ETHICS SCENARIO 1

(Employment Dismissal)
Issue No. 1:
Whether or not it is legally permissible for an employer to distinguish between
foreign hired and local hired employees in terms of compensation and other economic
benefits.

Answer:
No, it is not legally permissible for an employer to distinguish between foreign hired
and local hired employees in terms of compensation and other economic benefits.

Article 3 of the Labor Code of the Philippines provides that the State shall "ensure
equal work opportunities regardless of sex, race or creed". Also, in the case of International
School Alliance of Educators (ISAE), vs. Hon. Leonardo A. Quisumbing, et. al. (G.R. No.
128845; June 1, 2000), the Supreme Court ruled that “while we recognize the need of the
School (International School, Inc.) to attract foreign-hires, salaries should not be used as an
enticement to the prejudice of local-hires. The local-hires perform the same services as
foreign-hires and they ought to be paid the same salaries as the latter. For the same reason,
the "dislocation factor" and the foreign-hires' limited tenure also cannot serve as valid bases
for the distinction in salary rates”. Such practice of according higher salaries to foreign-hires
contravenes public policy.

Issue No. 2:
Under the Philippine Labor Code, how is a labor organization formed for the purpose
of collective bargaining?

Answer:
Article 219 of the Labor Code defines a labor organization as any union or association
of employees which exists in whole or in part for the purpose of collective bargaining or of
dealing with employers concerning terms and conditions of employment. Such organization
must be registered to be called a Legitimate Labor Organization.

A bargaining unit, according to International School Alliance of Educators (ISAE), vs.

Hon. Leonardo A. Quisumbing, et. al., is "a group of employees of a given employer,
comprised of all or less than all of the entire body of employees, consistent with equity to
the employer indicate to be the best suited to serve the reciprocal rights and duties of the
parties under the collective bargaining provisions of the law”. For the purpose of collective
bargaining, a bargaining unit is acceptable or appropriate when the following concur, to wit:
(1) the will of the employees (Globe Doctrine);
(2) affinity and unity of the employees' interest, such as substantial similarity
of work and duties, or similarity of compensation and working conditions
(Substantial Mutual Interests Rule);
(3) prior collective bargaining history; and
 (4) similarity of employment status.

The basic test of an asserted bargaining unit's acceptability is whether or not it is

fundamentally the combination which will best assure to all employees the exercise of their
collective bargaining rights.

Issue No. 3:
Whether or not Atty. Victor has access to any confidential information of IS-Cebu
which he could unfairly use against the latter considering that he has not rendered any
service for IS-Cebu as the latter exclusively consulted with Partner D of XYZ Law Firm.

Answer:
Yes, Atty. Victor has access to any confidential information of IS-Cebu which he could
unfairly use against the latter although he has not rendered any service for IS-Cebu since IS-
Cebu exclusively consulted with Partner D of XYZ Law Firm.

In the case of Hilado vs. David (G.R. No. L-961; September 21, 1949), the Supreme
Court ruled that “an information obtained from a client by a member or assistant of a law
firm is information imparted to the firm. This is not a mere fiction or an arbitrary rule; for
such member or assistant, as in our case, not only acts in the name and interest of the firm,
but his information, by the nature of his connection with the firm is available to his
associates or employers”.

Therefore, Atty. Victor, as a partner of D in the XYZ Law Firm, is deemed to have
obtained any confidential information of IS-Cebu despite not having rendered his services to
IS-Cebu.

Issue No. 4:
Whether or not Jacklyn’s conduct in raising questions about IS-Cebu’s “equal work
but unequal pay” practice can be considered a form of misconduct that can subject her to
disciplinary action including dismissal.

Answer:
Jacklyn’s conduct in raising questions about IS-Cebu’s equal work but unequal pay
practice cannot be considered a form of misconduct that can subject her to a disciplinary
action including dismissal.

The Labor Code of the Philippines recognizes the right of the employer to discipline
its erring employees who violated the company’s rules and regulations. It also recognizes
the right of the employer to terminate employees on certain cases. Under Article 282 (Now
Art. 297) of the Labor Code, an employer may terminate an employment for any of the
following causes:
 a. Serious misconduct or wilful disobedience by the employee of the lawful
orders of his employer or representative in connection with his work;
b. Gross and habitual neglect by the employee of his duties;
c. Fraud or wilful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
d. Commission of a crime or offense by the employee against the person of
his employer or any immediate member of his family or his duly authorized
representative; and
e. Other causes analogous to the foregoing.

Jacklyn’s conduct in raising questions about IS-Cebu’s equal work but unequal pay
practice is neither an error on her part nor a ground to warrant her termination. Such
practice of IS-Cebu is declared contrary to public policy as it encourages discrimination;
thus, Jacklyn has the right to question it.

Moreover, the same law provides, under Art. 243 (now Art. 253), that “all persons
employed in commercial, industrial and agricultural enterprises and in religious, charitable,
medical or educational institutions whether operating for profit or not, shall have the right
to self-organization and to form, join, or assist labor organizations of their own choosing for
purposes of collective bargaining”. Hence, Jacklyn’s act of encouraging her colleagues to
form a labor organization for the purpose of collective bargaining is simply an enforcement
of their right to self-organize which, if abridged through suspension, dismissal, or any other
means, constitutes unfair labor practice.

Issue No. 5:
Whether or not there is a conflict of interest situation considering that Victor, a
Senior Associate of the law firm, had advised Jacklyn on legal issues concerning IS-Cebu’s
employment practices.

Answer:
Yes, there is a conflict of interest situation considering that Victor, a Senior Associate
of the law firm, had advised Jacklyn on legal issues concerning IS-Cebu’s employment
practices.

There is a conflict of interests when the acceptance of a new relation will prevent an
attorney from the full discharge of his duty of undivided fidelity and loyalty to his client or
invite suspicion of unfaithfulness or double dealing in the performance thereof.

In this case, Atty. Victor is a partner of XYZ Law Firm which is representing IS-Cebu
through partner D. Atty. Victor, by representing Jacklyn against IS-Cebu, accepted a new
relation which prevented him from the full discharge of his duty of undivided fidelity and
loyalty to his client. The rules provide that where a lawyer is disqualified or forbidden from
appearing as counsel because of conflict of interest, any member, associate or assistant in
the law firm in which he is a member is likewise disqualified or prohibited to appear as
counsel. Partner D is disqualified from appearing as Jacklyn’s counsel because of conflicting
interest. Partner D is a member of XYZ Law Firm of which Atty. Victor is a Senior Associate.
Atty. Victor is likewise disqualified from appearing as Jacklyn’s counsel.

Hence, there is a conflict of interest situation considering that Victor, a Senior

Associate of the law firm, had advised Jacklyn on legal issues concerning IS-Cebu’s
employment practices.

Issue No. 6:
Whether or not asking Victor to resign from the firm or dismissing him if he refused
will avoid any conflict of interest situation.

Answer:
No, asking Victor to resign from the firm or dismissing him if he refused will not
avoid any conflict of interest situation.

In the case of Pormento vs Pontevedra (A.C. No. 5128; March 31, 2005), the Court
ruled that the termination of the relation of attorney and client provides no justification for
a lawyer to represent an interest adverse to or in conflict with that of the former client. The
reason for this rule is that the client’s confidence once reposed cannot be divested by the
expiration of the professional employment. An attorney owes loyalty to his client not only in
case in which he has represented him but also after the relation of attorney and client has
terminated.

In the case at bar, dismissing Atty. Victor or asking him to resign from XYZ Law Firm
terminates the attorney-client relationship between Atty. Victor and IS-Cebu. Nevertheless,
Atty. Victor’s termination or resignation does not avoid the conflict of interest situation
which is probable, if not certain, to happen when he represents Jacklyn against IS-Cebu.