Bar Q & A, Labor Law



What are the accepted tests to determine the existence of an employer employee relationship? (5%)

The accepted tests to determine the existence of an employer employee relationship are:
A) Four-fold Test:

  1. The selection and engagement of the employees;
  2. The payment of wages
  3. The power of dismissal; and
  4. The power to control the employees’ conduct (The Manila Hotel Corp. v. NLRC, G.R. No. 154591, March 5, 2007, 343 SCRA 1).

The most important test is the element of control, which has been defined as the “right to control not only the end to be achieved but also the means to be used in reaching such end” (LVN Pictures v. Philippine Musicians Guild, G.R. No. L-12582, January 28, 1961, 1 SCRA 132).

B) Economic reality Test:
The Supreme Court has also used the economic reality test, where the economic realities prevailing within the activity or between the parties are examined, taking into consideration the totality of circumstances surrounding the true nature of the relationship between the parties (Orozco v. Court of Appeals, G.R. No. 155207, August 13, 2008, 562 SCRA 36).

Applying the tests to determine the existence of an employer employee relationship, is a jeepney driver operating under the boundary system an employee of his jeepney operator or a mere lessee of the jeepney? Explain your answer. (3%)


The jeepney driver operating under the boundary system is an employee of the jeepney operator, not a mere lessee. The jeepney operator exercises supervision and control over the jeepney driver. The jeepney operator, as holder of the certificate of public convenience, must see to it that the jeepney driver follows the route prescribed by the franchising authority and the rules promulgated as regards its operation. Moreover, jeepney drivers perform activities which are usually necessary or desirable in the usual business or trade of the jeepney operator (Jardin, et al. v. NLRC, G.R. No. 119268, February 23, 2000, 326 SCRA 299).


Procopio was dismissed from employment for stealing his co employee Raul’s watch. Procopio filed a complaint for illegal dismissal. The Labor 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. On appeal, the NLRC reversed the ruling because Article 4 of the Labor Code – which states that all doubts in the interpretation and implementation of the provisions of the Labor Code, including the implementing rules and regulations, shall be resolved in favor of labor – applied only when the doubt involved the “implementation and interpretation” of the Labor Code; hence, the doubt, which involved the application of the rules on evidence, not the Labor Code, could not necessarily be resolved in favor of Procopio. Was the reversal correct? Explain your answer. (3%)

The reversal is not correct. It is a time-honored rule that in controversies between a laborer and his master, doubts reasonably arising from the evidence, or in the interpretation of agreement and writings, should be resolved in the former’s favor (Lepanto Consolidated Mining Company v. Dumapis, G.R. No. 163210, August 13, 2008, 562 SCRA 103). There 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 his favor in line with the policy under the Labor Code to afford protection to labor and construe doubts in favor of labor (Asuncion v. NLRC, G.R. No. 129329, July 31, 2001, 362 SCRA 56).

The reversal is not correct. Article 227 (221) of the Labor Code clearly provides that “the rules of evidence prevailing in courts of law shall not be controlling” in any proceeding before the NLRC or the Labor Arbiters. Moreover, the NLRC/Labor Arbiters are mandated to use every and all reasonable means to ascertain the facts speedily and objectively and without regard to technicalities of law or procedure, all in the interest of due process.


Andrew Manning Agency (AMA) recruited Feliciano for employment by Invictus Shipping, its foreign principal. Meantime, AMA and Invictus Shipping terminated their agency agreement. Upon his repatriation following his premature termination, Feliciano claimed from AMA and Invictus Shipping the payment of his salaries and benefits for the unserved portion of the contract. AMA denied liability on the ground that it no longer had an agency agreement with Invictus Shipping. Is AMA correct? Explain your answer. (3%)

AMA is not correct. The liability of the principal/employer and the recruitment/placement agency is joint and several. Such liability shall continue during the entire period or duration of the employment contract and shall not be affected by any substitution, amendment or modification made locally or in a foreign country of the said contract (Section 10, Rep. Act No. 8042, as amended by Section 7 of Rep. Act No. 10022).
The fact that AMA and its foreign principal have already terminated their agency agreement does not relieve the former of its fiability, because the obligations covenanted in the agency agreement between the local agent and its foreign principal are not coterminous with the term of such agreement so that if either or both of the parties decide to end the agreement, the responsibilities of such parties towards the contracted employees under the agreement do not at all end, but the same extends up to and until the expiration of the employment contracts of the employees recruited and employed pursuant to said recruitment agreement; otherwise, this will render nugatory the very purpose which the law governing the employment of workers for foreign jobs’ abroad was enacted (Catan v. NLRC, G.R. No. 77279, April 15, 1988, 160 SCRA 691).

As a rule, direct hiring of migrant workers is not allowed. What are the exceptions? Explain your answer. (2.5%)

The exceptions are: direct hiring by members of the diplomatic organizations, international organizations, heads of state and government officials with the rank of at least deputy minister, and such other employers as may be allowed by the Secretary of Labor (Book I, Title 1, Chapter 1, Article 18, Labor Code). The reasons for the ban on direct hiring are:

A worker hired directly by a foreign employer without government intervention may not be assured of the best possible terms and conditions of employment.
A foreign employer must also be protected. Without government intervention, a foreign employer may be entering into a contract with a Filipino who is not qualified to do the job.
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.


Phil, a resident alien, sought employment in the Philippines. The employer, noticing that Phil was a foreigner, demanded that he first secures an employment permit from the DOLE. Is the employer correct? Explain your answer. (2.5%)

No, the employer is not correct. Only non-resident aliens seeking admission to the Philippines are required to obtain an employment permit from the Department of Labor and Employment (Article 40, Labor Code).

The employer is not correct. Under DOLE Department Order No. 75-06, resident foreign nationals are exempted from securing an employment permit.


The Regional Tripartite Wages and Productivity Board (RTWPB) for Region 3 issued a wage order on November 2, 2017 fixing the minimum wages for all industries throughout Region 3.
(a) Is the wage order subject to the approval of the National Wages and Productivity Commission before it takes effect? (2%)

(a) No, because the NWPC exercises only technical and administrative supervision over the RTWPB (Article 121(g), Labor Code).

(a) No, the Wage Order becomes effective fifteen (15) days after its publication in at least one (1) newspaper of general circulation in the region pursuant to the Rules of Procedure in Minimum Wage Fixing.

(a) Yes. In NWPC v. Alliance of Progressive Labor (G.R. No. 150326, March 12, 2014), it was ruled that “(t)he very fact that the validity of the assailed sections of Wage Order No. NCR-07 had been already passed upon and upheld by the NWPC meant that the NWPC had already given the wage order its necessary legal imprimatur. Accordingly, the requisite approval or review was complied with.”

(b) The law mandates that no petition for wage increase shall be entertained within a period of 12 months from the effectivity of the wage order. Under what circumstances may the Kilusang Walang Takot, a federation of labor organizations that publicly and openly assails the wage order as blatantly unjust, initiate the review of the wage increases under the wage order without waiting for the end of the 12-month period? Explain your answer. (3%)

(b) The federation may initiate a review of the wage order even before the expiration of the 12 month period when there are supervening conditions, such as extraordinary increase in prices of petroleum products and basic goods/services which demand a review of minimum wage rates as determined by the Board and confirmed by the


Percival was a mechanic of Pacific Airlines. He enjoyed a meal break of one hour. However, during meal breaks, he was required to be on stand-by for emergency work. During emergencies, he was made to forego his meals or to hurry up eating. He demanded payment of overtime for work done during his meal periods. Is Percival correct? Explain your answer. (3%)

Percival is correct. Under Article 85 of the Labor Code and Book III, Rule I, Section 7 of the Rules, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. But where during the meal break, the workers are required to stand by for emergency work, such period is considered overtime (Pan American World Airways System (Phil.) v. Pan American Employees Association, G.R. No. L-16275, February 23, 1961, 1 SCRA 527).

Percival is correct. All the time during which an employee is required to be on duty or to be at the employer’s premises or to be at a prescribed work place, and all time during which an employee is suffered or permitted to work is considered compensable hours. Given that Percival’s meal break was not one of complete rest, as he did not have the freedom to devote such period for his personal needs, the same should be considered as compensable hours of work.

Distinguish a learner from an apprentice. (4%)


As to nature: a learner trains in a semi-skilled job; whereas, an apprentice trains in a highly technical job.

As to period: a learner is for three months; whereas, an apprentice is not less than three months but not more than six months, as a rule.

As to commitment to employ: For a learner, there is a commitment to employ the learner, as regular employees if he so desire, upon completion of the learnership; whereas, for an apprentice, there is no such commitment.

As to necessity of TESDA approval: For a learner, TESDA approval is not necessary, only TESDA inspection is required; whereas, for an apprentice, prior approval by TESDA is required.

As to deductibility of expenses: For a learner, there is no provision for deductibility of expenses; whereas, for an apprentice, expenses of training are deductible from income tax.

As to compensation: a learner has compensation; whereas, an apprentice has none if DOLE authorizes, as when OJT is required by the school.


Are there differences between a househelper and a homeworker? Explain your answer. (4%)

Househelper refers to any person, whether male or female, who renders services in and about the employer’s home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort and enjoyment of the employer’s family (Rule XIII, Section 1(b), Book 3, Labor Code; Apex Mining Company, Inc. v. NLRC, G.R. No. 94951, April 22, 1991, 196 SCRA 251), homeworker, on the other hand, is one who works in a system of production under an employer or contractor whose job is carried out at his/her home, the materials of which may or may not be furnished by the employer or contractor (Department Order No. 005-92).

The househelper is covered by the Kasambahay Law; whereas, the homeworker is subject to the provisions of Book III of the Labor Code. The househelper works in another person’s home; whereas, the homeworker does his job in the confines of his own home. The househelper has a definite employer while the homeworker has none. The househelper has security of tenure, which the homeworker does not have.


One of Pacific Airline’s policies was to hire only single applicants as flight attendants, and considered as automatically resigned the flight attendants at the moment they got married. Is the policy valid? Explain your answer. (2.5%)
The policy is not valid. It violates the provisions of Article 136. (now Article 134) of the Labor Code on stipulations against marriage, to wit: “It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman emploves shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate, or otherwise prejudice a woman employee merely by reason of her marriage.”


  1. Tarcisio was employed as operations manager and received a monthly salary of P25,000.00 through his payroll account with DB Bank. He obtained a loan from Roberto to purchase a car. Tarcisio failed to pay Roberto when the loan fell due. Roberto sued to collect, and moved to garnish Tarcisio’s payroll account. The latter vigorously objected and argued that salaries were exempt from garnishment. Is Tarcisio correct? Explain your answer. (3%)

No, Tarcisio is not correct. Case law exempts wages of rank and-file employees from garnishment. Tarcisio, however as operations manager, is a managerial employee. Since the rule covers only rank-and file employees, therefore, Tarcisio’s salary is not exempt from garnishment (Gaa v. Court of Appeals, G.R. No. L-44169, December 3, 1985, 140 SCRA 304).

Yes, Tarcisio is correct. Under Article 1708 of the Civil Code, “(t). he laborer’s wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance.” The indebtedness of Tarcisio was due to a purchase of a car which is nou one of the exceptions under the said law.


Garnishment, which is a species of attachment requires that debtor (Tarcisio) is insolvent.


Dr. Crisostomo entered into a retainer agreement with AB Hotel and Resort whereby he would provide medical services to the guests and employees of AB Hoteland Resort, which, in turn, would provide the clinic premises and medical supplies. He received a monthly retainer fee of 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 employed nurses and allied staff, whose salaries, SSS contributions and other benefits he undertook to pay. AB Hotel and Resort issued directives giving instructions to him on the replenishment of emergency kits and forbidding the clinic staff from receiving cash payments from the guests.
In time, the nurses and the clinic staff claimed entitlement to rights as regular employees of AB Hoteland Resort, but the latter refused on the ground that Dr. Crisostomo, who was their employer, was an independent contractor. Rule, with reasons. (4%)

I will rule in favor of AB Hoteland Resort. Applying the Four Fold Test will readily show that the real employer of the nurses and the clinic staff is Dr. Crisostomo and not AB Hoteland Resort, viz: (1) the selection and engagement of the nurses and clinic staff were made by Dr. Crisostomo; (2) their wages were paid by Dr. Crisostomo. As a matter of fact, SSS contributions were paid by him which, by itself, is already an indication that he is the employer. Although he did not exercise the power of dismissal, it can be said that as the doctor, he has the control, of his employees’ conduct in the dispensing of medical services to the guests and personnel of the resort. The fact that AB Hoteland Resort gave instructions to him regarding replenishment of emergency kits and forbidding his staff from receiving cash payments from guests is of no consequence. They are nothing more but guidelines which will not create an employer-employee relationship (Insular Life Co., Ltd. v. NLRC, G.R. No. 84484, November 15, 1989, 179 SCRA 459).


I will rule in favor of the employees. In the case of Samonte v. La Salle Greenhills, Inc. (G.R. No. 199683, February 10, 2016), the Court held that “Time and again, we have held that the power of control refers to the existence of the power and not necessarily to the actual exercise thereof, nor is it essential for the employer to actually supervise the performance of duties of the employee. It is enough that the employer has the right to wield that power.” Such power is present in the hands of AB Hoteland Resort.


Marciano was hired as Chief Engineer on board the vessel M/V Australia. His contract of employment was for nine months. After nine months, he was re-hired. He was hired a third time after another nine months. He now claims entitlement to the benefits of a regular employee based on his having performed tasks usually necessary and desirable to the employer’s’ business for a continuous period of more than one year. Is Marciano’s claim tenable? Explain your answer. (3%)

No. Marciano’s claim is not tenable. Seafarers are contractual employees for a fixed term, governed by the contracts they sign. We should not depart from the rulings of the Supreme Court in Brent School, Inc. v. Zamora (G.R. No. L-48494, February 5, 1990, 181 SCRA 702); Covoca v. NLRC (G.R. No. 113658, March 31, 1995, 243 SCRA 190); and Millares v. NLRC (G.R. No. 110524, July 29, 2002, 385 SCRA 306), which constitute stare decisis with respect to the employment status of seafarers as contractual employees, not regular employees, notwithstanding performance of usually necessary and desirable functions which exceed one year or continuous rehiring.


Section 255 (245) of the Labor Code recognizes three categories of employees, namely: managerial, supervisory, and rank-and-file.
(a) Give the characteristics of each category of employees, and state whether the employees in each category may organize and form unions. Explain your answer. (5%)

(a) Managerial employees – those vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall employees (Article 219 1212), par. m, Labor Code) Managerial employees cannot join, assist or form unions (Article 255 (245), Labor Code).

Supervisory employees – those who, in the interest of management, effectively recommend such managerial actions if the exercise of such authority is not merely routine or clerical in nature, but requires use of independent judgment (Article 219 (212), par, m, Labor Code). Supervisory employees are not eligible for membership in a labor organization of rank-and-file employees but may join, assist, or form separate labor organizations of their own (Art. 255 [245], Labor Code).

Rank-and-file employees – all other employees not falling within the definition of “managerial” or “supervisory” employees are considered rank-and-file employees (Article 219 [212], par. m, Labor Code). Rank and-file employees have the right to form, join or assist unions of their own choosing (Art. 253 [243], Labor Code);

(b) May confidential employees who assist managerial employees, and who act in a confidential capacity or have access to confidential matters being handled by persons exercising managerial functions in the held of labor relations form, or assist, or join labor unions? Explain your answer. (2.5%)

(b) No, these confidential employees cannot form, assist, or join labor unions. The exclusion from bargaining units of employees who, in the general course of their duties, become aware of management policies relating to labor relations is founded upon the confidential employee rule”. The rationale behind this rule is that employees should not be placed in a position involving a potential conflict of interests. Management should not be required to handle labor relation matters through employees who are represented by the union with which the company is required to deal and who in the normal performance of their duties may obtain advance information of the company’s position with regard to contract negotiations, the disposition of grievances or other labor relations matters (San Miguel Corporation Supervisor and Exempt Employees Union v. Laguesma, G.R. No. 110399, August 15, 1997, 277 SCRA 370).

(b) No. Under the doctrine of necessary implication, same reason for the disqualification of managerial employees app! confidential employees (Pepsi-Cola Products Phil., Inc. v. Sec. oj bu G.R. Nos. 96693 and 103300, August 10, 1999, 312 SCRA 104).


The labor sector has been loudly agitating for the end of labor-only contracting, as distinguished from job contracting. Explain these two kinds of labor contracting, and give the effect of a finding that one is a labor-only contractor. Explain your answers. (4%)

There is labor-only contracting where: (1) the person supplying. workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others; and (2) the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer (Baguio v. NLRC, G.R. Nos. 79004-08, October 4, 1991, 202 SCRA 465; Art. 106, Labor Code).
There is job contracting where: (1) the contractor carries on an independent business and undertakes the contract work on his own account under his own responsibility according to his own manner and method, free from the control and direction of his principal in all matters connected with the performance of the work except as to the results thereof; and (2) the contractor has substantial capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of his business (Baguio v. NLRC, G.R. Nos. 79004-108, October 4, 1991, 202 SCRA 465).
A finding that a contractor is a labor-only contractor is equivalent to a declaration that there is an employer-employee relationship between the principal and the employees of the labor-only contractor (Industrial Timber Corp. v. NLRC, G.R. No. 83616, January 20, 1989, 169 SCRA 341). In such a case, the person or intermediary shall be considered merely as an agent of the employer, who shall be responsible to the workers in the manner and extent as if the latter were directly employed by him (Sandoval Shipyards, Inc. v. Prisco Pepito, G.R. No. 143428, June 25, 2001, 359 SCRA 555). The liability of the principal vis-à-vis the employees of the labor-only contractor is comprehensive, i.e., not only for unpaid wages but for all claims under the Labor Code and ancillary laws (San Miguel Corporation v. MAERC Integrated Services, Inc., G.R. No. 144672, July 10, 2003, 405 SCRA 579).

What are the grounds for validly terminating the services of an employee based on a just cause? (5%)

Article 296 of the Labor Code (formerly Article 282) provides for the termination of the services of an employee for just causes.
An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representatives; and
e) Other causes analogous to the foregoing.

Give the procedure to be observed for validly terminating the services of an employee based on a just cause? (4%)

Procedural due process mandates that the twin requirements of Notice and Hearing should be present. The two notices are as follows:
1st notice: Notice of appraisal, which is a written notice served on the employee specifying the ground or grounds of termination, and giving the employee reasonable opportunity within which to explain his side.
2nd notice: Notice of termination, which is a written notice of termination served upon the employee, indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination.

The first notice should contain a detailed narration of facts and circumstances that will serve as basis for the charge or specific causes or ground for termination against the employee, and a directive that the employee is given the opportunity to submit his written explanation within a reasonable period (Unilever Phil. v. Maria Ruby Rivera, G.R. No. 201701, June 3, 2013, 697 SCRA 136). This is to enable the employee to intelligently prepare his explanation and defenses.
A general description of the charge will not suffice. The notice should specifically mention which company rules, if any, are violated (King of Kings Transport, Inc. v. Mamac, G.R. No. 166208, June 29, 2007, 526 SCRA 116), and that the employer seeks his dismissal for the act or omission charged against him; otherwise, the notice does not comply with the rules (Magro Placement and General Services v. Hernandez, G.R. No. 156964, July 4, 2007, 526 SCRA 408; see also Mercury Drug Corporation: V. Serrano, G.R. No. 160509, March 10, 2006, 484 SCRA 434; citing Maquiling v. Philippine Tuberculosis Society, Inc., G.R. No. 143384, February 4, 2005, 450 SCRA 465).

“Reasonable opportunity” under the Omnibus Rules means every kind of assistance that management must accord to the employee to enable him to prepare adequately for his defense. This should be construed as a period of at least five (5) calendar days from receipt of the notice to give the employee an opportunity to study the accusation against him, consult a union official or lawyer, gather data and evidence, and decide on the defenses he will raise against the complaint (King of Kings Transport, Inc. v. Mamac, G.R. No. 166208, June 29, 2007, 526 SCRA 116).
After receiving the first notice apprising him of the charges against him, the employee may submit a written explanation (which may be in the form of a letter, memorandum, affidavit or position paper) and offer evidence in support thereof, like relevant company records (such as his 201 file and daily time records) and the sworn statements of his witnesses.

For this purpose, he may prepare his explanation personally or with the assistance of a representative or counsel. He may also ask the employer to provide him copy of records material to his defense. His written explanation may also include a request that a formal hearing or conference be held.
In such a case, the conduct of a formal hearing or conference becomes mandatory, as where there exist substantial evidentiary disputes or where company rules or practice requires an actual hearing as part of employment pre-termination procedure (Perez V. Philippine Telegraph and Telephone Company, G.R. No. 152048, April 7, 2009, 584 SCRA 110).


The modes of determining the exclusive bargaining agent of the employees in a business are: (a) voluntary recognition; (b) certification election; and (c) consent election. Explain how they differ from one another. (4%)

Voluntary Recognition: An employer may voluntarily recognize the representation status of a labor union if the establishment is unorganized and has only one legitimate labor organization. Such voluntary recognition, accompanied by supporting documents, should be submitted to the Regional Office, which issued the labor union’s certificate of registration.
Certification Election: This is the process by which a legitimate labor organization or the employer may file a petition for certification election to determine the choice of an exclusive collective bargaining agent of the employees. A med-arbiter shall automatically order a certification election by secret ballot when a petition is filed (1) in an unorgànized establishment or (2) in an organized establishment where the petition is supported by at least 25% of all employees in the bargaining unit. To have a valid certification election, at least a majority of all eligible votes in the bargaining unit must have cast their votes. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all employees in the unit.
Consent Election: Similar to a certification election proceeding, consent election is the process of determining through secret ballot the sole and exclusive bargaining agent of employees in an appropriate collective bargaining unit for purposes of collective bargaining or negotiations. This process, however, differs from a certification election as this is voluntarily agreed upon by the parties, with or without the DOLE’s intervention. In such a case, the med-arbiter need not issue a formal order calling for such an election. The minutes of the agreement and records of the case are forwarded to the Regional Director for implementation of the consent election.

Marcel was the Vice President for Finance and Administration and a member of the Board of Directors of Mercedes Corporation. He brought a complaint for illegal suspension and illegal dismissal against Mercedes Corporation, which moved to dismiss the complaint on the ground that the complaint pertained to the jurisdiction of the RTC due to the controversy being intracorporate based on his positions in the corporation, Marcel countered that he had only been removed as Vice President for Finance and Administration, not as a member of the Board of Directors. He also argued that his position was not listed as among the corporate offices in Mercedes Corporation’s by laws. Is the argument of Marcel correct? Explain your answer. (2.5%)

Yes, Marcel’s argument is correct. The question is whether the complaint for illegal dismissal filed by Marcel is intra-corporate and thus beyond the jurisdiction of the Labor Arbiter. Marcel as the Vice-President for Finance and Administration is not a corporate official. Although he is a member of the Board of Directors, he was not removed as such; he was removed only from his position as Vice-President. Inasmuch as the core issue is his termination as a non-corporate official, then Marcel’s complaint for illegal dismissal is not an intra-corporate controversy (Real v. Sangu Philippines, Inc. et al., G.R. No. 168757, January 19, 2011, 640 SCRA 67).
Yes, Marcel’s argument is correct. Only corporate officers such as the president, secretary, treasurer, and such other officers as may be provided in the by-laws of the corporation are subject to the jurisdiction of the RTC. Corporate officers are those whose position is a creation of the corporate charter or by laws and whose election is by virtue of the acts of the Board of Directors (Cosare v. Broadcom Asia, Inc., G.R. No. 201298, February 5, 2014,715 SCRA 534).

State the jurisdiction of the Voluntary Arbitrator, or Panel of Voluntary Arbitrators in labor disputes? (4%)
The jurisdiction of the Voluntary Arbitrator, or Panel of Voluntary Arbitrators in labor disputes is provided in Article 274 (formerly Article 261) of the Labor Code, viz: the Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding article. Accordingly, violations of a Collective Bargaining Agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the Collective Bargaining Agreement. For purposes of this article, gross violations of Collective Bargaining Agreement shall mean flagrant and/or malicious. refusal to comply with the economic provisions of such agreement.
Under Articles 274 and 275 of the Labor Code, as re-numbered, the jurisdiction of Voluntary Arbitrators or Panel of Voluntary Arbitrators are:
(a) original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the Collective Bargaining Agreement (Article 274);
(b) those arising from the interpretation or enforcement of company personnel policies (Id.);
(c) upon agreement of the parties, jurisdiction to hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks (Article 275).


Juanito initiated a case for illégal dismissal against Mandarin Company. The Labor Arbiter decided in his favor and ordered his immediate reinstatement with full backwages and without loss of seniority and other benefits. Mandarin Company did not like to allow him back in its premises to prevent him from influencing his co-workers to move against the interest of the company; hence, it directed his payroll reinstatement and paid his full backwages and other benefits even as it appealed to the NLRC..
A few months later, the NLRC reversed the ruling of the Labor Arbiter and declared that Juanito’s dismissal was valid. The reversal ultimately became final.
May Mandarin Company recover the backwages and other benefits paid to Juanito pursuant to the decision of the Labor Arbiter in view of the reversal by the NLRC? Rule, with reasons. (2.5%)

Mandarin cannot recover the backwages and other benefits paid to Juanito. The decision of the Labor Arbiter insofar as the reinstatement aspect is concerned, is immediately executory pending appeal (Felix v. Enertech Systems Industries Inc., G.R. No. 192007, March 28, 2001, 355 SCRA 680). In fact, in the case of Pioneer Texturizing Corp. v. NLRC (G.R. No. 118651, October 16, 1997, 280 SCRA 806), it was held that the order of the Labor Arbiter is self-executory; hence, it is the obligation of Mandarin to immediately admit Juanito back to work or reinstate him in the payroll.
When Mandarin appealed the Labor Arbiter’s decision to the NLRC, the employer-employee relationship between the former and Juanito never ceased; and his employment status remained uncertain until the NLRC reversed the decision, which became final.
Thus, the reinstatement salaries due to Juanito were, by their nature, payment of unworked backwages. These were salaries due to him because he was prevented from working despite the finding of the Labor Arbiter that he had been illegally dismissed (Wenphil Corp. v. Abing and Tuason, G.R. No. 207983, April 7, 2014, 721 SCRA 126).


Gene is a married regular employee of Matibay Corporation. ” employees and Matibay Corporation had an existing CBA that provided for funeral or bereavement aid of P15,000.00 in case of the death of a legal dependent of a regular employee. His widowed mother, who had been living with him and his family for many years, died; hence, he claimed the funeral aid. Matibay Corporation denied the claim on the basis that she had not been his legal dependent as the term legal dependent was defined by the Social Security Law.
(a) Who may be the legal dependents of Gene under the Social Security Law? (2.5%)
(b) Is Gene entitled to the funeral aid for the death of his widowed mother? Explain your answer. (2%)

(a) Pursuant to Section 8(e) of Rep. Act No. 1161, the legal dependents of Gene under the Social Security Law are the legitimate, legitimated or legally adopted child who is unmarried, not gainfully employed and not over twenty-one years of age, or over twenty-one years of age provided that he is congenitally incapacitated and incapable of self-support, physically or mentally; the legitimate spouse dependent for support upon the employee; and the legitimate parents wholly dependent upon the covered employee for regular support.
(b) Gene would be entitled to the funeral aid under the CBA for the death of his widowed mother because the latter is a legitimate parent wholly dependent upon him for regular support for many years. As held in a case, the coverage of the term “legal dependent” in a stipulation in a CBA granting funeral or bereavement benefits to a regular employee for the death of a legal dependent, if the CBA is silent about it, is to be construed as similar to the meaning that contemporaneous social legislation have set. This is because the terms of such social legislation are deemed incorporated in or adopted by the CBA (Philippines Journalists, Inc. v. Journal Employees Union, et al., G.R. No. 192601, June 3, 2013, 697 SCRA 103).

Rosa was granted vacation leave by her employer to spend three weeks in Africa with her family. Prior to her departure, the General Manag of the company requested her to visit the plant of a client of the compan in Zimbabwe in order to derive best manufacturing practices useful to the company. She accepted the request because the errand would be important to the company and Zimbabwe was anyway in her itinerary. It appears that she contracted a serious disease during the trip. Upon her return, she filed a claim for compensation, insisting that she had contracted the disease while serving the interest of her employer.
Under the Labor Code, the sickness or death of an employee, to be compensable, must have resulted from an illness either definitely accepted as an occupational disease by the Employees’ Compensation Commission, or caused by employment subject to proof that the risk of contracting the same is increased by working conditions.
Is the serious disease Rosa contracted during her trip to Africa compensable? Explain your answer. (2.5%)

For sickness and the resulting disability to be compensable, the sickness must be the result of an occupational disease listed under Annex A of the Amended Rules on Employees’ Compensation with the condition set therein satisfied; otherwise, proof must be shown that the risk of contracting the disease is increased by the working condition. The burden of proof is upon Rosa. No proof was presented by Rosa to substantiate the foregoing. Moreover, it is required that the sickness and the resulting injury must have arisen out of or in the course of employment. In the present case, Rosa contracted the disease while on vacation leave. Consequently, the disease contracted by her in Africa during her vacation leave is not compensable (Iloilo Dock & Engineering Co. v. Workmen Compensation Commission et al., G.R. No. L-26341, November 27, 1900, 26 SCRA 102).

Yes, although Rosa’s leave of absence was approved, she was merely on a partial vacation due to the business assignment that her employer gave her to visit the plant of a client in Zimbabwe to derive best manufacturing practices useful to the company; thus, she had to go and observe said activity beneficial to her employer in the performance of her assigned task. As she contracted the disease during her trip, the same must be construed as work-related.


Given that the liability for an illegal strike is individual, not collective, state when the participating union officers and members may be terminated from employment because of the illegal strike. Explain your answer. (4%)

When a strike is declared illegal because of non-compliance with statutory or contractual requirements or because of the use of unlawful means, the consequence is loss of employment status of the officers of the union who knowingly participated in the illegal strike.
Ordinary union members will lose their employment status only if they participated in the commission of illegal acts during the strike, thus, mere union membership does not result in automatic loss of employment as a result of an illegal strike (Article 263-264 (now Articles 278-279) of the Labor Code; Pepsi-Cola Labor Union v. NLRC, G.R. No. L-58341, June 29, 1982, 114 SCRA 930; Solidbank Corp. v. Solidbank Union, G.R. No. 159461, November 15, 2010, 634 SCRA 554).


A sympathetic strike is stoppage of work to make common cause with other strikers in another establishment or business. Is the sympathetic strike valid? Explain your answer. (1%)

A sympathetic strike is not valid. It is illegal because the strikers have no direct grievance against their own employer; that is, no labor dispute exists between the strikers and the employer.
Due to business recession, Ballistic Company retrenched a part of its workforce. Opposing the retrenchment, some of the affected employees staged a strike. Eventually, the retrenchment was found to be justified, and the strike was declared illegal; hence, the leaders of the strike, including the retrenched employees, were declared to have lost their employment status.
Are the striking retrenched employees still entitled to separation pay under Sec. 298 (283) of the Labor Code despite the illegality of their strike?
Explain your answer. (2%)

No. The Supreme Court has ruled if the strike staged by the union is declared illegal, the union officers and members are considered validly dismissed from employment for committing illegal acts during the illegal strike. The striking retrenched union officials and members who were found guilty of having staged an illegal strike, which constituted serious misconduct, will not be entitled to separation pay (C. Alcantara & Sons, Inc. v. Court of Appeals, G.R. No. 155109, March 14, 2012, 631 SCRA 486; citing Toyota Motors Phils. Corp. Workers Association v. NLRC, G.R. No. 158786 & 158789, October 19, 2007, 537 SCRA 171).

Yes. Article 298 (283) of the Labor Code requires an employer to give, without qualification, separation pay in cases of retrenchment. The law does not make a distinction as to which among the retrenched employees are entitled to receive separation pay; thus, the striking retrenched employees are still entitled to separation pay despite the illegality of their strike.


Pursuant to his power under Sec. 278(g) (263(g)) of the Labor Code, the Secretary of Labor assumed jurisdiction over the 3-day old strike in Armor Steel Plates, Inc., one of the country’s bigger manufacturers of steel plates, and ordered all the striking employees to return to work. The striking employees ignored the order to return to work.

(a) What conditions may justify the Secretary of Labor to assume jurisdiction? (2.5%)

(a) The conditions that may justify the Secretary of Labor to assume jurisdiction are found in Article 278(g) (formerly Article 263 (g)), viz: “When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. xxx”

(b) What are the consequences of the assumption of jurisdiction by the Secretary of Labor, and of the disobedience to me to work? Explain your answer. (2.5%)

(b) The assumption of jurisdiction by the Secretary of Labor automatically results in a return-to-work of all striking workers (if one has already taken place) or enjoins the taking place of a strike, whether or not a corresponding order had been issued by the Secretary of Labor (Union of Filipro Employees v. Nestle Philippines, Inc., G.R. Nos. 88710-13, December 19, 1990, 192 SCRA 396).

When jurisdiction over a labor dispute is assumed by the Secretary of Labor, such comprehensive jurisdiction includes all incidental issues and cases which otherwise would be under the original and exclusive jurisdiction of the labor arbiters (International Pharmaceuticals, Inc v. Secretary of Labor, G.R. Nos. 92981-83, January 9, 1992, 205 SCRA 59).
A disobedience or defiance of the return-to-work order of the Secretary of Labor results in a loss of employment status (Allied Banking Corporation v. NLRC, G.R. No. 116128, July 12, 1996, 258 SCRA 724).

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