LABOR LAW 2019

A.1.
Define, explain or distinguish the following terms:

(a) Just and authorized causes

A just cause is a fault-based ground for dismissal under Art. 297, LC; whereas an
authorized cause is a non-fault ground for dismissal under Art. 298-299, LC.

(b) Seasonal and project employees

A seasonal employee is one engaged for the duration of the season for which he has
been engaged; whereas, a project employee is on whose employment is co-terminus with the
specific project or undertaking for which he has been engaged; provided, its scope or
duration was made known to him upon engagement. [Art. 295, LC]

(c) Strikes and lockouts

Strikes are carried out through temporary stoppage of work; whereas, lockouts are
carried out through temporary withholding of work. [Art. 279, LC]

(d) Bona fide occupational qualifications

A bona fide occupational qualification (BFOQ) is an occupational requirement based on

quality or attribute. It is valid if it serves a legitimate business purpose, it is work-related, and
its possession enhances an employee’s productivity at work. [Star Paper Corp., et al. v.
Symbol, et al., GR no. 164774, April 12, 2006]

(e) Grievance machinery

A grievance machinery is a contractual dispute resolution mechanism for all grievable

disputes. It is a mandatory provision of a CBA, without which it cannot be registered.

A.2.
X is a member of the Social Security System (SSS). In 2015, he died without any spouse or children.
Prior to the semester of his death, X had paid 36 monthly contributions. His mother, M, who had
previously been receiving regular support from X, filed a claim for the latter’s death benefits.

(a) Is M entitled to claim death benefits from the SSS? Explain.

M is entitled to the death benefits. Being the mother of X, who was single and without
issue, she is elevated to the status of sole beneficiary. [Sec. 8(k), RA 8282]

(b) Assuming that X got married to his girlfriend a few days before his death, is M entitled to claim
death benefits from the SSS? Explain.

In view of the marriage of X to his girlfriend, M is deemed restored to her secondary

beneficiary status. Hence, X’s wife will be his primary beneficiary until she remarries;
provided, she was living with him at the time of his death. [Sec. 8(k), RA 828; Yolanda Signey
v. SSS, GR No. 173582, January 28, 2008]
 A.3.
A, B, and C were hired as resident-doctors by MM Medical Center, Inc. In the course of their
engagement, A, B, and C maintained specific work schedules as determined by the Medical Director.
The hospital also monitored their work through supervisors who gave them specific instructions on
how they should perform their respective tasks, including diagnosis, treatment, and management of
their patients.

One day, A, B, and C approached the Medical Director and inquired about the non-payment of their
employment benefits. In response, the Medical Director told them that they are not entitled to any
because they are mere “independent contractors” as expressly stipulated in the contracts which they
admittedly signed. As such, no-employer-employee relationship exists between them and the
hospital.

(a) What is the control test in determining the existence of an employer-employee?

Under the Control Test, the person who exercises labor law concept of control, actual or
reserved, is the employer of the person over whom he exercises it. Labor law concept of
control is control over means and methods of performance. [Orozco v. CA, Philippine Daily
Inquirer & Magsanoc, GR 155207, August 13, 2008]

(b) Is the Medical Director’s reliance on the contracts signed by A, B, and C to refute the existence of
an employer-employee relationship correct? If not, are A, B, and C employees of MM Medical Center,
Inc.? Explain.

No, the Medical Director is not correct. Employer-employee relationship is a question of

both law and fact. Law provides its cognitive significance, whereas evidence gives its out-
there representation. Being a matter of law and evidence, it cannot be the subject of
stipulation. A, B, and C, who are not medical specialists, are the employees of MM Medical
Center, Inc. owing to the “means-methods control” exercised by the latter over them.

A.4.
Mrs. B, the personal cook in the household of X, filed a monetary claim against her employer, X, for
denying her service incentive leave pay. X argued that Mrs. B did not avail of any service incentive
leave at the end of her one (1) year of service and hence, not entitled to the said monetary claim.

(a) Is the contention of X tenable? Explain.

No, X’s contention is not tenable. As a kasambahay, Mrs. B is entitled to service

incentive leave (RA 10361). As such, she has the prerogative to use it, monetize it after 12
months of service, or commute it until separation from service. If she elects the second, she
has 3 years from demand for payment to avail of the benefit. [Lourdes Rodriguez v. Park N
Ride, GR 222980, March 20, 2017]. Hence, not being a prescribed claim, its withholding is
unlawful.

(b) Assuming that Mrs. B is instead a clerk in X’s company with at least 30 regular employees, will her
monetary claim prosper? Explain.

Being a corporate employee, Mrs. B is a covered employee. Not being one of the less
than 10 regular employees, as her employee has at least 30 regular employees, she is
qualified. Hence, prescription being a non-issue, she is entitled to service incentive leave.
 A.5.
Ms. F, a sales assistant, is one of the eight (8) workers regularly employed by ABC Convenience
Store. She was required to report on December 25 and 30.

Should ABC Convenience Store pay her holiday pay? Explain.

No, ABC Convenience Store, being a retail establishment does not have the duty to pay
holiday pay to Ms. F because she is one of its less than 10 regular employees. As such, she is
disqualified by Art. 94(a), LC.

A.6.
D, one of the sales representatives of OP, Inc., was receiving a basic pay of P50,000.00 a month,
plus a 1% overriding commission on his actual sales transactions. In addition, beginning 3 months
ago, or in August 2019, D was able to receive a monthly gas and transportation allowance of
P5,000.00 despite the lack of any company policy therefor.

In November 2019, D approached his manager and asked for his gas and transportation allowance
for the month. The manager declined his request, saying that the company had decided to
discontinue the aforementioned allowance considering the increased costs of its overhead expenses.
In response, D argued that OP, Inc.’s removal of the gas and transportation allowance amounted to a
violation of the rule on non-diminution of benefits.

Is the argument of D tenable? Explain.

No, D’s argument is not tenable. The Principle of Non-Diminution of Benefits [Art. 100,
LC] strictly pertains to pre-promulgation benefits and not to post-promulgation benefits such
as subject allowance [Apex Mining Co. v. NLRC, GR 86200, Feb 25, 1992; Insular Hotel
Employees Union-NFL v. Waterfront Insular Hotel Davao, GR 174040, Sept. 22, 2010]. If what is
diminished is s post-promulgation benefit, the rule violated is the Principle of Grants. At any
rate, the subject allowance has not yet ripened to a demandable right since its enjoyment was
for a few months only and the company did not intend to grant it permanently.

A.7.
W Gas Corp. is engaged in the manufacture and distribution to the general public of various
petroleum products. On January 1, 2010, W Gas Corp. entered into a Service Agreement with Q
Manpower Co., whereby the latter undertook to provide utility workers for the maintenance of the
former’s manufacturing plant. Although the workers were hired by Q Manpower Co., they used the
equipment owner by W Gas Corp. in performing their tasks, and were likewise subject to constant
checking based on W Gas Corp.’s procedures.

On February 1, 2010, Mr. R, one of the utility workers, was dismissed from employment in line with
the termination of the Service Agreement between W Gas Corp. and Q Manpower Co. Thus, Mr. R
filed a complaint for illegal dismissal against W Gas Corp., claiming that Q Manpower Co. is only a
labor-only contractor. In the course of the proceedings, W Gas Corp. presented no evidence to prove
Q Manpower Co.’s contractualization.

(a) Is Q Manpower Co. a labor-only contractor? Explain.

Q Manpower Co., not being substantially capitalized and possessed with investment in the
form of tools, equipment, machineries or work premises, is a labor-only contractor.
Relevantly, its apparent labor-only contractor status is confirmed by the fact that it does not
control the means and methods of performance of the manpower it supplied. Since both
essential element and confirming element are present, it is a labor-only contractor.

(b) Will Mr. R’s complaint for illegal dismissal against W Gas Corp. prosper? Explain.

Yes, it will prosper. In labor-only contracting, the legal personality of the principal merges with
that of its labor-only contractor who is just its agent. [Coca-Cola Bottlers Phils., Inc. v. Dela
Cruz, et al., GR 184977, Dec. 7, 2009] Hence, pursuant to the Principle of Merger of Legal
Personalities, the former as the real employer can be proceeded against for illegal dismissal
despite the termination of subject contracting agreement.

A.8.
Ms. T was caught in the act of stealing the company property of her employer. When Ms. T admitted
to the commission of the said act to her manager, the latter advised her to just tender her resignation;
otherwise, she would face an investigation which would likely lead to the termination of her
employment and the filing of criminal charges in court.

Acting on her manager’s advice, Ms. T submitted a letter of resignation. Later on, Ms. T filed a case
for constructive dismissal against her employer. While Ms. T conceded that her manager spoke to her
in a calm and unforceful manner, she claimed that her resignation was not completely voluntary
because she was told that she should not resign, she could be terminated from work for just cause
and worse criminal charges could be filed against her.

(a) What is the difference between resignation and constructive dismissal?

A resignation is voluntary self-termination when personal reasons cannot be sacrificed

in favor of the exigency of the employer’s business [Gan v. Galderma Philippines, Inc., et al.,
GR 177167, Jan. 17, 2013]. In contrast, a constructive dismissal is a quitting because the
employer makes continued employment impossible, unreasonable or unlikely [Phil. Japan
Active Carbon Corp. v. NLRC, GR 83239, March 8, 1989]

(b) Will Ms. T’s claim for constructive dismissal prosper? Explain.

No, Ms. T’s claims will not prosper. She was not placed in a situation that left her no
option except to self-terminate. Instead, she was just given a graceful exit. A graceful exit is
within the prerogative of an employer to give instead of binding an employee to his fault, or
filing an action for redress against him. [Central Azucarera de Bais, Inc., et al. v. Janet T.
Siason, GR 215555, July 29, 2015]

A.9.
After due proceedings, the LA declared Mr. K to have been illegally dismissed by his former
employer, ABC, Inc. As a consequence, the LA directed ABC, Inc. to pay Mr. K separation pay in lieu
of reinstatement as well as his full back wages.

While ABC, Inc. accepted the finding of illegal dismissal, it nevertheless filed a motion for
reconsideration, claiming that the LA erred in awarding both separation pay and full back wages, and
instead, should have ordered Mr. K’s reinstatement to his former position without loss of seniority
rights and other privileges, but without payment of back wages. In this regard, ABC, Inc. pointed out
that the LA’s ruling did not contain any finding of strained relations or that reinstatement was no
longer feasible. In any case, it appears that no evidence was presented on this score.
(a) Is ABC, Inc.’s contention to delete the separation pay, and instead, order reinstatement without
back wages correct? Explain.

As to separation pay, the LA’s decision fails to state that there is a bar to reinstatement;
hence, he should have ordered reinstatement pursuant to the general rule prescribed by Art.
294 of the Labor Code. Since the alternative relief of separation pay is an exception, it must be
justified with a reinstatement bar. As to back wages, however, it cannot be deleted because it
is a logical consequence of a finding of illegal dismissal [ICT Marketing Services, Inc. v.
Mariphil Sales, GR 202090, Sept. 9, 2015]. Hence, absent any reason for limiting or withholding
it, it should be awarded as it was awarded by the LA.

(b) Assuming that on appeal, the NLRC upholds the decision of the LA, where, how, and within what
timeframe should ABC, Inc. assail the NLRC ruling?

After the denial of the appellant’s motion for reconsideration, the NLRC’s decision (10
days) and order of denial can be assailed under Rule 65 of the Rules of Court through the filing
a petition for certiorari within 60 days from receipt of said denial order (sa Court of Appeals).
Correction of error of jurisdiction, resulting in the nullification of the assailed dispositions,
should be sought based on the NLRC’s grave abuse of its appellate power amounting to lack
of or excess of jurisdiction.

A.10.
For purposes of prescription, within what periods from the time the cause of action accrued should
the following cases be filed:

(a) Money claims arising from employer-employee relations – within 3 years from date they
become a legal possibility or can be judicially brought [Art. 306, LC; Art. 1150, NCC; Anabe v.
Asian Construction, GR 183233, Dec. 23, 2009]

(b) Illegal dismissal – within 4 years from complete severance of employer-employee

relationship or date of salary/positional downgrade [Art. 1146, NCC; Orchard Golf & Country
Club v. Francisco, GR 178125, March 18, 2013]

(c) Unfair labor practice – not later than 1 year from date of commission [Art. 305, LC]. As to its
criminal aspect, it shall be prosecuted within 3 years from date of finality of the ULP judgment
[Art. 305, LC[

(d) Offenses under the Labor Code – within 3 years from date of commission [Art. 305, LC]

(e) Illegal recruitment – within 5 years if simple illegal recruitment, and within 20 years if
economic sabotage [Sec. 7, Rule IV, RA 10022/]

B.11.
Briefly discuss the powers and responsibilities of the following in the scheme of the Labor Code:

(a) Secretary of Labor – Ordinary Powers: Visitorial and enforcement [Art. 128, LC]; appellate, review
of compliance orders issued under Art. 128, LC; and review of CA orders per Art. 272, LC; rule-
making [Art. 5, LC]; and control and supervision [The Heritage Hotel Manila v. NUWHRAIN-HHMSC,
GR 178296, Jan. 12, 2011]

Extraordinary Powers: Assumption power under Art. 278(g); and suspension power under Art. 292(b),
LC.
(b) Bureau of Labor Relations

(c) Voluntary Arbitrators

B.12.
Due to serious business reverses, ABC Co. decided to terminate the services of several officers
receiving “fat” compensation packages. One of these officers was Mr. X, its Vice-President for
External Affairs and a member of the Board of Directors. Aggrieved, Mr. X filed a complaint for illegal
dismissal before the NLRC – Regional Arbitration Branch.

ABC Co. moved for the dismissal of the case on the ground of lack of jurisdiction, asserting that since
Mr. X occupied the position of Vice-President for External Affairs which is listed in the by-laws of the
corporation, the case should have been filed before the RTC.

The LA denied ABC Co.’s motion and proceeded to rule that Mr. X was illegally dismissed. Hence, he
was reinstated in ABC Co.’s payroll pending its appeal to the NLRC.

(a) Did the LA err in denying ABC Co.’s motion to dismiss on the ground of lack of jurisdiction?
Explain.

The LA did not err. Even if the office occupied by Mr. X may have been listed in the
corporate by-laws as a corporate office, it should have been shown that he was appointed to it
by the Board of Directors. Absent evidence, Mr. X was a corporate employee; hence, the
tenurial issue he brought to the LA was not an intra-corporate issue. [Cosare v. Broadcom
Asia, Inc., et al, GR 2011298, Feb 5, 2014]. Moreover, mere membership in the governing board
does not make one a corporate officer. Unless elected as President, Secretary or Treasurer, a
member of the board would not qualify as a corporate officer. [Sec. 24, Revised Corporation
Code]

(b) Assuming that jurisdiction is not at issue and that the NLRC reverses the LA’s ruling of illegal
dismissal with finality, may ABC Co. claim reimbursement for the amounts it paid to Mr. X during the
time that he was on payroll reinstatement pending appeal? Explain.

ABC Co. cannot claim reimbursement because Mr. X had nothing to do with the
reinstatement given him. On the contrary, the company exercised its exclusive right to
determine which type of reinstatement to give him. Had it informed him of the possibility of a
reimbursement, he would not have chosen to be driven to perjury at the end of the day
through a reimbursement by compulsion. In this case, the Principle of Unjust Enrichment has
no application; hence, he can keep the salaries he received. [Garcia, et al. v. PAL, GR 164856,
Jan. 20, 2009]

B.13.
Mr. A signed a 1-year contract with XYZ Recruitment Co. for deployment as wielding supervisor for
DEF, Inc. located in Dubai. The employment contract, which the POEA approved, stipulated a salary
of USD 600.00 a month.

Mr. A had only been in his job in Dubai for 6 months when DEF, Inc. announced that it was suffering
from severe financial losses and thus intended to retrench some of its workers, among them Mr. A.
DEF, Inc. hinted, however, that employees who would accept a lower salary could be retained.
Together with some other Filipino workers, Mr. A agreed to a reduced salary of USD 400.00 a month
and thus, continued with his employment.

(a) Was the reduction of Mr. A’s salary valid? Explain.

No, the reduction is not valid. There is a contractual breach. Applying lex ex contractu or lex loci
celebrationis, Philippine law controls; hence, the substantial character of the alleged financial losses
must have been proven with financial statements duly certified by an independent external auditor.
Mere announcement of losses would not suffice. The threat of retrenchment was just a scheme to
conveniently effect the illegal substitution of the POEA-approved employment contracts.

(b) Assuming that the reduction was invalid, may Mr. A hold XYZ Recruitment Co. liable for
underpayment of wages? Explain.

Yes, Mr. A may hold XYZ Recruitment Co. liable for the payment of his wages under the rule that a
recruiter is solidarily liable for breaches of the terms and conditions of the POEA-approved
employment contract [Sec. 1(f), Rule II, Book II, POEA Rules and Regulations; Datuman v. First
Cosmopolitan Manpower and Promotion Services, Inc., GR 156029, Nov. 14, 2008]

B.14

Upon a review of the wage rate and structure pertaining to its regular rank and file employees, K
Corporation found it necessary to increase its hiring rates for employees belonging to the different job
classification levels to make their salary rates more competitive in the labor market.

After the implementation of the new hiring salary, Union X, the exclusive bargaining agent of the rank
and file employees, demanded a similar salary adjustment for the old employees. It argued that the
increase in hiring rates resulted in wage distortion since it erased the wage gap between the new and
old employees. In other words, new employees would enjoy almost the same salary rates as K
Corporation’s old employees.

(a) What is wage distortion?

A wage distortion is the elimination or serious contraction of the wage gap advantage enjoyed by one
wage group over another of same wage region; provided, such elimination or compression is caused
by a wage law, or wage order [Art. 124, LC]; CBA recognition [Metro Transit Organization, Inc. v.
NLRC, et al., GR 116008, July 11, 1995]; or merger [Manila Mandarin Employees Union v. NLRC, et
al., GR 108556, Nov. 19, 1996]; but not a promotion [NFL v. NLRC, GR 103586, July 21, 1994]

(b) Did a wage distortion arise under the circumstances which legally obligated K Corporation to
rectify the wages of its old employees? Explain.

No. Since the cause of the alleged elimination is not one of the recognized causes, as it was an
adjustment of the hiring rate for new hires joining other wage groups, the elimination of the wage gap
is not a wage distortion. It is rather clear that the increased rate would only be given to new hires and
not to all the members of the wage group/s they would be joining. Hence, the company has nothing to
adjust or rectify.

B.15.
On December 1, 2018, GHI Co., an organized establishment, and Union J, the exclusive bargaining
agent therein executed a 5-year CBA which, after ratification, was registered with the Bureau of Labor
Relations.

(a) When can the union ask, at the earliest, for the renegotiation of all terms of the CBA, except its
representation aspect? Explain.

Except for the representation aspect of the CBA, the other provisions can be renegotiated not later
than 3 years from date of the CBA’s effectivity. [Art. 265, LC]

(b) When is the earliest time that another union can file for a petition for certification election? Explain.

Another union can file a petition for certification election during the freedom period of the CBA which
is its last 60 days. [Art. 265, LC]

B.16.

W Ship Management, Inc. hired Seafarer G as bosun in its vessel under the terms of the 2010 POEA-
Standard Employment Contract.

On his 6th month on board, Seafarer G fell ill while working. In particular, he complained of stomach
pain, general weakness, and fresh blood in his stool. When his illness persisted, he was medically
repatriated on January 15, 2018. On the same day, Seafarer G submitted himself to a post-
employment medical examination, wherein he was referred to further treatment. As of September 30,
2018, Seafarer G has yet to be issued any fit-to-work certification by the company-designated
physician, much less a final and definitive assessment of his actual condition. Since Seafarer G still
felt unwell, he sought an opinion from a doctor of his choice who later issued an independent
assessment stating that he was totally and permanently disabled due to his illness sustained during
work.

Seafarer G then proceeded to file a claim for total and permanent disability compensation. The
company asserts that the claim should be dismissed due to prematurity since Seafarer G failed to first
settle the matter through the third-doctor conflict resolution procedure as provided under the 2010
POEA-SEC.

(a) What is the third-doctor conflict resolution procedure under the 2010 POEA-SEC.

In the event of conflicting medical assessments, the parties are required to select a third physician
whose finding shall be final and binding on them. Under Sec. 20(B) of the 2010 POEA-SEC, the
selection is consensual; however, jurisprudence has made it mandatory. [Philippine Hammonia Ship
Agency, Inc. v. Eulogio Dumadag, GR 194362, June 26, 2013]

(b) Will Seafarer G’s claim for total and permanent disability benefits prosper despite his failure to first
settle the matter through the third-doctor conflict resolution procedure? Explain.

Yes, it will prosper. The Third Physician Rule has no application when the company-designated
physician exceeds the 120-day treatment period without making a final, categorical and definitive
assessment. Here, he allowed 209 days to elapse without issuing a fit-to-work assessment or a
disability grade. [Apines v. Elburg Shipmanagement Phil., Inc. GR 202114, Nov. 9, 2016]

(c) Assuming that Seafarer G failed to submit himself to a post-employment medical examination
within 3 working days from his return, what is the consequence thereof to his claim? Explain.
Non-compliance with the 3-day reporting requirement results in the forfeiture of G’s entitlement to
disability compensation. [Sec. 20(B), POEA-SEC]

B.17.

Ms. A is a volleyball coach with 5 years of experience in her field. Before the start of the volleyball
season of 2015, she was hired for the sole purpose of overseeing the training and coaching of the
University’s volleyball team. During her hiring, the Vice-President for Sports expressed to Ms. A the
University’s expectation that she would bring the University a championship at the end of the year.

In her first volleyball season, the University placed 9th out of the 10 participating teams. Soon after
the end of the season, the Vice-President for Sports informed Ms. A that she was a mere
probationary employee and hence, she need not come back for the next season because of the poor
performance of the team.

In any case, the Vice-President for Sports claimed that Ms. A was a fixed-term employee whose
contract had ended at the close of the year.

(a) Is Ms. A a probationary, fixed-term, or regular employee? Explain your reasons as to why she is or
she is not such kind of an employee for each of the types of employment given.

Ms. A is a regular employee. She cannot be considered a fixed-term employee in the absence of a
fixed-term employment contract, nor a probationary employee because it was not expressly
communicated to her upon her engagement that her tenure was for 6 months unless she survived
pre-disclosed standards for regularization. When an employee is hired without being apprised of such
standards, he is deemed a regular employee regardless of the employer’s intent to hire him as a
probationary employee. [Abbott Laboratories v. Alcaraz, GR 192571, July 23, 2013]

(b) Assuming that Ms. A was dismissed by the University for serious misconduct but was never given
a notice to explain, what is the consequence of a procedurally infirm dismissal from service under our
Labor law and jurisprudence? Explain.

The violation of Mr. A’s right to statutory due process requires the assessment of the University with
nominal damages. The amount is P30,000.00 because a dismissal for failure to qualify is akin to a
dismissal for a just cause. [Abbott Laboratories v. Alcaraz, GR 192571, July 23, 2013]

B.18.

When resolving a case of unfair labor practice filed by a union, what should the critical point of
analysis to determine if an act constitutes ULP?

The nature of a ULP is that it is a violation of workers’ right to self-organization. [Art. 258, LC; Culili v.
Eastern Telecommunications Phils., GR 165381, Feb. 9, 2011] An act, however unfair it may be, is
not a ULP unless listed as such under Art. 259 & 260, LC. Therefore, the critical point of analysis in a
ULP case filed by a union is whether the act complained of is expressly listed as ULP under Art. 259,
LC.

B.19.

Because of dwindling sales and the consequent limitation of production, rumors were rife that XYZ,
Inc. would reduce its employee force. The next day, the employees of XYZ, Inc. received a notice that
the company will have a winding down period of 10 days, after which there will be a 6-month
suspension of operations to allow the company to address its precarious financial position.

On the 4th month of suspension of its operations XYZ, Inc. posted announcement that it will resume
its operations in 60 days but at the same time announced that instead of closing down due to financial
losses, it will retrench 50% of the work force.

(a) Is the announcement that there would be retrenchment affecting 50% of the work force sufficient
compliance with the legal requirements for retrenchment? Explain.

No. The 30-day notice requirement is a written notice that must be served on both the DOLE and the
affected employees. [Art. 298, LC] Hence, the posted announcement is a violation of the prescribed
pre-termination procedure.

(b) Assuming that XYZ, Inc., instead of retrenchment, extended the suspension of its operations from
6 months to 8 months, would the same be legally permissible? If not, what are the consequences?

Temporary suspension of business operations under Art. 301 of the LC should not exceed 6 months;
otherwise, the suspension would ripen to constructive dismissal after the period expires. In such
case, the company would be ordered to reinstate and pay back wages.

B.20.

Discuss the differences between compulsory and voluntary/optional retirement as well as the
minimum benefits provided under the Labor Code for retiring employees of private establishments.

A voluntary/optional retirement is a termination of employment based on a bilateral agreement to

terminate employment at an agreed age regardless of years in service, or after a certain number of
years in service regardless of age. It is a matter of contract. In contrast, a compulsory retirement is a
termination of employment by operation of law. It is a matter of statute.

Under Art. 302 of the LC, retiring employees shall be paid retirement benefits computed as follows:
(22.5 days x Daily Rate) x Length of Service. The 22.5 days consist of 15 days representing half-
month salary, 5 days as service incentive leave, and 2.5 days representing 1/12 of 13th month pay.
The full 22.5 days shall be used if the retiree is entitled to both service incentive leave and 13th
month pay. Meantime, the 15 days must always be used.

BAR 2018
I.
Narciso filed a complaint against Norte University for the payment of retirement benefits after having
been a part-time professional lecturer in the same school since 1974. Narciso taught for two
semesters and a summer term for the school year 1974-1975, took a leave of absence from 1975 to
1977, and resumed teaching until 2003. Since then, his contract has been renewed at the start of
every semester and summer, until November 2005 when he was told that he could no longer teach
because he was already 75 years old. Norte University also denied Narciso’s claim for retirement
benefits stating that only full-time permanent faculty, who have served for at least five years
immediately preceding the termination of their employment, can avail themselves of post-employment
benefits. As part-time faculty member, Narciso did not acquire permanent employment status under
the Manual of Regulations for Private Schools, in relation to the Labor Code, regardless of his length
of service.
(a) Is Narciso entitled to retirement benefits? (2.5%)

SUGGESTED ANSWER:

(a) As a part-time employee with fixed-term employment, Narciso is entitled to retirement benefits.
Book VI, Rule II of the Rules Implementing the Labor Code states that the rule on retirement shall
apply to all employees in the private sector, regardless of their position, designation or status and
irrespective of the method by which their wages are paid, except to those specifically exempted. Part-
time faculty members do not fall under the exemption. Based also on the Retirement Pay Law, and its
Implementing Rules, part-time faculty members of private educational institutions are entitled to full
retirement benefits even if the services are not continuous, and even if their contracts have been
renewed after their mandatory age of retirement.

If he is entitled to retirement benefits, how should retirement pay be computed in the absence of any
contract between him and Norte University providing for such benefits? (2.5%)
SUGGESTED ANSWER:

(b) In the absence of any contract providing for higher retirement benefits, private educational
institutions, including Norte University, are obligated to set aside funds for the retirement pay of all its
part-time faculty members. A covered employee who retires pursuant to the Retirement Pay Law 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. One-half 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 service incentive leaves. In total, this should amount to 22.5
days for every year of service (De La Salle Araneta University v. Bernardo, G.R. No. 190809,
February 13, 2017).

II

Nayon Federation issued a charter certificate creating a rank-and-file Neuman Employees Union. On
the same day, New Neuman Employees Union filed a petition for certification election with the
Department of Labor and Employment (DOLE) Regional Office, attaching the appropriate charter
certificate.

(a) The employer, Neuman Corporation, filed a motion to dismiss the petition for lack of legal
personality on the part of the petitioner union. Should the motion be granted? (2.5%)

SUGGESTED ANSWER:

No. The motion should be denied. Under Article 240 of the Labor Code (LC), a petition for certification
election may be filed on the basis of a valid charter certificate issued to a chartered local by a duly
registered federation.
The employer likewise filed a petition for cancellation of union registration against New Neuman
Employees Union, alleging that Nayon Federation already had a chartered local rank-and-file union,
Neuman Employees Union, pertaining to the same bargaining unit within the establishment. Should
the petition for cancellation prosper? (2.5%)
SUGGESTED ANSWER:

(b) No. The existence of another chartered local under the same federation within the same
bargaining unit is not among the grounds to cancel union registration under Article 247 LC, as
amended by RA 9481.
III

Due to his employer’s dire financial situation, Nicanor was prevailed upon by his employer to
voluntarily resign. In exchange, he demanded payment of salary differentials, 13th month pay, and
financial assistance, as promised by his employer. Management promised to pay him as soon as it is
able to pay off all retrenched rank-and-file employees. Five years later, and before management
was able to pay Nicanor the amount promised to him, Nicanor died of a heart attack. His widow,
Norie. filed a money claim against the company before the National Labor Relations Commission
(NLRC), including interest on the amount of the unpaid claim. She also claimed additional damages
arguing that the supposed resignation letter was obtained from her spouse through undue pressure
and influence. The employer filed a motion to dismiss on the ground that (A) the NLRC did not have
jurisdiction over money claims, and (8) the action has prescribed.

(a) Does the NLRC have jurisdiction to award money claims including interest on the amount
unpaid? (2.5%)

SUGGESTED ANSWER:

The NLRC has jurisdiction over money claims arising from an employer-employee relationship where
the amount claimed is in excess of PhP 5,000, including interest, regardless of whether or not there
is a claim for reinstatement. (Sec. 10, RA 8042, as amended by RA 10022.
Assuming that the NLRC has jurisdiction, has the action prescribed?(2.5%)
SUGGESTED ANSWER:

(b) In Accessories Specialists, Inc. v. Alabama, (G.R. No. 168985, July 23, 2008), the Supreme
Court held that the principle of promissory estoppel can apply as a recognized exception to the three-
year prescriptive period under Article 291 (now 306) of the Labor Code. Nicanor relied on the promise
of the employer that he would be paid as soon as the claims of retrenched employees were paid. If
not for this promise, there would have been no reason why Nicanor would delay the filing

of the complaint. Great injustice would be committed if the employee’s claim were brushed aside on
mere technicality, especially when it was the employer’s action that prevented Nicanor from filing the
claims within the required period.

May Nicanor’s spouse successfully claim additional damages as a result of the alleged undue
pressure and influence? (2.5%)
SUGGESTED ANSWER:

(c) Norrie failed to establish that Nicanor’s consent was vitiated when he filed his resignation letter.
In BMG Record v. Aparecio, (G.R. No. 153290, September 5, 2007), the SC ruled that the matter of
“financial assistance” was an act of generosity on the part of management. Under the circumstances,
Nicanor had the intention to resign. Once management had accepted the resignation, Nicanor could
not unilaterally withdraw this voluntary act of termination of employment.

IV

Natasha Shoe Company adopted an organizational streamlining program that resulted in the
retrenchment of 550 employees in its main plant. After having been paid their separation benefits, the
retrenched workers demanded payment of retirement benefits under a CBA between their union and
management. Natasha Shoe Company denied the workers’ demand.

(a) What is the most procedurally peaceful means to resolve this dispute? (2.5%)
SUGGESTED ANSWER:

The parties may resolve this through plant-level mechanisms such as a labor-management
committee or a grievance machinery under a collective bargaining agreement.
Can the workers claim both separation pay and retirement benefits? (2.5%)
SUGGESTED ANSWER:

(b) In Santos v. Senior Philippines, (G.R. No. 166377, November 28, 2008), the Supreme Court held
that retirement benefits and separation pay are not mutually exclusive, and both benefits may be paid
in the absence of a contrary stipulation in the retirement plan and/or in the CBA.

Nelda worked as a chambermaid in Hotel Neverland with a basic wage of PhP560.00 for an eight-
hour workday. On Good Friday, she worked for one (1) hour from 10:00 PM to 11 :00 PM. Her
employer paid her only PhP480.00 for each 8-hour workday, and PhP70.00 for the work done on
Good Friday. She sued for underpayment of wages and non-payment of holiday pay and night shift
differential pay for working on a Good Friday. Hotel Neverland denied the alleged underpayment,
arguing that based on long-standing unwritten tradition, food and lodging costs were partially
shouldered by the employer and partially paid for by the employee through salary deduction.
According to the employer, such valid deduction caused the payment of Nelda’s wage to be below the
prescribed minimum. The hotel also claimed that she was not entitled to holiday pay and night shift
differential pay because hotel workers have to work on holidays and may be assigned to work at
night.

(a) Does the hotel have valid legal grounds to deduct food and lodging costs from Nelda’s basic
salary? (2.5%)

SUGGESTED ANSWER:

(a) In Mabeza v. NLRC, (271 SCRA 670 [1997]), the Supreme Court established three
requirements before the value of “facilities” such as food and lodging may be deducted from an
employee’s wages: first, proof must be shown that such facilities are customarily furnished by the
trade; second, the provision of deductible facilities must be voluntarily accepted in writing by the
employee; and finally, facilities must be charged at fair and reasonable value. In the case at hand, the
second and third requisites on voluntary acceptance of deductible facilities in writing, at fair and
reasonable value, was not established.

Applying labor standards law, how much should Nelda be paid for work done on Good Friday? Show
the computation in your test booklet and encircle your final answer. (2.5%)
SUGGESTED ANSWER:

(b) As an employee paid PhP 70 an hour, Nelda was entitled to an additional 100% of her hourly
wage for working on a Good Friday, plus 10% for night differential pay. Nelda should be paid a total of
PhP 154.00 for working that day.

VI

A certification election was conducted in Nation Manufacturing Corporation, whereby 55% of eligible
voters in the bargaining unit cast their votes. The results were as follows:
Union Nana: 45 votes Union Nada: 40 votes Union Nara: 30 votes No Union: 80 votes

Union Nana moved to be declared as the winner of the certification election.

(a) Can Union Nana be declared as the winner? (2.5%)

SUGGESTED ANSWER:

Union Nana cannot be immediately declared as the winner. A run-off election pursuant to Article 268
of the Labor Code (LC) must be first be conducted. A run-off election is required since the present
case involves an election which provided for three or more choices, with no choice receiving a
majority of the valid votes cast, and the total number of votes for all contending unions being at least
50% of the number of votes cast.
Assume that the eligibility of 30 voters was challenged during the pre-election conference. The ballots
of the 30 challenged voters were placed inside an envelope sealed by the DOLE Election Officer.
Considering the said envelope remains sealed, what should be the next course of action with
respect to the said challenged votes? (2.5%)
SUGGESTED ANSWER:

(b) Since the challenged votes may materially affect the results of the election, and may in fact
even give Union Nada or Union Nara an absolute majority, then the said

challenged votes should be opened. Pursuant to Rule IX, Section 11 of the Rules Implementing Book
V of the Labor Code, the envelope with the challenged votes shall be opened and the question of
eligibility shall be passed upon by the DOLE medarbiter.

VII

Nico is a medical representative engaged in the promotion of pharmaceutical products and medical
devices for Northern Pharmaceuticals, Inc. He regularly visits physicians’ clinics to inform them of the
chemical composition and benefits of his employer’s products. At the end of every day, he receives
a basic wage of PhP700.00 plus a PhP150.00 “productivity allowance.” For purposes of computing
Nico’s 13th month pay, should the daily “productivity allowance” be included? (2.5%)

SUGGESTED ANSWER:

No. The second paragraph of Section 5(a) of the Revised Guidelines Implementing the 13th Month
Pay Law states that “employees who are paid a fixed or guaranteed wage plus commission are also
entitled to the mandated 13th month pay, based on their total earnings during the calendar year, i.e.,
on both their fixed or guaranteed wage and commission.” However, the SC in Philippine Duplicators,
Inc. v. NLRC, 241 SCRA 380 (G.R. No. 110068 February 15, 1995), declared the aforesaid provision
as null and void with respect to those medical representatives who do not obtain productivity
allowances by virtue of generated sales. Such allowances are in the nature of profit-sharing bonuses
or commissions that should be properly excluded from the ambit of the term “basic salary” for
purposes of computing 13th month pay due to employees.

VIII

Nathaniel has been a salesman assigned by Newmark Enterprises (Newmark) for nearly two years at
the Manila office of Nutrition City, Inc. (Nutrition City). He was deployed pursuant to a service
agreement between Newmark and Nutrition City, the salient provisions of which were as follows:
the Contractor (Newmark) agrees to perform and provide the Client (Nutrition City), on a non-
exclusive basis, such tasks or activities that are considered contractible under existing laws, as may
be needed by the Client from time to time;
the Contractor shall employ the necessary personnel like helpers, salesmen, and drivers who are
determined by the Contractor to be efficiently trained;
the Client may request replacement of the Contractor’s personnel if quality of the desired result is not
achieved;
the Contractor’s personnel will comply with the Client’s policies, rules, and regulations; and
the Contractor’s two service vehicles and necessary equipment will be utilized in carrying out the
provisions of this Agreement.
When Newmark fired Nathaniel, he filed an illegal dismissal case against the wealthier company,
Nutrition City, Inc., alleging that he was a regular employee of the same. Is Nathaniel correct? (2.5%)

SUGGESTED ANSWER:

Yes, Nathaniel is correct. Similar to the case of Coca-Cola Bottlers Philippines, Inc. v. Agito, (G.R.
No. 179546, February 13, 2009), the lack of control by the Contractor (Newmark) over the worker
Nathaniel can be gleaned from the Service Agreement. It is apparent that Newmark has to comply
with Nutrition City’s regulations, and that Nutrition City has the right to request the replacement of
Newmark’s personnel. It is likewise apparent that the Agreement did not identify the work needed to
be performed and the final result to be accomplished, pointing to the conclusion that Newmark did not
obligate itself to perform an identifiable job, work, or service. Nathaniel, thus, was under the control of
Nutrition City.

With respect to the service vehicles and equipment, these may not be considered as substantial
capital on the part of Newmark, as the facts do not establish their sufficiency to carry out the
Agreement. The presence of

Newmark’s vehicles and equipment did not necessarily preclude the use of Nutrition City’s own
capital and assets.

IX

Sgt. Nemesis was a detachment non-commissioned officer of the Armed Forces of the Philippines in
Nueva Ecija. He and some other members of his detachment sought permission from their Company
Commander for an overnight pass to Nueva Vizcaya to settle some important matters. The Company
Commander orally approved their request and allowed them to carry their firearms as the place
they were going to was classified as a “critical place.” They arrived at the place past midnight; and as
they were alighting from a tricycle, one of his companions accidentally dropped his rifle, which fired
a single shot, and in the process hit Sgt. Nemesis fatally. The shooting was purely accidental. At the
time of his death, he was still legally married to Nelda, but had been separated de facto from her for
17 years. For the last 15 years of his life, he was living in with Narda, with whom he has two minor
children. Since Narda works as a kasambahay, the two children lived with their grandparents, who
provided their daily support. Sgt. Nemesis and Narda only sent money to them every year to pay for
their school tuition.

Nelda and Narda, both for themselves and the latter, also on behalf of her minor children, separately
filed claims for compensation as a result of the death of Sgt. Nemesis. The line of Duty Board of the
AFP declared Sgt. Nemesis’ death to have been “in line of duty”, and recommended that all benefits
due to Sgt. Nemesis be given to his dependents. However, the claims were denied by GSIS because
Sgt. Nemesis was not in his workplace nor performing his duty as a soldier of the Philippine Army
when he died.
(a) Are the dependents of Sgt. Nemesis entitled to compensation as a result of his death? (2.5%)

SUGGESTED ANSWER:

The death of Sgt. Nemesis arose out of and in the course of his employment as a soldier on active
duty in the AFP and hence,
compensable. The concept of a “workplace” cannot always be literally applied to a soldier on active
duty. Sgt. Nemesis had permission to go to Nueva Vizcaya and he and his companions had permit to
carry their firearms which they could use to defend themselves when attacked. A soldier on active
duty is really on duty 24 hours a day since he can be called upon anytime by his superiors, except
when he is on vacation leave status, which Sgt. Nemesis was not, at the time of his death (Hinoguin
v. ECC, G.R. No. 8430, April 17, 1989).

As between Nelda and Narda, who should be entitled to the benefits? (2.5%)
SUGGESTED ANSWER:

To be considered as a beneficiary, the spouse must be the legal spouse and living with the employee
at the time of his death. Nelda, as the surviving spouse who has been separated de facto from the
deceased employee, may still however be entitled if the separation was due to the covered
employee’s abandonment of the spouse without valid reason, or for other justifiable reasons. Narda,
not being a legitimate spouse, is not entitled to the benefits; however, the ECC may act as referee
and arbitrator between two (2) claimants to help each other reach a mutually acceptable compromise
settlement of allocating the compensation among themselves and their dependent children (Samar
Mining Co. Inc. v. WCC, G.R. No. L-29938-39, March 31, 1971).
Are the minor children entitled to the benefits considering that they were not fully dependent on Sgt.
Nemesis for support? (2.5%)
SUGGESTED ANSWER:

(c) Being a dependent does not mean absolute dependency for the necessities of life, but rather, that
the claimant looked up to and relied on the contribution of the covered employee for his means of
living as determined by his position in life. One need not be in the deceased’s household in order to
be a dependent. (Malate Taxicab v. Del Villar G.R. No. L-7489, Feb. 29, 1956).

Nonato had been continuously employed and deployed as a seaman who performed services that
were necessary and desirable to the business of N- Train Shipping, through its local agent, Narita
Maritime Services (Agency), in accordance with the 2010 Philippine Overseas Employment
Administration Standard Employment Contract (2010 POEA-SEC). Nonato’s last contract (for five
months) expired on November 15, 2016. Nonato was then repatriated due to a “finished contract.” He
immediately reported to the Agency and complained that he had been experiencing dizziness,
weakness, and difficulty in breathing. The Agency referred him to Dr. Neri, who examined, treated,
and prescribed him with medications. After a few months of treatment and consultations, Nonato was
declared fit to resume work as a seaman. Nonato went back to the Agency to ask for re-deployment
but the Agency rejected his application. Nonato filed an illegal dismissal case against the Agency and
its principal, with a claim for total disability benefits based on the ailments that he developed on board
N- Train Shipping vessels. The claim was based on the certification of his own physician, Dr. Nunez,
that he was unfit for sea duties because of his hypertension and diabetes.

(a) Was Nonato a regular employee of N-Train Shipping? (2.5%)

SUGGESTED ANSWER:

(a) No. Seafarers are considered contractual employees. They cannot be considered as regular
employees under Article 280 of the Labor Code. Their employment is governed by the contracts they
sign every time they are hired or rehired and their employment is terminated when the contract
expires. Their employment is contractually fixed for a certain period of time (Millares v. NLRC, G.R.
No. 110524, July 29, 2002).

Can Nonato successfully claim disability benefits against N-Train Shipping and its agent Narita
Maritime Services? (2.5%)
SUGGESTED ANSWER:

No. Nonato was repatriated due to a finished contract and not due to any accident or illness he
suffered while on board N- Train’s vessel. Moreover, Nonato was declared fit-to-work by the
company-designated physician. Under the 2010 POEA- SEC, if a doctor appointed by the seafarer
disagrees with the assessment of the company-designated physician, a third doctor may be agreed
upon jointly between the employer and the seafarer. The third doctor’s decision shall be final and
binding on both parties. In this case, no third doctor was appointed. Thus, the fit-to-work assessment
by the company- designated physician stands.
XI

Your favorite relative, Tita Nilda, approaches you and seeks your advice on her treatment of her
kasambahay, Noray. Tita Nilda shows you a document called a “Contract of Engagement” for your
review. Under the Contract of Engagement, Noray shall be entitled to a rest day every week, provided
that she may be requested to work on a rest day if Tita Nilda should need her services that day. Tita
Nilda also claims that this Contract of Engagement should embody all terms and conditions of
Noray’s work as the engagement of a kasambahay is a private matter and should not be regulated by
the State.

(a) Is Tita Nilda correct in saying that this is a private matter and should not be regulated by the
State? (2.5%)

SUGGESTED ANSWER:

Tita Nilda is incorrect. The relationship between Tita Nilda and Noray is an employer-employee
arrangement that is
regulated by the police power of the State. Through the Batas Kasambahay (R.A. 10361), the State
recognizes this employment relationship and establishes minimum labor standards for domestic
workers, toward decent employment and income, enhanced coverage of social protection and respect
for human rights, and strengthened social dialogue. Also, since domestic workers are generally
working women in vulnerable working conditions, the State regulates domestic worker employment to
prevent abuse and exploitation and uphold the gender rights of domestic workers.

Is the stipulation that she may be requested to work on a rest day legal? (2.5%)
SUGGESTED ANSWER:

Yes. Such a stipulation is legal as it states that Noray may only be “requested” to work on a rest
day, thereby recognizing that the consent of Noray is needed in order to waive her right to a weekly
rest day. Section 21 of the Kasambahay Law allows both the employer and domestic worker to
agree on certain arrangements to offset, waive, or accumulate rest days, subject to payment of
appropriate wages and benefits.
Are stay-in family drivers included under the Kasambahay Law?
(2.5%)

SUGGESTED ANSWER:

(c) No. Family drivers are not included under the Kasambahay Law. A “Kasambahay” refers to any
person engaged in domestic work within an employment relationship such as, but not limited to, the
following: general househelp, nursemaid or “yaya”, cook, gardener, or laundry person, but shall
exclude any person who performs domestic work only occasionally or sporadically and not on an
occupational basis.

XII

Nena worked as an Executive Assistant for Nesting, CEO of Nordic Corporation. One day, Nesting
called Nena into his office and showed her lewd pictures of women in seductive poses which Nena
found offensive. Nena complained before the General Manager who, in turn, investigated the matter
and recommended the dismissal of Nesting to the Board of Directors. Before the Board of Directors,
Nesting argued, that since the Anti-Sexual Harassment Law requires the existence of “sexual favors,”
he should not be dismissed from the service since he did not ask for any sexual favor from Nena. Is
Nesting correct? (2.5%)

SUGGESTED ANSWER:

Nesting’s argument on lack of sexual favor is incorrect. While his actions require further proof of being
a “sexual favor” in terms of criminal liability under RA 7877, he may still be held liable under the just
causes of termination in Article 297 of the Labor Code. In Villarama v. NLRC and

Golden Donuts, (G.R. No. 106341, September 2, 1994), the Supreme Court held that a managerial
employee is bound by more exacting work ethics, with a high standard of responsibility. Sexual
harassment of a subordinate amounts to “moral perversity” which provides a justifiable ground for
dismissal due to lack of trust and confidence.

XIII

Nicodemus was employed as a computer programmer by Network Corporation, a

telecommunications firm. He has been coming to work in short and sneakers, in violation of the
“prescribed uniform policy” based on company rules and regulations. The company human resources
manager wrote him a letter, giving him 10 days to comply with the company uniform policy.

Nicodemus asserted that wearing shorts and sneakers made him more productive, and cited his
above-average output. When he came to work still in violation of the uniform policy, the company
sent him a letter of termination of employment. Nicodemus filed an illegal dismissal case. The Labor
Arbiter ruled in favor of Nicodemus and ordered his reinstatement with backwages. Network
Corporation, however, refused to reinstate him. The NLRC 1st Division sustained the Labor Arbiter’s
judgment. Network Corporation still refused to reinstate Nicodemus. Eventually, the Court of Appeals
reversed the decision of the NLRC and ruled that the dismissal was valid. Despite the reversal,
Nicodemus still filed a motion for execution with respect to his accrued backwages.

Were there valid legal grounds to dismiss Nicodemus from his employment?2.5%)
SUGGESTED ANSWER:
(a) Yes. Nicodemus clearly committed willful disobedience of lawful orders issued by the Network
Corporation, with respect to the uniform policy. This is a ground for termination under Article 288(a) of
the Labor Code.

Should Nicodemus’ motion for execution be granted? (2.5%)

SUGGESTED ANSWER:

(b) Yes. In Garcia v. Philippine Airlines, Inc.,( G.R. No. 164856, January 20, 2009), the employer who
did not reinstate an employee pending appeal may be held liable for wages of the dismissed
employee covering the period from the time he was ordered reinstated by the Labor Arbiter to the
reversal of the NLRC’s decision by the Court of Appeals.

XIV

Nelson complained before the DOLE Regional Office about Needy Corporation’s failure to pay his
wage increase amounting to PhP5,000.00as mandated in a Wage Order issued by the Regional
Tripartite Wages and Productivity Board. Consequently, Nelson asked the DOLE to immediately issue
an Order sustaining his money claim. To his surprise, he received a notice from the DOLE to appear
before the Regional Director for purposes of conciliating the dispute between him and Needy
Corporation. When conciliation before the Regional Director failed, the latter proceeded to direct both
parties to submit their respective position papers in relation to the dispute. Needy Corporation argued,
that since Nelson was willing to settle for 75% of his money claim during conciliation proceedings,
only a maximum of 75% of the said money claim may be awarded to him.

(a) Was DOLE’s action to conduct mandatory conciliation in light of Nelson’s complaint valid?
(2.5%)

SUGGESTED ANSWER:

Yes. In relation to R.A. 10396 or the “Mandatory Conciliation-Mediation Law”, Article 234 of the Labor
Code provides that “all issues arising from labor and employment shall be subject to mandatory
conciliation-mediation. The Labor Arbiter or appropriate DOLE agency or office that has jurisdiction
over the dispute shall entertain only endorsed or referred cases by the duly authorized officer.”
Should the Regional Director sustain Needy Corporation’s argument? (2.5%)
SUGGESTED ANSWER:

(b) No. Article 239 of the Labor Code provides that the information and statements given in
confidence at the conciliation-mediation proceedings shall be treated as privileged communication
and shall not be used as evidence in any arbitration proceeding, except when there is a waiver of
confidentiality. In the present case, Nelson’s willingness to settle for 75% of his money claim may not
be used against him in the money claims case before the Regional Director due to the confidentiality
rule.

XV

Nexturn Corporation employed Nini and Nono, whose tasks involved directing and supervising rank-
and-file employees engaged in company operations. Nini and Nono are required to ensure that such
employees obey company rules and regulations, and recommend to the company’s Human
Resources Department any required disciplinary action against erring employees. In Nexturn
Corporation, there are two independent unions, representing rank-and-file and supervisory
employees, respectively.
(a) May Nini and Nono join a union? (2.5%)

SUGGESTED ANSWER:

(a) Yes. Nini and Nono, in effect, are supervisors as defined under Article 219(m) who may join a
supervisory union pursuant to Article 255 of the Labor Code.

May the two unions be affiliated with the same Union Federation? (2.5%)
SUGGESTED ANSWER:

(b) Yes. Article 255, as amended by Republic Act 9481, allows a rank-and-file union and a
supervisors’ union operating within the same establishment to join one and the same federation or
national union as affiliates thereof.

XVI

Nagrab Union and Nagrab Corporation have an existing CBA which contains the following provision:
“New employees within the coverage of the bargaining unit who may be regularly employed shall
become members of Nagrab Union. Membership in good standing with the Nagrab Union is a

requirement for continued employment with Nagrab Corporation.” Nagrab Corporation subsequently
acquired all the assets and rights of Nuber Corporation and absorbed all of the latter’s employees.
Nagrab Union immediately demanded enforcement of the above-stated CBA provision with respect to
the absorbed employees. Nagrab Corporation refused on the ground that this should not apply to the
absorbed employees who were former employees of another corporation whose assets and rights it
had acquired.

(a) Was Nagrab Corporation correct in refusing to enforce the CBA provision with respect to the
absorbed employees? (2.5%)

May a newly-regularized employee of Nagrab Corporation (who is not part of the absorbed
employees) refuse to join Nagrab Union?

SUGGESTED ANSWER:

Nagrab Corporation’s argument that the union security clause should not apply to absorbed
employees resulting from the acquisition is untenable. In BPI Employees Union-Davao City- FUBU
(BPIEU-Davao City-FUBU) v. Bank of the Philippine Islands, (G.R. No. 174912, July 24, 2013), the
Supreme Court ruled that the subject union security clause does not make a distinction as to how a
regular employee should attain such status as a “new employee” in order to be covered by the
clause. Absorbed employees as a result of merger or acquisition of assets and rights between two
corporations, therefore, should be considered as “new employees” of the surviving or acquiring
corporation.
How would you advise the human resources manager of Nagrab Corporation to proceed? (2.5%)
SUGGESTED ANSWER:

The HR Manager should heed the Supreme Court’s proscription in Alabang Country Club, Inc. v.
NLRC, (G.R. No. 170287, February 14, 2008), in cases involving termination of employment due to
enforcement of a union security clause. The following requirements must be observed:
The union security clause is applicable;
The certified bargaining agent is requesting for enforcement of such clause; and
There is sufficient evidence to support the sole and exclusive bargaining agent’s decision to expel the
employee from membership.
XVII

Upon compliance with the legal requirements on the conduct of a strike, Navarra Union staged a
strike against Newfound Corporation on account of a collective bargaining deadlock. During the
strike, some members of Navarra Union broke the windows and punctured the tires of the company-
owned buses. The Secretary of Labor and Employment assumed jurisdiction over the dispute.

(a) Should all striking employees be admitted back to work upon the assumption of jurisdiction by the
Secretary of Labor and Employment? Will these include striking employees who damaged company
properties? (2.5%)

SUGGESTED ANSWER:

(a) Yes. Under Article 278(g) of the Labor Code, all striking 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.

Regarding the striking union members who damaged company property, the employer should still
reinstate them, but after their reinstatement, the employer may institute the appropriate disciplinary
proceedings, or raise the matter on the illegality of the strike on the ground of violence and illegal
acts committed during the strike before the Secretary of Labor and Employment assumed jurisdiction.

May the company readmit strikers only by restoring them to the payroll? (2.5%)
SUGGESTED ANSWER:

(b) As a general rule the answer is no, as actual reinstatement is envisioned by Article 278(g) of the
Labor Code. The purpose of the law is to bring back the workers to their original work under the
same terms and conditions prevailing before the strike.

XVIII

Nestor and Nadine have been living in for the last 10 years without the benefit of marriage. Their
union has produced four children. Nadine was three months pregnant with her 5th child when Nestor
left her for another woman. When Nadine was eight months pregnant with her 5th child, she applied
for maternity leave benefits. Her employer refused on the ground that this was already her 5th
pregnancy and that she was only living in with the father of her child, who is now in a relationship with
another woman. When Nadine gave birth, Nestor applied for paternity leave benefits. His employer
also denied the application on the same grounds that Nadine’s employer denied her application.

(a) Can Nadine’s employer legally deny her claim for maternity benefits? (2.5%) .

SUGGESTED ANSWER:

Yes, Nadine is not entitled to maternity benefits since it is only available for the first four (4) deliveries
or miscarriages. On the other hand, her employer cannot refuse on the ground that Nadine was only
living in with her partner since a valid marriage is not a condition for the grant of maternity leave
benefits.
Can Nestor’s employer legally deny his claim for paternity benefits? (2.5%)
SUGGESTED ANSWER:
(b) Yes, Nestor is not entitled to paternity benefits since it is only available for the first four (4)
deliveries or miscarriages of his legitimate spouse with whom he is living with.

XIX

Northeast Airlines sent notices of transfer, without diminution in salary or rank, to 50 ground crew
personnel who were front-liners at Northeast Airlines counters at the Ninoy Aquino International
Airport (NAIA). The 50 employees were informed that they would be distributed to various airports in
Mindanao to anticipate robust passenger volume growth in the area. North

Union, representing rank-and-file employees, filed unfair labor practice and illegal dismissal cases
before the NLRC, citing, among others, the inconvenience of the 50 concerned employees and union
discrimination, as 8 of the 50 concerned ground crew personnel were union officers. Also, the Union
argued that Northeast Airlines could easily hire additional employees from Mindanao to boost its
ground operations in the Mindanao airports.

(a) Will the transfer of the 50 ground crew personnel amount to illegal dismissal? (2.5%)

SUGGESTED ANSWER:

(a) Yes. The transfer of an employee is an exercise of a managerial prerogative, which must be
exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair
play. Such transfer cannot be used as a subterfuge by the employer to rid itself of an undesirable
worker. In particular, the employer must be able to show that the transfer is not undesirable,
inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of
his salaries, privileges, and other benefits. Should the employer fail to overcome this burden of
proof, the employee’s transfer shall be tantamount to constructive dismissal which exists when an act
of clear discrimination, insensibility or disdain by an employer has become so unbearable to the
employee, leaving him with no option but to forego with his continued employment (Best Wear
Garments v. De Lemos, G.R. No. 191281, December 5, 2012).

In the present case, the impending transfer of 50 employees based in Luzon to Mindanao, allegedly
borne out of business necessity, is unreasonable and inconvenient to the concerned employees and
their families. It was not shown also if Northeast Airlines looked into the option of hiring workers from
Mindanao to run its counters in the Mindanao airports.

Will the unfair labor practice case prosper? (2.5%)

SUGGESTED ANSWER:

(b) No. In ascertaining whether Northeast Airlines’ proposed transfer amounted to an unfair labor
practice or interference with, restraint or coercion of the employees’ exercise of their right to self-
organization, the “totality of conduct doctrine” test should be applied, Insular Life Assurance Co.,
Ltd. Employees Association-NATU v. Insular Life Assurance Co., Ltd., G.R. No. L-25291, January 30,
1971. A finding of an unfair labor practice should not be based on a single act in isolation, but should
be viewed on the basis of the employer’s acts outside of the bigger context of the accompanying
labor relation situation. In the case at hand, Northeast Airlines’ act of transferring the 50 employees,
while it may amount to constructive dismissals, cannot translate into an unfair labor practice, absent
any other indicia of anti-union bias on the part of the Company.

XX
In Northern Lights Corporation, union members Nad, Ned, and Nod sought permission from the
company to distribute flyers with respect to a weekend union activity. The company HR manager
granted the request through a text message sent to another union member, Norlyn.

While Nad, Ned, and Nod were distributing the flyers at the company assembly plant, a company
supervisor barged in and demanded that they cease from distributing the flyers, stating that the
assembly line employees were trying to beat a production deadline and were thoroughly distracted.
Norlyn tried to show the HR manager’s text message authorizing flyer distribution during work hours,
but the supervisor brushed it aside.

As a result, Nad, Ned, and Nod were suspended for violating company rules on trespass and
highly-limited union activities during work hours. The Union filed an unfair labor practice (ULP) case
before the NLRC for union discrimination.

(a) Will the ULP case filed by the Union prosper? (2.5%)

SUGGESTED ANSWER:

(a) Yes. The supervisor of Nad, Ned and Nod directly interfered with union activities and ultimately
with the right to self- organization. Good faith can be ascribed to Nad, Ned and Nod’s actions, as
prior permission was obtained thru the HR Manager who apparently failed to communicate such
permission to the plant supervisor.

Assume the NLRC ruled in favor of the Union. The Labor Arbiter’s judgment included, among others,
an award for moral and exemplary damages at PhP50,000.00 each for Nad, Ned, and Nod. Northern
Lights Corporation argued that any award of damages should be given to the Union, and not
individually to its members. Is Northern Lights Corporation correct? (2.5%)
SUGGESTED ANSWER:

(b) No. In Digitel Telecommunications Philippines, Inc. v. Digitel Employees Union (DEU), G.R. No.
184903-04, October 10, 2012, the Supreme Court ruled that the award of moral and exemplary
damages in illegal dismissal cases (applicable to suspension) resulting from unfair labor practices
may be made in individual or aggregate amounts. If the offended parties can be identified, then
damages may be awarded individually, such as in the case at hand.