LABOR LAW

By: Prof. Joselito Guainan Chan

PROBLEM NO. 1

Janet L. Naples was the secretary to Pork Barrel, Inc,s President Rube Loy for almost 15
years. One of her task is to act as a custodian of Loys several passbooks in various
banks where he maintains multi-million deposits. One day, Loy discovered that Naples
has forged a number of withdrawal slips which allowed her to withdraw a total of Php10
Million from several banks. Loy was so furious that upon seeing Naples, he physically
dragged and threw her outside of his office at the Rich Carlsberg building in Makati.
Naples sufferered injuries which resulted in her confinement for about two months in the
St. Fugitive Hospital in Taguig (now Makati) City. She subsequently filed with the Labor
Arbiter an illegal dismissal case against Pork Barrel, Inc. and Loy and a civil suit for
damages against Loy with the Regional Trial Court (RTC) of Makati City. For their part,
Pork Barrel, Inc, and Loy filed a counter-claim in the illegal dismissal case for the unpaid
car and appliance loans they extended to Naples in the total sum of Php500,000.00.
Loy also filed a Motion to Dismiss in the civil case contending that the RTC has no
jurisdiction over the damage suit, it having arisen from employer-employee relationship.

Which has jurisdiction over the following issues:

1. Civil suit for damages filed by Napoles against Loy; and
2. Counter-claim filed by Pork Barrel, Inc. and Loy against Napoles for the total
unpaid car and appliance loans of Php500,00.00.

ANSWER:

1. The Regional Trial Court (RTC) of Makati City has jurisdiction over the civil suit for
damages filed by Naples against Loy because this case is not one arising for
employer-employee relationship. It involves an injury to Janet Naples which is
cognizable by the RTC and by the Labor Arbiter.

2. The counter-claim for unpaid car and appliance loan filed by the Pork BArrle,
Inc. and Loy in the illegal dismissal case pending with the Labor Arbiter should be
dismissed for lack of jurisdiction. They should file a separate case with the RTC
and not with the Labor Arbiter because the said loan is a civil claim and not a
labor claim in nature. (On Car Loan, See Manese v. Jollibbe Foods Corporation,
G.R. No. 170454, Oct. 11, 2012; Nestl Philippines, Inc. v. NLRC, G.R. No. 85197.
March 18, 1991, 195 SCRA 340; On Appliance Loan, see Hongkong and Shanghai
Banking Corp.. Ltd. Staff Retirement Plan v. Spouses Broqueza, G.R. No. 178610,
Nov. 17, 2010).

PROBLEM NO. 2

Ted Talon, a famous TV and radio commentator, had entered into a 3-year contract
with ABC-GMA, a nationwide TV-Radio broadcasting company, where Talon was
engaged to host a daily radio program from 7 a.m. to 10 a.m. and a once-a-week
television program, Talon Ngayon, to be aired every Saturday from 4 p.m. to 6 p.m.
Besided this stint in TV and radio, Talon also is the President and CEO of a marketing firm
and he also writes regular columns for about 2 dailies and 3 magazines. After its
expiration, his contract was no longer renewed by ABC-GMA. Feeling extremely
aggrieved, Talon filed an illegal dismissal case with the Labor Arbiter. He claims that he
was a regular employee of ABC-GMA and that the 3-year term of the contract is null
and void since, as radio commentator and TV host, he was performing activities which
are usually necessary or desirable in the usual business of ABC-GMA. In its defense, ABC-
GMA contends that Talon is an independent contractor and, therefore, not its
employee. It thus moved for the immediate dismissal of Talons complaint on the
ground of lack of jurisdiction. Talon countered that in no way can he be considered a
contractor since he has no substantial capital of at least Php3 Million as required under
the latest Department Order No. 18-A, Series of 2011 and he has no investment in tools,
equipment, etc. that would make him a legitimate contractor. Assuming you are the
Labor Arbiter, rule on the issue of whether Talon is an employee or an independent
contractor. Explain your answer.

ANSWER:

Ted Talon is not an employee but an independent contractor. His tools are his talent and
skill as a radio commentator. To be considered as such, he need not comply with the
requirements provided in the Department Order No. 18-A, Series of 2011 such as
substantial capital of at least P3 Million or investment in tools, equipment, etc. It is
enough that he possesses said talent and skill. (Sonza v. ABS-CBN Broadcasting
Corporation, G.R. No. 138051, June 10, 2004)


PROBLEM NO. 3

The CBA between the management of Napolis Corporation and Samahan ng mga
Aping-Aping Manggagawa sa Napolis (SAAMN), the bargaining agent of all rank-and-
file employees, provides that all covered employees shall be given a new pair of Nike
shoes and a Rolex Oyster wristwatch every year. For the first 2 years of the 5-year CBA,
management had faithfully complied with this commitment. Because of the sluggish
business, however, the company gave for the 3
rd
year, a pair of Advan shoes and a
Timex wristwatch instead. You are the retained counsel of SAAMN. You were consulted
on which of these two bodies has the authority to take cognizance of the complaint
thereon the Labor Management Council (LMC) or the Grievance Committee (GC). To
better inform them, SAAMN has also asked you to point out and discuss at least three
(3) distinctions between LMC and GC. As the unions counsel, give your answer to these
queries in details.

ANSWER:

As counsel of SAAMN, I will give the following advice:

The Grievance Committee has jurisdiction over the issue and not the Labor-
Management Council (LMC) because the issue is considered a grievance (or grievable
issue) and no longer an issue of policy-making or decision-making which is cognizable
by the LMC. It is grievable issue because there is already a violation of the policy on the
grant of the pair of Nike shoes and Rolex Oyster wristwatch.

The following distinctions between the LMC and Grievance Committee (GC) may be
cited: (NOTE: ONLY THREE DISTINCTIONS ARE REQUIRED)

1. Constitutional origin. The creation of the LMC is based on the constitutional
grant to workers of the right to participate in policy and decision-making process
under the 1
st
paragraph, Section 3, Article XIII of the 1987 Constitution, thus:

It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage. They shall also participate in
policy and decision-making processes affecting their rights and benefits as may
be provided by law. [Underlining supplied]

The creation of a GC, on the other hand, is based on a different constitutional
provision, the 2
nd
paragraph, Section 3, Article XIII of the 1987 Constitution, which
provided as follows:

The Sate shall promote the principle of shared responsibility between workers
and employers and the preferential use of voluntary modes setting disputes,
including conciliation, and shall enforce their mutual compliance therewith to
foster industrial peace. [Underlining supplied]

2. Legal anchor. The creation of LMC is provided under Article 255 of the Labor
Code; while the formation of a GC is mandated under Article 260 of the same
Code.

3. Purpose for creation. The LMC is created for the purpose of affording workers
the right to participate in policy and decision-making process in matters
affecting their rights, benefits and welfare; while that of the GC is to resolve
disputes and grievances involving (1) the interpretation or implementation of the
CBA or (2) the interpretation or enforcement or company personnel policies.

4. Nature of functions. The LMC is in the nature of a preventive mechanism meant
to prevent and avoid disputes