above all others.
The UNION filed a Motion for Clarification" claiming that the package benefit
award of P20-million does not cover the decretal benefits granted by Wage Order
No. 2 which was issued on the same day when the arbitration award was made.
The Arbitrator issued an order which modified the original award of P20-million
and sought to impose upon the CORPORATION an additional burden of decretal
benefits given by Wage Order No. 2. The CORPORATION assailed the Arbitrators
modification of the original award claiming that the modification of the original
award was null and void and without or in excess of the
Arbitrators authority and brought the issue to the Supreme Court by petition for
certiorari
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1) Are decisions or awards of the Voluntary Arbitrators appealable? Discuss.
2) Has the Voluntary Arbitrator the authority to modify his original award
under the above-narrated facts. Discuss.
SUGGESTED ANSWER:
1) No. The decisions or awards of Voluntary Arbitrators are not appealable because,
according to Art.262-A of the Labor Code, they are final and executory' after ten (10)
calendar days from receipt of the copy of the award or decision by the parties.
But said award or decision could be brought to the Supreme Court on certiorari on the
ground that the Voluntary Arbitrator committed grave abuse of discretion amounting to
lack or excess of jurisdiction. The Supreme Court has taken cognizance of petitions
questioning decision of Voluntary Arbitrator where want of jurisdiction, grave abuse of
discretion, violation of due process, denial of substantial justice and erroneous
interpretation of the law were brought to its attention.
2) No. The Voluntary Arbitrator has no authority to modify his original award. Acting on a
Motion for Clarification, he could only clarify his award. It is in excess of his jurisdiction
to go beyond clarifying his award by radically modifying and in fact increasing the
original award.
a) If his award has not yet become final and executory because it is still within the
ten (10) day period from receipt of the copy of award by the parties, the
Voluntary Arbitrator could still modify his original award in the way he did it
because in the facts of the case, a Wage Order was issued on the same day
when the arbitration award was made. In his award, the Voluntary Arbitrator
made reference to decretal benefits. He said: seeing to it that the decretal
benefits shall first be satisfied above all others. Thus, the Voluntary Arbitrator
was just clarifying that the employer should pay the decretal benefits granted by
Wage Order No. 2 which was not dealt with in the award of the Voluntary
Arbitrator because the Wage Order was issued on the same day the arbitration
award was made.
b) No. such authority has disappeared, upon rendition of an award which is final, in
appealable and executory by stipulation of the parties. Enforcement of the Wage Order
must be by legal process, through claims filed before the Labor Arbiter.
Q: State the cases when a labor dispute would fall under the jurisdiction of
voluntary arbitrators or panel of voluntary arbitrators. (1997 Bar Question)
Page 446 of 450

Labor Law

SUGGESTED ANSWER:
A labor dispute falls under the jurisdiction of a voluntary arbitrator or a panel of voluntary
arbitrator if a labor disputes arises from an unresolved grievance which in turn arises
from the Interpretation or implementation of a Collective Bargaining Agreement or of
company personnel policies. (Art. 261)
Upon agreement of parties, a voluntary arbitrator or panel of voluntary arbitrators may

also hear and decide all other labor disputes including unfair labor practices and
bargaining deadlock. (Art. 262)
Q: Company C, a toy manufacturer, decided to ban the use of cell phones in the
factory premises. In the pertinent Memorandum, management explained that too
much texting and phone-calling by employees disrupted company operations.
Two employees-members of Union X were terminated from employment due to
violation of the memorandum-policy. The union countered with a prohibitory
injunction case (with prayer for the issuance of a temporary- restraining order)
Filed with the Regional Trial Court, challenging the validity and constitutionality
of the cell phone ban. The company filed a motion to dismiss, arguing that the
case should be referred to the grievance machinery pursuant to an existing
Collective Bargaining Agreement with Union X, and eventually to Voluntary
Arbitration. Is the company correct? Explain. (3%) (2010 Bar Question)
SUGGESTED ANSWER:
YES. Termination cases arising in or resulting from the interpretation and

implementation of collective bargaining agreements, and interpretation and enforcement
of company personnel policies which were initially processed at the various steps of the
plant-level Grievance Procedures under the parties collective bargaining agreements,
fall within the original and exclusive jurisdiction of the voluntary arbitrator pursuant to
Article 217 (c) and Article 261 of the Labor Code.
ALTERNATIVE ANSWER:
NO. The Regional Trial Court has jurisdiction to hear and decide the prohibitory
injunction case filed by Union X against Company C to enjoin the latter from
implementing the memorandum-policy against use of cell phones in the factory. What is
at issue is Union X S challenge against the validity and constitutionality of the cell phone
ban being implemented by Company C. The issue, therefore, does not involve the
interpretation of the memorandum-policy, but its intrinsic validity (Haliguefla v. PAL, 602
SCRA 297 [2009]).
Q: The employer company, in a directive to the union president, ordered the

transfer of some of its employees, including a number of union officials, to its
plant offices. The order was opposed by the union. Ultimately, the union filed an
unfair labor practice against the company alleging that the purported transfer of
Page 447 of 450
Labor Law

its union officials was unjust and in violation of the Collective Bargaining
Agreement (CBA). Pursuant to the terms of the CBA, the dispute was referred to a
voluntary arbitrator who later ruled on the issues raised by the parties. Could it
later be validly asserted that the decision" of the voluntary arbitrator would have
no 'compulsory" effect on the parties? Explain. (2005 Bar Question)
SUGGESTED ANSWER:
No. A voluntary arbitrator chosen under the Grievance Machinery of a CBA can
exercise jurisdiction not only on disputes involving interpretation/implementation of a
CBA and/or company rules, personnel policies (Art. 261, Labor Code) but also, upon
agreement of the parties, all other labor disputes including unfair labor practice (Art.
262, Labor Code). As no objection was raised by any of the parties when the dispute
was referred to a voluntary arbitrator who later ruled on the issues raised by the
parties, itfollows that what we have is voluntary arbitration agreed upon by the parties.
His decision is binding upon the parties and may be enforced through any of the
sheriffs, including those of the NLRC, he may deputize.
No. The award of voluntary arbitrators acting within the scope of their authority
determines the rights of the parties, and their decisions have the same legal effects as a
judgment of the Court. Such decisions on matters of fact or law are conclusive, and all
matters in the award are thenceforth res judicata on the theory that the matter has been
adjudged by the tribunal which the parties have agreed to make final as tribunal of last
resort. (Volkschel Labor Union v. NLRC, 98 SCRA 314 f19801).
Q: The State has a policy of promoting collective bargaining and voluntary

arbitration as modes of settling labor disputes. To this end, the voluntary
arbitrators jurisdiction has not been limited to interpretation and implementation
of collective bargaining agreements and company personnel policies. It may
extend to all other labor disputes, provided (2011 BAR)
(A) the extension does not cover cases of union busting.

(B) the parties agreed to such extended jurisdiction.
(C) the parties are allowed to appeal the voluntary arbitrator's decision.
(D) the parties agreed in their CBA to broaden his jurisdiction.
H. Court of Appeals
Q: J refused to comply with the deployment assignment with K, a manning

agency. K filed a complaint against him for breach of contract before the
Philippine Overseas Employment Administration (POEA). The POEA penalized J
with one (1) year suspension from overseas deployment. On appeal, the
suspension was reduced to six (6) months by the Secretary of Labor. Is the
Page 448 of 450
Labor Law

remedy of appeal still available to J and where should he file his appeal? (2012
Bar Question)
a. Yes, he can file an appeal before the Court of Appeals via a Petition for
Certiorari under Rule 65;
b. Yes, he can file an appeal before the Supreme Court via a petition for
certiorari under Rule 65;
c. Yes, he can file an appeal before the Office of the President since this is
administrative case;
d. Yes, he can file an appeal before the National Labor Relations
Commission because there is an employer-employee relationship.
SUGGESTED ANSWER:
a. Yes, he can file an appeal before the Court of Appeals via a Petition
for Certiorari under Rule 65 [NFL vs. Laguesma]
I. Prescription of actions
Q: On October 30, 1980, A, an employee, was served notice of dismissal allegedly

for gross dishonesty. Forthwith, the Union to which A was a member raised As
dismissal with the grievance machinery as provided for in its Collective
Bargaining Agreement (CBA). At that point, negotiations for a new CBA was in
progress. Hence, both the Union and the Company had very little time to address
As grievance. In fact, said grievance, as it were, slept the sleep of the dead, being
resolved only with finality on November 23, 1983 when the General Manager of
the Company affirmed As dismissal on the fifth and the last step of the grievance
machinery.
A filed an action for illegal dismissal with the Arbitration Branch of the NLRC on
November 25, 1983. The Company immediately filed a Motion to Dismiss on the
ground of prescription, invoking Article 290 of the Labor Code.
If you were the Labor Arbiter, how would you resolve the Companys Motion to
Dismiss?
SUGGESTED ANSWER:
As the Labor Arbiter. I will deny the Motion to Dismiss. Where an employee was
dismissed and the matter of his dismissal was then referred to the grievance machinery
pursuant to the provision in the existing collective bargaining agreement, and the
grievance machinery had a final meeting after quite a long while thereafter, the
complaint for illegal dismissal was then filed, the action was not barred by laches, as the
pendency of the matter before the grievance machinery affected the ripeness of the
cause of action for illegal dismissal. [Radio Communications of the Philippines, Inc.
(RCPI), us. National Labor Relations Commission, et al. G.R No. 102958. 25 June
1993, J. Davide. Jr. 223 SCRA 656.
Page 449 of 450
Labor Law

ALTERNATIVE ANSWER:
If I were the Labor Arbiter. I will deny the motion to dismiss because the action for illegal
dismissal has not yet prescribed. The prescriptive period for an action for illegal
dismissal is four (4) years. [Callanta vs. Carnation. 145 SCRA 268)
Q: What is the prescriptive period of all criminal offenses penalized under the
Labor Code and the Rules implementing the Labor Code?
a. 3 years;
b. 4 years;
c. 5 years;
d. 10 years.
SUGGESTED ANSWER:
a) 3 years [Art. 290, Labor Code]
Q: Chito was illegally dismissed by DEF Corp. effective at the close of business
hours of December 29, 2009.
IV (1). He can file a complaint for illegal dismissal without any legal bar within
_________. (2013 Bar Questions)
(A) three (3) years

(B) four (4) years
(C) five (5) years
(D) six (6) years
(E) ten (10) years
SUGGESTED ANSWER:
(B) Basis: Article 1146 of the Civil Code.
IV (2). If he has money claims against DEF Corp., he can make the claim without
any legal bar within _________. (2013 Bar Questions)
(A) three (3) years

(B) four (4) years
(C) five (5) years
(D) six (6) years
(E) ten (10) years
SUGGESTED ANSWER:
(A) Basis: Article 297 (formerly 291) of the Labor Code.
Page 450 of 450
Labor Law

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LABOR LAW AND SOCIAL LEGISLATION

I. Fundamental Principles and Policies

II. Recruitment and Placement

III. Labor Standards ............................................................................................................... 36

IV. Termination of Employment ........................................................................................... 121

V. Management Prerogative .................................................................................................. 237

VI. Social Welfare Legislation (P.D. 626)

VII. Labor Relations Law

VIII. Procedure and Jurisdiction

1. Article II, Secs. 9, 10, 11, 13, 14, 18, 20

a)agricultural lessees and share tenants:

A basic qualification of a beneficiary shall be his willingness, aptitude, and ability to

2. Article III, Secs. 1, 4, 7, 8, 10, 16, 18(2)

Q: Distinguish Just compensation under the Comprehensive Agrarian Reform

3. Article XIII, Secs. 1, 2, 3, 13, 14

1. Extent of Protection - Full protection to labor;

Q: The constitution promotes the principle of shared responsibility between

(A) compulsory arbitration.

The three (3) general classifications of labor statutes are:

Another way of classifying labor statutes may be:

a. Labor Legislation like the Labor Code:

Q: Is there any distinction between labor legislation and social

Labor legislation is sometimes distinguished from social legislation by the former

ANOTHER SUGGESTED ANSWER:

(A) the nationalization of the tools of production.

Q: Clarito, an employee of Juan, was dismissed for allegedly stealing Juans

implementation and interpretation of the Labor Code provisions. The NLRC

ANOTHER SUGGESTED ANSWER:

Q: Article 4 of the Labor Code provides that in case of doubt in the

2. The contention of Mica-Mara Company is not tenable. The constitutional right to

A. Employers Right to a reasonable return on investments, and to expansion and

1. Right to self organization, collective bargaining and negotiations and peaceful

In an employer-employee relationship, it is the right of the employer to use the services

The second innovative measure, on a law allowing contractualization in all areas

ANOTHER SUGGESTED ANSWER:

Q: Armstrong Corporation, a foreign corporation intends to engage in the

Q: Because of alleged unfair labor practices" by the management of GFI System,

ANOTHER SUGGESTED ANSWER:

Rule on whether the quitclaim executed by A (Gabriel) is valid or not. Explain.

The quitclaim executed by A is valid and binding.

Generally, deeds of release, waiver or quitclaims cannot bar employees from

A elected to voluntarily resign, and accepted a credible and reasonable separation

Q: Can a final and executory judgment be compromised under a Release and-

A final and executory judgment cannot be compromised under a Release and

The preference could be exercised only in the event of bankruptcy or liquidation of an

ANOTHER SUGGESTED ANSWER:

4. The reference in the Decision to labor benefits due to an employee is superior to

Q: The Independence Bank of the Philippines (IBP) is the mortgage creditor of

b. Would it make any difference if there is no judicial declaration of

b. If there is no judicial declaration of bankruptcy, the claim of the Union in

Q: Which is not a constitutional right of the workers? (2012 Bar Question)

a. The right to engage in peaceful concerted activities;

c) The right to return on investment [Art. XIII, Sec. 3, Constitution]

a. It applies to managerial and to all rank-and-file employees if not yet

a. It applies to managerial and to all rank-and-file employees if not yet

b. Such amount of relevant evidence which a reasonable mind might accept as

Q: Phil-Norksgard Company. Inc., a domestic corporation engaged in the optics

Q: What is the principle of codetermination? (2007 Bar Question)

FIRST ALTERNATIVE ANSWER:

By the principle of codetermination, the workers have a right to participate in the

SECOND ALTERNATIVE ANSWER:

Codetermination is a term identified with workers participation in the determination of

FIRST ALTERNATIVE ANSWER: