2005 BAR EXAMS QUESTIONS IN LABOR AND SOCIAL LEGISLATION -I(1.

) As Human Resources Department (HRD) manager of EZ Components, an unorganized manufacturer of electric and electronic components for household appliances, you are suddenly confronted with demands for recognition and collective bargaining negotiations from two competing labor unions. They both claim to represent all the rank-and-file employees. Union A is led by a moderate faction, while Union B is affiliated with a militant federation identified with leftist ideology. Which of the following courses of action should you take to best protect the interests of your company and employees? (a) Recognize Union A as the rightful bargaining representative because it will be more reasonable to deal with; (b) Recognize Union B because you do not want to antagonize its leftist connections and foment inter-union conflicts; (c) Ignore the demands of either union since you cannot be compelled legally to deal with them at this stage; or (d) Petition the Bureau of Labor Relations to conduct a certification election to determine which union really represents the majority of the employees in the bargaining unit; (10%)

SUGGESTED ANSWER: (d) Petition the Bureau of Labor Relations to conduct a certification election to determine which union really represents the majority of the employees in the bargaining unit; ILAW AT BUKLOD NG MANGGAGAWA (IBM) LOCAL NO. 56 vs. HON. PURA FERRERCALLEJA [G.R. No. 84685 February 23, 1990] Ordinarily, in an unorganized establishment like the SMC Calasiao Beer Region, it is the union that files a petition for a certification election if there is no certified bargaining agent for the workers in the establishment. If a union asks the employer to voluntarily recognize it as the bargaining agent of the employees, as the petitioner did, it in effect asks the employer to certify it as the bargaining representative of the employees a certification which the employer has no authority to give, for it is the employees' prerogative (not the employer's) to determine whether they want a union to represent them, and, if so, which one it should be. The petitioner's request for voluntary recognition as the bargaining representative of the employees was in effect a request to bargain collectively, or the first step in that direction, hence, the employer's request for a certification election was in accordance with Article 258 of the Labor Code, and the public respondents did not abuse their discretion in granting the request.
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

(2.) Little Hands Garment Company, an unorganized manufacturer of childrens apparel with around 1,000 workers, suffered losses for the first time in history when its US and European customers shifted their huge orders to China and Bangladesh. The management informed its employees that it could no longer afford to provide transportation shuttle services. Consequently, it announced that a nominal fare would be charged depending on the distance travelled by the workers availing of the service. Was the Little Hands Garments Company within its rights to withdraw this benefit which it had unilaterally been providing to its employees? Select the best answer(s) and briefly explain your reason(s) therefor. (a) Yes, because it can withdraw a benefit that is unilaterally given;

(b) Yes, because it is suffering losses for the first time; (c) Yes, because this is a management prerogative which is not due to any legal or contractual obligation; (d) No, because this amounts to a diminution of benefits which is prohibited by the Labor Code; (e) No, because it is a fringe benefit that has already ripened into a demandable right or entitlement. (10%)

ALTERNATIVE ANSWER: (b) Yes, because it is suffering losses for the first time; (c) Yes, because this is a management prerogative which is not due any legal or contractual obligation; An employer cannot be forced to continue giving a benefit, being given as a management prerogative, when it can no longer afford to pay for it. To hold otherwise, would be to penalize the employer for his past generosity. (Producer's Bank of the Philippines v. NLRC, G.R. No. 100701, March 28, 2001)
ALTERNATIVE ANSWER:

(d) No, because this amounts to a diminution of benefits which is prohibited by the Labor Code; (e) No, because it is a fringe benefit that has already ripened into a demandable right or entitlement. A company practice favorable to employees had indeed been established and the payments made pursuant thereto, ripened into benefits enjoyed by them. And any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the employer by virtue of Article 100 of the Labor Code of the Philippines which prohibits the diminution or elimination of the employer of the employees' existing benefits. (Sevilla Trading Co. v. Semana, G.R. No. 152456, April 28, 2004) ALTERNATIVE ANSWER: (b) Yes, because it is suffering losses for the first time; (d) No, because this amounts to a diminution of benefits which is prohibited by the Labor Code. You cannot compel an employer to continue paying the benefits if it is suffering from serious business losses. However, the benefit has already ripened into an employer practice or policy, and therefore it cannot be withdrawn without violating Article 100 of the Labor Code on non-diminution of benefits.
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

- II (1.) During the open forum following your lecture to a group of managers and HRD personnel, you were asked the following questions: (a) What qualifying circumstances will convert illegal recruitment to economic sabotage, thus subjecting its perpetrator or perpetrators to a penalty of life imprisonment and a fine of at least P500, 000.00? (3%)

SUGGESTED ANSWER: Under Article 38(b) of the Labor Code, as amended by P.D. No. 2018, it provides that illegal recruitment shall be considered an offense involving economic sabotage if any of the following qualifying circumstances exists: (1) When illegal recruitment is committed by a SYNDICATE, requiring three or more persons who conspire or confederate with one another in carrying out any unlawful or illegal transaction, enterprise or scheme; When illegal recruitment is committed in a LARGE SCALE, as when it is committed against three or more persons individually or as a group. (People v. Navarra, G.R. No. 119361, February 19, 2001; See also Sec. 6 of R.A. No. 8042)
(b) Is the commission of an unfair labor practice by an employer subject to criminal prosecution? (3%)

SUGGESTED ANSWER: Yes, because unfair labor practices are not only violations of the civil rights of both labor and management but are also criminal offenses against the State which shall be subject to prosecution and punishment. (Article 247, Labor Code; See also B.P. Blg. 386 as amended by R.A. No. 6715). However, the criminal aspect can only be filed when the decision of the labor tribunals, finding the existence of unfair labor practice, shall have become final and executory.
(c) How are the portability provisions of Republic Act No. 7699 beneficial or advantageous to SSS and GSIS members in terms of their creditable employment services in the private sector or the government, as the case may be, for purposes of death, disability or retirement? (3%)

SUGGESTED ANSWER: Portability provisions of R.A. No. 7699 shall benefit a covered worker who transfers employment from one sector to another or is employed in both sectors, whose creditable services or contributions in both systems credited to his service or contribution record in each of the system and shall be totalized for purposes of old-age, disability, survivorship and other benefits. (Sec. 3, R.A. No. 7699) The "portability" provisions of R.A. No. 7699 allow the transfer of funds for the account and benefit of the worker who transfers from one system to another. This is advantageous to the SSS and GSIS members for purposes of death, disability or retirement benefits. In the event the employees transfer from the private sector to the public sector, or vice-versa, their creditable employment services and contributions are carried over and transferred as well.
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

(2.) Mariano Martillo was a mason employed by the ABC Construction Company. Every time that ABC had a project, it would enter into an employment contract with Martillo for a fixed period that coincided with the need for his services, usually for a duration of three to six months. Since the last project involved the construction of a 40-storey building, Martillo was contracted for 14 months. During this period, ABC granted wage increases to its regular employees, composed mostly of engineers and rank-and-file construction workers as a result of the just concluded CBA negotiations. Feeling aggrieved and discriminated against, Martillo and other 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. (a) If you were ABCs legal counsel, how would you respond to this demand?

ALTERNATIVE ANSWER: The demand is without legal basis. The simple fact that the employment of petitioners as project employees had gone beyond one (1) year does not detract from, or legally dissolve, their status as project employees. The second paragraph of Article 280 of the Labor Code, providing that an employee who has served for at least one (1) year shall be considered a regular employee, relates to casual employees, not to project employees. (ALUTUCP v. NLRC, G.R. No. 109902, August 2, 1994) ALUTUCP v. NLRC, G.R. No. 109902, August 2, 1994 Moreover, it has been held that the length of service of a project employee is not the controlling test of employment tenure but whether or not "the employment has been 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". In the case of Mercado, Sr. v. NLRC, G.R. No. 79869, September 5, 1991, the Supreme Court ruled that the proviso in the second paragraph of Article 280 of the Labor Code relates only to casual employees and is not applicable to those who fall within the definition of said Article's first paragraph, i.e., project employees. The familiar rule is that a proviso is to be construed with reference to the immediately

preceding part of the provision to which it is attached, unless there is clear legislative intent to the contrary. No such intent is observable in Article 280 of the Labor Code. Mercado, Sr. v. NLRC, G.R. No. 79869, September 5, 1991 A project employee has been defined to be one whose employment has been 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, or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season as in the present case. ALTERNATIVE ANSWER: If I were ABC's legal counsel, I will argue that the project workers are not regular employees but fixed-term employees. Stipulation in employment contracts providing for term employment or fixed period were agreed upon knowingly and voluntarily by the parties without force, duress or improper pressure, being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter. (Pangilinan v. General Milling Corp., G.R. No. 149329, July 12, 2004) Pangilinan v. General Milling Corp., G.R. No. 149329, July 12, 2004 Stipulations in employment contracts providing for term employment or fixed period employment are valid when the period were agreed upon knowingly and voluntarily by the parties without force, duress or improper pressure, being brought to bear upon the employee and absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer and employee dealt with each other on more or less equal terms with no moral dominance whatever being exercised by the former over the latter.
(b) How is a project worker different from a casual or contractual worker?

ALTERNATIVE ANSWER: A "CONTRACTUAL WORKER" is a generic term used to designate any worker covered by a written contract to perform a specific undertaking for a fixed period. On the other hand, a "PROJECT WORKER" is used to designate workers in the construction industry, hired to perform a specific undertaking for a fixed period, co-terminous with a project or phase thereof determined at the time of the engagement of the employee. (Policy Instruction No. 19, DOLE) In addition, to be considered a true project worker, it is 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, G.R. No. 114733, January 2, 1997) In contrast, there is no such requirement for an ordinary contractual worker. Aurora Land Projects Corp. v. NLRC, G.R. No. 114733, January 2, 1997 Consonant with a string of cases beginning with Ochoco v. NLRC, followed by Philippine National Construction Corporation v. NLRC, Magante v. NLRC, and Capitol Industrial Construction Corporation v. NLRC, if truly, private respondent was employed as a "project employee," petitioners should have submitted a report of termination to the nearest public employment office everytime his employment is terminated due to completion of each project, as required by Policy Instruction No. 20, which provides: Project employees are not entitled to termination pay if they are terminated as a result of the completion of the project or any phase thereof in which they are employed, regardless of the number of project in which they have been employed by a particular construction company. Moreover, the company is not required to obtain a clearance from the Secretary of Labor in connection with such termination. What is required of the company is a report to the nearest Public Employment Office for statistical purposes. ALTERNATIVE ANSWER:

A PROJECT WORKER performs job that is necessary and desirable to the nature of the business of the employer. On the other hand, a CASUAL WORKER performs job that is not necessary or desirable to the nature of the business of the employer. (Art. 280, Labor Code) A project worker becomes a regular employee if the employer fails to submit as many reports to the DOLE on terminations as there were projects actually finished. (Audion Electric Co. v. NLRC, G.R. No. 106648, June 17, 1999) On the other hand, a casual worker becomes a regular employee if he has rendered service for at least one (1) year whether the same is continuous or broken. (Art. 280, Labor Code) Audion Electric Co. v. NLRC, G.R. No. 106648, June 17, 1999 Policy Instruction No. 20 of the Department of Labor is explicit that employers of project employees are exempted from the clearance requirement but not from the submission of termination report. This court has consistently held that failure of the employer to file termination reports after every project completion with the nearest public employment office is an indication that private respondent was not and is not a project employee. Department Order No. 19 superseding Policy Instruction No. 20 expressly provides that the report of termination is one of the indications of project employment.
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

- III (1.) 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, night time and rest day benefits. He thereafter filed a complaint for illegal dismissal and non-payment of benefits against Yosi Cigarette Factory, which he claimed was his actual and direct employer. As the Labor Arbiter assigned to hear the case, how would you correctly resolve the following: (a) Antonios charge of illegal dismissal; and

SUGGESTED ANSWER: This is a case involving permissible job contracting. Antonio's charge of illegal dismissal against Yosi Cigarette Factory will not prosper. Wagan Security Agency, an independent contractor, is Antonio's direct employer. Yosi is only Antonio's indirect employer. By force of law, there is in reality no employeremployee relationship between Yosi and Antonio. (Baguio v. NLRC, G.R. Nos. 79004-08, October 4, 1991) Baguio v. NLRC, G.R. Nos. 79004-08, October 4, 1991 Art. 106. Contractor or subcontractor. Whenever an employer enters into a contract with another person for the performance of the former's work, the employees of the contractor and of the latter's subcontractor, if any, shall be paid in accordance with the provisions of this Code. 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 xxx xxx There 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, and the workers recruited and placed by such persons are performing activities which are directly related to the principal business of such employer. In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him (Emphasis supplied).

In other words, a person is deemed to be engaged in "labor only" contracting where (1) 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 (2) the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer (See Section 9, Rule VIII, Book III of the Omnibus Rules Implementing the Labor Code; emphasis supplied). Since the construction of an annex building inside the company plant has no relation whatsoever with the employer's business of flour and feeds manufacturing, "labor-only" contracting does not exist. Article 106 is thus inapplicable. Instead, it is "job contracting," covered by Article 107, which is involved, reading: Art. 107. Indirect Employer. The provisions of the immediately preceding Article shall likewise apply to any 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. (Emphasis supplied). Specifically, there is "job contracting" where (1) the contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and (2) the contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business. It may be that LUPO subsequently ran out of capital and was unable to satisfy the award to petitioners. That was an after-the-fact development, however, and does not detract from his status as an independent contractor.
(b) Antonios claim for overtime and other benefits. (6%)

SUGGESTED ANSWER: I will dismiss Antonio's claim for overtime and other benefits for lack of merit as against Yosi. In legitimate job contracting, the principal employer (Yosi) becomes jointly and severally liable with the job contractor (Wagan) only for the payment of the employee's (Antonio) wages whenever the contractor fails to pay the same. Other than that, the principal employer (Yosi) is not responsible for any other claim made by the employee (Antonio). (San Miguel Corp. v. MAERC Integrated Services, Inc., G.R. No. 144672, July 10, 2003) San Miguel Corp. v. MAERC Integrated Services, Inc., G.R. No. 144672, July 10, 2003 In legitimate job contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that the employees are paid their wages. The principal employer becomes jointly and severally liable with the job contractor only for the payment of the employees' wages whenever the contractor fails to pay the same. Other than that, the principal employer is not responsible for any claim made by the employees. On the other hand, in labor-only contracting, the statute creates an employer-employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been directly employed by the principal employer. The principal employer therefore becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees.
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

(2.) 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, Wetos 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. (a) Whose contention is correct, Weto or the HRD manager?

ALTERNATIVE ANSWER: The contention of Weto is correct. The law provides that every married male is entitled to a paternity leave of seven (7) days for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting. Jovy is Weto's legitimate spouse with whom he is cohabiting. The fact that Jovy is his second wife and that Weto had 4 children with his first wife is beside the point. The important fact is that this is the first child of Jovy with Weto. The law did not distinguish and we should therefore not distinguish. The paternity leave was intended to enable the husband to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly born child (Sec. 3, RA. No. 8187). To deny Weto this benefit would be to defeat the rationale for the law. Moreover, the case of Weto is a gray area and the doubt should be resolved in his favor. Sec. 3, RA. No. 8187 SECTION 3. Definition of Term. - For purposes of this Act, Paternity Leave refers to the benefits granted to a married male employee allowing him not to report for work for seven (7) days but continues to earn the compensation therefor, on the condition that his spouse has delivered a child or suffered a miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly-born child. ALTERNATIVE ANSWER: Weto's contention is correct. R.A. No. 8187 provides that paternity leave of (7) days with full pay shall be granted to all married employees in the private and public sectors for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting. With the death of Weto's first wife, the first (4) deliveries provided by law, shall apply to the new legitimate spouse of Weto with whom he is cohabiting. ALTERNATIVE ANSWER: Since R.A. No. 8282 is silent on the matter, the doubt should be resolved in favor of the second wife.
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

(b) Is Jovy entitled to maternity leave benefits? (6%)

Yes, Jovy's maternity benefit is personal to her and she is entitled under the law to avail herself of the same for the first four times of her delivery. (R.A. No. 8282) R.A. No. 8282 "SEC. 14A. Maternity Leave Benefit. A female member who has paid at least three (3) monthly contributions in the twelvemonth period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days or seventyeight (78) days in case of caesarean delivery, subject to the following conditions: "(a) That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide; "(b) The full payment shall be advanced by the employer within thirty (30) days from the filing of the maternity leave application; "(c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this Act for the same period for which daily maternity benefits have been received;

"(d) That the maternity benefits provided under this section shall be paid only for the first four (4) deliveries or miscarriages; "(e) That the SSS shall immediately reimburse the employer of one hundred percent (100%) of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and "(f) That if an employee member should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified by the employer of the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

- IV (1.) Malyn Vartan is a well-known radio-TV 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, 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. (a) As the networks legal counsel, how would you justify its decision to cancel Ms. Vartans program which in effect terminated her services in the process?
ALTERNATIVE ANSWER:

As the network's legal counsel, I will argue that Ms. Vartan is under contract on a fixed term employment basis. The network cancelled the show "upon the expiration of its latest contract with Ms. Vartan." Hence, this does not involve dismissal but an expiration of term. (Felix v. Buenaseda, G.R. No. 109704, January 17,1995; St. Theresa's School of Novaliches Foundation v. NLRC, G.R. No. 122955, April 15, 1998)
Felix v. Buenaseda, G.R. No. 109704, January 17, 1995

As an apparent incident of the power to appoint, the renewal of a temporary appointment upon or after its expiration is a matter largely addressed to the sound discretion of the appointing authority. St. Theresa's School of Novaliches Foundation v. NLRC, G.R. No. 122955, April 15, 1998 Article 280 of the Labor Code does not proscribe or prohibit an employment contract with a fixed period provided the same is entered into by the parties, without any force, duress or improper pressure being brought to bear upon the employee and absent any other circumstance vitiating consent. It does not necessarily follow that where the duties of the employee consist of activities usually necessary or desirable in the usual business of the employer, the parties are forbidden from agreeing on a period of time for the performance of such activities. There is thus nothing essentially contradictory between a definite period of employment and the nature of the employee's duties. ALTERNATIVE ANSWER: As the network's counsel, there was no termination of her services, only the expiration of her contract, being an independent contractor. (Sonza v. ABSCBN, G.R. No. 138051, June 10, 2004) Sonza v. ABSCBN, G.R. No. 138051, June 10, 2004 Case law has consistently held that the elements of an employer-employee relationship are: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employers power to control the employee on the means and methods by which the work is accomplished. The last element, the so-called "control test", is the most important element.

xxx xxx xxx

The control test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well the less control the hirer exercises, the more likely the worker is considered an independent contractor.
(b) As counsel for the talk-show host, how would you argue your case? (6%)

ALTERNATIVE ANSWER: As a radio-TV talk show host, Ms. Vartan is performing an activity which is necessary and desirable in the usual trade or business of XYZ Entertainment Network. Hence, Ms. Vartan is a regular employee and cannot be terminated except for cause and only after due process. The cancellation of the program is tantamount to closure but XYZ Entertainment Network did not comply with the procedural requirements of law, i.e., 30 days notice to Ms. Vartan and to DOLE prior to the intended date of termination. ALTERNATIVE ANSWER: As counsel for the talk show host, I will argue that she is a regular employee. First, she performs job that is necessary and desirable to the nature of the business of the employer; Second, she serves for at least one (1) year which is an indication of regular employment.
-VDuring 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%)

If unworked, the covered employees are entitled to at least 200% of their basic wage, because to do otherwise would reduce the number of holidays under EO No. 203. If worked, the covered employees are entitled to compensation equivalent to at least 300% of their basic wage because they are entitled to the payment not only of the two regular holidays, but also of their regular wage, plus the premium thereof. (DOLE Explanatory Bulletin on Workers' Entitlement to Holiday Pay on 9 April 1993, Araw ng Kagitingan and Good Friday) DOLE Explanatory Bulletin on Workers Entitlement to Holiday Pay on 9 April 1993, Araw ng Kagitingan and Good Friday enunciated the following rule in case of two regular holidays falling on the same day (e.g., Araw ng Kagitingan and Good Friday falling on April 9, 1993): 1. If employee did not work: 200% of basic pay; 2. If employee worked: 300% of basic pay. Said bulletin dated March 11, 1993, including the manner of computing the holiday pay, was reproduced on January 23, 1998, when April 9, 1998 was both Maundy Thursday and Araw ng Kagitingan. In the 2004 case of Asian Transmission Corporation vs. CA, [G. R. No. 144664, March 15, 2004], the petitioner sought the nullification of the said March 11, 1993 Explanatory Bulletin. The Supreme Court, in affirming the validity thereof, ruled that Article 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. The provision is mandatory, regardless of whether an employee is paid on a monthly or daily basis. Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive.

It is elementary, under the rules of statutory construction, that when the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says. (Insular Bank of Asia and America Employees Union (IBAAEU) vs. Inciong, G.R. No. L-52415, Oct. 23, 1984, 132 SCRA 663, 673). In the case at bar, there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day. Asian Transmission Corporation vs. CA, [G. R. No. 144664, March 15, 2004] Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. Its purpose is not merely "to prevent diminution of the monthly income of the workers on account of work interruptions. In other words, although the worker is forced to take a rest, he earns what he should earn, that is, his holiday pay." It is also intended to enable the worker to participate in the national celebrations held during the days identified as with great historical and cultural significance. Independence Day (June 12), Araw ng Kagitingan (April 9), National Heroes Day (last Sunday of August), Bonifacio Day (November 30) and Rizal Day (December 30) were declared national holidays to afford Filipinos with a recurring opportunity to commemorate the heroism of the Filipino people, promote national identity, and deepen the spirit of patriotism. Labor Day (May 1) is a day traditionally reserved to celebrate the contributions of the working class to the development of the nation, while the religious holidays designated in Executive Order No. 203 allow the worker to celebrate his faith with his family. As reflected above, Art. 94 of the Labor Code, as amended, affords a worker the enjoyment of ten paid regular holidays. The provision is mandatory, regardless of whether an employee is paid on a monthly or daily basis. Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit demandable under the law. Since a worker is entitled to the enjoyment of ten paid regular holidays, the fact that two holidays fall on the same date should not operate to reduce to nine the ten holiday pay benefits a worker is entitled to receive. It is elementary, under the rules of statutory construction, that when the language of the law is clear and unequivocal, the law must be taken to mean exactly what it says. In the case at bar, there is nothing in the law which provides or indicates that the entitlement to ten days of holiday pay shall be reduced to nine when two holidays fall on the same day.
(b) 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%)

Yes, because the bargaining representative (union) does not act for its members alone. It represents all the employees covered by the bargaining unit. (Mactan Workers Union v. Aboitiz, G.R. No. L-30241, June 30, 1972) However, non-members who avail of CBA benefits are required under the law to pay agency fees. Mactan Workers Union v. Aboitiz, G.R. No. L-30241, June 30, 1972 The terms and conditions of a collective bargaining contract constitute the law between the parties. Those who are entitled to its benefits can invoke its provisions. In the event that an obligation therein imposed is not fulfilled, the aggrieved party has the right to go to court for redress. Nor does it suffice as a defense that the claim is made on behalf of non-members of intervenor Associated Labor Union, for it is a well-settled doctrine that the benefits of a collective bargaining agreement extend to the laborers and employees in the collective bargaining unit, including those who do not belong to the chosen bargaining labor organization. Any other view would be a discrimination on which the law frowns. It is appropriate that such should be the case. As was held in United Restauror's Employees and Labor Union v. Torres, this Court speaking through Justice Sanchez, "the right to be the exclusive representative of all the employees in an appropriate collective bargaining unit is vested in the labor union 'designated or selected' for such purpose 'by the majority of the employees' in the unit concerned." If it were otherwise, the highly salutory purpose and objective of the collective bargaining scheme to enable labor to secure better terms in employment condition as well as rates of pay would be frustrated insofar as non-members are concerned, deprived as they are of participation in whatever advantages could thereby be gained. The labor union that gets the

majority vote as the exclusive bargaining representative does not act for its members alone. It represents all the employees in such a bargaining unit. It is not to be indulged in any attempt on its part to disregard the rights of non-members.
(c) What is meant by payroll reinstatement and when does it apply? (4%)

SUGGESTED ANSWER: "PAYROLL REINSTATEMENT" is one where an employee is paid his monthly salary without making him perform actual work. It applies in termination cases where the labor court declares the dismissal illegal and orders reinstatement of the employee, but the employer does not want to actually or physically reinstate him and instead, at the employer's option, merely reinstates the employee in the payroll pending appeal.
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

(d) 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%) ALTERNATIVE ANSWER:

The conditions for an allowable "compressed work week" are the following: the workers agree to the temporary change of work schedule and they do not suffer any loss of overtime pay, fringe benefits or their weekly or monthly take-home pay. (DOLE Explanatory Bulletin on the Reduction of Workdays on Wages issued on July 23, 1985) ALTERNATIVE ANSWER: "Compressed work week" is resorted to by the employer to prevent serious losses due to causes beyond his control, such as when there is a substantial slump in the demand for his goods or services or when there is lack of raw materials. (Explanatory Bulletin on the Reduction of Workdays on Wages Issued by DOLE, July 23, 1985) CONDITIONS 1. It is expressly and voluntarily supported by majority of the employees affected. 2. If work is hazardous, a certification is needed from an accredited safety organization or the firms safety committee that work beyond 8 hours is within the limits or levels of exposure set by DOLEs occupational safety and health standards. 3. The DOLE is duly notified (DOLE advisory No. 02, Series of 2004)
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

- VI A group of employees in XYZ Factory belonging to a religious sect, in conformity with the teachings and dictates of their religion, refused to join the labor union in the factory. The labor union was able to negotiate a substantial wage increase in its collective bargaining agreement with management. A provision therein stated that the wage increase would be paid to the members of the union only in view of a closed shop union security clause in the new agreement. The members of the sect protested and demanded that the wage increase be extended to them. The officers of the union countered by demanding their termination from the company pursuant to the closed shop provision in the just-concluded CBA. (a) Is the CBA provision valid?

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

Moreover, when a union bids to be the bargaining agent, it voluntarily assumes the responsibility of representing all the employees in the appropriate bargaining unit. That is why Section 12 of the law states that "The labor organization designated or selected for the purpose of collective bargaining by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of all employees in such unit for the purpose of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment."
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

(b) Should the company comply with the unions demand of terminating the members of the religious sect? (6%)

SUGGESTED ANSWER: No. The right to join includes the right not to join by reason of religious beliefs. Members of said religious sect cannot be compelled or coerced to join the labor union even when the union has a closed shop agreement with the employer; that in spite of any closed shop agreement, members of said religious sect cannot be refused employment or dismissed from their jobs on the sole ground that they are not members of the collective bargaining union. (Victoriano v. Elizalde Rope Workers' Union, G.R. No. L-25246, September 12, 1974) Victoriano v. Elizalde Rope Workers' Union, G.R. No. L-25246, September 12, 1974 To that all-embracing coverage of the closed shop arrangement, Republic Act No. 3350 introduced an exception, when it added to Section 4 (a) (4) of the Industrial Peace Act the following proviso: "but such agreement shall not cover members of any religious sects which prohibit affiliation of their members in any such labor organization". Republic Act No. 3350 merely excludes ipso jure from the application and coverage of the closed shop agreement the employees belonging to any religious sects which prohibit affiliation of their members with any labor organization. What the exception provides, therefore, is that members of said religious sects cannot be compelled or coerced to join labor unions even when said unions have closed shop agreements with the employers; that in spite of any closed shop agreement, members of said religious sects cannot be refused employment or dismissed from their jobs on the sole ground that they are not members of the collective bargaining union. It is clear, therefore, that the assailed Act, far from infringing the constitutional provision on freedom of association, upholds and reinforces it. It does not prohibit the members of said religious sects from affiliating with labor unions. It still leaves to said members the liberty and the power to affiliate, or not to affiliate, with labor unions. If, notwithstanding their religious beliefs, the members of said religious sects prefer to sign up with the labor union, they can do so. If in deference and fealty to their religious faith, they refuse to sign up, they can do so; the law does not coerce them to join; neither does the law prohibit them from joining; and neither may the employer or labor union compel them to join. Republic Act No. 3350, therefore, does not violate the constitutional provision on freedom of association.
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

- VII (1.) Ricky Marvin had worked for more than ten (10) years in IGB Corporation. Under the terms of the personnel policy on retirement, any employee who had reached the age of 65 and completed at least ten (10) years of service would be compulsorily retired and paid 30 days pay for every year of service. Ricky Marvin, whose immigrant visa to the USA had just been approved, celebrated his 60th birthday recently. He decided to retire and move to California where the son who petitioned him had settled. The company refused to grant him any retirement benefits on the ground that he had not yet attained the compulsory retirement age of 65 years as required by its personnel policy; moreover, it did not have a policy on optional or early retirement. Taking up the cudgels for Ricky Marvin, the union raised the issue in the grievance machinery as stipulated in the CBA. No settlement was arrived at, and the matter was referred to voluntary arbitration.

If you were the Voluntary Arbitrator, how would you decide? Briefly explain the reasons for your award. (5%)

SUGGESTED ANSWER: I will decide the case in accordance with the Retirement Law. (R.A. No. 7641) Under the law, Ricky Marvin is entitled to Optional Retirement at age 60 since he has served the Company for at least 5 years, in fact 10 years already. He will also receive 22.5 days for every year of service. (Capitol Wireless v. Confesor, G.R. No. 117174, November 13, 1996) Capitol Wireless v. Confesor, G.R. No. 117174, November 13, 1996 SECRETARY'S AWARD a. Compulsory Retirement An employee shall be compulsorily retired upon reaching the age of sixty (60), or after thirty-five (35) years of continuous service, whichever comes first. An employee shall be entitled to a retirement benefit of 1/2 month salary plus six (6) days multiplied by the number of years in service. b. Optional Retirement At his option, an employee may entire upon reaching the age of fifty-five (55) or more if he has served for at least five (5) years; provided, however, that any employee who is under fifty-five (55) years old may retire if he has rendered at least ten (10) years of continuous service. Such an employee shall be entitled to a retirement benefit of 1/2 month salary plus three (3) days multiplied by the number of years in service. For purposes of computing compulsory and optional retirement benefits and to align the current retirement plan with the minimum standards of Art. 287 of the Labor Code, as amended by R.A. 7641, and Sec. 5 (5.2) of its implementing rules, "1/2 month salary" means 22.5 days salary, exclusive of leave conversion benefits. Article 287 of the Labor Code, as amended by R.A. 764l, provides Art. 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining agreement and other agreements: provided, however, That an employee's retirement benefits under any collective bargaining and other agreements shall not be less than those provided herein. In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, 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 (6) months being considered as one whole year. Unless the parties provide for broader inclusions, the term "one-half (1/2) month salary" shall mean fifteen (15) 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 . . . . (Emphasis supplied).
~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~ # ~#~

(2.) 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 banks 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 invited 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%)

SUGGESTED ANSWER: I will hold Mr. Perry Winkle guilty of sexual harassment. This resolution is predicated mainly upon the following considerations:
(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" implies a request or demand for a sexual favor; (3) Mr. Winkle's warning clearly manifests that the refusal of the sexual favor would jeopardize Carissa's continued employment; and (4) Mr. Winkle's invitation for a sexual favor will result in an intimidating, hostile, or otherwise offensive working environment for Carissa. Carissa is correct in stating that there was no need for prior referral to the Committee on Decorum and Discipline of her complaint because nothing in the law precludes the victim of sexual harassment from instituting a separate and independent action for damages and other affirmative relief. (Sec. 6, R.A. No. 7877)

Sec. 6, R.A. No. 7877 SECTION 6. Independent Action for Damages. - Nothing in this Act shall preclude the victim of work, education or training-related sexual harassment from instituting a separate and independent action for damages and other affirmative relief.
- VIII (1.) 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 Odecks surviving spouse whom he had abandoned for another woman years back. When she learned of Odecks 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%)

ALTERNATIVE ANSWER:

Yes, because under the law, a dependent is one who is a legitimate spouse living with the employee. (Article 167[i], Labor Code) In the problem given, Zhop had been abandoned by Odeck who was then living already with another woman at the time of his death. Moreover, Odeck was on leave when he was killed. The 24-hour duty rule does not apply when the policeman is on vacation leave. (Employees' Compensation Commission v. Court of Appeals, G.R. No. 121545, November 14, 1996) Taking together jurisprudence and the pertinent guidelines of the ECC with respect to claims for death benefits, namely:
\

(a) that the employee must be at the place where his work requires him to be; (b) that the employee must have been performing his official functions; and (c) that if the injury is sustained elsewhere, the employee must have been executing an order for the employer, it is not difficult to understand then why Zhop's claim was denied by the GSIS. (Tancinco v. Government Service Insurance System, G.R. No. 132916, November 16, 2001) In the present case, Odeck was resting at his house when the incident happened; thus, he was not at the place where his work required him to be. Although at the time of his death Odeck was performing a police function, it cannot be said that his death occurred elsewhere other than the place where he was supposed to be because he was executing an order for his employer. Article 167[i], Labor Code (i) "Dependent" means the legitimate, legitimated or legally adopted or acknowledged natural child who is unmarried, not gainfully employed, and not over twenty-one (21) years of age or over twenty-one (21) years of age provided he is incapacitated and incapable of self-support due to a physical or mental defect which is congenital or acquired during minority; the legitimate spouse living with the employee and the parents of said employee wholly dependent upon him for regular support. Employees' Compensation Commission v. Court of Appeals, G.R. No. 121545, November 14, 1996 SYLLABUS 1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; SOCIAL WELFARE BENEFITS; SOCIAL JUSTICE REQUIRES LIBERAL ATTITUDES IN FAVOR OF THE EMPLOYEE. P.D. No. 626 (27 December 1974) further amended Title II of Book IV on the ECC and State Insurance Fund of the Labor Code of the Philippines (P.D. No. 442, as amended). This law abandoned the presumption of compensability and the theory of aggravation under the Workmens Compensation Act. Fo r the sickness and resulting disability or death to be compensable, the claimant must prove that: (a) the sickness must be the result of an occupational disease listed under Annex A of the Rules on Employees Compensation, or (b) the risk of contracting the disease was increased by the claimants working conditions. This means that if the claimants illness or disease is not included in the said Annex A, then he is entitled to compensation only if he can prove that the risk of contracting the illness or disease was increased by his working conditions. Despite the abandonment of the presumption of compensability established by the old law, the present law has not ceased to be an employees compensation law or a social legislation; hence, the liberality of the law in favor of the working man and woman still prevails, and the official agency charged by law to implement the constitutional guarantee of social justice should adopt a liberal attitude in favor of the employee in deciding claims for compensability, especially in light of the compassionate policy towards labor which the 1987 Constitution vivifies and enhances. Elsewise stated, a humanitarian impulse, dictated by no less than the Constitution itself under the social justice policy, calls for a liberal and sympathetic approach to legitimate appeals of disabled public servants; or that all doubts to the right to compensation must be resolved in favor of the employee or laborer. Verily, the policy is to extend the applicability of the law on employees compensation to as many employees who can avail of the benefits thereunder. Tancinco v. Government Service Insurance System, G.R. No. 132916, November 16, 2001 Rule III of the Amended Rules on Employees Compensation provides:

SECTION 1. Grounds(a) For the injury and the resulting disability or death to be compensable, the injury must be the result of an employment accident satisfying all of the following conditions: (1) The employee must have been injured at the place where his work requires him to be; (2) The employee must have been performing his official functions; and (3) If the injury is sustained elsewhere, the employee must have been executing an order for the employer.

ALTERNATIVE ANSWER: GSIS is correct in denying the claim not on the grounds provided in the problem but for the reason that uniformed members of the PNP are not covered by R.A. No. 8291 or the GSIS Law of 1997.
(2.) Maryrose Gandas 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. Maryrose represented to the sisters that she had a license to recruit workers for overseas employment. Maryrose also demanded and received P30,000.00 from each of them for her services. However, Maryroses application for the renewal of her license was denied, and consequently failed to employ the four sisters in Saudi Arabia.

The sisters charged Maryrose with large scale illegal recruitment. Testifying in her defense, Maryrose declared that she acted in good faith because she believed that her application for the renewal of her license would be approved. Maryrose adduced in evidence the Affidavits of Desistance which the four private complainants had executed after the prosecution rested its case. In the said affidavits, they acknowledged receipt of the refund by Maryrose of the total amount of P120,000.00 and indicated that they were no longer interested to pursue the case against Maryrose. Resolve the case with reasons. (5%)

- IX -

Kitchie Tempo was one of approximately 500 production operators at HITEC 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 HITECs personnel department to inquire why she was not yet being recalled for another temporary contract. She was told that her performance during her last stint was below average. Since there was no union to represent her,

Kitchie seeks your advice as a labor lawyer about her chances of getting her job back. What will your advice be? (5%)

NOTHING FOLLOWS.