4 - Labor laws

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UP Bar Review Institute

University of the Philippines Law Center

SUGGESTED ANSWERS TO THE

2023 BAR EXAMINATIONS:

LABOR LAW AND SOCIAL

LEGISLATION 1

Santos Hauling Incorporated (SHI) dismissed its drivers and helpers after
discovering that they were committing anomalous transactions involving the
sale of excess broilers and crates, without the knowledge and consent of SHI.
The drivers and helpers filed a complaint for illegal dismissal against SHI. In its
defense, SHI presented as evidence the affidavits of co-employees narrating
the alleged anomalous transactions in detail. May the drivers and helpers be
dismissed on the basis of these affidavits? Explain your answer.

SUGGESTED ANSWER:

Yes, the drivers and helpers may be dismissed on the basis of the affidavits
presented.

Substantial evidence means "that amount of relevant evidence which a

reasonable mind might accept as adequate to justify a conclusion,” and the
Supreme Court has categorically declared in several decisions that affidavits,
by themselves, may be sufficient to establish substantial evidence
(Punongbayan & Araullo (P&A) vs. Ponce Lepon,
G.R. No. 174115, 9 November 2015). This, especially in the absence of fraud
or other badges of irregularity which may cast doubt on their probative value.
In this case, there appears to be no badges of fraud or irregularity which would
cast doubt on the probative value of the affidavits.

Moreover, a document acknowledged before a notary public is a public

document that enjoys the presumption of regularity, a prima facie evidence of
the truth of the facts state therein, and a conclusive presumption of its
existence and due execution (See JR Hauling Services v. Solamo, G.R. No.
214294, 30 September 2020).

Maria met Ange, Louise, and Sam at a coffee shop one afternoon. Maria
promised she could send the three of them to work as bartenders in Scotland
in exchange for ₱100,000 each. Ange, Louise, and Sam immediately agreed
and gave the money to Maria. Upon

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receipt of the placement fees, Maria used the money to buy a luxury bag and
posted it on her Instagram page. Ange, Louise, and Sam followed up on their
employment in Scotland, but Maria stopped replying to them. After six months
of waiting, Ange, Louise, and Sam filed a complaint for Illegal Recruitment in
Large Scale against Maria. During trial, Ange, Louise, and Sam testified and
presented a certification from the Department of Migrant Workers stating that
Maria was neither licensed nor authorized to recruit people for employment.
On the other hand, Maria claimed that she was not the one who recruited them
but a certain Rashid, the president of the placement agency where Maria
supposedly worked. Is Maria guilty of Illegal Recruitment in Large Scale?
Explain.

SUGGESTED ANSWER:

Yes, Maria is guilty of Illegal Recruitment in Large Scale.

The elements of Illegal Recruitment in Large Scale are present in this case:

(a) Maria undertook a recruitment activity defined under the law. Maria met
with Ange, Louise, and Sam, promised to deploy them to Scotland, and
received placement fees amounting to PhP100,000 each, which may be
considered as recruitment activities;
(b)Maria was neither authorized nor licensed to lawfully engage in the
recruitment of workers, as certified by the Department of Migrant
Workers; and
(c) She committed the unlawful act against three (3) people, namely Ange,
Louise, and Sam (People of the Philippines v. Mildred Coching Liwanag,
G.R. No. 232245, 2 March 2022).

Maria cannot disclaim liability for her acts by pointing to the agency which she
worked, because: (a) even if she really works in the agency, she can still be
held liable alongside the agency per the express wording of RA 8042 because
she was the one who directly committed acts of recruitment despite not being
licensed to do so; and (b) assuming the agency is licensed, it, through Maria,
still committed illegal acts for which licensees can be held liable.

Lipad Pinoy (LP), a licensed local recruitment agency, deployed Mutya for its
principal, Alab Construction (AC), for a two-year project in Dubai. Mutya had
been on the job for one year when, for unknown reasons, AC and LP
terminated their agency agreement. Thereafter, AC failed to pay the salary of
Mutya. Upon her return to the Philippines, Mutya sued both LP and AC for
unpaid salaries and damages. May LP be held liable together with AC? Explain.

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SUGGESTED ANSWER:

Yes, LP may be held liable together with AC for the unpaid salaries and
damages claimed by Mutya.

Section 10 of Republic Act No. 8042 provides that the liability of the
principal/employer and the recruitment/placement agency are joint and
several for claims arising out of an employer-employee relationship or by
virtue of any law or contract involving Filipino workers for overseas
deployment, including claims for actual, moral, exemplary and other forms of
damages (Elevera v. Orient Maritime Services, Inc., G.R. No. 240054, 18 March
2021). The imposition of joint and solidary liability is in line with the policy of
the State to protect and alleviate the plight of the working class (ATCI
Overseas Corp. vs. Echin, G.R. No. 178551, 11 October 2010).

The severance of relations between local agent and the foreign principal does
not affect the liability of the local agent-recruiter as the obligations in the
recruitment agreement is not coterminous with such term of agreement. The
solidary liability extends up to and until the expiration of the employment
contracts of the employees recruited and employed pursuant to the said
recruitment agreement. Otherwise, this will render nugatory the very purpose
for which the law governing the employment of workers for foreign jobs
abroad was enacted (OSM Shipping Phil., Inc. vs. NLRC, et al., G.R. No. 138193,
5 March 2003, citing Catan vs. National Labor Relations Commission, G.R. No.
77279, 15 April 1988).

Therefore, AC and LP’s obligation to pay the salaries do not end just because
their contractual relationship has ended.

Bangko Norte (BN) implemented an “Exogamy Policy”, which prohibits

employees from marrying their co-employees. Specifically, the policy states
that when two of its employees marry each other, one of them must sever his
or her employment immediately. Clara, who was hired as an account specialist,
married her co-worker Ibarra, a loan specialist. Subsequently, BN terminated
the employment of Clara but retained Ibarra. Clara argued that the policy
should not apply to her since she was employed prior to its effectivity, and that
said policy violates the Labor Code. She also pointed out that BN did not
explain why it was her, and not Ibarra, whose employment was terminated.
Since BN refused to reinstate her, Clara filed a complaint for illegal dismissal.
Will the complaint of Clara prosper? Discuss.

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SUGGESTED ANSWER:

Yes, the complaint of Clara will prosper. The exogamy policy and the manner
by which BN implemented its policy is clearly discriminatory.

First, it is in violation of the Magna Carta of Women. Using the disparate

impact analysis, the Exogamy policy, while facially neutral, was discriminatory
against one sex when it was actually applied in practice (Star Paper Corp. v.
Simbol, G.R. No. 164774, 12 April 2006). Here, there was no explanation as to
why Clara was dismissed, but her husband was retained. This is a clear act of
discrimination.

Second, while a marriage or no-marriage qualification may be justified as a

"bona fide occupational qualification," BN must prove the presence of two
conditions necessitating its imposition: (1) that the employment qualification
is reasonably related to the essential operation of the job involved; and (2)
that there is a factual basis for believing that all or substantially all persons
meeting the qualification would be unable to properly perform the duties of
the job (De la Cruz-Cagampan v. One Network Bank, GR No. 217414, 22 June
2022).

In this case, BN failed to demonstrate that the no-spouse qualification is

reasonably related to the bank’s essential operation of its business.
Additionally, there is no factual basis to conclude that those BN employees
who will marry each other would be unable to perform their duties.

Thus, the “Exogamy Policy” is unreasonable and not a valid exercise of

management prerogative. While employers may freely conduct their affairs
and employ discretion and judgment in managing all aspects of employment,
their exercise of this right to management prerogative must be in accord with
justice and fair play (De la Cruz- Cagampan v. One Network Bank, GR No.
217414, 22 June 2022).

In computing the 13th month pay of its employees, Liwayway Company (LC)
includes as basis not only the regular base pay but also the cash value of
unused vacation and sick leaves. LC had been implementing this method for
two years when it suddenly announced that the method was erroneous and
would therefore be discontinued. May LC lawfully discontinue using this
method? Discuss.

SUGGESTED ANSWER:

No, LC may not lawfully discontinue this method.

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The computation of the 13th month pay has ripened into a company policy
which cannot be unilaterally withdrawn without violating Article 100 of the
Labor Code.

The Supreme Court and various issuances on 13th month pay have previously
clarified the definition of “basic pay” for purpose of computing 13th month
pay, and there is no reason for any mistake in the construction or application
of the law (Davao Fruits Corporation v. Associated Labor Union, G.R. No.
85073, 24 August 1993).

In this case, if LC truly believed that there was an error in computation, it

should have immediately rectified the computation. Instead, LC kept the
practice of including non- basic benefits in the 13th month computation, and
such had done voluntarily, deliberately and continuously for a period of at
least two years.

There is no rule requiring a specific minimum number of years or length of

time for company practice to constitute voluntary employer practice, which
cannot be unilaterally withdrawn by the employer. Jurisprudence has stated
that a period of two years is already sufficient to vest it as a company practice
ripening into a policy. Thus, the two- year practice of computing the 13th
month pay cannot be unilaterally withdrawn by LC without violating the Labor
Code (Sevilla Trading Co. v. Semana, G.R. No. 152456, 28 April 2004).

ALTERNATIVE ANSWER:

Yes, LC may discontinue the inclusion of the cash value of the unused VL and
SL credits in the computation of the 13th month pay.

Under Section 2 of the Implementing Rule and Regulations (IRR) of PD 851, the
13th month pay is computed according to the basic salary of an employee
within a calendar year. The IRR explicitly excluded from the term “basic
salary” are all allowances and monetary benefits which are not considered or
integrated as part of the regular or basic salary of the employee. The cash
value of unused vacation and sick leaves, not being integrated into the basic
salary, is therefore nor part of basic salary and its inclusion on the
computation of 13th month pay is a mistake.

Moreover, LC cannot be prevented from discontinuing the same on the

argument that it would violate the non-diminution of benefits rule under Art.
100 of the Labor Code for the reason that this rule does not amount to a
correction of a mistake. A benefit which is a product of a mistake cannot ripen
into a binding company practice because to be considered a company
practice, the giving of the benefits should have been done over a long period
of time, and must be shown to have been consistent and deliberate. The test
or rationale of this rule on long practice requires an indubitable showing that
the employer agreed to continue giving the benefits knowing fully well that
said employees are not covered by the law requiring payment thereof
(Metropolitan Bank and Trust Co v.

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NLRC, G.R. No. 152928, 18 June 2009). Here, LC’s practice cannot be
considered deliberate, as it was doing so without full knowledge that the
method it was employing was erroneous.

Roman, an employee of Baltazar Company (BC), was reported to have fallen

asleep during work hours and that he smelled of marijuana. BC coordinated
with Bibo Health Clinic, a facility accredited by the Department of Health, to
conduct random drug testing on its employees. Roman tested positive during
both the screening and confirmatory tests. BC asked Roman to explain why he
should not be sanctioned and dismissed. Roman denied that he used drugs
and claimed that a colleague who bore a grudge merely framed him.
Unsatisfied with his explanation, BC sent Roman a notice of termination. Was
the dismissal of Roman valid? Explain briefly.

SUGGESTED ANSWER:

Yes, the dismissal of Roman was valid.

The use of illegal drugs, such as marijuana, qualifies as a serious misconduct,

which is defined as a forbidden act, dereliction of duty, willful in character, and
implies a wrongful intent and not merely an error in judgment. The Supreme
Court has ruled that any employee under the influence of drugs cannot
possibly continue doing his or her duties without posing a serious threat to the
lives and property of his or her co-workers and his or her employer (Villarico v.
DMCI, G.R. No. 255602, 4 August 2021).

Here, the company had strictly complied with the requirements of D.O. No. 53-
03. BC coordinated with Bibo Health Clinic, a facility accredited by the
Department of Health, to conduct random drug testing on its employees.
Roman tested positive for both screening test and confirmatory test. The
Supreme Court has taken judicial notice of scientific findings that drug abuse
can damage the mental faculties of the user. It is beyond question that any
employee under the influence of drugs cannot possibly continue doing his or
her duties without posing a serious threat to the lives and property of his or
her co-workers, and even his or her employer (Samson et al v. Central
Azucarera
G.R. No. 243855, November 25, 2020 and Bughaw Jr. vs. Treasure Island, 550
SCRA 307, 28 March 2008; see also Automotive Engine Rebuilders, Inc., et al.
v. Progresibong Unyon ng mga Manggagawa sa AER, et al., G.R. No. 160138,
13 July 2011).

Moreover, BC complied with the procedural requirements in dismissing an

employee for drug use. BC not only conducted drug tests through a DOH-
accredited facility, it required Roman to explain why he should not be
sanctioned and dismissed for drug use, and subsequently issued a notice of
termination.

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ALTERNATIVE ANSWER:

No, it is not valid.

The dismissal violates the Guidelines for the Implementation of a Drug Free
Workplace Policies and Programs for the Private Sector issued by the DOLE
(DO No. 53-03 series of 2003). Under these guidelines, in the event that a
confirmatory test turns positive, the employer’s assessment team should first
evaluate the results and determine the level of care and administrative
intervention that can be extended to the concerned employee. It is only when
there are repeated incidents of drug use that occurred when appropriate
penalties could be imposed.

Moreover, the dismissal made by BC did not comply with the procedural due
process requirements of termination. Under Book VI, Rule I, Section 2(d) of the
Omnibus Rules Implementing the Labor Code, termination of employment
based on just causes under Art. 298 of the Labor Code must comply with the
following procedural requirements— the employer must provide: (a) A written
notice served on the employee specifying the ground or grounds for
termination, and giving to said employee reasonable opportunity within which
to explain his or her side; (b) A hearing or conference during which the
employee concerned, with the assistance of counsel if the employee so
desires, is given opportunity to respond to the charge, present his or her
evidence or rebut the evidence presented against him or her; and (c) A written
notice of termination served on the employee indicating that upon due
consideration of all the circumstances, grounds have been established to
justify his or her termination.

Here, BC failed to provide Roman with the first written notice; it merely asked
him to explain why he should not be dismissed, but did not provide him with a
written notice specifying the ground or grounds for termination.

Arnel, a 55-year-old seafarer who worked on board different foreign vessels,

went to the office of the Social Security System (SSS) to avail of his retirement
benefits. However, he found out that his contributions had not been paid by
his principal employer, Pancho Lines (PL). When Arnel demanded an
explanation from PL, the latter replied that it was not obligated to cover his
SSS membership since he was hired abroad and covered by another insurance
provider. Is PL correct? Discuss your answer.

SUGGESTED ANSWER:

No, PL is not correct.

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Republic Act No. 11199 provides compulsory SSS coverage of Overseas

Filipino Workers, including both land-based and sea-based, provided they are
not over sixty (60) years of age. The law provides that recruitment agencies
are jointly and severally or solidarily liable with their principals with respect to
benefits provided by the SSS, including retirement benefits (Joint Ship
Manning Group v. SSS, G.R. No. 247471, 7 July 2020).

As an employee under the age of sixty (60), Arnel is entitled to compulsory

coverage in the SSS. Pancho Lines is likewise obliged to remit both employer
and employees contributions. Well-settled is the rule that the mandatory
coverage of the SSS is premised on the existence of an employer-employee
relationship (Chua v. Court of Appeals, G.R. No. 125837, 6 October 2004); in
previous cases, the Court has held that even temporary employees may be
covered by the same (Luzon Stevedoring Corporation v. Social Security
System, G.R. No. L-20088, 22 January 1966). The fact that Arnel was hired
abroad and covered by another insurance provider is therefore immaterial in
determining whether he qualifies for the SSS coverage.

Araro Federation applied for registration as a federation in the agricultural

sector. It has under its membership a mix of five rank-and-file unions and five
supervisory unions. One of the rank-and-file unions and one of the supervisory
unions both belong to the same establishment, Ani Corporation (AC). AC
opposed the application for registration citing the legal prohibition against the
commingling of rank-and-file and supervisory employees. Is the opposition of
AC meritorious? Explain briefly.

SUGGESTED ANSWER:

No, the opposition of AC is not

meritorious.

Article 255 of the Labor Code, as amended by Republic Act No. 9481 explicitly
provides that the rank-and-file union and the supervisors' union operating
within the same establishment may join the same federation or national union.

Lazara Corporation (LC) and Lazara Employees Union (LEU) forged a collective
bargaining agreement (CBA). During the freedom period, a certification
election was conducted where LEU lost to Samahan ng Manggagawa sa Lazara
(SML), a rival union in the same establishment. SML then sent a letter to LC
demanding for renegotiation of the existing CBA. LC refused to renegotiate
the CBA claiming its validity for two more

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years. SML filed a notice of strike against LC on the ground of Unfair Labor
Practice for the alleged refusal of the latter to comply with its duty to bargain
collectively. Is the notice of strike meritorious? Explain briefly.

SUGGESTED ANSWER:

Yes, the notice of strike is meritorious.

The certification election was held during the freedom period, or the 60-day
period prior to the expiration of the five-year term of the CBA. This means
therefore that the five-year term of the CBA between LC and LEU was about to
expire. When SML won during the certification election, it became the sole and
exclusive bargaining representative (SEBA) of the employees in the
bargaining unit. As the workers' exclusive bargaining agent, it has the right to
propose a re-negotiation of the CBA and LC had the corresponding duty to
bargain collectively with the former. LC’s refusal to do so constitutes an unfair
labor practice under the Labor Code, which is a ground for filing of a notice of
strike (Associated Labor Unions v. Hon. Ferrer-Calleja, G.R. No. 82260, 19 July
1989 and Ren Transport Corp. v. National Labor Relations Commission, G.R.
No. 188020, 27 June 2016).

ALTERNATIVE ANSWER:

No, the Notice of Strike is not meritorious.

In this instance where there was a change of a bargaining agent during the
freedom period but a CBA is still valid and effective, the substitutionary
doctrine will apply. The CBA continues to be valid and binding between the
management and the rank-and-file appropriate bargaining unit, and the new
exclusive bargaining agent is obliged to respect the same. It may however
bargain for the shortening of the term of the existing CBA. (Benguet
Consolidated vs. BCI Employees Union, G.R. No. L-24711, 30 April 1968).

10

Adarna Manufacturing Company (AMC) and Adarna Employees Union (AEU)

entered into collective bargaining negotiations but reached an impasse. AEU
then filed a notice of strike before the National Conciliation and Mediation
Board, which immediately conducted conciliation meetings to avert the strike.
Fifteen days after the filing of the notice, and despite the conciliation
proceedings, AEU staged a strike with the participation of 50% of its members.
Is the strike legal? Briefly explain.

SUGGESTED ANSWER:

No, the strike is illegal.

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Under Article 278, the striking union must comply with the procedural
requirements of the thirty (30) days cooling off period for economic deadlock
before the intended strike, the approval of the strike by a simple majority
(50% plus one) of the members of the union, and (c) the submission of the
strike vote result seven (7) days before the intended date of the strike.

Here, only fifteen (15) days have lapsed from the filing of the notice of strike
and only 50% of the members participated in the strike. There was likewise no
showing that the strike vote result was submitted seven (7) days before the
intended date of the strike.

In addition, the facts do not show that the union complied with the
requirement of the giving of notice to the NCMB at least 24 hours prior to the
holding of a strike vote meeting. Such failure also renders the subsequent
strike staged by the union illegal (Capitol Medical Center Inc. v. National Labor
Relations Commission, G.R. No. 147080, 26 April 2005).

11

In 2011, Amer and Raj worked as welders on board the barges of Magiting
Shipping Company (MSC), which later changed its corporate name to Perlas
Corporation (PC). In 2018, PC verbally dismissed Amer and Raj from
employment. Thus, they jointly filed a complaint for illegal dismissal against
PC, which countered that it already had a separate and distinct personality
from MSC. It also alleged that both complainants were not its regular
employees as they were merely helpers brought in by its own regular
employees on certain occasions when urgent repairs were required for its
barges. The Labor Arbiter (LA) held that there was an employer-employee
relationship between the parties based on Article 295 [280] of the Labor Code
since Amer and Raj: 1) were engaged to perform activities which are usually
necessary or desirable in the usual business or trade of PC; and 2) have
rendered at least one year of service. Was the LA correct in using Article 295
[280] as the basis? Explain briefly.

SUGGESTED ANSWER:

No, the Labor Arbiter was incorrect in using Article 295 [280] as the basis for
determining existence of employer-employee relationship.

Article 295 merely distinguishes the classifications of employees. Article 295

does not apply where the existence of an employment relationship is in
dispute" (Valeroso v. Skycable Corp., G.R. No. 202015, 13 July 2016).

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In determining the existence of an employer-employee relationship, this Court

has time and again applied the four-fold test which has the following elements,
to wit: (a) the selection and engagement of the employee; (b) the payment of
wages; (c) the power to discipline and dismiss; and (d) the employer's power to
control the employee with respect to the means and methods by which the
work is to be accomplished (Parayday v. Shogun Shipping Co., Inc., G.R. No.
204555, 6 July 2020). Under the four-fold test, the “control test” is the most
important.

12

On May 15, 2022, Marina International Shipping (MIS) hired Felipe as a bosun
on board its vessel for a period of nine months. On July 30, 2022, Felipe joined
his vessel of assignment. On October 31, 2022, he was repatriated due to
medical reasons and was immediately referred by MIS to its company-
designated physician for treatment and monitoring. On May 31, 2023, the
company designated physician pronounced Felipe fit to resume sea duties. Is
MIS obligated to rehire Felipe? Explain briefly.

SUGGESTED ANSWER:

No, MIS is not obligated to rehire Felipe.

Seafarers and overseas contract workers are not covered by the term "regular
employment" as defined in Article 280 of the Labor Code. Jurisprudence
provides that seafarers such as Felipe are contractual employees. (Antonio
Unico vs. Anscor Ship Management, GR 184312, 12 February 2014). Their
employment contract is governed by the contract they sign every time they
are rehired and their employment is terminated when their contract expires
(Covita v. SSM Maritime Services, Inc., G.R. No. 206600, 7 December 2016).

Here, Felipe was hired for a period of nine (9) months only. He joined his
vessel of assignment on July 30, 2022 and was on October 31 2022, and
referred to MIS for treatment and monitoring. By the time he was declared fit
to resume sea duties on 31 May 2023, his contract had already expired.

13

Sampaguita University (SU) hired Farah as Instructor I in the College of

Education on a contractual or part-time basis beginning the first semester of
school year 2015-2016. In 2018, SU appointed Farah as Instructor II. SU
informed her that she will attain regular status on the condition that she obtain
a master’s degree by May 31, 2022, otherwise, her employment will either be
terminated or considered as contractual or part-time. When

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Farah failed to secure the required educational qualification within the allotted
time, SU classified her as a part-time faculty effective June 1, 2022. On April
30, 2023, SU notified Farah that they will no longer be renewing or extending
her contract as part-time faculty upon its expiration. Farah thus filed a
complaint for illegal dismissal. Will her complaint prosper? Discuss your
answer.

SUGGESTED ANSWER:

No, the complaint will not prosper.

A college teacher must acquire the necessary academic qualification of a

master’s degree for regularization. The policy requiring postgraduate degrees
of college teachers was provided in the Manual of Regulations as early as
1992.

In this case, Farah was made fully aware that possession of a master’s degree
was a criterion to attain permanency as a full-time faculty member. She failed
to secure a Master’s degree within the timeframe set by SU. Thus, there is no
legal obligation on the part of SU to reappoint Farah after the lapse of her
temporary appointment as Instructor II.

Indeed, the requirement of a master’s degree for tertiary education teachers is

not unreasonable. The operation of educational institutions involves public
interest. The government has a right to ensure that only qualified persons, in
possession of sufficient academic knowledge and teaching skills, are allowed
to teach in such institutions (University of the East v. Pepanio, G.R. No.
193897, 23 January 2013). The minimum requirement is neither subject to the
prerogative of the school nor to the agreement between the parties. For all
intents and purposes, this qualification must be deemed impliedly written in
the employment contracts between private educational institutions and
prospective faculty members (Herrera-Manaois v. St. Scholastica’s College,
G.R. No. 188914, 11 December 2013).

14

Eduardo owns a licensed company that supplies janitorial and messengerial

aides to various businesses, including Gloria Restaurant (GR). The tools and
supplies used by the janitors and messengers are supplied by the clients who
also train the workers and monitor their performance. Their minimum wages
are paid by the clients through Eduardo. After two years of working in GR, the
janitors and messengers joined the union there to receive the same benefits
as the directly hired employees of GR. Can the janitors and messengers
legally join the union? Discuss.

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SUGGESTED ANSWER: Yes, the janitors and messengers can join the Union,
as they may be considered as direct employees of GR.

In this case, Eduardo's company is a labor-only contractor. Under DO 174-17,

labor-only contracting refers to the arrangement where: (a) (i) the contractor
does not have substantial capital, or (ii) the contractor does not have
investment in the form of tools and equipment, etc., and (iii) the contractor is
performing activities that are directly-related to the business of the principal;
or (b) the contractor does not exercise the right of control over the
performance of the work of the employee.

Here, Eduardo’s company does not have investment in tools and equipment,
as the tools and supplies used by the janitors and messengers are supplied by
the clients. It also does not have the right to control the performance of the
work, as the client train the workers and monitor their performance. Finally,
Eduardo’s company is only being used by GR to pay their salaries.

Since Eduardo’s company is only a labor-only contractor, GR is deemed the

direct employer of the janitors and messengers. As such, the workers have the
right to self- organization and join the union in GR (Caballero v. Vikings
Commissary, G.R. No. 238859, 19 October 2022 and Servflex, Inc. v. Urera,
G.R. No. 246369, March 29, 2022).

15

Ulap Airlines (UA) hired Salve as a cabin crew in 2010. Due to her hard work
and spotless service record, she was eventually promoted to senior purser, a
position imbued with trust and confidence. In 2023, after a flight from Sydney
to Manila, management received a report that Salve and other cabin crew
alighted from the aircraft with two cups of instant noodles and a can of soda,
which were part of the in-flight provisions for passengers. The items were
confiscated and the cabin crew were required to explain why those items were
in their possession. In her written explanation, Salve claimed that the cups of
instant noodles were purchased with her own money and that it was another
flight attendant who admitted to taking the can of soda. After investigation, UA
still terminated her employment on the grounds of serious misconduct and
loss of trust and confidence. Was Salve validly dismissed? Discuss briefly.

SUGGESTED ANSWER:

No, Salve was illegally dismissed.

Her infraction was clearly a case of misconduct considering that it is a

transgression of some established and definite rule of action, a forbidden act,
a dereliction of duty, willful in character, and implies wrongful intent and not
mere error in judgment. Salve’s position

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as Senior Purser is a position of trust and confidence. She committed an

infraction of company policy that eroded UA’s trust and confidence in her.

However, in determining the appropriate penalty for the offense, the totality of
infractions or the number of violations committed during the period of
employment should be considered. All surrounding circumstances must be
considered and the penalty must be commensurate to the violation committed
by an employee. Termination of the services of an employee should be the
employer's last resort especially when other disciplinary actions may be
imposed, considering the employee's long years of service in the company,
devoting time, effort and invaluable service in line with the employer's goals
and mission.

In the long years of Salve’s employment, she did not commit an infraction nor
was she ever sanctioned except in the incident subject of the present
controversy. To impose a penalty as grave as dismissal for a first offense and
considering the value of the property allegedly taken would be too harsh
under the circumstances. A less severe penalty of suspension should have
been imposed considering that the respondents have been in the service for
several years with spotless service record. Therefore, Salve was illegally
dismissed from service (Lamadrid v. Cathay Pacific Airways Limited, G.R. No.
200658, 23 June 2021).

16

Rajah Management (RM), the authorized local placement agency of Sultan

Group (SG), posted a job listing for project manager based in Qatar. Silang
applied for the position. After RM forwarded the documents of Silang to SG for
the processing of her work visa, SG sent a tourist visa notice instead of a work
visa. Six months into her two-year contract, Silang was repatriated by SG with
instructions to apply anew for deployment under a work visa. RM directed
Silang to undergo a pre-employment medical examination. When it was
discovered that she has uncontrolled diabetes, SG terminated her
employment. Thus, Silang filed a complaint for illegal dismissal against SG and
RM. SG argued that the disease of Silang was a valid cause for dismissal. Is the
contention of SG correct? Discuss.

SUGGESTED ANSWER:

No, SG’s argument that it validly terminated Silang on the ground of disease is
not correct.

To be considered valid, the dismissal on the ground of disease under Article

299 of the Labor Code must satisfy two requisites: (a) the employee suffers
from a disease which cannot be cured within six months and his/her continued
employment is prohibited by

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law or prejudicial to his/her health or to the health of his/her co-employees,

and (b) a certification issued by a competent public health authority that the
disease is of such nature or at such stage that it cannot be cured within a
period of six (6) months even with proper medical treatment.

In this case, neither SG nor RM presented any certification from a competent

public health authority citing that Silang’s disease cannot be cured within six
months, or that his employment is prejudicial to his health or that of his co-
employees. Absent this certification, Silang's dismissal was not based on a just
cause.

In addition, there is no showing that SG accorded Silang procedural due

process. It is settled that the employer must give the concerned employee at
least two notices before his or her termination. Specifically, the employer must
inform the employee of the cause or causes for his or her termination, and
thereafter, the employer's decision to dismiss him. Aside from the notice
requirement, the employee must be accorded the opportunity to be heard. In
this case, SG did not give Silang any form of notice or opportunity to explain
his side (SRL International Manpower Agency v. Yarza, Jr., G.R. No. 207828, 14
February 2022).

17

University of San Lazaro (USL) hired Dolores to work as a credit and collection
officer in its accounting department. Based on its audit reports, USL found
several anomalous transactions within the accounting department, resulting
in a shortage of ₱2 million. Dolores went on leave during the audit, but later
tendered her resignation. After its investigation, USL terminated the
employment of Dolores and filed a criminal case against her. Dolores
subsequently filed a complaint for illegal dismissal against USL, which claimed
that Dolores had voluntarily resigned. Will the complaint of Dolores prosper?
Explain.

SUGGESTED ANSWER:

No, the complaint of Dolores will not prosper. Her voluntary resignation
rendered her complaint for illegal dismissal without any basis.

Resignation is the formal pronouncement or relinquishment of a position or

office. For resignation from employment to be valid, there must be an intent to
relinquish the position together with the overt act of relinquishment.
Resignation must be voluntary.

Here, the voluntary resignation of Dolores is undisputed. The totality of

circumstances shows that Dolores voluntarily resigned prior to the effectivity
date of the termination of

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their employment, due to the ongoing investigations against her for the
irregular acts she has committed.

Even if the voluntary resignation is disregarded, she was dismissed for a just
cause. Her failure to remit and deposit the University's funds to its bank
account amounted to a willful breach of trust (Bance v. University of St.
Anthony, G.R. No. 202724, 3 February 2021).

18

In 2012, Magbanua Hotel (MH) hired Josefa and assigned her to the food and
beverage department. For six consecutive years, Josefa worked five days a
week. However, in 2018, MH, suddenly and without explanation, reduced the
regular workdays of Josefa to two days per week, resulting in the reduction of
her take home pay. Josefa thus filed a complaint for constructive dismissal. In
belying her claim, MH insisted that there could be no constructive dismissal
because Josefa still continued reporting for work even during the pendency of
the case. Was Josefa constructively dismissed? Decide with reasons.

SUGGESTED ANSWER:

Yes, Josefa was constructively dismissed.

There is constructive dismissal when continued employment is rendered

impossible, unreasonable, or unlikely due to demotion in rank or diminution in
pay and benefits. It may, likewise, exist if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable on the part of
the employee that it could foreclose any choice by him except to forego his
continued employment (Regala v. Manila Hotel Corp., G.R. No. 204684, 5
October 5, 2020). The test is whether a reasonable person in the employee's
standing was impelled to surrender his or her post under the given situation
(Jacob v. First Step Manpower Int’l Services, Inc., G.R. No. 229984, 8 July
2020).

Patently, the reduction of Josefa's regular work days from five (5) days to two
(2) days resulted to a diminution in pay. Josefa's change in her work schedule
resulting to the diminution of her take home salary is, therefore, tantamount
to constructive dismissal.

19

Consolacion is a Hong Kong-based, Filipino flight attendant of Hiroshi Airlines

(HA), a Japanese airline licensed to do business in the Philippines. She was
dismissed from employment as she was accused of stealing wine bottles and
cheese from the Melbourne- bound aircraft of HA. Consolacion then instituted
a complaint for illegal dismissal and

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money claims against HA with the Labor Arbiter (LA). In its defense, HA
asserted that the LA had no jurisdiction to hear the dispute as the incident
occurred in a foreign jurisdiction and involved a foreign entity. Does the LA
have jurisdiction over the case? Explain.

SUGGESTED ANSWER:

Yes, the labor arbiter has jurisdiction over Consolacion’s illegal dismissal and
money claims case against HA.

Article 224 of the Labor Code provides that the Labor Arbiter has original and
exclusive jurisdiction to hear and decide termination disputes involving all
workers. This provision must be read together with Section 10 of RA 8042, as
amended by RA 10022, which also confers original and jurisdiction to hear and
decide claims arising out of an employer- employee relationship involving
Overseas Filipino Workers (OFW). Under Section 3 of the same law, an OFW
refers to a person who is to be engaged, is engaged or has been engaged in a
remunerated activity in a state of which he or she is not a citizen.

Consolacion is considered an OFW. She had been engaged in a remunerated

activity in a state where she is not a citizen. Thus, faced with a termination
dispute, Consolacion’s case may be heard and decided by the Labor Arbiter
under Article 224 of the Labor Code in relation to RA 8042 as amended by RA
10022 (Lamadrid v. Cathay Pacific Airways Limited, G.R. No. 200658, 23 June
2021).

20

The employees of Bonifacio Memorial Hospital (BMH), who are union officers
and members of BMH Nurses Association, staged a strike to protest the failure
of BMH to provide them with adequate personal protective equipment and
sufficient hazard pay. What legal remedy can BMH avail of to immediately
enjoin the strike as well as ensure the proper protection of the life and health
of its patients? Explain your answer.

SUGGESTED ANSWER:

BMH may file a Petition for Assumption of Jurisdiction by the Secretary of

Labor.

Article 278(g) provides that when, in the opinion of the Secretary of Labor and
Employment (Secretary), there exists a labor dispute causing or likely to cause
a strike or lockout in an industry indispensable to the national interest, the
Secretary may assume jurisdiction over the dispute and decide it. Section 16,
Rule XXI of the IRR of the Labor Code categorizes hospitals, such as BMH, as an
industry indispensable to national interest.

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In this light, in labor disputes adversely affecting the continued operation of

hospitals, clinics or medical institutions, the Secretary may immediately
assume, within twenty- four (24) hours from knowledge of the occurrence of
such a strike or lockout, jurisdiction over the same or certify it to the
Commission for compulsory arbitration.

In this case, since a strike has already taken place, should the Secretary
assume jurisdiction over the dispute or certify it the Commission, all striking
employees of BMH shall immediately return-to-work and the employer shall
immediately resume operations and readmit all workers under the same terms
and conditions prevailing before the strike, under pain of immediate
disciplinary action, including dismissal or loss of employment status, even
criminal prosecution against either or both of them.

– NOTHING FOLLOWS –

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