— BAR EXAM SUGGESTED ANSWERS —

2017 Labor Law Bar Q&A

AUGUST 31, 2018

2017 Labor Law Bar Questions and Answers

A.

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

SUGGESTED ANSWER:

The accepted tests to determine the existence of an employer-employee relationship are the four-fold
test and the economic reality test.

The four-fold test requires the following requisites:

(a) the power to hire employees;

(b) the power of dismissal;

(c) payment of wages;

(d) power to control employee’s conduct, which is the most important requisite.

The economic reality test examines the economic realities prevailing within the activity or between the
parties, taking into consideration the totality of circumstances surrounding the true nature of the
relationship between the parties.

B.

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%)

SUGGESTED ANSWER:

The jeepney driver operating under the boundary system is an employee of the jeepney operator.

Applying the four-fold test:

(a) the jeepney operator has the power to choose the jeepney drivers who can drive his vehicles;

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(b) the jeep operator has the power to dismiss the jeepney driver by refusing to let the latter drive;

(c) the jeepney driver’s wage is the excess of the boundary; and

(d) most importantly, the jeepney operator exercises control over the jeepney driver, since the owner
must see to it that the driver follows the route prescribed under the certificate of public convenience.

Applying the economic reality test, the jeepney driver is dependent solely on his income from driving the
jeepney operator’s vehicle.

The jeepney driver operating under the boundary system is an employee of the jeepney operator.

II.

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%)

SUGGESTED ANSWER:

No, the reversal was not correct.

Adjudication of labor disputes, which includes appreciation of evidence, is subsumed in the

implementation of the Labor Code. Consequently, any doubt with respect to evidence should also be
resolved in favor of labor.

Hence, the NLRC’s reversal due to its erroneous interpretation of Article 4 of the Labor Code was not
correct.

III.

A.

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

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ground that it no longer had an agency agreement with Invictus Shipping. Is AMA correct? Explain your
answer. (3%)

SUGGESTED ANSWER:

AMA is not correct.

Under Section 10 of RA No. 8042, the solidary liability of the principal and the recruitment agency exists
for the whole duration of the employment contract and shall not be affected by any substitution,
amendment or modification made locally or in a foreign country.

Here, AMA recruited Feliciano for employment by Invictus Shipping.

Hence, AMA remains solidary liable with Invictus for any breach of the Feliciano’s employment contract,
even if AMA and Invictus had already terminated their agency contract.

B.

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

SUGGESTED ANSWER:

The exceptions to the prohibition on direct hiring of migrant workers are:

(a) Those hired by international organizations;

(b) Those hired by members of the diplomatic corps; and

(c) Name hires or workers who are able to secure overseas employment opportunity with an employer
without the assistance or participation of any agency.

C.

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%)

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SUGGESTED ANSWER:

No, the employer is not correct.

Only non-resident aliens who are seeking employment in the Philippines are required to secure first an
Alien Employment Permit.

Here, Phil is a resident alien, who is exempted from Alien Employment Permit requirement.

Hence, the employer is not correct in demanding that Phil first secure an employment permit from the
DOLE.

IV.

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%)

SUGGESTED ANSWER:

No, the wage order is not subject to the approval of the National Wages and Productivity Commission
(NWPC) before it takes effect.

Under the Labor Code, the NWPC only exercises technical and administrative supervision over the
RTWPB.

(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%)

SUGGESTED ANSWER:

Kilusang Walang Takot may initiate the review of wage order without waiting for the end of the
12-month period when there are supervening conditions that demand a review of the minimum wage
rates.

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These supervening conditions include:

(i) extraordinary increase in prices of petroleum products; and

(ii) extraordinary increase in the cost of basic goods and services.

V.

A.

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%)

SUGGESTED ANSWER:

Yes, Percival is correct.

Meal break is compensable when the employees are required to stand by for emergency work and is
considered overtime work.

Here, Percival is required to be on. stand-by for emergency work during his meal break.

Hence, he is correct to demand overtime for work done during his meal periods.

B.

Distinguish a learner from an apprentice. (4%)

SUGGESTED ANSWER:

The distinctions between a learner and an apprentice are as follows:

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

(b) As to period, a learner works for 3 months, whereas an apprentice works for not less than 3 months
but not more than 6 months.

(c) As to possibility of regular employment, learners become regular employees after the period for
learnership, whereas there is no such possibility.

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(d) As to requirement of TESDA approval, learnership does not require TESDA approval, whereas no such
requirement exists for apprenticeship.

(e) As to deductibility of expenses, a learner’s expenses are not deductible, whereas an apprentice’s
training expenses are deductible from income tax.

(d) As to compensation, a learner must be compensated, whereas an apprentice may be uncompensated,

if DOLE authorizes such, as when apprenticeship is part of OJT required by schools.

C.

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

SUGGESTED ANSWER:

As to persons included, househel include those who minister exclusively to the personal comfort and
enjoyment of the employer’s family; whereas homeworkers include those who work in a system of
production under an employer or contractor whose job is carried out at his or her home.

As to applicable law, househelpers are covered by the Kasambahay Law; whereas homeworkers are
covered by Book III of the Labor Code.

As to place of work, househelpers work in their employers’ homes; whereas homeworkers work in their
own homes.

As to existence of definite employers, househelpers work for a definite employer; whereas homeworkers
have none.

As to security of tenure, househelpers have security of tenure; whereas homeworkers have none.

VI.

A.

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%)

SUGGESTED ANSWER:

No, the policy is not valid.

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Under the Labor Code, stipulations against marriage are not allowed.

Here, Pacific Airline’s policy of automatic resignation of the flight attendants at the moment of marriage
is a stipulation against marriage.

Hence, Pacific Airline’s policy is not valid.

B.

Tarcisio was employed as operations manager and received a monthly salary of ₱25,000.00 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%)

SUGGESTED ANSWER:

No, Tarcisio is not correct.

Under Article 1708 of the Civil Code, only wages, which are the compensation paid for manual skilled or
unskilled labor, are exempt from garnishment.

Here, the subject of garnishment is Tarcisio’s salary as a managerial employee, which is not considered as
wages.

Hence, Tarcisio’s salary may be garnished.

VII.

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 ₱60,000.00, plus a 70% share
in the service charges from AB Hotel and 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%)

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SUGGESTED ANSWER 1:

I will rule in favor of the employees.

In labor contracting, the party with the power to control is considered the employer of the contracted
employees.

Here, AB Hoteland Resort exercises the power to control by requiring replenishment of emergency kits
and forbidding the clinic staff from receiving cash payments from the guests.

Hence, the employees are correct in arguing that they are regular employees of AB Hoteland Resort.

SUGGESTED ANSWER 2:

I will rule in favor of AB Hoteland Resort.

An employer-employee relationship exists when the four-fold test is satisfied, namely, the power to hire,
dismiss, pay wages, and control, which is the most important requirement.

Here, Dr. Crisostomo pays the medical staff their wages. As the doctor, he also has control over the
employees in performing their medical duties.

Hence, AB Hoteland Resort is correct in arguing that Dr. Crisostomo is the employer of the medical staff.

VIII.

Marciano was hired as Chief Engineer on board the vessel MN 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%)

SUGGESTED ANSWER:

No, Marciano’s claim is not tenable.

Seafarers are contractual employees for a fixed term and cannot attain regular status.

Here, Marciano is a considered a seafarer since he is hired as Chief Engineer on board a vessel.

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Hence, Marciano’s claim that he is a regular employee is not tenable.

IX.

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%)

SUGGESTED ANSWER:

Managerial employees is one who is vested with the powers or prerogatives to lay down and execute
management policies and/or to hire, transfer, lay-off, recall, discharge, assign or discipline employees.
Managerial employees cannot organize and form labor unions since their managerial duties present a
conflict of interest with that of a union member or officer.

Supervisory employees are those who, in the interest of the employer, effectively recommend such
managerial actions if the exercise of such functions is not merely routinary or clerical in nature but
requires the use of independent judgment. Supervisory are allowed to organize and form unions.

Rank-and-file employees includes those which do not fall under the classification of managerial or
supervisory employees. Rank-and-file employees are allowed to organize and form unions.

(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
field of labor relations form, or assist, or join labor unions? Explain your answer. (2.5%)

SUGGESTED ANSWER:

No, confidential employees to managerial employees may not form, assist or join labor unions.

Applying the doctrine of necessary implication, confidential employees are also covered by the
prohibition on joining or forming unions imposed on managerial employees.

The policy of the law is not to place confidential employees in a position involving a conflict of interest
because of their access to matters handled by managerial employees whom they assist.

X.

A.

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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%)

SUGGESTED ANSWER:

There is job contracting if a contractor carries on a distinct and independent business free from the
control of the principal in all matters except as to the results thereof; and has substantial capital or
investment.

There is labor-only contracting when the principal retains the power to control the contracted employees;
or when the contractor has insufficient capital and performs activities directly related to the business of
the principal.

A finding that there is labor-only contracting makes the principal the direct employer of the contracted
employees, and is solidarily liable with the contractor for the wages and other benefits of the contracted
employees.

B.

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

Under Article 296 of the Labor Code, the following are just causes for terminating the services of an
employee:

(a) serious misconduct or willful disobedience in connection with employee’s work;

(b) gross and habitual negligence by the employee of his duties;

(c) fraud or willful breach of turst by the employee;

(d) commission of a crime or offense against the person of the employer, his immediate family, or his
duly authorized representative; and

(e) any analogous causes.

C.

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

Termination of an employee based on just causes requires compliance with the twin-notice requirement.

First, a notice should be served on the employee specifying the grounds for termination. The employee
should be given reasonable opportunity to explain his side

Second, a notice should be served on the employee indicating the termination of his services.

XI.

A.

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%)

SUGGESTED ANSWER:

NOTE: Voluntary recognition has been repealed by DO 40-I-15, series of 2015, and replaced with Request
for SEBA recognition.

(a) Request for SEBA recognition is the process of certifying a labor union as the exclusive bargaining
agent when there is only one legitimate labor union in an unorganized establishment.

(b) Certification election is the process by which an employer or the employees file a petition with the
med-arbiter to determine the exclusive bargaining agent through secret ballot.

(c) Consent election is the process by which the employees, voluntarily by agreement, with or without
the DOLE’s intervention, determine the exclusive bargaining agent through secret ballot.

B.

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 intra-corporate 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%)

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SUGGESTED ANSWER:

Yes, the argument of Marcel is correct.

A dispute is intra-corporate when it involves, among others, the removal of corporate officers, namely
the corporate president, treasurer, and secretary, and corporate officers listed as such in the by-laws of
the corporation.

Here, Marcel was suspended and dismissed as the Vice President for Finance and Administration, which is
not a corporate officer as it is not one of those enumerated in the Corporation Code or in the by-laws of
Mercedes Corporation.

Hence, Marcel’s dismissal and suspension are not intra-corporate disputes.

See Matling Industrial and Commercial Corp. v. Coros (2010)

C.

State the jurisdiction of the Voluntary Arbitrator, or Panel of Voluntary Arbitrators in labor disputes? (4%)

SUGGESTED ANSWER:

Under the Labor Code, the jurisdiction of the Voluntary Arbitrator or Panel of Voluntary Arbitrators
include disputes involving:

(a) unresolved grievances arising from the interpretation or implementation of a collective bargaining
agreement;

(b) the interpretation or enforcement of company personnel policies;

(c) all labor disputes, upon agreement of the parties, including unfair labor practices and bargaining
deadlock;

XII.

A.

Juanito initiated a case for illegal 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.

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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%)

SUGGESTED ANSWER:

No, Mandarin Company may not recover the backwages and other benefits paid to Juanito.

In Garcia v. Philippine Airlines, Inc., the Supreme Court held that a reinstated employee need not refund
the backwages and other benefits paid pursuant to an order of reinstatement by the Labor Arbiter.

The rationale is to help the employee make both ends meet during the pendency of the appeal and to
prevent a situation where the dismissed employee will not spend the reinstatement wages for fear of
refunding the same if the decision of Labor Arbiter is subsequently reversed.

B.

Gene is a married regular employee of Matibay Corporation. The employees and Matibay Corporation
had an existing CBA that provided for funeral or bereavement aid of ₱15,000.00 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%)

SUGGESTED ANSWER:

The legal dependents of Gene under the Social Security Law are as follows:

(i) legitimate, legitimated, or legally adopted child, who is unmarried, not gainfully employed, and not
over 21 years or age, or over 21 years of age but congenitally incapacitated and incapable of self-support;

(ii) the legitimate spouse dependent for support from the employee; and

(iii) the legitimate parents wholly dependent on the employee for support.

(b) Is Gene entitled to the funeral aid for the death of his widowed mother? Explain your answer. (2%)

SUGGESTED ANSWER:

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Yes, Gene is entitled to the funeral aid for the death of his widowed mother.

In Philippine Journalists, Inc. v. Journal Employees Union, the Supreme Court held that term “legal
dependent” as used CBA should be construed as similar to the meaning that contemporaneous social
legislations have set if the CBA is silent about it.

Here, the CBA is silent about the coverage of the term “legal dependent.”

Hence, the definition of legal dependent in the Social Security Law, which includes a legitimate parent
dependent on the employee for support, should be used.

C.

Rosa was granted vacation leave by her employer to spend three weeks in Africa with her family. Prior to
her departure, the General Manager of the company requested her to visit the plant of a client of the
company 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%)

SUGGESTED ANSWER 1:

No, the serious disease Rosa contracted during her trip to Africa is not compensable.

For an occupational disease to be compensable, it must be an illness accepted as occupational disease by

the Employees’ Compensation Commission or otherwise shown that the risk of contracting the disease is
increased by the working condition.

Here, Rosa failed to present proof that there is increased risk of contracting the disease because of the
General Manager’s request for her to visit a client’s plant.

Hence, Rosa’s serious disease is not compensable.

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SUGGESTED ANSWER 2:

Yes, the serious disease Rosa contracted during her trip to Africa is compensable.

For an occupational disease to be compensable, it must be an illness accepted as occupational disease by

the Employees’ Compensation Commission or otherwise shown that the risk of contracting the disease is
increased by the working condition.

Here, the risk of contracting the serious disease is increased by the request of the General Manager for
Rosa to visit a client’s plant, which is done in the interest of Rosa’s employer.

Hence, Rosa’s serious disease is compensable.

XIII.

A.

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%)

SUGGESTED ANSWER:

For union officers, participation in an illegal strike is a just cause for termination of their employment.
This is because the union officers have the duty of leading their unions to comply with the law in staging
their strikes.

For union members, participation in an illegal strike results in loss of employment only if they committed
illegal acts during the strike.

B.

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%)

SUGGESTED ANSWER:

No, a sympathetic strike is not valid.

A strike is not valid if there is no labor dispute between the employer and the employees.

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In a sympathetic strike, there is no labor dispute in the employees’ work since they are merely making
common cause with strikers in another establishment.

Hence, a sympathetic strike is not valid.

C.

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%)

SUGGESTED ANSWER:

Yes, the striking retrenched employees are still entitled to separation pay despite the illegality of their
strike.

Union members who participate in an illegal strike do not lose their employment if they did not commit
illegal acts during the strike.

Here, there is no evidence that the retrenched employees committed illegal acts during the strike.

Hence, they are entitled to separation pay as retrenched employees.

XIV.

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%)

SUGGESTED ANSWER:

Under Article 278(g) of the Renumbered Labor Code, the Secretary of Labor is justified to assume
jurisdiction over a labor dispute, 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.

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

SUGGESTED ANSWER:

The assumption of jurisdiction by the Secretary of Labor enjoins the taking place of any strike, or if one
has already been staged, requires the employees to cease striking and return to their work. The employer
is required to reinstate the striking employees to their former positions before the strike.

Disobedience of the return-to-work order results in automatic loss of employment status of the
disobedient employee.

– NOTHING FOLLOWS –

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