A.1.

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

Define, explain or distinguish the following terms: employee? (2%)

(a) Just and authorized causes (2%) (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,
(b) Seasonal and project employees (2%) are A, B, and C employees of MM Medical Center, Inc.? explain. (3%)

(c) Strikes and lockouts (2%) A. Sonza vs. ABS-CBN mentioned the four-fold test in establishing an
employer-employee relationship. It involves the following: (1) selection
(d) Bona fide occupational qualifications (2%) and engagement of the employee, (2) wages; (3) power to dismiss; and
BFOQ is, in its essence, a form of employee discrimination in which such (4) the control test. The control test is the most important one. It can be
level of discrimination is warranted to perform the job involved. It was said that the power to control entails the fact that the ER can control
applied in Yrasuegui v. PAL by applying the Meiorin Test, i.e. in order for a the duties and performance of the job to be done by the EE.
BFOQ defense to prosper, such qualification must be rationally connected B. Personally, in this case, the fact that the hospital has the authority
and reasonably necessary the performance and accomplishment of the job to supervise A, B, and C on their tasks (diagnosis, treatment and
involved. management) establishes the fact that MM Medical Center has control
It was likewise used in Star Paper v. Simbol in which the Court mentioned over the three resident-doctors. By applying the four-fold test, an ER-
that the qualification must be reasonably necessary for the fulfillment of the EE relationship can be established, especially on the control test.
job performance. A defense over the contracts wouldn't suffice; thus, A, B, and C are
(e) Grievance machinery (2%) employees of MM Medical Center and not independent contractors.

A.2. X is a member of the Social Security System (SSS). In 2015, he died A.4. Mrs. B, the personal cook in the household of X, filed a monetary claim
without any spouse or children. Prior to the semester of his death, X had against her employer, X, for denying her service incentive leave pay. X
paid 36 monthly contributions. His mother, M, who had previously been argued that Mrs. B did not avail of any service incentive leave at the end of
receiving regular support from X, filed a claim for the latter’s death benefits. her one (1) year of service and hence, not entitled to the said monetary
claim.
(a) Is M entitled to claim death benefits from the SSS? Explain. (2.5%)
(a) Is the contention of X tenable? Explain. (2.5%)
(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. (2.5%) (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 (2.5%)
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 a. Yes,the contention of X is tenable.
schedules as determined by the Medical Director. The hospital also Under the Domestic workers act or kasambahay law provided in Article
monitored their work through supervisors who gave them specific 4 SEC. 29.
instructions on how they should perform their respective tasks, including A domestic worker who has rendered at least one (1) year of service
diagnosis, treatment, and management of their patients. shall be entitled to an annual service incentive leave of five (5) days
with pay: Provided, That any unused portion of said annual leave shall
One day A, B, and C approached the Medical Director and inquired about not be cumulative or carried over to the succeeding years. Unused
the non-payment of their employment benefits. In response, the Medical leaves shall not be convertible to cash. Here, the unused portion of the
Director told them that they are not entitled to any because they are mere leave cannot be converted to cash, Since Mrs. B is considered a
"independent contractors" as expressly stipulated in the contracts which they kasambahay..
admittedly signed. As such, no employer-employee relationship exists b. Yes, the claim will prosper.
between them and the hospital.

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Under the labor code all regular employee who atleast renders one A.7. W Gas Corp. is engaged in the manufacture and distribution to the
year of service is entitled to service incentive leave general public of various petroleum products. On January 1, 2010, W Gas
Corp. entered into a Service Agreement with Q Manpower Co., whereby the
A.5. Ms. F, a sales assistant, is one of the eight (8) workers regularly latter undertook to provide utility workers for the maintenance of the former’s
employed by ABC Convenience Store. She was required to report on manufacturing plant. Although the workers were hired by q Manpower Co.,
December 25 and 30. they used the equipment owed by W gas Corp. in performing their tasks, and
were likewise subject to constant checking based on W gas Corp.’s
Should ABC Convenience Store pay her holiday pay? Explain. (2.5%) procedures.

No. While as a general rule all employers are obliged to pay holiday On February 1, 2010, Mr. R, one of the utility workers, was dismissed from
pay to their employees, one of the exceptions are retail and service employment in line with the termination of the Service Agreement between
establishments regularly employing less than 10 workers. W Gas Corp. and Q Manpower Co. Thus, Mr. R filed a complaint for illegal
Thus, since ABC Convenience Store employs just 8 workers, it is not dismissal against W Gas Corp., claiming that Q Manpower Co. is only a
liable to pay holiday pay to Ms. F. labor-only contractor. In the course of the proceedings, W Gas Corp.
presented no evidence to prove Q manpower Co.’s capitalization.
A.6. D, one of the sales representatives of OP, Inc., was receiving a basic
pay of ₱50,000.00 a month, plus a 1% overriding commission on his actual (a) Is Q Manpower Co. a labor-only contractor? Explain. (2.5%)
sales transactions. In addition, beginning three (3) months ago, or in August
2019, D was able to receive a monthly gas and transportation allowance of (b)Will Mr. R’s complaint for illegal dismissal against W Gas Corp. prosper?
₱5,000.00 despite the lack of any company therefor. Explain. (2.5%)

In November 2019, D approached his manager and asked for his gas and Q Manpower - LOC/agent/no substantial capital/employee tasks are
transportation allowance for the month. The manager declined his request, necessary and desirable to W Gas corp who is the principal/employer/direct
saying that the company had decided to discontinue the aforementioned and comprehensively liable to the workers of Q Manpower.
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. 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
Is the argument of D tenable? Explain. (2.5%) 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
No, a 3-month gas and transportation allowance is not yet ripe to constitute employment and the filing of criminal charges in court.
as a demandable benefit by custom or company practice.
Since it is not demandable, its revocation would not be violative of the rule Acting on her manager’s advice, Ms. T submitted a letter of resignation.
on non-diminution of benefits. Later on, Ms. T filed a case for constructive dismissal against her employer.
The element of considerable long period of time, however, varies. In Davao While Ms. T conceded that her manager spoke to her in a calm and
Fruits Corp. v. Associated Labor Unions (225 SCRA 562, 1993), the unforceful manner, she claimed that her resignation was not completely
Honorable Supreme Court ruled that the act of including in the employees’ voluntary because she was told that should she not resign, she could be
13th-month pay, items which are expressly excluded by law, for at least six terminated from work for just cause and worse criminal charges could be file
years, was considered considerably long and hence, a company practice. In against her.
Sevilla Trading Co. v. Semana (438 SCRA 239, 2004), the Honorable
Supreme Court held that the act of giving benefits in addition to the (a) What is the difference between resignation and constructive dismissal?
requirement of the law for at least two years, likewise, constituted a (2%)
company practice.- it must be years not months
(b) Will Ms. T’s claim for constructive dismissal prosper? Explain. (3%)

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Resignation: due to (1) the closure of the employer's business or (2) strained
-voluntariness to severe employment is pure. relations between the employer and employee. Nevertheless, for this
-not attributable to the employer. "doctrine of strained relations" to apply, it must be both alleged and
Constructive dismissal: proved by the employer that the continued relationship between the
-not necessarily voluntary but employee is forced to resign due to employer and employee is no longer feasible due to a high degree of
unbearable/unfavorable/oppressive/hostile environment antagonism.
-attributable to employer who is in bad faith to cause resignation In this case, since (a) the LA's ruling did not contain any finding of
B strained relations, and that (b) even ABC did not allege such strained
no her claim will no propsper, since theft for one is a just cause for relations and (c) even claimed that reinstatement is the proper ruling,
termination. she was not placed in an unreasonable situation. she was separation pay cannot be awarded in lieu of reinstatement.
even given the chance to redeem herself by resigning. in a way the
company was doing her a favor therefore her claims will not prosper b) ABC must assail the NLRC ruling via a Petition for Certiorari (under
Rule 65 of the Rules of Court) with the Court of Appeals, within 60 days
from the time of receipt of the notice of denial of a Motion for
A.9. After due proceedings, the Labor Arbiter (LA) declared Mr. K to have Reconsideration filed before the NLRC. Failure to file a Motion for
been illegally dismissed by his former employer, AB, Inc. As a consequence, Reconsideration with the NLRC will result in the dismissal of the
the LA directed ABC, Inc. to pay Mr. K separation pay in lieu of Petition, because one of the requisites of a Petition for Certiorari is that
reinstatement as well as his full backwages. there is no plain, speedy, and adequate remedy in the ordinary course
of law, and verily, a Motion for Reconsideration is such a plain, speedy,
While ABC, Inc. accepted the finding of illegal dismissal, it nevertheless filed and adequate remedy.
a motion for reconsideration, claiming that the LA erred in awarding both
separation pay and full backwages, and instead, should have ordered Mr. A.10. For purposes of prescription, within what periods from the time the
K’s reinstatement to his former position without loss of seniority rights and cause of action accrued should the following cases be filed:
other privileges, but without payment of backwages. In this regard, ABC, Inc.
pointed out that the LA’s ruling did not contain any finding of strained (a) Money claims arising from employer-employee relations (1%) 3 years
relations or that reinstatement was no longer feasible. In any case, it from the time the action accrued
appears that no evidence was presented on this score.
(b) Illegal dismissal (1%) 4years
(a) Is ABC, Inc.’s contention to delete the separation pay, and instead, order
reinstatement without backwages correct? Explain. (3%) (d) Offenses under the Labor Code (1%) 3years from commission

(b) Assuming than on appeal, the National Labor Relations Commission (e) Illegal recruitment (1%) 5 simple 20 economic sabotage
(NLRC) upholds the decision of the LA, where, how, and within what
timeframe should ABC, Inc. assail the NLRC ruling? (2%)
B.11. Briefly discuss the powers and responsibilities of the following in the
NO, ABC Inc.'s contention is incorrect as to the deletion of backwages; scheme of the Labor Code:
but YES, its contention is correct that the LA should've ordered
reinstatement, and its contention as to the deletion of separation pay. (a) Secretary of Labor (2%)
Under Article 294 of the Labor Code, an employee who was illegally
dismissed is entitled to (1) reinstatement without loss of seniority (b) Bureau of Labor Relations (2%)
rights, plus (2) full backwages, from the time of illegal dismissal up to Art. 226. Bureau of Labor Relations. The Bureau of Labor Relations and
the time of actual reinstatement. the Labor Relations Divisions in the regional offices of the Department
However, the Supreme Court has consistently held in a long line of of Labor, shall have original and exclusive authority to act, at their own
cases that, in lieu of reinstatement (and not in lieu of backwages), initiative or upon request of either or both parties, on all inter-union
separation pay may be awarded if reinstatement is no longer possible and intra-union conflicts, and all disputes, grievances or problems

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arising from or affecting labor-management relations in all workplaces, FAT compensation packages are commission shares of Mr X as
whether agricultural or non-agricultural, except those arising from the member of the board of directors.
implementation or interpretation of collective bargaining agreements Hence, the dispute is an intracorporate one lodged within the
which shall be the subject of grievance procedure and/or voluntary jurisdiction of the RTC as special commercial court.
arbitration. Not between er ee since Mr. X is not an employee, rather, an
incorporator.
The Bureau shall have fifteen (15) working days to act on labor cases B.13.
before it, subject to extension by agreement of the parties. (As
amended by Section 14, Republic Act No. 6715, March 21, 1989) Mr. A signed a one (1)-year contract with XYZ Recruitment Co. for
deployment as welding supervisor for DEF, Inc. located in Dubai. The
(c) Voluntary Arbitrators (2%) employment contract, which the Philippine Overseas Employment
"Voluntary Arbitrator" means any person accredited by the Board as such or Administration (POEA) approved, stipulated a salary of US$600.00 a month.
any person named or designated in the Collective Bargaining Agreement by
the parties to act as their Voluntary Arbitrator, or one chosen with or without Mr. A had only been in his job in Dubai for six (6) months when DEF, Inc.
the assistance of the National Conciliation and Mediation Board, pursuant to announced that it was suffering from severe financial losses and thus
a selection procedure agreed upon in the Collective Bargaining Agreement, intended to retrench some of its workers, among them Mr. A. DEF, Inc.
or any official that may be authorized by the Secretary of Labor and hinted, however, that employees who would accept a lower salary could be
Employment to act as Voluntary Arbitrator upon the written request and retained.
agreement of the parties to a labor dispute.
B.12. Together with some other Filipino workers, Mr. A agreed to a reduced salary
of US$400.00 a month and thus, continued with his employment.
Due to serious business reverses, ABC Co. decided to terminate the
services of several officers receiving "fat" compensation packages. One of (a) Was the reduction of Mr. A’s salary valid? Explain. (2.5%)
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 (b) Assuming that the reduction was invalid, may Mr. A hold XYZ recruitment
illegal dismissal before the National labor Relations Commission (NLRC) – Co. liable for underpayment of wages? Explain. (2.5%)
Regional Arbitration Branch. CHECK DIMINUTIUON OF BENEFITS. EFFECT IF IT’S A CBA. NO
BLABLA OF CONTRACT
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- B.14. Upon a review of the wage rate and structure pertaining to its regular
President for External Affairs which is listed in the by-laws of the corporation, rank and file employees, K Corporation found it necessary to increase its
the case should have been tiled before the Regional Trial Court. hiring rates for employees belonging to the different job classification levels
to make their salary rates more competitive in the labor market.
The Labor Arbiter (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 After the implementation of the new hiring salary, Union X, the exclusive
pending its appeal to the NLRC. 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
(a) Did the LA err in denying ABC Co.’s motion to dismiss on the ground of resulted in wage distortion since it erased the wage gap between the new
lack of jurisdiction? Explain. (2.5%) and old employees. In other words, new employees would enjoy almost the
same salary rates as K Corporation’s old employees.
(b) Assuming 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 (a) What is wage distortion? (2%)
was on payroll reinstatement pending appeal? Explain. (2.5%)

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(b) Did a wage distortion arise under the circumstances which legally
obligated K Corporation to rectify the wages of its old employees? Explain. (c) Assuming that Seafarer G failed to submit himself to a post-employment
(3%) medical examination within three (3) working days from his return, what is
CHECK WAGE DISTORTION the consequence thereof to his claim? Explain. (2%)

B.15. On December 1, 2018, GHI Co., an organized establishment, and B.17. Ms. A is a volleyball coach with five (5) years of experience in her field.
Union J, the exclusive bargaining agent therein executed a five (5)-year Before the start of the volleyball season of 2015, she was hired for the sole
collective bargaining agreement (CBA) which, after ratification, was purpose of overseeing the training and coaching of the University’s volleyball
registered with the Bureau of Labor Relations. team. During her hiring, the Vice-President for Sports expressed to Ms. A
the University’s expectation that she would bring the University a
(a) When can the union ask, at the earliest, for the renegotiation of all terms championship at the end of the year.
of the CBA, except its representation aspect? Explain. (2.5%)
In her first volleyball season, the University placed ninth (9th) out of 10
(b) When is the earliest time that another union can file for a petition for participating teams. Soon after the end of the season, the Vice-president for
certification election? Explain. (2.5%) 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
B.16. W Ship Management, Inc. hired Seafarer G as bosun in its vessel performance of the team.
under the terms of the 2010 Philippine Overseas Employment Administration
– Standard Employment Contract (POEA-SEC). 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.
On his sixth (6th) month on board, Seafarer G fell ill while working. In
particular, he complained of stomach pain, general weakness, and fresh (a) Is Ms. A a probationary, fixed-term, or regular employee? Explain your
blood in his stool. When his illness persisted, he was medically repatriated reasons as to why she is or she is not such kind of an employee for each of
on January 15, 2018. On the same day, Seafarer G submitted himself to a the types of employment given, (5%)
post-employment medical examination, wherein he was referred for further
treatment. As of September 30, 2018, Seafarer G has yet to be issued any (b) Assuming that Ms. A was dismissed by the University for serious
fit-to-work certification by the company-designated physician, much less a misconduct but was never given a notice to explain, what is the
final and definite assessment of his actual condition. Since Seafarer G still consequence of a procedurally infirm dismissal from service under our labor
felt unwell, he sought an opinion from a doctor of his choice who later issued law and jurisprudence? Explain. (2%)
an independent assessment stating that he was totally and permanently
disabled due to his illness sustained during work. Probationary employment. Probationary employment shall not exceed six (6)
months from the date the employee started working, unless it is covered by
Seafarer G then proceeded to file a claim for total and permanent disability an apprenticeship agreement stipulating a longer period. The services of an
compensation. The company asserts that the claim should be dismissed due employee who has been engaged on a probationary basis may be
to prematurity since Seafarer g failed to first settle the matter through the terminated for a just cause or when he fails to qualify as a regular employee
third-doctor conflict resolution procedure as provided under the 2010 POEA- in accordance with reasonable standards made known by the employer to
SEC. the employee at the time of his engagement. An employee who is allowed to
work after a probationary period shall be considered a regular employee.
(a) What is the third-doctor conflict resolution procedure under the 2010
POEA-SEC? Explain. (2%)
B.19 Because of dwindling sales and the consequent limitation of
(b) Will Seafarer G’s claim for total and permanent disability benefits prosper productions, rumors were rife that XYZ, Inc. would reduce its employee
despite his failure to first settle the matter through the third-doctor conflict force. The next day, the employees of XYZ, Inc. received a notice that the
resolution procedure? Explain. (3%)

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company will have a winding down period of 10 days, after which there will during her last contract was “below average.” Lucy seeks your legal advice
be a six (6)-month suspension of operations to allow the company to about her chances of getting her job back. What will your advice be? (4%)
address its precarious financial position.
SUGGESTED ANSWER
On the fourth (4th) month of suspension of its operations XYZ, Inc. posted Lucy cannot get her job back. She is a fixed-term employee and as such, her
announcement that it will resume its operations in 60 days but at the same employment terminates upon the expiration of her contract (Rowell Industrial
time announced that instead of closing down due to financial losses, it will Corporation v. Court of Appeals, G.R. No. 167714, March 7, 2007, 517
retrench 50% of the work force. SCRA 691).

(a) Is the announcement that there would be retrenchment affecting 50% of

the work force sufficient compliance with the legal requirements for III. Lolong Law Firm (LLF), which employs around fifty (50) lawyers and one
retrenchment? Explain. (2.5%) hundred (100) regular staff, suffered losses for the first time in its history.
The management informed its employees that it could no longer afford to
(b) Assuming that XYZ, Inc., instead of retrenchment, extended the provide them free lunch. Consequently, it announced that a nominal fee
suspension of its operations from six (6) months to eight (8) months, would would henceforth be charged. Was LLF justified in withdrawing this benefit
the same be legally permissible? If not, what are the consequences? (2.5%) which it had unilaterally been providing to its employees? (1%)

Article 283. Closure of establishment and reduction of personnel. The (A) Yes, because it is suffering losses for the first time.
employer may also terminate the employment of any employee due to
the installation of labor-saving devices, redundancy, retrenchment to (B) Yes, because this is a management prerogative which is not due to any
prevent losses or the closing or cessation of operation of the legal or contractual obligation.
establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice (C No, because this amounts to a diminution of benefits which is
on the workers and the Ministry of Labor and Employment at least one prohibited by the Labor Code.
(1) month before the intended date thereof. In case of termination due
to the installation of labor-saving devices or redundancy, the worker (D) No, because it is a fringe benefit that has already ripened into a
affected thereby shall be entitled to a separation pay equivalent to at demandable right.
least his one (1) month pay or to at least one (1) month pay for every
year of service, whichever is higher. In case of retrenchment to prevent VI. Lina has been working as a steward with a Miami, U.S.A.-based Loyal
losses and in cases of closures or cessation of operations of Cruise Lines for the past fifteen (15) years. She was recruited by a local
establishment or undertaking not due to serious business losses or manning agency, Macapagal Shipping, and was made to sign a ten-month
financial reverses, the separation pay shall be equivalent to one (1) (10) employment contract everytime she left for Miami. Macapagal Shipping
month pay or at least one-half (1/2) month pay for every year of service, paid for Lina’s round-trip travel expenses from Manila to Miami. Because of
whichever is higher. A fraction of at least six (6) months shall be a food poisoning incident which happened during her last cruise assignment,
considered one (1) whole year. Lina was not re-hired. Lina claims she has been illegally terminated and
seeks separation pay. If you were the Labor Arbiter handling the case, how
2014 would you decide? (4%)
II. Lucy was one of approximately 500 call center agents at Hambergis, Inc.
She was hired as a contractual employee four years ago. Her contracts SUGGESTED ANSWER:
would be for a duration of five (5) months at a time, usually after a one- I will dismiss Lina’s complaint. Lina is a contractual employee and the length
month interval Her re-hiring was contingent on her performance for the of her employment is determined by the contracts she entered into. Here,
immediately preceding contract. Six (6) months after the expiration of her her employment was terminated at the the expiration of the contract (Millares
last contract, Lucy went to Hambergis personnel department to inquire why v. NLRC, G.R. No. 110524, July 29, 2002, 385 SCRA 306, 318).
she was not yet being recalled to work. She was told that her performance

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VIII. As a result of a bargaining deadlock between Lazo Corporation and If you were the Labor Arbiter assigned to the case, how would you decide?
Lazo Employees Union, the latter staged a strike. During the strike, several (4%)
employees committed illegal acts. Eventually, its members informed the
company of their intention to return to work. (6%) SUGGESTED ANSWER:
I will decide in favor of Luisa Court, provided that all the requisites for a valid
(A) Can Lazo Corporation refuse to admit the strikers? retrenchment under the Labor Code are satisfied. It is management
prerogative to farm out any of its activities (BPI Employees UnionDavao
SUGGESTED ANSWER: City-FUBU (BPIEU-Davao City-FUBU) v. Bank of the Philippine Islands,
No. The commission of illegal acts during a strike does not automatically G.R. No. 174912, July 24, 2013).
bring about loss of employment status. Due process must be observed by
the employer before any dismissal can be made (Stamford Marketing Corp. X. Luisa was hired as a secretary by the Asian Development Bank (ADB) in
v. Julian, G.R. No. 145496, February 24, 2004, 423 SCRA 633). Manila. Luisa’s first boss was a Japanese national whom she got along with.
But after two years, the latter was replaced by an arrogant Indian national
(B) Assuming the company admits the strikers, can it later on dismiss those who did not believe her work output was in accordance with international
employees who committed illegal acts? standards. One day, Luisa submitted a draft report filled with typographical
errors to her boss. The latter scolded her, but Luisa verbally fought back.
SUGGESTED ANSWER: The Indian boss decided to terminate her services right then and there.
No. The employer may be considered as having waived its right to dismiss Luisa filed a case for illegal dismissal with the Labor Arbiter claiming
employees who committed illegal acts during the strike (Reformist Union of arbitrariness and denial of due process.
R.B. Liner v. NLRC, G.R. No. 120482, January 27, 1997, 266 SCRA 713).
If you were the Labor Arbiter, how would you decide the case? (4%)
(C) If due to prolonged strike, Lazo Corporation hired replacements, can it
refuse to admit the replaced strikers? SUGGESTED ANSWER:
I will dismiss the case. ADB enjoys immunity from suit (DFA v. NLRC, G.R.
No. Sec. 3, Art. XIII of the Constitution guarantees workers the right to strike No. 113191, September 18, 1996).
in accordance with law, and prolonged strike is not prohibited by law. With
Art. 212 (o) defining strike as “any temporary stoppage of work as a result of ALTERNATIVE ANSWER:
an industrial or labor dispute, it is the prerogative of strikers to cut short or I will decide in favor of Luisa, by granting nominal damages. To clarify,
prolong a strike. By striking, the employees have not abandoned their however, Luisa’s dismissal is not illegal, for it has been held that failure to
employment. Rather, they have only ceased temporarily from rendering observe prescribed standards of work, or to fulfill reasonable work
work. The striking employees have not lost their right to go back to their assignments due to inefficiency, as in this case, may constitute just cause
positions, because the declaration of a strike is not a renunciation of their for dismissal (Iluminada Ver Buiser v. Leogardo, Jr., G.R. No. L-63316, July
employment, much less their employee-employer relationship. 31, 1984, 131 SCRA 15). Nonetheless, the employer’s failure to comply with
the procedure prescribed by law in terminating the services of the employee
IX. Luisa Court is a popular chain of motels. It employs over thirty (30) warrants the payment of nominal damages of Php 30,000, in accordance
chambermaids who, among others, help clean and maintain the rooms. with the Supreme Court’s ruling in the case of Agabon v. NLRC (G.R. No.
These chambermaids are part of the union rank-and-file employees which 158693, November 17, 2004).
has an existing collective bargaining agreement (CBA) with the company.
While the CBA was in force, Luisa Court decided to abolish the position of XII. Which of the following groups does not enjoy the right to self-
chambermaids and outsource the cleaning of the rooms to Malinis Janitorial organization? (1%)
Services, a bona fide independent contractor which has invested in
substantial equipment and sufficient manpower. The chambermaids filed a (A) those who work in a non-profit charitable institution
case of illegal dismissal against Luisa Court. In response, the company (B) those who are paid on a piece-rate basis
argued that the decision to outsource resulted from the new management’s (C) those who work in a corporation with less than ten (10) employees
directive to streamline operations and save on costs.

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(D) those who work as legal secretaries (Tunay na Pagkakaisa ng realization of bigger profits. The granting of a bonus is a management
Manggagawa sa Asia Brewery v. Asia Brewery, Inc., G.R. No. 162025, prerogative, something given in addition to what is ordinarily received by or
August 3, 2010). strictly due the recipient. Thus, a bonus is not a demandable and
enforceable obligation, except when it is made part of the wage, salary or
XVII. Philhealth is a government-owned and controlled corporation compensation of the employee. It may, therefore, be withdrawn, unless they
employing thousands of Filipinos. Because of the desire of the employees of have been made a part of the wage or salary or compensation of the
Philhealth to obtain better terms and conditions of employment from the employees, a matter which is not in the facts of the case (American Wire and
government, they formed the Philhealth Employees Association (PEA) and Cable Daily Rated Employees Union v. American Wire and Cable Co., Inc.,
demanded Philhealth to enter into negotiations with PEA regarding terms G.R. No. 155059, April 29, 2005).
and conditions of employment which are not fixed by law. (4%)
XXVII.
(A) Are the employees of Philhealth allowed to self-organize and form PEA
and thereafter demand Philhealth to enter into negotiations with PEA for The jurisdiction of the National Labor Relations Commission does not
better terms and conditions of employment? include: (1%)

SUGGESTED ANSWER: (A) exclusive appellate jurisdiction over all cases decided by the Labor
Yes. Employees of Philhealth are allowed to selforganize under Sec. 8, Art. Arbiter
III and Sec. 3, Art. XIII of the Constitution which recognize the rights of all (B) exclusive appellate jurisdiction over all cases decided by Regional
workers to self-organization. They cannot demand, however, for better terms Directors or hearing officers involving the recovery of wages and other
and conditions of employment for the same are fixed by law (Art. 244, Labor monetary claims and benefits arising from employer-employee relations
Code), besides, their salaries are standardized by Congress (Art. 276, Labor where the aggregate money claim of each does not exceed five thousand
Code). pesos (P5,000)
(C) original jurisdiction to act as a compulsory arbitration body over
(B) In case of unresolved grievances, can PEA resort to strikes, walkouts, labor disputes certified to it by the Regional Directors
and other temporary work stoppages to pressure the government to accede (D) power to issue a labor injunction
to their demands?
2015
SUGGESTED ANSWER: I. (A) Rocket Corporation is a domestic corporation registered with the SEC,
No. Since the terms and conditions of government employment are fixed by with 30% of its authorized capital stock owned by foreigners and 70% of its
law, government workers cannot use the same weapons employed by authorized capital stock owned by Filipinos. Is Rocket Corporation allowed to
workers in the private sector to secure concessions from their employers engage in the recruitment and placement of workers, locally and overseas?
(Blaquera v. Alcala, G.R. Nos. 109406. 110642, 111494, 112056, 119597, Briefly state the basis for your answer. (2%)
September 11, 1998).
(B) When does the recruitment of workers become an act of economic
XX. Lito was anticipating the bonus he would receive for 2013. Aside from sabotage? (2%)
the 13th month pay, the company has been awarding him and his other co-
employees a two to three months bonus for the last ten (10) years. However, SUGGESTED ANSWER
because of poor over-all sales performance for the year, the company (A) No. Article 27 of the Labor Code mandates that pertinently, for a
unilaterally decided to pay only a one month bonus in 2013. (4%) Corporation to validly engage in recruitment and placement of workers,
locally and overseas, at least seventy-five percent (75%) of its authorized
Is Lito’s employer legally allowed to reduce the bonus? and voting capital stock must be owned and controlled by Filipino citizens.
Since only 70% of its authorized capital stock is owned by Filipinos, it
SUGGESTED ANSWER: consequently cannot validly engage in recruitment and placement of
Yes. A bonus is an act of generosity granted by an enlightened employer to workers, locally and overseas.
spur the employee to greater efforts for the success of the business and

8|Page
(B) Under Section 6(m) of RA 8042, illegal recruitment is considered
economic sabotage if it is committed by a syndicate or is large scale in Katrina, an employee of FEB, who had gotten a rating of “Excellent” for the
scope. It is syndicated illegal recruitment if the illegal recruitment is carried last 3 quarters was looking forward to the bonuses plus the productivity
out by three (3) or more conspirators; and it is large scale in scope when it is incentive bonus. After learning that FEB had modified the bonus scheme,
committed against three (3) more persons, individually or as a group. she objected. Is Katrina’s objection justified? Explain. (3%)

II. LKG Garments Inc. makes baby clothes for export. As part of its SUGGESTED ANSWER
measures to meet its orders, LKG requires its employees to work beyond Katrina’s objection is justified. Having enjoyed the across-the-board
eight (8) hours everyday, from Monday to Saturday. It pays its employees an bonuses, Katrina has earned a vested right. Hence, none of them can be
additional 35% of their regular hourly wage for work rendered in excess of withheld or reduced. In the problem, the company has not proven its alleged
eight (8) hours per day. Because of additional orders, LKG now requires two losses to be substantial. Permitting reduction of pay at the slightest
(2) shifts of workers with both shifts working beyond eight (8) hours but only indication of losses is contrary to the policy of the State to afford full
up to a maximum of four (4) hours. Carding is an employee who used to protection to labor and promote full employment (Linton Commercial Co. v.
render up to six (6) hours of overtime work before the change in schedule. Hellera, G.R. No. 163147, October 10, 2007,535 SCRA 434). As to the
He complains that the change adversely affected him because now he can withheld productivity-based bonuses, Katrina is deemed to have earned
only earn up to a maximum of four (4) hours’ worth of overtime pay. Does them because of her excellent performance ratings for three quarters. On
Carding have a cause of action against the company? (4%) this basis, they cannot be withheld without violating the Principle of Non-
Diminution of Benefits.
SUGGESTED ANSWER
No. A change in work schedule is a management prerogative of LKG. Thus, Moreover, it is evident from the facts of the case that what was withdrawn by
Carding has no cause of action against LKG if, as a result of its change to FEB was a productivity bonus. Protected by RA No. 6791 which mandates
two (2) shifts, he now can only expect a maximum of four (4) hours overtime that the monetary value of the productivity improvement be shared with the
work. Besides, Art. 97 of the Labor Code does not guarantee Carding a employees, the “productivity-based incentive” scheme of FEB cannot just be
certain number of hours of overtime work. In Manila Jockey Employees’ withdrawn without the consent of its affected employees.
Union v. Manila Jockey Club (G.R. No. 167760, March 7, 2007,517 SCRA
707), the Supreme Court held that the basis of overtime claim is an VII. Don Don is hired as a contractual employee of CALLHELP, a call center.
employee’s having been “permitted to work”. Otherwise, as in this case, His contract is expressly for a term of 4 months. Don Don is hired for 3
such is not demandable. straight contracts of 4 months each but at 2-week intervals between
contracts. After the third contract ended, Don Don is told that he will no
V. Far East Bank (FEB) is one of the leading banks in the country. Its longer be given another contract because of “poor performance.” Don Don
compensation and bonus packages are top of the industry. For the last 6 files a suit for “regularization” and for illegal dismissal, claiming that he is a
years, FEB had been providing the following bonuses across-the-board to all regular employee of CALLHELP and that he was dismissed without cause.
its employees: You are the Labor Arbiter. How would you decide the case? (4%)

(a) 13th month pay; (b) 14th to 18th month pay; (c) Christmas basket worth SUGGESTED ANSWER
P6,000; (d) Gift check worth P4,000; and (e) Productivity-based incentive As Labor Arbiter, I will decide the case in favor of Don Don. Given the nature
ranging from a 20% to 40% increase in gross monthly salary for all of Don Don’s work, which consist of activities usually or desirable in the
employees who would receive an evaluation of “Excellent” for 3 straight usual business of CALLHELP, Don Don should be considered a regular
quarters in the same year. employee.

Because of its poor performance over-all, FEB decided to cut back on the CALLHELP’s termination of Don Don’s service in the guise of “poor
bonuses this year and limited itself to the following: performance” is not valid. Whether for a probationary or regular employee,
the requisites of dismissal on that ground do not appear to have been
(a) 13th month pay; (b) 14th month pay; (c) Christmas basket worth P4,000; complied with by the employer here.
and (d) Gift check worth P2,000.

9|Page
IX Din Din is a single mother with one child. She is employed as a sales the company. He hires and pays his own secretary but is provided free office
executive at a prominent supermarket. She and her child live in Quezon City space in the office of the company. He is, however, required to meet a
and her residence and workplace are a 15-minute drive apart. One day, Din monthly quota of twenty (20) insurance policies, otherwise, he may be
Din is informed by her boss that she is being promoted to a managerial terminated. He was made to agree to a Code of Conduct for underwriters
position but she is now being transferred to the Visayas. Din Din does not and is supervised by a Unit Manager.
want to uproot her family and refuses the offer. Her boss is so humiliated by
Din Din’s refusal of the offer that she gives Din Din successive unsatisfactory [a] Is Gregorio an employee of Guaranteed? (2.5%)
evaluations that result in Din Din being removed from the supermarket.
SUGGESTED ANSWER:
Din Din approaches you, as counsel, for legal advice. What would you No, Gregorio is not an employee of Guaranteed. Control is the most
advise her? (4 %) important element of employer-employee relationship, which refers to the
means and methods by which the result is to be accomplished (Avelino
SUGGESTED ANSWER Lambo and Vicente Belocura v. NLRC and J.C. Tailor Shop and/or Johnny
I will advise Din Din to sue her boss and the supermarket for illegal Co., 375 Phil. 855 [1999]), .citing Makati Haberdashery, Inc. v. NLRC, 259
dismissal. Din Din cannot be compelled to accept the promotion. Her Phil. 52 [1989]. The requirement of complying with quota, company code of
unsatisfactory evaluations as well as her boss’ insistence that she should conduct and supervision by unit managers do not go into the means and
agree to the intended transfer to Visayas are badges of an abuse of methods by which Gregorio must achieve his work. He has full discretion on
management prerogative. In Pfizer Inc. v. Velasco (G.R. No. 177467, March how to meet his quota requirement, hence, there is no employer-
9, 2011, 645 SCRA 135), the Supreme Court held that the managerial employee relationship between Gregorio and Guaranteed.
prerogative to transfer personnel must be exercised without abuse of
discretion, bearing in mind the basic elements of justice and fair play. Hence,
Din Din’s dismissal is illegal. III. Inggo is a drama talent hired on a per drama "participation basis" by DJN
Radio Company. He worked from 8:00 a.m. until 5:00 p.m., six days a week,
XI Rico has a temper and, in his work as Division Manager of Matatag on a gross rate of P80.00 per script, earning an average of P20,000.00 per
Insurance, frequently loses his temper with his staff. One day, he physically month. Inggo filed a complaint before the Department of Labor and
assaults his staff member by slapping him. The staff member sues him for Employment (DOLE) against DJN Radio for illegal deduction, non-payment
physical injuries. Matatag Insurance decides to terminate Rico, after notice of service incentive leave, and 13th month pay, among others. On the basis
and hearing, on the ground of loss of trust and confidence. Rico claims that of the complaint, the DOLE conducted a plant level inspection.
he is entitled to the presumption of innocence because he has not yet been
convicted. Comment on Matatag’s action in relation to Rico’s argument. (4%) The DOLE Regional Director issued an order ruling that Inggo is an
employee of DJN Radio, and that Inggo is entitled to his monetary claims in
SUGGESTED ANSWER: the total amount of P30,000.00. DJN Radio elevated the case to the
Matatag Insurance does not have to await the result of the criminal case Secretary of Labor who affirmed the order. The case was brought to the
before exercising its prerogative to dismiss. Dismissal is not affected by a Court of Appeals. The radio station contended that there is no employer-
criminal case. Under the Three-fold Liability Rule, a single act may result in employee relationship because it was the drama directors and producers
three liabilities, two of which are criminal and administrative. To establish who paid, supervised, and disciplined him. Moreover, it argued that the case
them, the evidence of the crime must amount to proof beyond reasonable falls under the jurisdiction of the NLRC and not the DOLE because Inggo's
doubt; whereas, the evidence of the ground for dismissal is substantial claim exceeded PS,000.00.
evidence only. In this regard, the company has some basis already for [a] May DOLE make a prima facie determination of the existence of an
withholding the trust it has reposed on its manager. Hence, Rico’s convic employer-employee relationship in the exercise of its visitorial and
tion need not precede the employee’s dismisssal. enforcement powers? (2.5%)

II Gregorio was hired as an insurance underwriter by the Guaranteed SUGGESTED ANSWER:

Insurance Corporation (Guaranteed). He does not receive any salary but Yes. Pursuant to Article 128 (b) of the Labor Code, the DOLE may do so
solely relies on commissions earned for every insurance policy approved by where the prima facie determination of employer-employee relationship

10 | P a g e
is for the exclusive purpose of securing compliance with labor standards requested by an employee. In case it was requested, a summary hearing
provisions of said Code and other labor legislation. The DOLE, in the must be done by the employer where the employee must be afforded the
exercise of its visitorial and enforcement powers, somehow has to make a opportunity to adduce evidence and present witnesses in his behalf. Then
determination of the existence of an employer-employee relationship. Such the employer must inform the employee in writing of its decision stating the
determination, however, cannot be coextensive with the visitorial and facts, the analysis of the evidence and statement of witnesses and the law or
enforcement power itself. Indeed, such determination is merely preliminary, policy which led to the decision.
incidental and collateral to the DOLE's primary function of enforcing labor
standards provisions (People's Broadcasting Bombo Radyo Phils., Inc. v. [b] Did the Biyahe sa Langit Transport comply with the prior procedural
Secretary of Labor, G.R. No. 179652, May 8, 2009). requirements for dismissal? (2.5%)

[b] If the DOLE finds that there is an employee-employer relationship, does SUGGESTED ANSWER:
the case fall under the jurisdiction of the Labor Arbiter considering that the No. The notice given by Biyahe sa Langit Transport did not give Pedro a
claim of Inggo is more than P5,000.00. Explain. (2.5%) minimum period lof five (5) days to submit a written explanation. He was
given only 48 hours to submit the same. The fact that he met the deadline
SUGGESTED ANSWER: No. As held in the case of Meteoro v. Creative did not cure the lapse committed by Biyahe sa Langit Transport. There being
Creatures, Inc., G.R. No. 171275, July 13, 2009, the visitorial and a violation, of procedural due process, Biyahesa Langit Transport becomes
enforcement powers of the Secretary, exercised through his representatives, liable for nominal damages even, assuming that there was a valid ground for
encompass compliance with all labor standards taws and other labor dismissal.
legislation, regardless of the amount of the claims filed by workers; thus,
even claims exceeding P5,000.00. VIII. Differentiate learnership from apprenticeship with respect to the period
of training, type of work, salary and qualifications. (5%)
VI Pedro, a bus driver of Biyahe sa Langit Transport, was involved in a
collision with a car, damaging the bus. The manager accused him of being SUGGESTED ANSWER:
responsible for the damage and was told to submit his written explanation Learnership and apprenticeship are similar because they both mean training
within 48 hours. Pedro submitted his explanation within the period. The day periods for jobs requiring skills that can be acquired through actual work
after, Pedro received a notice of termination stating that he is dismissed for experience. And because both a learner and an apprentice are not as fully
reckless driving resulting to damage to company property, effective productive as regular workers, the learner and the apprentice may be paid
immediately. Pedro asks you, as his counsel, if the company complied with wages twenty-five percent lower than the applicable legal minimum wage.
the procedural due process with respect to dismissal Of employees. They differ in the focus and terms of training. An apprentice trains in a
highly skilled job or in any job found only in highly technical industries.
[a] Explain the twin notice and hearing rule. (2.5%) Because it is a highly skilled job, the training period exceeds three months.
For a learner, the training period is shorter because the job is more easily
SUGGESTED ANSWER: learned than that of apprenticeship. The job, in other words, is "non-
The twin notice and hearing rule requires a directive that the employee be apprenticeable" because it is practical skills which can be learned in three
given the opportunity to submit a written explanation on why he should not (not six) months. A learner is not an apprentice but an apprentice is,
be dismissed within a reasonable period of time (King of Kings Transport, conceptually, also a learner.
Inc. v. Santiago 0. Mamac, G.R. No. 166208, June 29, 2007). The grounds Accordingly, because the job is more easily learnable in learnership than in
for terminating an employee, again as explained in the Kings case, must be apprenticeship, the employer is committed to hire the learner- trainee as an
a detailed narration of the facts and circumstances that will serve as basis employee after the training period. No such commitment exists in
for the charge against him. Further, it should mention specifically which apprenticeship.
company rule or provision of the Labor Code was violated. The Supreme Finally, employment of apprentices, as stated in Article 60, is legally allowed
Court defines 'reasonable period of time" to be five calendar days from the only in highly technical industries and only in apprenticeable occupations
day the employee received the NTE. As to the hearing, in Perez v. Philipjine approved by the DOLE. Learnership is allowed even for non-
Telegraph Company, 584 SCRA 110 120091, the Supreme Court technical jobs.
enunciated the rule that a hearing is only necessary if it was asked or

11 | P a g e
XIII Matibay Shoe and Repair Store, as added service to its customers, 6 inclusive, plus interests of 6% per annum from the date the same were
devoted a portion of its store to a shoe shine stand. The shoe shine boys unlawfully withheld, were also awarded.
were tested for their skill before being allowed to work and given ID cards. [a] Robbie, the employer, contests the award of attorney fees amounting
They were told to be present from the opening of the store up to closing time to 10% on all the amounts adjudged on the ground that Article 111 of the
and were required to follow the company rules on cleanliness and decorum. Labor Code authorizes only 10% "of the amount of wages recovered". Rule
They bought their own shoe shine boxes, polish, and rags. The boys were on the issue and explain. (2.5%)
paid by their customers for their services but the payment is coursed through
the store's cashier, who pays them before closing time. They were not SUGGESTED ANSWER: The attorney's fees should be granted to Robbie.
supervised in their work by any managerial employee of the store but for a There are two commonly accepted concepts of attorney's fees the so-called
valid complaint by a customer or for violation of any company rule, they can ordinary and extraordinary. In its ordinary concept, an attorney's fee is the
be refused admission to the store. Were the boys employees of the store? reasonable compensation paid to a lawyer by his client for the legal services
Explain. (5%) he has rendered to the latter. The basis of this compensation is the fact of
his employment by and his agreement with the client. In its extraordinary
SUGGESTED ANSWER: concept, attorney's fees are deemed indemnity for damages ordered by the
Yes. The elements to determine the existence of an employment relationship court to be paid by the losing party in a litigation. The instances where these
are: (a) the selection and engagement of the employee; (b) the payment of may be awarded are those enumerated in Article 2208 of the Civil Code,
wages; (c) the employer's power to control the employee's conduct; and (d) specifically par. 7 thereof which pertains to actions for recovery of wages,
the power of dismissal. and is payable not to the lawyer but to the client, unless they have agreed
The first element is present, as Matibay Shoe allowed shoe shine boys in its that the award shall pertain to the lawyer as additional compensation
shoe shine stand to render services that are desirable in the line of business or as part thereof. The extraordinary concept of attorneys fees is the one
of Matibay Shoe. In issuing ID's to the shoe shine boys, the same signifies contemplated in Article 111 of the Labor Code, which provides:
that they can represent themselves as part of the work force of Matibay "Art. 111. Attorneys fees. (a) In cases of unlawful withholding of
Shoe. wages, the culpable party may be assessed attorneys fees
The second element is also present. Requiring the customers to pay equivalent to ten percent of the amount of wages recovered x x x"
through the Matibay Shoe's cashier signifies that their services were not Article 111 is an exception to the declared policy of strict construction in the
engaged by the customers. Equally important, it was Matibay Shoe which awarding of attorneys fees. Although an express finding of facts and law is
gave the shoe shine boys their daily wage. still necessary to prove the merit of the award, there need not be any
showing that the employer acted maliciously or in bad faith when it withheld
The third element is satisfied. Requiring the shoe shine boys to be present the wages. There need only be a showing that the lawful wages were not
from store opening until store closing and to follow company rules on paid accordingly, as in this case.
cleanliness and decorum shows that they cannot conduct their activity
anywhere else but inside the store of Matibay Shoe, hence, their means and In carrying out and interpreting the Labor Code's provisions and its
methods of accomplishing the desired services for the customers of Matibay implementing regulations, the employees' welfare should be the primordial
Shoe was controlled by it. and paramount consideration. This kind of interpretation gives meaning and
Lastly, the fourth element is made apparent when Matibay Shoe barred the substance to the liberal and compassionate spirit of the law as provided in
shoe shine boys from continuing with their work-related activity inside its Article 4 of the Labor Code which states that all doubts in the
establishment. implementation and interpretation of the provisions of the Labor Code,
including its implementing rules and regulations, shall be resolved in favor of
XVI. In a case for illegal dismissal and non-payment of benefits, with prayer labor, and Article 1702 of the Civil Code which provides that in case of
for Damages•, Apollo was awarded the following: 1) P200,000.00 as doubt, all labor legislation and all labor contracts shall be construed in favor
back.wages; 2) P80,000.00 as unpaid wages; 3) P20,000.00 as unpaid of the safety and decent living for the laborer (PCL Shipping Philippines,
holiday pay; 4) PS,000.00 as unpaid service incentive leave pay; 5) Inc. v. NLRC, G.R. No. 153031, [December 14, 2006]).
P50,000.00 as moral damages; and 6) P10,000.00 as exemplary damages.
Attorney's fees of ten percent (10%) of all the amounts covered by items 1 to [b] Robbie likewise questions the imposition of interests on the amounts in
question because it was not claimed by Apollo, and the Civil Code provision

12 | P a g e
on interests does not apply to a labor case. Rule on the issue and explain. employee of his jeepney operator or a mere lessee of the jeepney? Explain
(2.5%) your answer. (3%)

SUGGESTED ANSWER:
It is now well-settled that generally, legal interest may be imposed upon any SUGGESTED ANSWER
unpaid wages, salary differential, merit increases, productivity bonuses, The jeepney driver operating under the boundary system is an employee of
separation pay, backwages on other monetary claims and benefits awarded the jeepney operator, not a mere lessee. The jeepney operator exercises
illegally dismissed employees. Its grant, however, remains discretionary supervision and control over the jeepney driver. The jeepney operator, as
upon the courts (Conrado A. Lim v. HMR Philippines G.R. No. 189871, holder of the certificate of public convenience, must see to it that the jeepney
August 13, 2013). Legal interest was imposed on all the monetary awards driver follows the route prescribed by the franchising authority and the rules
by the SC in the case of Bani Rural Bank v. De Guzman (G.R. No. 170904 promulgated as regards its operation. Moreover, jeepney drivers perform
November 13, 2013). The Court therein declared that imposition of legal activities which are usually necessary or desirable in the usual business or
interest in any final and executory judgment does not violate the immutability trade of the jeepney operator (Jardin, et al. v. NLRC, G.R. No. 119268,
principle. The court ruled that once a decision in a labor case becomes final, February 23, 2000, 326 SCRA 299).
it becomes a judgment for money from which another consequence flows -
the payment of interest in case of delay. II. Procopio was dismissed from employment for stealing his co employee
Raul’s watch. Procopio filed a complaint for illegal dismissal. The Labor
2017 Arbiter ruled in Procopio’s favor on the ground that Raul’s testimony was
doubtful, and, therefore, the doubt should be resolved in favor of Procopio.
I. A. What are the accepted tests to determine the existence of an employer On appeal, the NLRC reversed the ruling because Article 4 of the Labor
employee relationship? (5%) Code – which states that all doubts in the interpretation and implementation
of the provisions of the Labor Code, including the implementing rules and
SUGGESTED ANSWER regulations, shall be resolved in favor of labor – applied only when the doubt
The accepted tests to determine the existence of an employer employee involved the “implementation and interpretation” of the Labor Code; hence,
relationship are: the doubt, which involved the application of the rules on evidence, not the
A) Four-fold Test: Labor Code, could not necessarily be resolved in favor of Procopio. Was the
1. The selection and engagement of the employees; reversal correct? Explain your answer. (3%)
2. The payment of wages
3. The power of dismissal; and SUGGESTED ANSWER
4. The power to control the employees’ conduct (The Manila Hotel The reversal is not correct. It is a time-honored rule that in controversies
Corp. v. NLRC, G.R. No. 154591, March 5, 2007, 343 SCRA 1). between a laborer and his master, doubts reasonably arising from the
The most important test is the element of control, which has been defined as evidence, or in the interpretation of agreement and writings, should be
the “right to control not only the end to be achieved but also the means to be resolved in the former’s favor (Lepanto Consolidated Mining Company v.
used in reaching such end” (LVN Pictures v. Philippine Musicians Guild, Dumapis, G.R. No. 163210, August 13, 2008, 562 SCRA 103). There
G.R. No. L-12582, January 28, 1961, 1 SCRA 132). appears to be serious doubts in the evidence on record as to the factual
basis of the charges against Procopio. These doubts should be resolved in
B) Economic reality Test: his favor in line with the policy under the Labor Code to afford protection to
The Supreme Court has also used the economic reality test, where the labor and construe doubts in favor of labor (Asuncion v. NLRC, G.R. No.
economic realities prevailing within the activity or between the parties are 129329, July 31, 2001, 362 SCRA 56).
examined, taking into consideration the totality of circumstances surrounding
the true nature of the relationship between the parties (Orozco v. Court of III. A. Andrew Manning Agency (AMA) recruited Feliciano for employment by
Appeals, G.R. No. 155207, August 13, 2008, 562 SCRA 36). Invictus Shipping, its foreign principal. Meantime, AMA and Invictus Shipping
terminated their agency agreement. Upon his repatriation following his
B. Applying the tests to determine the existence of an employer employee premature termination, Feliciano claimed from AMA and Invictus Shipping
relationship, is a jeepney driver operating under the boundary system an the payment of his salaries and benefits for the unserved portion of the

13 | P a g e
contract. AMA denied liability on the ground that it no longer had an agency an employment permit from the DOLE. Is the employer correct? Explain your
agreement with Invictus Shipping. Is AMA correct? Explain your answer. answer. (2.5%)
(3%)
SUGGESTED ANSWER
SUGGESTED ANSWER No, the employer is not correct. Only non-resident aliens seeking admission
AMA is not correct. The liability of the principal/employer and the to the Philippines are required to obtain an employment permit from the
recruitment/placement agency is joint and several. Such liability shall Department of Labor and Employment (Article 40, Labor Code).
continue during the entire period or duration of the employment contract and B. Distinguish a learner from an apprentice. (4%)
shall not be affected by any substitution, amendment or modification made
locally or in a foreign country of the said contract (Section 10, Rep. Act No. SUGGESTED ANSWER
8042, as amended by Section 7 of Rep. Act No. 10022). As to nature: a learner trains in a semi-skilled job; whereas, an apprentice
The fact that AMA and its foreign principal have already terminated their trains in a highly technical job.
agency agreement does not relieve the former of its fiability, because the As to period: a learner is for three months; whereas, an apprentice is not
obligations covenanted in the agency agreement between the local agent less than three months but not more than six months, as a rule.
and its foreign principal are not coterminous with the term of such agreement As to commitment to employ: For a learner, there is a commitment to employ
so that if either or both of the parties decide to end the agreement, the the learner, as regular employees if he so desire, upon completion of the
responsibilities of such parties towards the contracted employees under the learnership; whereas, for an apprentice, there is no such commitment.
agreement do not at all end, but the same extends up to and until the As to necessity of TESDA approval: For a learner, TESDA approval is not
expiration of the employment contracts of the employees recruited and necessary, only TESDA inspection is required; whereas, for an apprentice,
employed pursuant to said recruitment agreement; otherwise, this will render prior approval by TESDA is required.
nugatory the very purpose which the law governing the employment of As to deductibility of expenses: For a learner, there is no provision for
workers for foreign jobs’ abroad was enacted (Catan v. NLRC, G.R. No. deductibility of expenses; whereas, for an apprentice, expenses of training
77279, April 15, 1988, 160 SCRA 691). are deductible from income tax.
As to compensation: a learner has compensation; whereas, an apprentice
B. As a rule, direct hiring of migrant workers is not allowed. What are the has none if DOLE authorizes, as when OJT is required by the school.
exceptions? Explain your answer.(2.5%)
C. Are there differences between a househelper and a homeworker? Explain
SUGGESTED ANSWER your answer. (4%)
The exceptions are: direct hiring by members of the diplomatic
organizations, international organizations, heads of state and government SUGGESTED ANSWER
officials with the rank of at least deputy minister, and such other employers Househelper refers to any person, whether male or female, who renders
as may be allowed by the Secretary of Labor (Book I, Title 1, Chapter 1, services in and about the employer’s home and which services are usually
Article 18, Labor Code). The reasons for the ban on direct hiring are: necessary or desirable for the maintenance and enjoyment thereof, and
ministers exclusively to the personal comfort and enjoyment of the
A worker hired directly by a foreign employer without government employer’s family (Rule XIII, Section 1(b), Book 3, Labor Code; Apex Mining
intervention may not be assured of the best possible terms and conditions of Company, Inc. v. NLRC, G.R. No. 94951, April 22, 1991, 196 SCRA 251),
employment. homeworker, on the other hand, is one who works in a system of production
A foreign employer must also be protected. Without government under an employer or contractor whose job is carried out at his/her home,
intervention, a foreign employer may be entering into a contract with a the materials of which may or may not be furnished by the employer or
Filipino who is not qualified to do the job. contractor (Department Order No. 005-92).
The mandatory requirement for remittance to the Philippines of a portion of
the worker’s foreign exchange earnings can easily be evaded by the worker. The househelper is covered by the Kasambahay Law; whereas, the
homeworker is subject to the provisions of Book III of the Labor Code. The
C. Phil, a resident alien, sought employment in the Philippines. The househelper works in another person’s home; whereas, the homeworker
employer, noticing that Phil was a foreigner, demanded that he first secures does his job in the confines of his own home. The househelper has a definite

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employer while the homeworker has none. The househelper has security of additional damages arguing that the supposed resignation letter was
tenure, which the homeworker does not have. 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
VII Dr. Crisostomo entered into a retainer agreement with AB Hotel and have jurisdiction over money claims, and (B) the action has prescribed.
Resort whereby he would provide medical services to the guests and
employees of AB Hoteland Resort, which, in turn, would provide the clinic (a) Does the NLRC have jurisdiction to award money claims including
premises and medical supplies. He received a monthly retainer fee of interest on the amount unpaid? (2.5%)
P60,000.00, plus a 70% share in the service charges from AB Hoteland
Resort’s guests availing themselves of the clinic’s services. The clinic SUGGESTED ANSWER:
employed nurses and allied staff, whose salaries, SSS contributions and Jurisdiction will depend on the amount being claimed by Nicanor’s surviving
other benefits he undertook to pay. AB Hotel and Resort issued directives spouse. If the amount exceeds Five Thousand Pesos (PhP5,000.00) as
giving instructions to him on the replenishment of emergency kits and provided in Article 224 (a [6]) of the Labor Code then jurisdiction belongs to
forbidding the clinic staff from receiving cash payments from the guests. the Arbitration Branch of the NLRC. However, if the amount did not exceed
In time, the nurses and the clinic staff claimed entitlement to rights as regular Five Thousand Pesos (PhP5,000.00) and then jurisdiction belongs to the
employees of AB Hoteland Resort, but the latter refused on the ground that Regional Director under Article 129 of the Labor Code involving recovery of
Dr. Crisostomo, who was their employer, was an independent contractor. wages, simple money claims and other benefits. Either of the said quasi-
Rule, with reasons. (4%) judicial body can award interest in the concept of actual and compensatory
damages in accordance. The award of interest in money claim was
SUGGESTED ANSWER explained in Limlingan v. Asian Institute Management, Inc., G.R. No.
I will rule in favor of AB Hoteland Resort. Applying the Four Fold Test will 220481, February 17, 2016, that the rate of interest in the concept of actual
readily show that the real employer of the nurses and the clinic staff is Dr. and compensatory damages as well as its accrual are as follows:
Crisostomo and not AB Hoteland Resort, viz: (1) the selection and 1. When the obligation is breached, and it consists in the payment of a sum
engagement of the nurses and clinic staff were made by Dr. Crisostomo; (2) of money, i.e., a loan or forbearance of money, the interest due should be
their wages were paid by Dr. Crisostomo. As a matter of fact, SSS that which may have been stipulated in writing. Furthermore, the interest due
contributions were paid by him which, by itself, is already an indication that shall itself earn legal interest from the time it is judicially demanded. In the
he is the employer. Although he did not exercise the power of dismissal, it absence of stipulation, the rate of interest shall be 6% per annum to be
can be said that as the doctor, he has the control, of his employees’ conduct computed from default, i.e., from judicial or extrajudicial demand under and
in the dispensing of medical services to the guests and personnel of the subject to the provisions of Article 1169 of the Civil Code.
resort. The fact that AB Hoteland Resort gave instructions to him regarding 2. When an obligation, not constituting a loan or forbearance of money, is
replenishment of emergency kits and forbidding his staff from receiving cash breached, an interest on the amount of damages awarded may be imposed
payments from guests is of no consequence. They are nothing more but at the discretion of the court at the rate of 6% per annum. No interest,
guidelines which will not create an employer-employee relationship (Insular however, shall be adjudged on unliquidated claims or damages, except
Life Co., Ltd. v. NLRC, G.R. No. 84484, November 15, 1989, 179 SCRA when or until the demand can be established with reasonable certainty.
459). Accordingly, where the demand is established with reasonable certainty, the
interest shall begin to run from the time the claim is made judicially or
III extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so
Due to his employer’s dire financial situation, Nicanor was prevailed upon by reasonably established at the time the demand is made, the interest shall
his employer to voluntarily resign. In exchange, he demanded payment of begin to run only from the date the judgment of the court is made (at which
salary differentials, 13th month pay, and financial assistance, as promised time the quantification of damages may be deemed to have been reasonably
by his employer. Management promised to pay him as soon as it is able to ascertained). The actual base for the computation of legal interest shall, in
pay off all retrenched rank-and-file employees. Five years later, and before any case, be on the amount finally adjudged.
management was able to pay Nicanor the amount promised to him, Nicanor 3. When the judgment of the court awarding a sum of money becomes final
died of a heart attack. His widow, Norie, filed a money claim against the and executory, the rate of legal interest, whether the case falls under
company before the National Labor Relations Commission (NLRC), paragraph 1 or paragraph 2, above, shall be 6% per annum from such
including interest on the amount of the unpaid claim. She also claimed

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finality until its satisfaction, this interim period being deemed to be by then all aspects of employment and the only criterion to guide the exercise of its
an equivalent to a forbearance of credit. management prerogative is that the policies, rules and regulations on work-
related activities of the employees must always be fair and reasonable. (The
(c) May Nicanor’s spouse successfully claim additional damages as a result Coca-Cola Export Corporation v. Gacayan, G.R. No. 149433, December 15,
of the alleged undue pressure and influence? (2.5%) 2010, 638 SCRA 377, 398-399)

SUGGESTED ANSWER: According to Endico v. Quantum Foods Distribution Center, G.R. 161615,
Yes, Nicanor’s spouse can successfully claim additional damages as a result January 30,2009, “Managerial prerogatives, however, are subject to
of the alleged undue pressure and influence. This is provided under Article limitations provided by law, collective bargaining agreements, and general
224 (a [4] of the Labor Code which provides for claims for actual, moral, principles of fair play and justice. The test for determining the validity of the
exemplary and other forms of damages arising from employer-employee transfer of employees was explained in the case of Blue Dairy Corporation v.
relationship within the jurisdictional authority of the Arbitration Branch of the NLRC, G.R. No. 129843, 14 September 1999, 314 SCRA 401, 408-409 the
NLRC. Supreme Court explained the test for determining the validity of the transfer
In the alternative, it can be argued that Nicanor’s spouse cannot successfully of employees, as follows:
claim additional damages because it is the jurisdictional authority of the But, like other rights, there are limits thereto. The managerial prerogative to
Arbitration Branch of the NLRC. The employer-employee relationship is only transfer personnel must be exercised without grave abuse of discretion,
incidental and the cause of action arises from other sources like torts and bearing in mind the basic elements of justice and fair play. Having the right
damages. Therefore, jurisdiction belongs to the regular courts. should not be confused with the manner in which that right is exercised.
Thus, it cannot be used as a subterfuge by the employer to rid himself of an
XIX undesirable worker. In particular, the employer must be able to show that the
Northeast Airlines sent notices to transfer without diminution in salary or transfer is not unreasonable, inconvenient or prejudicial to the employee; nor
rank, to 50 ground crew personnel who were front-liners at Northeast does it involve a demotion in rank or a diminution of his salaries, privileges
Airlines counters at the Ninoy Aquino International Airport (NAIA). The 50 and other benefits.
employees were informed that they would be distributed to various airports As their employer, Northeast Airlines has the right to regulate, according to
in Mindanao to anticipate robust passenger volume growth in the area. its discretion and best judgment, work assignments, work methods, work
Northeast Union representing rank-and-file employees, filed unfair labor supervision, and work regulations, including the hiring, firing and discipline of
practice and illegal dismissal cases before the NLRC, citing, among others, its employees. The Supreme Court upholds these management prerogatives
the inconvenience of the 50 concerned employees and union discrimination, so long as they are exercised in good faith for the advancement of the
as 8 of the 50 concerned round crew personnel were union officers. Also, employer’s interest and not for the purpose of defeating or circumventing the
the Union argued that Northeast Airlines could easily hire additional rights of the employees under special laws and valid agreements.
employees from Mindanao to boost ground operations in the Mindanao (Challenge Socks Corporation v. Court of Appeals, G.R. No. 165268,
airports. November 8, 2005, 474 SCRA 356, 362-363)
a) Will the transfer of the 50 ground crew personnel amount to Illegal In this case it does not show that Northeast Airlines implemented the
dismissal (5%) transfer for the purpose of defeating or circumventing the rights of the said
SUGGESTED ANSWER: 50 ground crew personnel.

The transfer of the 50 ground crew personnel does not amount to Illegal
dismissal. This is because their transfer is a valid exercise of management
prerogatives.
In Gemina, Jr. v. Bankwise, Inc. (Thrift Bank) G.R. No. 175365, October 23,
2013, it was held: The employer’s right to conduct the affairs of its business,
according to its own discretion and judgment, is well-recognized. An
employer has a free reign and enjoys wide latitude of discretion to regulate

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