Albano Bar Review Center

Manila
LABOR LAW
___________________

PRE-WEEK BULLET REMINDERS

Prof. Benedict Guirey Kato1

I
CURRENT EVENTS

1
Art. 128 (Replacement Wages)

Boracay Closure

(a) The obligation to pay replacement wages as required by Art. 128, LC, attaches only if the
order of closure or suspension is issued by the DOLE-RD, not the DENR (NAMAWU v. Marcopper, G.R.
NO. 174641, 11 Nov. 2008). Therefore, displaced resort employees owing to the closure by the DENR
of Boracay establishments cannot demand from their employers payment of replacement wages, i.e.,
even if the latter may have been found liable for violating anti-pollution law.

(b) As the implied means of making Art. 128 operational, the DOLE-RD must issue his
own order of closure based on violation of health and safety rules.

2
Anti-Sexual Harassment Act (R.A. 7877)

Gretchen Fullido

Cheryl Favila and Maricar Asprec, executives of ABS-CBN, are domestic partners. In her
administrative complaint for sexual harassment against the two, Gretchen Fullido alleges that Asprec
has been urging her to be Favila’s “Thursday Girl” as Favila reserved Thursdays for a third party.
However, she rejected the idea. Allegedly too, Favila has been sending her sexually charged messages.
According to Gretchen, the unwanted sexual attention started since 3 years ago. When her boyfriend
blocked the two on instagram, they were enraged and sent her attacks via text messages.

(a) As in-house counsel of ABS-CBN, would you urge Ces Drilon to pursue her comment in
defense of the two corporate executives that Gretchen filed her complaint for the purpose of leveraging her
career only?

Ans. No. Instead, I will suggest the immediate constitution of a Committee on Decorum and
Investigation (CODI) to investigate Gretchen’s complaint; otherwise, ABS-CBN would be liable under R.A.
7877.

(b) What matters require attention in the course of the investigation?

Ans. Per R.A. 7877, the following should be looked into:

(i) Whether the act complained of is a workplace event;

(ii) Whether the respondents have authority, moral ascendancy or influence over
the complainant;
(iii) Whether there is a demand, request or requirement for sexual favour in
exchange for employment, continuing employment, re-employment or other
considerations;
(iv) Whether the sexual solicitation, if any, has been rejected and the work
environment of the complainant has turned hostile, offensive or intimidating by
reason thereof.

1
Labor Arbiter (NCR), Law Professor, Bar Reviewer (ABRC, Magnificus Juris, UST, VLC),
Online Bar Review Lecturer (ChanRobles), Member: UP Law Center Panel of Experts in Labor Law;
Author of “Survival Notes in Labor Law”.
 (c) Would the fact that it took Gretchen 3 years to file her complaint disadvantage her
cause?

Ans. No. In Philippine Aeolus Automotive United Corp. v. NLRC, G.R. No. 124617, 28 April
2000), where the delay was 4 years, it was held that it would be unreasonable to expect the complainant to
have filed her complaint sooner than she did as she was still employed and had her job to protect.

(d) What would be the effect of the pendency of the CODI case on the civil and criminal
aspects of the act complained of?

Ans. None. The civil and criminal aspects can proceed independently of the administrative
case since a final finding of sexual harassment is not a precondition for instituting both civil and criminal
actions. Moreover, the decision of the CODI - which is supposed to be based on substantial evidence only
- is non-prejudicial, i.e., it cannot be relied upon in the civil case which requires preponderance of
evidence. Neither can it be relied upon in the criminal case which requires proof beyond reasonable doubt.

3
A.M. No. MTJ-13-1821

Gravemen of the Offense

A female corporate VP sent this message to another female corporate VP: “It’s good you gave me an
idea of your preferred sexual position. There’s no need to study that 69 position, you’ll get it from me spontaneously
... that’s easy, pull down your underwear, and eat what’s between your thighs ... but you have to pay me $10 first ...
He He He! Take care and see you later.” (Source: A.M. No. MTJ-13-1821; names and positions withheld).

Note: Since the parties are of equal rank, there can be no sexual harassment. The gravamen of the
offense of sexual harassment is not the violation of the sexuality of the offended party but the abuse of authority by
the offender (Phil. Aeolus Automotive United Corp. v. NLRC, G.R. No. 124617, 28 April 2000) .

4
Atty. Crescenio Co Untian, Jr.

Acts of Sexual Harassment: Law Professor to 3 Female Law Students

1. SMS: luv u; miss u

2. Student: Come again, Sir? Prof: It takes me 5 minutes to come. Don’t ask me to come again.
3. Prof. showing nude pic and telling student in the presence of others that she looked like the nude
female. Student had to lower her pants to show her skin with tattoo to disprove him.

“Clearly, respondent abused the power and authority he possessed over the complainants. His sexually laced
conduct had created a hostile and offensive environment which deeply prejudiced his students. In what was
supposed to be a safe place for them to learn and develop, they were instead subjected to unwarranted sexual
advances.”

II
CODAL PROVISIONS

1
Art. 4
(a) The Liberal Interpretation Rule (LIR) and the Full Protection Clause (FPC) require that
doubts arising from evidence in labor proceedings be resolved in favor of labor.

(b) Full Extent of LIR. All doubts and ambiguities shall be resolved in favour of the workingman if
they arise from: PD 442 provisions; ORILC provisions; labor contracts; and evidence in labor proceedings.

(c) Principle of Equipoise. When the evidence in labor cases is in equipoise, the balance must be
disturbed in favour of the employee (Hubilla v. HSY Marketing Ltd, G.R. No. 207354, 10 Jan. 2018).

(d) Double Recovery Rule. Since the CBA provision which guarantees indemnification of medical
expenses of the covered workers’ dependents requires payment of premiums thru salary deductions, it is an
insurance policy. As such, it is governed by insurance principles, e.g., rule against double recovery. Therefore,
since the dependents used separate health insurance cards, the company cannot be required to pay full medical
expenses as it would result in double recovery. (Mitsubishi Motors Phils. Salaried Employees Union v. Mitsubishi
Motors Phils. Corp., G.R. No. 175773, 17 June 2013, J del Castillo).
 (e) This is a “pull out” certification, not a “employment termination” certification; hence, there is no
dismissal: “This is to certify that X was employed by this agency from 20 Nov. 1996 to 7 May 2003 as SG assigned
at NPC. He was terminated from his employment on 7 May 2003 per client’ request.” (Canedo v. Kampilan Security
& Detective Agency, 31 July 2013).

2
Art. 5
(a) The power granted the DOLE is quasi-legislative power only, i.e., the power to implement PD 442
and other labor statutes.

(b) D.O. 119-12, which redefines “night worker”, amends R.A. 10151 (from “mn - 5 a.m” to “10 p.m -
6:00 a.m”). However, it is valid and should be allowed to produce legal effects until nullified pursuant to the
Operative Fact Doctrine.

(e) Despite the letter of Art. 272 (formerly Art. 259) which allows appeal by both employer and union,
D.O. 40-03 limits right of appeal to the union if the establishment is unorganized. If the Med-Arbiter automatically
granted the CE petition, it means that the hotel is unorganized because he could only do that if the establishment
was unorganized. In such case, the hotel could not appeal the CE order (The Heritage Hotel Manila, et al v. SOLE,
et al., G.R. No. 172132, 23 July 2014).

3
Art. 6
An agricultural employee renders personal services and is paid wage therefor; whereas, an agricultural
tenant renders personal cultivation and is paid with a share in the harvest. The first enjoys protection under P.D.
442; whereas, the second enjoys protection under agrarian law.

4
Art. 13(b)
Whether for profit or not, one commits illegal recruitment if he goes into a “CUTE CPA Having Cute Red
Peanut “ (acts of recruitment) without a license. Hence, passing on a job applicant to an employer, agency or
employment bureau after an initial interview (Rodolfo v. People) which is an act of “referring”, and “transporting”
people to undergo medical examination in contemplation of job placement (Pp. v. Comila) require a license. Since
the definition of recruitment includes the phrase “whether for profit or not”, the prosecutor does not have to present
the receipts issued by the accused to cover the placement fees paid (Pp v. Jamilosa). Likewise, the remittance of
money collected by a non-licensee to a licensed recruiter does not justify an acquittal (Rodolfo v. People).

5
Arts. 34 & 38
(a) A THIFF Reports OCI
(b) Sec. 6, R.A. 10022
In a criminal prosecution for illegal recruitment based on failure to reimburse, the prosecutor does not have
to present a POEA certification that the accused is not licensed to recruit. The gravamen of the offense is the
commission by any person (licensed or not) of a prohibited act (Pp. v. Ocden).

6
Arts. 40-42

Sec. 12, Art. XII, 1987 Constitution reserves Filipino labor to Filipino workers. As an exception, non-
resident aliens can be employed subject to alien employment permit (AEP). If the purpose of the non-resident alien
is not gainful employment, he is not required to get an AEP.

Exempt Aliens (D.O. 186-17):

(a) Section 2

(i) All members of the diplomatic service and foreign government officials accredited by
and with reciprocity arrangement with the Ph government;

(ii) Officers and staff of international organizations of which the Ph is a member, and their
legitimate spouses desiring to work in the Ph;

(iii) Owners and representatives of foreign principals whose companies are accredited by
the POEA who come to the Ph for a limited period and solely for the purpose of
interviewing Filipino applicants for overseas employment;

(iv) Foreign nationals who come to the Ph to teach, present and/or conduct research
studies in universities and colleges as visiting, exchange or adjunct professors under
formal agreements between the universities or colleges in the Ph and foreign
 universities or colleges; or between the Ph government and foreign governments;
provided that the exemption is on reciprocal basis;

(v) Permanent resident foreign nationals and probationary or temporary resident visa
holders under Sec. 13 (a-f) of the Ph Immigration Act of 1940 and Sec. 3 of the Alien
Social Integration Act of 1995 (R.A. 79170);

(vi) Refugees and stateless persons recognized by the DOJ pursuant to Art. 17 of the UN
convention and Protocol Relating to the Status of Refugees and Stateless Persons;
and

(b) Section 3

(i) Members of the governing board with voting rights only and who do not intervene in the
management of the corporation or in the day-to-day operation of the enterprise;

(ii) President and Treasurer who are part-owners of the company;

(iii) Those providing consultancy services who do not have employers in the Ph;

(iv) Intra-corporate transferee who is a manager, executive or specialist as defined below

in accordance with trade agreements and who is an employee of the foreign service
supplier for at least 1 continuous year employment prior to deployment to a branch,
subsidiary, affiliate or representative office in the Ph;
(iv.i) Executive. A natural person within the organization who primarily directs the
management of the organization and exercises wide latitude in decision-making
and receives only general supervision or direction from higher level executives,
the board of directors, or stockholders of the business; and he does not directly
perform tasks related to the actual provision of the service/s of the organization;
(iv.ii) Manager. A natural person within the organization who primarily directs the
organization/department/subdivision and exercises supervisory and control
functions over other supervisory, managerial or professional staff. It does not
include first line supervisors unless the employees supervised are
professionals. It does not include employees who primarily perform tasks
necessary for the provision of the service;
(iv.iii) Specialist. A natural person within the organization who possesses knowledge
on an advanced level of expertise essential to the establishment/provision of
the service and/or possesses proprietary knowledge of the organization’s
service, research equipment, technique or management. It may include, but is
not limited to, members of the licensed profession.

7
Arts. 57-81
(a) Learner v. Apprentice (PONDACA): Period of employment; Obligation to regularize; Nature of
work; effect of illegal Dismissal; Approval by TESDA; filing of Complaint; Appeal.
(b) Learner must file his complaint with the LA, subjet to SEnA; while apprentice must file his
complaint with the RD, subject to prior use of PAC (plant apprenticeship committee) remedy.
(c) If illegally dismissed on the 3rd month, a learner must be reinstated and paid backwages as a
regular employee; hence, the expiration of 3 months will not bar such reliefs. In contrast, an apprentice is bound to
the 6 months.
(d) After a successful learnership, it is the obligation of the employer to regularize. In contrast, the
employer of an apprentice is not imposed such duty.

8
Arts. 82, 94, 95 & P.D. 851

(a) Ejusdem Generis. For workers paid on task basis and those paid on purely commission basis
to be excluded from the coverage of holiday pay or HP (Art. 94) and service incentive leave or SIL (Art. 95), they
must at the same time be field personnel. Both will not get 13th month pay because their employers are exempt.

(b) R&E Transport Case. A taxi driver is a worker paid on task basis and a field personnel at the
same time. Therefore, he has no HP and SIL. He has no 13th month pay also because his employer is exempt.
 (c) David Case. Paul Paran, a butcher paid P700 per engagement to butcher Dave’s pigs, is a
worker paid on task basis. Since he works inside the latter’s premises, hence supervised, he is not a field
personnel. Thereof, he is entitled to HP and SIL. However, he has no 13th month pay because David is exempt.

(d) Retirement Pay (Art. 302). If the retiree is entitled to SIL and 13th month pay, his retirement pay
shall be computed based on 22.5 days. The 15 days represent ½ of his monthly salary; the 5 is SIL; and the 2.5 is
1/12 of his 13th month pay. If not entitled to 13th month pay, the computation shall be based on 20 days; and if not
entitled to both SIL and 13th month pay, the computation shall be based on 15 days.

(e) Backwages (Art. 294; Q. 4, Bar 2001). The economic components of the backwages of rank-
and-filers and managers are the same in that they consist of salary, allowances and benefits or their
monetary equivalent. As to the components of “benefits”, however, rank-and-filers get SIL and 13th month
pay; whereas, managers do not get these benefits as a matter of law.

9
Art. 97
(a) A stipulation that compensation shall be “talent fees” does not bar employer-employee relationship
from arising. Based on the amount of the musician’s pay, it is just a wage. A wage is remuneration “however
designated” capable of being expressed in terms of money whether on fixed basis or based on time or result of
work payable under a contract of employment for work done or to be done or services rendered or to be rendered,
including the reasonable value of facilities customarily provided by the employer (Legend Hotel Manila v. Realuyo, 18
July 2012). Payment of services based on “piece trip” does not negate EER for same reason (Felicilda v. Uy, 14
Sept. 2016).

(b) Only unpaid wage is subject to the Double Indemnity Law (Sapio v. Undaloc Construction, 2008).

(c) Bus drivers and conductors shall be paid mixed-compensation consisting of basic salary and
performance-based commission (D.O. 118-12). The D.O., including LTFRB Memo Circular 2012-001 requiring
submission of Labor Standards Compliance Certificate as a condition for renewal of CPC, is constitutional being a
piece of social legislation to improve the working conditions of bus drivers and conductors and to protect the public by
ensuring road safety (Provincial Bus Operators Association of the Phils, et al. v. DOLE, et al., G.R. No. 202275, 17
July 2018, en banc).

10
Art. 83

(a) Rendition of work for 2 hours only, instead of 8, does not rule out employer-employee relationship.
8 is the maximum, but it can be reduced (Legend Hotel Manila).
(b) Requisites of Compressed Work Week (CWW): (i) necessity; (ii) voluntariness; and (iii)
temporariness.
(c) 8 hours is the normal hours of work of talents (DOLE advisory 4-16) and provincial bus drivers and
conductors (D.O. 118-12).

11
Art. 111

Extraordinary attorney’s fees cannot exceed 10%; whereas, ordinary attorney’s fees are subject to
stipulation and are governed by quantum meruit absent agreement. However, seafarers and lawyers cannot
stipulate more than 10% ordinary attorney’s fees (Seafarers Protection Act).

12
Art. 124

A wage distortion obtains when: (a) there are 2 or more wage groups assigned different pay rates as to
result in a wage gap (wage advantage); (b) the wage gap is either eliminated or seriously contracted (compressed
by more than 50%); and (c) the cause of the elimination or compression is a wage law or wage order.

13
Art. 128

(a) Mistaken referral by the DOLE-RD of a case to the LA based on the 5K jurisdictional threshold rule
does not entitle the employer to assail continuing exercise of visitorial power ( ).
 (b) Visitorial power is exercisable over establishments, not over individual workers; hence, there is no
need for complaints to be filed. Neither are appeals to the SOLE required to be verified by all workers (Catholic
Vicariate of Baguio v. Sto. Tomas, 2008).
(c) The power to determine employer-employee relationship is co-extensive with visitorial power;
hence, the RD’s factual finding is not for the NLRC to review (Bombo Radyo, 2009).
(d) Replacement wages can be ordered under Art. 128 based on closure of establishments or
suspension of business operations for violation of health and safety rules; provided, the closure or suspension order
was issued by the RD (NAMAWU v. Marcopper, 2008).
(e) Motion to reduce appeal bond is a prohibited motion (D.O. 183-16).
(f) Appeal period is 10 days and appeal shall be taken to the SOLE.
(g) Jurisdiction is acquired thru the service of a Notice of Inspection which may be prompted by
complaint (complaint inspection) or self-initiation (routine inspection).

(h) There must be an express factual finding of employer-employee relationship; otherwise, the
RD/SOLE’s decision is void because EER is the bedrock of exercise of visitorial power and no less than Sec. 14, Art.
VIII of the Constitution requires that a judgment must contain facts and applicable law (South Cotabato
Communication Corp. v. Hon. Sto. Tomas, 15 June 2016)

14
Art. 129

(a) The basis of the 5K jurisdictional threshold rule is “aggregate individual money claims”, excluding
damages and attorney’s fees.
(b) Jurisdiction is acquired thru the filing of a verified complaint.
(c) Appeal to the NLRC must be perfected within 5 days.
(d) There is filing of motions to reduce appeal bond.

15
Art. 132 (R.A. 10151)

(a) A night worker is one required to render not less than 7 consecutive hours of work between 10:00
p.m. and 6:00 a.m. the following day (as redefined by D.O. 119-12) except FAMIS workers (Fishing industry,
Agriculture, Marine Industry, Inter-island Navigation & Stock raising).
(b) No person shall be assigned to night work unless medically cleared as fit for night work. On
medical grounds, a night worker shall be transferred to a similar job for which he is fit.
(c) Women Night Workers’ Rights:
(i) Right to alternative work before and after childbirth for a period of at least 16 weeks –
which shall be divided between the time before and after childbirth;
(ii) Additional period for alternative work if medically required as necessary for the health of
mother or child. During said period, she shall not be dismissed except for a just or authorized cause; and
she shall not lose her status, seniority and right to promotion.

16
Art. 134

(a) Art. 134 is violated when there is singling out of women which amounts to direct discrimination
(disparate treatment); otherwise, the indirect discrimination (disparate impact) would be a violation of the Full
Protection Cause (Star Paper, 2006). No Couples Policy is not lawful, unless it amounts to a bona fide occupational
qualification (BFOQ).
(b) The BFOQ character of a qualification (no marriage) is evaluated based on: (a) legitimacy of its
business purpose; (b) connection to the position of the employee; and (c) ability to enhance the employee’s
productivity.

17
Art. 135

Absences which are pregnancy-related, even if the dates on which a pregnant employee was absent do not
correspond to the dates on her explanatory medical certificates, do not amount to gross and habitual neglect of duty
(Del Monte Phils. v. Lolita Velasco, G.R. No. 153477, 6 March 2007) .

18
Art. 153

(a) Types of industrial homework:

(i) Industrial homework which arises when a principal delivers goods, articles or materials to
a homeworker for purpose of fabrication or processing; subject to the duty of the latter to deliver the
finished products to the former or distribute them in accordance with his instructions – subject to the right
 of the worker to compensation, as well as the right of the employer to reject the work or order it to be
redone; and
(iii) Industrial homework which arises when the principal sells goods, articles or materials to a
homeworker for processing or fabrication - whereby the latter sells the finished products to the former.

(b) Rights (D.O. 5, s. 1995)

(a) Right to compensation; and

(b) As provided for by D.O. 5-95: self-organization, security of tenure, and SSS coverage.

19
Art. 157

The employer is not required to hire nurses and doctors as regular employees to comply with the duty to
provide medical services to its employees. They can be engaged on retainership basis only( Singco, et al. v.
Shangri-Las Mactan Island Resort, et al., 4 March 2009 ).

20
Art. 167

Invocation of Art. 161 (now Art. 167) in a claim for moral and exemplary damages based on alleged
commission of tortious acts amounting to violation of Art. 161 does not give the LA jurisdiction over said claims. Per
material allegations and prayer for relief, the claim is for the regular court to determine (Tolosa v. NLRC, 10 April
2003).

21
Art. 218
Q
(a) What is the principle of co-management?
(b) Is there a legal basis for its observance in the Philippines?
A
(a) Co-management is codetermination, or the principle of allowing workers to determine
business policy and to run the business with its owner.
(b) There is no legal basis for its observance in the Philippines. Neither Sec. 3, Art. XIII of the
Constitution allows it because the participation which it guarantees is the opposite of
codetermination; nor does Art. 218 of the Labor Code allow it because the participation it
guarantees is no more than that guaranteed by the Constitution.

22
Art. 219

(a) Employer includes one acting in the interest of an employer, directly or indirectly (par. e);
however, the solidary liability of a corporate officer is determined with Sec. 31, Corporation Code and not with Art.
219(e).
(b) Employee includes one whose work has ceased as a result of or in connection with a current
labor dispute or ULP; however, to be able to exercise labor relations rights (e.g., to vote in a CE), he must contest
his dismissal before a forum of appropriate jurisdiction (VA if there is an express stipulation in the CBA; otherwise,
LA).
(c) Labor Dispute .... “regardless of whether the disputants stand in the proximate relation of employer
and employee”; hence, there can be a labor dispute over which a labor tribunal has jurisdiction even outside
employer-employee relationship (e.g., intra-union and inter -union disputes).
(d) Labor Organization ... “exists in whole or in part for the purpose of collective bargaining or dealing
with the employer concerning terms and conditions of employment.” Managers can organize for mutual aid and
protection, but not for purposes of collective bargaining or dealing with the employer. AIM Faculty Association filed
a CE petition; hence, AIM moved to dismiss the petition and filed a CR cancellation based on the union’s all-
manager membership (AIM v. AIM Faculty Association, G.R. No. 207971, 23 Jan. 2017). However, the issue of
WON said members are really managers is still being determined in G.R. No. 197089 which was commenced by the
cancellation case.

23
Art. 229 vs. Art. 230

(a) Sugarsteel Industrial Inc., et al. v. Albina, et al., G.R. No. 168749, 6 June 2016. The grounds
for appeal under Art. 229 need not be stated word for word in the appeal memorandum. The grounds “not supported
by evidence” and “contrary to the facts obtaining” are equivalent to the first (prima facie abuse of discretion) and last
(serious errors in the findings of facts) grounds stated under the provision.
 (b) Reinstatement. If ordered by the LA or VA, Art. 229 does not require a writ of execution
because it is immediately executory. However, if ordered on appeal, a writ of execution is required by Art. 230.
Significance: There is no refusal to reinstate if reinstatement is ordered on appeal and no writ of
execution has been issued; hence, reinstatement wages cannot be ordered.
(c) VA’s reinstatement order is immediately executory also because it is based on same Art. 229
which is a Full Protection provision (Baronda v. CA, G.R. No. 161006, 14 Oct. 2015).
24
Arts. 259 & 260

(a) Violation of CBA

(i) To be a ULP, the violation must be of the economic provisions; hence, if what is violated
is the Grievance Machinery provision or Union Security Clause (political provisions), there is no ULP.
(ii) For the LA to have jurisdiction, the violation of the economic provision/s must be gross
and flagrant.
(b) EER is an element of ULP except under Art. 260 when the victim is a worker or union membership.
The reason is the violator is a labor organization, not the employer.

25
Art. 266 (No Injunction)

(a) Principle of the Strong Arm of Equity. Injunction represents the strong arm of equity; hence, it
should be issued with restraint. Its purpose is to preserve status quo, not to create a new status.
(b) Rule XII, 2011 NLRC Rules of Procedure. It gives the NLRC extraordinary injunctive power, i.e.,
the power to enjoin the LA. Other injunctive powers of the NLRC: ordinary (Art. 225 in relation to Art. 279), and
ancillary which requires a principal case (PAL ruling).
(c) Art. 278 (Doctrine of Great Breadth of Discretion; Incidental Jurisdiction).

26
Art. 267

For purpose of collective bargaining, the workers shall be represented by the EBR/SEBA. However, a
group of workers can directly bring grievances to the employer. It does not follow, however, that any union (group
of workers) can serve a notice to arbitrate on the employer. This is the exclusive right of the EBR/SEBA (Tabigue
v. Interco, G.R. No. 183335, 23 Dec. 2009)

27
Arts. 268-269

(a) A CE is valid if (i) it is not barred; and (ii) majority of the eligible voters cast their votes.
(b) The CE winner is the union (including No Union) which garners majority vote based on the valid
votes.
(c) Run-off Election shall be conducted if the CE fails to produce an EBR based on these conditions:
(i) The CE is valid;
(ii) 3/more participants (including No Union);
(iii) None got majority vote based on the valid votes;
(iv) Total votes garnered by the unions (excluding No Union) is at least 50% of the votes cast;
and
(v) There is no election contest that can materially alter the CE result.
(d) Re-run election is one conducted when there is failure of CE as when less than majority cast their
votes; or when the CE is attended by irregularities.

28
Art. 272

(a) Art. 272 allows both employer and EBR to appeal a CE order; however, D.O. 40-03 distinguished
between organized establishment (OE) and unorganized establishment (UE). If OE, both can appeal; if UE, only
the EBR can appeal.
(b) In Manila Legend Hotel, J Bersamin ruled that an employer cannot move to dismiss a CE petition
(Standby Rule) and cannot appeal (why?). This was because the hotel was a UE as implied by the fact that the
Med-Arbiter automatically granted the CE petition. This he could do only if the establishment is UE.

29
Art. 276

(a) Old Rule. Period of appeal from VA to CA is 10 days (Phil. Electric Co. v. CA, G.R. No. 16812, 10
Dec. 2014; Baronda v. CA, G.R. No. 161006, 14 Oct. 2015).
 (b) New Rule: Period to file MR is 10 days. If MR is denied, appeal to CA shall be filed within
15 days (Guagua National Colleges v. CA, et al., en banc, G.R. No. 188492, 28 Aug. 2018).

30
Art. 278(g)
(a) Art. 266
(b) Characteristics of Assumption Power
(c) Doctrine of Great Breadth of Discretion
(d) Incidental Jurisdiction
(e) Subsumed Rule
(f) Certified Case
(g) Return-to-Work Order vs. Reinstatement Order
31
Arts. 292-299
(a) Guarantees of Art. 292 (formerly art. 277): self-organization; statutory due process; workers
shall not be assessed docket fees in labor standards disputes; and the SOLE’s suspension power.
(b) Art. 294 (formerly Art. 279) does not limit security of tenure to regular employees; it simply
provides that regular employees can only be dismissed for a just or authorized cause; the logical consequences of
illegal dismissal are immediate reinstatement and full backwages; if reinstatement is ordered by the LA/VA, there is
no need for a writ of execution to enforce it; the components of backwages are salary, allowances and benefits or
their monetary equivalent; benefits shall include SIL and 13th month pay if the illegally dismissed employee is entitled
thereto.
(c) Art. 295 (formerly Art. 280) is not an EER test; it only distinguishes between regulars and casuals;
as exceptions to the “usually necessary or desirable” rule, fixed-term employment, project-based employment, and
seasonal employment are listed.
(d) Art. 296 (formerly Art. 282) places 6 months as maximum probationary period; the period can be
shortened or prolonged by mutual agreement; the grounds for termination re just or authorized cause; failure to
qualify; after the probationary period, the employee cannot demand regularization as a matter of right; the provision
does not cover teachers in the private sector.
(e) Art. 297 (formerly Art. 282). Just causes are listed causes for dismissal and imply fault or
culpability on the employee’s part; however, even an unlisted cause can justify a dismissal if it is similar to any of
the listed causes, in which case it is called an analogous cause; violation of pre-termination procedure for fault-
based dismissals requires assessment of P30K nominal damages; circumstances may justify adjustment;
(f) Art. 298 (formerly Art. 283). Authorized causes are business performance -based grounds for
dismissal; the dismissed employee is not at fault; hence, if the 30-day notice is violated, the penalty is P50K nominal
damages; the amount can be adjusted as required by the circumstances; number of claimants, capacity to pay,
effort at compliance, and giving of benefits.
(g) Art. 299 (formerly Art. 283). Continuing employment cannot be denied based on a sick
employee’s failure to submit a medical clearance; only a medical certificate issued by a competent public health
authority that he suffering from a disease of such nature or at such stage that it is incurable in 6 months even with
adequate medical attention can justify his dismissal.

32
Arts. 300-301

(a) Overt Act Test. The operative act in constructive dismissal is the employee’s act of quitting for a
just cause; just causes are SICO (serious insult, inhuman and unbearable treatment, crime/offense and other
analogous causes); the SICO act is the overt act of dismissal, absent which the self-termination is either a
resignation or abandonment;
(b) Resignation vs. Constructive Dismissal. Resignation is a voluntary relinquishment of job when
personal reasons cannot be sacrificed in favour of the exigencies of the employer’s business; whereas, constructive
dismissal is a forced relinquishment of job effected thru the employer’s act of placing the employee in a situation that
leaves him no option except to quit.
(c) Abandoment vs. Constructive dismissal. Abandonment is a self-termination that is deduced
from the employee’s unjustifiable refusal to render service and commission of an overt act from which his intent not to
resume work can be deduced; whereas, constructive dismissal is a quitting because continued employment has
been rendered impossible, unreasonable or unlikely by the employer.

33
Art. 302
(a) Retirement Pay: 22.5 x Daily Salary x Length of Service
(b) Arts. 82 & 95 (PD 851). The 22.5 comes from ½ month salary (15 days), SIL (5 days) and 1/12
of 13th month pay (2.5 days); the 15 will always be given; however, whether to give the 5 (SIL) depends on
whether or not the retiree is entitled to SIL (see Art. 82); and whether to give the 2.5 (13th month pay) depends on
whether or not the retiree is entitled to 13th month pay (see P.D. 851); all employees in all establishments, whether
for profit or not, are entitled to SIL – except if employee No. 9 (Less Than 10 Rule), receiving the equivalent of SIL,
and the employer enjoys exemption; all land-based rank-n-file employees are entitled to 13th month pay – except
managers, supervisors, those receiving equivalent 13th month pay, and workers whose employers are exempt, viz., “
workers paid on task basis” and “workers paid on purely commission basis.”

(c) Retirement Age: in general (60-65); underground/surface miner (50-60); licensed racehorse
jockey (55)

34
Art. 306
(a) Reckoning Date. The 3-year prescriptive period shall be counted from the date the money claim
became a legal possibility, or day it could be judicially brought, e.g., date of discovery of the illegal salary deductions
(Virgilio Anabe v. Asian Construction, et al., G.R. No. 183233, 23 Dec. 2009).
(b) Curious Animal. As a curious animal, service incentive leave (SIL) does not prescribe like other
money claims (Autobus Transport System, Inc. v. Bautista, G.R. No. 156367, 16 May 2005).

(c) Twenty-five (25) SILs. SIL prescribes in 3 years but differently as follows:

(i) Monetization Option (2nd Option). From date of demand for payment.
(ii) Commutation Option (3rd Option). From date of retirement, resignation or termination.
If filed within 3 years from constructive dismissal, it is not barred as to allow the employee
to get all her 25 commuted SILs. (Lourdes Rodriguez v. Park N Ride, et al., G.R. No.
222980, 20 March 2017 ).

III
EMPLOYER-EMPLOYEE RELATIONSHIP

1
Characteristics

1.1. In Personam
(a) Principle of Total Insulation
(b) Exceptions:
(i) Principle of Limited Liability
(ii) Principle of Unaltered Responsibility
(iii) Merger
1.2. Shared-Responsibility.
1.3. Inter-Party.
1.4. Contractual.
1.5. Impressed with Public Interest.
2
EER Tests

2.1. Tests
(a) Fourfold Test
(b) Economic Dependence Test
(c) Ecclesiastical Affair Test

2.2. Non-Tests
(a) Art. 280 (now Art. 295)
(b) Payment “per trip”, on “commission” basis
(c) Payment with “talent fee”
(d) Work for Less Than 8 Hours
(e) Holding Out Theory

IV
LABOR STANDARDS
1
Labor Standards

1.1. Coverage. All employees in all establishments - whether for profit or not; whether daily-paid or
monthly-paid.
1.2. Exception: MOM GF WPD: Managers (top managers) , Officers & members of the
manager staff (middle managers) , Members of the family of the employer dependent on him for support; Gov’t
employees; Field personnel; Workers paid by result; Persons in the personal service of another; and domestic
workers.
(a) Workers paid by result. Sec. 8(b), Rule IV III, ORILC entitles pieceraters to holiday
pay even if they are workers paid by result.
 (b) Domestic workers. R.A. 10361 or Kasambahay Act entitles a kasambahay to service
incentive leave (SIL) even f excluded by Art. 82; a kasambahay enjoys 2 rest benefits (weekly rest period
and daily rest period of not less than 8 hours).
2
Holiday Pay

(a) Divisor Test. It is a test to determine whether or not the employer paid the holiday pay of his
monthly-paid employees, absent clear evidence of payment except the employer’s argument that monthly-paid
employees are deemed paid all the days of the month, including holidays. If, in computing other benefits, e.g., SIL
(daily rate x 5 days), the employer uses a divisor to arrive at the daily rate used, said divisor will tell if holiday day has
been paid or not.
(i) In the Chartered Bank Case, the 251 divisor is arrived at by deducting the 104 un-
worked and un-paid Saturdays and Sundays from 365 days; thereafter, 10 days were deducted from 261
days.
(ii) The deduction indicates non-payment; “ -104 days” means unpaid 104 days (because
these are un-worked, hence unpaid, Saturdays and Sundays).
(iv) Ipso facto, “-10” means unpaid 10 days. Since these are the 10 old regular holidays, it
means they are unpaid.
(b) 2 Regular Holidays on Same Day
(i) If the covered employee does not work, he shall get 200%;
(ii) If he works, he shall get 300%.

3
Overtime Pay

(a) Elements
(i) Extra work rendered beyond normal hours; and
(ii) Within the same work day.

(b) 8 hours is the normal hours of work of:

(i) Talents (whether employees or independent contractors per Advisory 4-16; and
(ii) Bus drivers and conductors per D.O. 118-12.
4
Art. 88 (OT cannot offset UT)

Q
Wakin ‘s workshift is 8:00 a.m. to 5:00 p.m. and receives P240.00 daily. On August 7, he reported
at 9:00 a.m. and retired at 5:00 p.m. On August 8, he reported at 8:00 a.m. and retired at 6:00 p.m. For his
2-day work, he was paid P480.00. The employer paid him P210.00 on the first day due to his 1-hour
undertime. Since he worked an extra hour on the second day, he was paid an additional P30.00
representing his hourly rate. Is the computation valid?

A
No. The employer violated Art. 88 which provides that overtime cannot offset undertime. The
computation was arrived at by using the 1 hour overtime on August 8 to offset the 1 hour undertime on
August 7. The offsetting is prohibited because it allows the employer to withhold the 25% overtime rate of
Wakin on the second day.

Note: Art. 88 applies only when there are 2 work days involved. Hence, it is not violated if Wakin is paid
P240.00 when he reports at 9:00 a.m. and retires at 6:00 p.m. on the same day. 9:00 am to 6:00 pm work
is an 8-hour work; hence, there is no OT to speak of.

5
Service Incentive Leave

Q: Arnold has not been using his SIL the past 10 years; nor has he monetized it. A year before
retirement, he requested that he be allowed to go on vacation leave with pay for 2 months using his commuted
SILs. Is this allowed?

A: Unless allowed by contract, practice or policy, Arnold cannot deprive his employer of his services
for 2 straight months. Since he waived the first 2 modes of availment, it is understood that he has opted to get the
money equivalent of all his accrued SILs upon retirement.

6
Night Shift Differential (NSD)

(a) CBA provides: “However, fr overtime work, which extends beyond the regular day shift (7:00 am
to 3:00 pm), there will be no night differential pay added before the overtime pay is calculated.”
 Employer:The employees are not entitled to NSD.
VA: They are entitled.
SC: They are entitled. The provision means that nightshift differential pay shall not be added
to the basic pay before OT is computed. The purpose is to limit the basis for computing OT to the
basic salary (Lepanto Consolidated Mining Co. v. Lepanto Local Staff Union, G.R. No. 161713, 20
August 2008).

(b) A night shifter and a night worker work between 10:00 p.m. and 6:00 a.m. the following day. To be
a night worker, one must render work for not less than 7 consecutive hours. This is not required of a night shifter to
be entitled to the 10% extra compensation.

V
JOB-CONTRACTING
1
Job Contracting (JC) vs. Independent Contracting (IC)

1.1. JC is a trilateral affair; whereas, IC is a bilateral affair;

1.2. JC is qualified by substantial capital or investment; whereas, IC is qualified by skills, talents,
celebrity status, or expertise.
1.3. C is governed by Labor Law; whereas, IC is governed by Civil Law.

Note: If the respondent’s defense is IC status, the complainant should not counter by claiming that he is
not substantially capitalized or possessed with investment. It is a misplaced argument (Sonza v. ABS-CBN).

2
Substantial Capital (SC) or Investment (I)

2.1. Or. The term used is a disjunct (or); hence, a contractor without SC may still qualify as a JC
provided it has I in the form of tools, equipment, machineries or work premises.

2.2. Substantial Capital

(a) It is P5M under D.O. 174 as follows: corporation – paid up capital; partnership – paid up
contribution; and sole proprietorship – networth.
(b) The following do not constitute substantial evidence of SC: BIR Certificate of
Registration, VAT Return, BIR Confirmation Receipt, TIN, Individual Income Tax Return, Mayor’s Permit and
DTI Certificate of Registration are not conclusive evidence of financial capability. They only show that the
contractor is engaged in business under a government license. Neither is a performance bond evidence
of substantial capital. To be significant evidence, the bond must be shown to be sufficient to cover not only
payrolls, rentals and equipment but also possible damages to the equipment and to third parties and other
contingent liabilities. (Petron Corp. v. Caberte, G.R. No. 182255, 15 June 2015).

2.3. Investment
The contractor has no I if the service agreement (SA) it has with its principal provides that it shall
buy equipment worth P1.4M owned by the principal; store the same within the latter’s premises; hold office
inside said premises; and there is no evidence that the sale was carried out (Manila Memorial Park
Cemetery, Inc. v. Llus, et al., G.R. No. 208451, 3 Feb. 2016).
.
3
Labor-Only Contractor (LoC): Types

3.1. Essential Element + Confirming Element 1. It has no SC or I + Its workers perform work
directly related to the trade of its principal.
3.2. Essential Element + Confirming Element 2. It has no SC or I + it does not control its workers’
means and methods of performance.

4
Principle of Merger of Legal Personalities

4.1. Where the contractor is an LoC, there is no need for the workers to implead both contractor and
principal. In LoC arrangements, the principal’s legal personality mergers with that of its agent (CocaCola v. de la
Cruz, et al., G.R. No. 184977, 7 Dec. 2009 ).
4.2. Where the contractor is a legitimate JC, the principal must be impleaded to acquire jurisdiction over
it for purposes of imposing limited solidary liability (for unpaid wages) on it pursuant to Art. 106, Labor Code. 5

5
Statutory Employer
 5.1. The solidary liability of a statutory employer cannot be stretched beyond unpaid wages (Meralco
Industrial Engineering Services, Inc. v. NLRC, 14 March 2008); hence, it cannot be imposed obligations arising from
violations by its legitimate job contractor of health and safety rules; labor relations law; and social legislation despite
the letter of Art. 109, Labor Code.

5.2. A legitimate JC is one which has a D.O. 174 CR; and

(a) it carries on an independent business;
(c) makes use of its SC or I actually and directly in performing its work;
(d) works on its own account;
(e) works independently of its principal as to means and methods of performance;
(f) its SA with its principals has remunerative and protective provisions for its workers.
6
Outside Job Contracting Rules

6.1. IT-assisted business process outsourcing;

6.2. PAC-registered contractor; and
6.3. Canteen concessionaires.

7
Certain Prohibited JC Arrangements

(a) Based on effect on the JC’s workers.

(i) When the period of the employment contract (1 year) is shorter than the period of the
service agreement (2 years) and the employee is dismissed upon the expiration of his contract – unless
lawfully engaged as a project-based employee.
(ii) When the periods are the same and the project is completed ahead of schedule, the
contractor can pre-terminate the employment contract – subject to its duty to pay completion bonus.

(b) Based on the effects on the principal’s regular workers.

(i) Workers supplied b the JC start performing portions of the work of the regular employees
of the principal;
(ii) Workers supplied cause over-manning resulting in redundation of the positions of said
regular workers; hence, the latter’s right to security tenure is violated due to the JC arrangment;
(iii) When there is a Closed Shop Agreement and the same is violated thru the engagement of
non-union members in the persons of the supplied workers; hence, the right to self-organization of said
regular employees is violated.

8
In-House Contracting

It obtains when the apparent JC is organized by its principal; its business policies are determined by the
latter; it is funded by the latter; and its has only one client, viz., the latter. The JC arrangement is also prohibited
because is a circumvention of the law.

VI
SELF-ORGANIZATION
1
Double Majority Rule

(a) Valid CE. To be valid, majority of the eligible voters must cast their votes. And for a CE
participant to win, it must be able to garner majority vote based on the valid votes. Eligible voters exclude: non-
employees; non-CBU members; CBU members for less than 3 months; managerial employees; confidential
employees; and subversives. Valid votes exclude: blank ballots; spoiled ballots; and torn ballots.

(b) CE Winner. The winner is the union that gets majority vote (50% + 1) based on valid votes. “No
Union” can win. If the number of valid votes is 337, majority is 170 (50% which 168.5 + 1) NUHRAIN-Mla Pavilion
Hotel Chapter v. SOLE, G.R. No. 181531, 31 July 2009).

(i) Q. No. V. Bar 2014

Liwayway Glass had 600 rank-and-file employees. Three rival unions – A, B, and C ‒ participated
in the certification elections ordered by the Med-Arbiter. 500 employees voted. The unions obtained the
following votes: A-200; B-150; C-50; 90 employees voted "no union"; and 10 were segregated votes. Out of
 the segregated votes, four (4) were cast by probationary employees and six (6) were cast by dismissed
employees whose respective cases are still on appeal. (10%)

(A) Should the votes of the probationary and dismissed employees be counted in the total
votes cast for the purpose of determining the winning labor union?

(B) Was there a valid election?

(C) Should Union A be declared the winner?

(D) Suppose the election is declared invalid, which of the contending unions should represent
the rank-and-file employees?

(E) Suppose that in the election, the unions obtained the following votes: A-250; B-150; C-50;
40 voted "no union"; and 10 were segregated votes. Should Union A be certified as the bargaining
representative?

(ii) Hypo

X Co. has 1,000 rank-n-filers. Of said number, 100 are: non-CBU members; CBU members for 2
months; legal secretaries; and confidential employees. In a CE, 900 cast their ballots. Of the ballots cast,
20 are blank, spoiled and/or torn. The result of the voting is as follows: Union A – 400; Union B – 241;
Union C – 239; and No Union – 0.

(a) Is the CE valid?

(b) If so, is there a winner?

2
Strikes

(a) Fact of Strike; Elements

(i) Temporary stoppage of work;
(ii) Concerted activity; and
(iii) Labor dispute

(b) Validity Tests: MISPAP

(i) Means Test
(ii) Injunction Test
(iii) Statutory Prohibition Test
(iv) Purpose Test
(iv) Agreement Test
(v) Procedure Test
3
Lockout

4
CR Cancellation
4.1. Grounds
(a) MisFaFra in relation to adoption of CBL;
(b) MisFaFra in relation to election of officers; and
(c) Voluntary dissolution.
4.2. Non-Grounds
(a) Mixed-union membership;
(b) Dual unionism;
(c) Old Art. 239 grounds, except MisFaFra in relation to adoption of CBL and MisFaFra in
relation to election of union officers.
Note: The AIM Case involves MisFaFra in relation to registration requirements. J del Castillo
recognized it as a cancellation ground.

5
Unfair Labor Practice
 5.1. Temporary CBA. In the Sonedco Case, 5 Oct. 2016, it was held that in view of the filing of a CE
petition, the current CBA was to take effect temporarily only; hence, the company could not refuse to bargain on the
ground of its effectivity. Such refusal is ULP.

5.2. Non-Prejudicial Rule. A labor finding of ULP, even if final, is non-prejudicial in the civil case for
ULP which requires preponderance of evidence and in the criminal case for ULP which requires proof beyond
reasonable doubt. The reason is such administrative finding is based on substantial evidence only.

5.3. Pendency of Labor Case. No criminal action for ULP can be initiated except after a final
judgment finding ULP.

5.4. Nature of ULP. It is a violation of workers’ right to self-organization (Culili v. Eastern

Telecommunications). Although there was no such violation, still the employer committed ULP when i refused to
collectively bargain on the ground that the 2002-2006 CBA was still in effect (Sonedco, supra).

6
Voluntary Arbitration

6.1. Assumption of Jurisdiction. A case involving the same parties before the VA shall be
subsumed to the case assumed by the SOLE; hence, a jurisdictional event takes place wherein a dispute is
brought from voluntary arbitration to compulsory arbitration.
6.2. Express Stipulation Rule. Law confers jurisdiction over the subject matter of a case. As
exception, it can be expressly stipulated in a CBA that cases cognizable by other tribunals be subject to voluntary
arbitration. This is in keeping with Sec. 3, Art. XIII of the Constitution on preferential use of voluntary modes of
settling labor disputes. The CBA must specify the cases to be brought to the VA; otherwise, the term “all disputes”
shall only be taken to refer to those disputes embraced by the cases falling under the traditional jurisdiction of the VA
(Guagua National Colleges v. Guagua National Colleges Faculty Labor Union, 13 July 2016, J del Castillo).

VII
SECURITY OF TENURE & DUE PROCESS

066. Art. 292

(a) Curative Jurisprudence. A person whose dismissal is declared valid but without due process
under the Agabon Doctrine cannot claim backwages for the reason that he was dismissed under the Serrano
Doctrine. The Agabon Doctrine is a curative jurisprudence; hence, it can be retroacted (De Jesus v. Hon. Aquino,
G.R. No. 165787, 18 Feb. 2013).

(b) Contractual Due Process. A probationary employee can be dismissed for failure to qualify. If
the supporting ground is poor performance and there is a stipulated performance evaluation procedure in the
company rules, the company is required to observe it as a requirement of contractual due process; otherwise, it
shall be liable for nominal damages (Abbott Laboratories Phil. v. Alcaraz, G.R. No. 192571, 22 April 2014).

(c) SA Termination Notice. Notice to terminate the service agreement between the employer’s
company (as main contractor) and the employee’s company (as sub-contractor) is not an employment termination
notice as shown by the fact that said notice was exclusively addressed to the sub-contractor company and it
mentioned retention of 15% of the contract price, a provision common to sub-contracting agreements but not to
employment contracts.

(d) Seafarers. Two notices, and an investigation in between, are required of the ship Captain.
Exception: When there is clear and present danger to either vessel or crew.

(e) Reduction of Nominal Damages: Grounds

(i) bona fide attempt to comply with due process;

(ii) number of employees to be awarded;
(iii) authorized cause invoked;
(iv) capacity to pay; and
(v) grant of other termination benefits (Sangwoo Phils., Inc. v. Sangwoo Phils., Inc.
Employees Union-Olalia, G.R. No. 173229, 9 Dec. 2013)

VIII
LABOR PROCEDURE
1
Jurisdiction

1.1. Equity Jurisdiction. Exercisable when the factual findings of the appellate body and the first level
tribunal are divergent, i.e., to allow the certiorari court to determine which if the two is the correct one.

1.2. Corrective Jurisdiction. Even if the factual findings of the review body and the first level tribunal
are uniform, the certiorari court can still review their findings if not in accord with the evidence on record and are
contrary to law and jurisprudence as when separation is awarded based on ½ month salary despite their finding of a
valid dismissal. Moreover, the NLRC dismissed the employer’s appeal - which was grounded on allegations that
the LA’s decision was “not supported by the evidence” and was “contrary to the facts obtaining” – on the ground that
same were not among the grounds listed under Art. 223 (now Art. 229) of the Labor Code although they were
substantially the same as the first (prima facie abuse of discretion) and last (serious errors in the findings of facts)
grounds under said provision. (Sugarsteel Industrial, Inc. v. Albina, G.R. No. 168749, 6 June 2016).

1.3. Incidental Jurisdiction. When the SOLE assumes jurisdiction over a national interest (NI) case,
he has the power to resolve any and all issues arising therefrom. In fact, any pending case before any labor tribunal
involving the same parties shall be subsumed to the NI case and manifested and transmitted by said tribunal to the
SOLE.

1.4. Ouster of Jurisdiction. Under Art. 128, Labor Code, the visitorial and enforcement power of the
DOLE-RD can be challenged via a motion for ouster of jurisdiction, or simply a motion for referral to the Labor Arbiter.
There are two grounds: (a) cessation of EER; and (c) unresolved issues arising from un-verifiable documentary
evidence.

(a) Anent the first ground, when EER has ceased prior to the DOLE-RD’s taking cognizance
of the case, i.e., prior to the service of a letter (inspection) authority which is what allows him to acquire
jurisdiction over establishments, the case should be referred to the Labor Arbiter who shall hear and
resolve it. In effect, the DOLE-RD shall dismiss it for lack of jurisdiction but it will be heard and resolved by
the LA even if EER has ceased. The LA has jurisdiction because the money claim has reasonable causal
connection to EER.

(b) The DOLE-RD’s Art. 128 power requires continuing EER. Hence, if it has ceased then he
has no jurisdiction – except, however, if the cessation follows service of the inspection authority in which
case he shall continue to hear the case (Catholic Vicariate of Baguio v. Hon. Patricia Sto. Tomas, G.R.
No. 167334, 7 March 2008). In contrast, the LA’s jurisdiction always survives EER. Hence, even if it has
ceased, he can hear and resolve claims for unpaid salaries and benefits totalling more than P5,000.00 per
complainant. It is required for validity of judgment that a factual finding of EER be made by the RD/SOLE
as required by visitorial power and Sec. 14, Art. VIII of the Consitution (South Cotabato Communication
Corp. v. Hon. Sto. Tomas, G.R. No. 217575, 15 June 2016).

1.5. Doctrine of Great Overbreadth of Discretion. Assumption power is complete, plenary (full) and
discretionary. Art. 278(g), through the phrase “if in his discretion”, gives the SOLE overbreadth of discretion to
assume or not to assume. Thus, even without a petition to assume, he can assume jurisdiction because the remedy
is given to the State to protect national interest and not to any of the parties.

(a) Based on jurisprudence, the following are NI cases: HEAT d WET BEDS 5 Star Roof.
Hospital, Energy, Air Traffic Control, Transportation, Water Production, Export, Banking, Education, Drugs &
Pharmaceuticals, Support Services, 5 Star Hotel & Roofing Material Production.
(b) Based on D.O. 40-H-13, only the following are NI cases now: WHOEA. Water
Production, Hospital, Other Industries as may be certified by the NTIPC, Energy and Air Traffic Control.

Note: The SOLE can always expand the list in the exercise of his discretion.

2
Jurisdictional Rules

2.1. Reasonable Causal Connection Rule

(i) Labor Dispute. “... regardless of whether the disputants stand in the proximate relation
of employer and employee.” Inter-union and intra-union disputes are employer-less disputes; hence, the
Reasonable Causal Connection Rule has no application. Likewise, the LA can hear and determine a
complaint for regularization between total strangers.

(ii) Habeas Data. An issue arising from an alleged punitive transfer and violation of due
process is a labor issue. Hence, it is cognizable by a labor tribunal. A petition for habeas data to compel
production of the document bearing threats against her and upon which the transfer was based is not
proper because the writ is not available for the purpose of protecting property (security of tenure) or
commercial interest. Besides, per demand letter of the employee for production of the document, the
threat against her, which was the basis of her transfer, was a “joke”. On that basis, there was no threat
to her privacy, security or liberty. Finally, Meralco was not engaged in the business of collecting and storing
data. (Meralco v. Lim, G.R. No. 184769, 5 Oct. 2010).

(iii) Non-Compete Clauses

Portillo Case. “Under pain of liquidated damages, I undertake not to be employed by a

competitor company within 2 years from my separation.” The employer’s counterclaim for
liquidated damages based on violation by the employee of the non-compete clause, i.e., in a case
initiated by the latter’s complaint for recovery of withheld salary, is a post employment claim;
hence, the LA has no jurisdiction to award the damages claimed (Portillo v. Lietz, G.R. No.
196539, 10 Oct. 2012).

Century Properties Case. The non-compete or non-involvement clause reads: “Under

pain of liquidate damages, I undertake not to join a competitor company as an employee,
consultant or agent within 2 years during or after my separation from service.” If violated by the
employee by getting involved in a competitor company as an agent or consultant while employed,
the employer’s claim for liquidated damages is not a post-employment claim. Hence, the LA has
jurisdiction (Century Properties, Inc. v. Babiano, et al., G.R. No. 220978, 5 July 2016).

(iv) Un-deployed OFWs. An OFW does not become an employee unless actually deployed
overseas (Paul Santiago v. CF Sharp Crew Management, Inc., G.R. No. 162419, 10 July 2007). However,
an un-deployed OFW is allowed to prosecute his money claims against his recruiter/manning agent
before the LA. Under the Migrants Act, the LA has jurisdiction also over claims arising from OFW law and
contracts.

(v) Intracorporate Controversy. The jurisdiction of the special commercial court is

determined with the Relationship Test and Nature of Controversy Test.

(v.i) Where the respondent maintains that the complainant is a corporate officer, it
must prove that the position the latter occupies is a corporate office under the Corporation Code
(President, Treasurer, Secretary); created as such by the By-Laws – provided he was appointed
by the BOD or elected by the stockholders; or, created by board resolution – provided the BOD is
authorized by the By-Laws to create corporate offices and he was appointed by the BOD or
elected by the stockholders. If there is no enabling provision in the By-Laws, the remedy is to
amend it to include such authority. In Cosare v. Broadcom Asia, Inc., G.R. No.201298, 5 Feb.
2014 , the respondent failed to present a board resolution. Being a stockholder, and nothing else
more, does not make one a corporate officer. If appointed by the General Manager to a corporate
office, one is not a corporate officer.

(v.ii) Dismissal by Board Resolution; Corporate Office vs. Corporate Officer.

A corporate office is created by (a) the Corporation Code (President, Treasurer and Secretary
only); (b) CBL (e.g., VP); or (c) board resolution if expressly authorized by the CBL (e.g.,
General Manager). A corporate officer under “b” and “c” must be appointed by the board of
directors or stockholders (Cosare v. Broadcom Asia, Inc, 2014). If appointed by the president or
General Manager, he is a corporate employee. Dismissal of a corporate employee by board
resolution does not make him a corporate officer, i.e., to prevent circumvention of tenurial security
(Real v. Sangu Phils., Inc., G.R. No. 168757, 19 Jan. 2011, J del Castillo).

(v.iii) Nature of Controversy. If the grounds for dissociation pertain to the position of
the complainant as General Manager (position is VP and GM) and the same consist of
absenteeism, loss of trust and confidence, and cost-saving measure, the controversy is not
intracorporate; hence, the LA has jurisdiction over the termination issue (Real, supra).

(vi) Ecclesiastical Affair. In Pastor Austria v. NLRC, 16 Aug. 1999, a distinction was made
between removal my ex-communication and removal by dismissal. If the ground for dissociation is violation
of church disciplinary rules, the matter is an ecclesiastical affair; hence, the dispute is an ecclesiastical
dispute which is for the Church to resolve. But if the ground for dissociation is a just cause, e.g., serious
misconduct and loss of trust and confidence, the matter is an employer-employee affair; hence, the dispute
is a labor dispute which the LA must hear and resolve.
 (b) Sole Reference to Labor Law Rule

(i) Principle of Unjust Enrichment

Training expenses. The employer files a complaint with the LA against an employee for
recovery of training expenses because the latter violated his undertaking to render return service.
In turn, the employee files a complaint for illegal dismissal against the former. The two cases were
consolidated before the LA. Does the LA have jurisdiction over the employer’s money claim?
None. The money claim is based on the Principle of Unjust Enrichment and not on any Labor
Law principle. It cannot be argued that it is intertwined with the issue of illegal dismissal because
the employer’s complaint does not, because it should not, include illegal dismissal (U-Bix v.
Hollero, G.R. No. 199660, 13 July 2015).

SSS Reimbursement. The employer settled an SSS case by paying the unremitted
contributions, i.e., employer’s and employee’s contributions. It then filed a sum of money case with
the RTC to recover the employee’s contributions it paid, invoking the Principle of Unjust
Enrichment. In Amecos Innovations, Inc. v. Lopez, G.R. No. 2 July 2014, it was held that the LA
had jurisdiction. Justice del Castillo reasoned that, while the employee’s SSS contributions were
withheld, she was not yet a covered member. Moreover, in view of the payment made, the SSS
should not be dragged into the picture anymore. (Honestly, I do not understand the logic.)

(ii) Principle of Abuse of Rights. The employer’s claim for damages, based on the
resigning employee’s non-compliance with the 30-day notice rule (abuse of right to resign), is under the LA’s
jurisdiction. In contrast, the former’s claim for liquidated damages based on the latter’s violation of a non-
compete clause is under the jurisdiction of a regular court (Portillo, supra).

(c) Nullification of a CBA Provision. The VA has jurisdiction over CBA interpretation and
implementation. Since nullification is neither interpretation nor implementation, the RTC has jurisdiction –
especially because the mode of nullification is via a petition for declaratory relief over which the RTC has
general jurisdiction (Halaguena, et al. v. PAL, G.R. No. 172013, 2 Oct. 2009).

(d) Property Issue. The NLRC can determine the issue of property ownership when it aids
it in resolving a labor issue. Whether or not to order the payment of an employee’s last salary which has
been withheld for lack of clearance over properties in his possession is resolvable by first determining the
ownership of said properties. (Milan v. NLRC, G.R. No. 202961, 4 Feb. 2015).

5
Secretary of Labor: Powers

(a) Assumption Power (Art. 278, g).

(b) Control and Supervision. SOLE can hear an appeal transmitted from the BLR after the
Director’s inhibition (Heritage Hotel Manila v. , G.R. No. ).

(c) Suspension. SOLE can suspend the effects of a dismissal based on a report from his
representative that the intended dismissal is likely to result ina mass lay-off or will aggravate a currect labor disute
(Art. 292, Labor Code).

(d) Review . In AIM v. AIM Faculty Union, G.R. No. 207971, 23 Jan. 2017, J del Castillo, a CE
petition was filed with the Med-Arbiter. AIM moved to dismiss on the ground of illegal association because the
members of the union were all managers. The Med-Arbiter dismissed the petition. His CE order was appealed to
the SOLE who reversed it and ordered the RD to conduct an election.

AIM, for its part, filed a CR cancellation petition with the RD. The RD cancelled the union’s CR. His order
was appealed to the BLR which reversed it.

6
National Labor Relations Commission

(a) Appellate Power

Art. 225(c), formerly Art. 218(c), of the Labor Code allows the NLRC to “correct, amend, or waive
any error, defect or irregularity whether in substance or in form” in the exercise of its appellate power.
Art.225(c) shall not be interpreted to mean that the NLRC can open a case for total review, including un-
brought issues. In fact, Sec. 4(d), Rule VI of the 2011 NLRC Rules of Procedure, as amended, now
provides that “ it shall limit itself to reviewing and deciding only the specific issues that were elevated on
appeal.” (Rodolfo Luna v. Allado Construction, Inc., G.R. No. 175251, 30 May 2011).

(b) Compulsory Arbitration Power (Rule VIII, 2011 NLRC Rules of Procedure, as amended)

(i) Certified Labor Disputes (Sec. 2). Certified disputes are cases certified to the
Commission for compulsory arbitration under Art 263 (now 278) (g) of the Labor Code, as amended.

(ii) Effects of Certification (Sec. 3)

First. The intended strike or lockout is automatically enjoined, i.e., even pending
resolution or non-resolution of an MR. If effected already, all striking or locked out employees
shall immediately return to work and the employer shall immediately resume operations and admit
all workers under the same terms and conditions;

Second. Except where the CO states otherwise, all cases between the same parties so
far as they are relevant or are proper incidents of the certified case, shall be subsumed to the
certified case. The parties shall inform their counsels and the Division concerned of all pending
cases of said nature between them before the LA or VA.

(iii) Effects of Defiance (Sec. 4). Non-compliance with the CO shall be considered as an
illegal act committed in the course of the strike or lockout and shall authorize the Commission to enforce
the same under pain of immediate disciplinary action, including dismissal or loss of employment status, or
payment of backwages by the locking-out employer, including damages – even criminal prosecution of the
liable parties.

(iv) Execution of Judgment (Sec. 6). Upon issuance of the entry of judgment, the
Commission, motu proprio or on motion, may cause the execution of the judgment in the certified case.

(c) Injunctive Power

(i) Types of Injunctive Power

(i.i) Ordinary. Art. 218, now Art. 255, gives the NLRC the power to enjoin or
restrain actual or threatened commission of any or all prohibited or unlawful acts. Art. 264(a), now
Art.279(a), enumerates prohibited activities of employers and labor organizations. Sec. 2(a), Rule
X, 2011 NLRC Rules of Procedure, as amended, expressly allows the NLRC to TRO prohibited or
unlawful acts. However, it cannot issue a writ of injunction without prior notice and hearing. This
time, unlike before the LA, a party has the right to cross-examine. In SMC v. NLRC, G.R. No.
119293, 10 June 2003, the employer invoked the NLRC’s ordinary injunctive power to enjoin an
illegal strike, e.g., one about to be carried out even after the NCMB has converted the union’s
notice of strike to preventive mediation. The effect of the conversion was it dropped the strike
notice from the roll of strike notices; hence, as though none had been served at all.
(i.ii) Ancillary. In PAL v. NLRC, G.R. No. 120567 20 March 1998, the PAL
management rendered a resolution to dismiss two flight stewards for their alleged involvement
in the 3 April 1993 currency smuggling in Hong Kong. Instead of filing a complaint for illegal
dismissal, the latter filed with the NLRC a petition for injunction praying that a TRO be issued
prohibiting PAL from carrying out its resolution to dismiss them. The NLRC granted their
petition, reasoning that to file an illegal dismissal suit with the Labor Arbiter was not an "adequate"
remedy since it took three years before it could be disposed of. The Supreme Court brushed that
aside. An "adequate" remedy at law has been defined as one "that affords relief with reference to
the matter in controversy, and which is appropriate to the particular circumstances of the case." It
is a remedy which is equally beneficial, speedy and sufficient which will promptly relieve the
petitioner from the injurious effects of the acts complained of. In Lamb vs. Phipps, it ruled that if
the remedy is specifically provided by law, it is presumed to be adequate.
(i.iii) Extraordinary. Rule XII, 2011 NLRC Rules of Procedure, as amended, allows
the NLRC to TRO or enjoin by writ any order issued by the LA. An order denying a motion to
quash writ is not appealable. The remedy is Rule XII on petition for extraordinary remedies.

Note: Under the new rules, a Labor Arbiter has no TRO and injunction powers
anymore. In like manner, the DOLE-RD cannot restrain an intended retrenchment upon his finding
that the good faith character of the intended dismissal is in question. However, based on his report
to the SOLE that the intended dismissal would likely result in a mass lay-off or would aggravate a
current labor dispute, the latter may exercise his suspension power under Art. 292 of the Labor
 Code. In the exercise of said power, the SOLE may suspend the effects of the dismissal.

(d) Contempt Power (Rule IX)

3. Rule-Making Power

Sec. 18, Rule XI (Restitution). Absent TRO from the CA, a money judgment can be enforced
notwithstanding the pendency of the employer’s petition for certiorari. If, at the end of the day, the
employer gets a final reversal of the judgment, he can move for the restitution of the money paid to satisfy it.
However, Sec. 18, Rule XI requires that the reversal judgment must direct restitution. In other words, if it is
silent as to restitution, the LA cannot order restitution. The Wallem Ruling, which is based on the Principle
of Unjust Enrichment, allows restitution even without judicial order of restitution.

(f) Other Salient Features of the 2011 NLRC Rules of Procedure, as amended.

(i) Verification & Non-Forum Shopping Certification. Lawyer cannot verify. Those presumed
to have personal knowledge of labor relations matters can veriry, e.g., corporate president, manager, labor
relations officer.

(ii) Improper Venue. It can only be challenged via a motion to dismiss which must be filed
before the first preliminary mandatory conference before the LA.

(iii) Two-Dismissal Rule. The second dismissal of the employee’s complaint for failure to
prosecute bars a third complaint involving the same parties, cause of action, and issues.

7
Related Matters

7.1. Conferment of Jurisdiction

(a) VA ( After Grievance Machinery )

(i) Art. 274 (new) - Traditional Jurisdiction

RTC has jurisdiction over a petition for declaratory relief seeking nullification of
CBA provision. Nullification is neither interpretation nor implementation
(Halaguena, et al. v. PAL, 2 October 2009)

(ii) Art. 275 (new) - Jurisdiction by Stipulation

Note: Express Stipulation Rule / Vivero v. CA, G.R. No. 138938, 24 October
2000
J del Castillo: There is a need for an express stipulation in the CBA that ULP
shall be brought to voluntary arbitration. Absent such express stipulation, the phrase “all
disputes” should be construed as limited to areas of conflict traditionally within the VA’s
jurisdiction (Guagua National College v. GNC Faculty Labor Union, G.R. No. 204693, 13
July 2016).

(b) LA (after SEnA proceedings); except intracorporate controversies (Matling Industrial &
Commerical Corp. v. Coros, 13 October 2010). Water Districts are quasi-public corporations under the
jurisdiction of the CSC (Hagonoy Water District v. NLRC).

(c) RD (after SEnA proceedings)

(i) Kasambahay (Sec. 37, R.A. 10361)
(ii) Media Talents (Advisory 4, S. 2016)
(iii) Apprentices (after exhaustion of adm. remedies)
(iv) 28 (money claims and health& safety issues) & 129 (simple money claims)
(v) WACLIU Disputes (inter & intra union disputes involving Workers Associations
(WA), Charters & Locals (CL) and Independent Unions (IU)
(vi) CR Cancellation (Direct Attack Rule)
(vii) CBA Deregistration

(d) Med- Arbiter (CE Petitions)

 (i) CE is investigative; hence, the employer cannot move to dismiss (Heritage
Hotel Manila, et al v. SOLE, et al., G.R. No. 172132, 23 July 2014).

(ii) CE Petition Requisites

Note: If not verified, Med-Arbiter should not dismiss because CE does not
initiate a litigation. It is just a means of verification as to workers’ will on which union
must represent them.
(iii) Valid CE: Requisites
i. Not barred; and
ii. Majority of the eligible voters cast their votes (Major ELVOT CASVOT)
NON-ELVOT
1. Non-employees
2. Non-members of the CBU involved
3. CBU members of less than 3 months
4. Confidential employees;
5. Legal secretaries; corporate secretaries
6. Subversives (this will not be given in light of the
repeal of the Anti-Subversion Act)
7. Dismissed employees, unless: dismissed by
reason of ULP or current labor dispute; no
substantially equivalent and regular employment
yet; and hs contested his dismissal before a
forum of appropriate jurisdiction.
(iv) CE Winner: Union with majority vote based on the valid votes (Major VOT
VALVOT)

7.2. Acquisition of Jurisdiction

(a) VA acquires jurisdiction thru:

(i) Submission Agreement (SA)
(ii) Notice to Arbitrate (NTA)
Note: Only EBR can serve NTA (Tabigue vs. Interco, G.R. No. 183335, 23
Dec. 2009)
(iii) Appointment, e.g., of LA as VA
Appeal shall be to the CA, not NLRC because the LA’s decision is that of “LA
sitting as VA by appointment”. Appeal period: VA to CA under Rule 43, RC, is 15 days
(Guagua National Colleges v. CA, 28 Aug. 2018). The 10 days in art. 276-A is the
period to file an MR. If denied, petition for review follows in 15 days. Rule 43, RC, does
not require an appeal bond.

(b) LA acquires jurisdiction thru:

(i) Verified Complaint. Sec.1, Rule II, NLRC Rules of Procedure provides that only
causes/ matters included in the complaint can be treated in the complainant’s
position paper; hence, relief not prayed for cannot be awarded (Sec. 12, Rule V,
NLRC Rules of Procedure). The complaint is not the only document from which
the complainant’s cause of action is determined. Any cause not included in the
complaint or position paper can no longer be alleged after submission of position
papers; hence, the submission of position papers is the operative act which
forecloses the raising of other matters constitutive of the cause of action. This
necessarily implies that the cause of action is finally ascertained only after both
complaint and position paper are properly evaluated (Tegimenta Chemical Phils
v. Rolan E. Buensalida, G.R. No. 176466, 17 June 2008). As to the “General
Prayer for Relief”, the un-brought cause or un-prayed for relief must at least be
touched upon in the position paper/memorandum; otherwise, it cannot be
passed upon owing only to the prayer for general relief because it is coram non
judice. (Citibank v. NLRC, G.R. No. 159302, 17 Aug. 2005).

(ii) Referral by NCMB of unresolved wage distortion disputes in unorganized

establishments.

(c) RD acquires jurisdiction as follows:

(i) Art 128, Victoria Power

 Thru: Service of Authority to Inspect/notice of Inspection ( D.O 183, s, 2017)
How Initiated:
(a) Routine Inspection (motu proprio)
(b) Complaint Inspection (by complaint; when there is a SEnA referral)

(ii) Prohibited Pleadings (D.O. 183, s. 2017)

Motion to reduce appeal bond
Motion to Dismiss
Motion for bill of particulars
Motion for intervention
Motion for inhibition
MR of interlocutory orders
Motion to quash writ of execution
Dilatory and obstructive motions
Motion to Suspend (No Prejudicial Questions)

7.3. Exercise of Jurisdiction

(a) Jurisdiction cannot be exercised because:

(i) The respondent enjoys immunity from suit. A Philippine court, labor tribunal,
agency or office may have acquired a conferred jurisdiction; however, it should not exercise it
because the respondent enjoys immunity. Based on Deutsche Gesellschaft Fur Techniche
Zusammenarbeit, also known as German Agency for Technical Cooperation (GTZ), et al., v. CA
G.R. 152318, 16 April 2009, the questions to ask are as follows:

Is the foreign-owned corporation incorporated?

No. It must be treated as an extension of the foreign government; hence, it must be

accorded immunity.

Yes. Perhaps it enjoys immunity.

If registered, does the private law under which it was incorporated give it the power to
sue and be sued?

No. It has immunity

Yes. It has no immunity

Note: Presumed Identity Approach/Processual Presumption Theory . If the foreign

private law is silent on power to sue and be sued, it shall be presumed to be the same as the
Corporation Code which gives corporations that power. Hence, the foreign corporation should not
be accorded immunity. (Edi-StaffBuilders International, Inc. v. NLRC, et al., G.R. No. 145587, 26
Oct. 2007).
.

(ii) A Commencement Order (CO) has been issued. A CO shall include a

Suspension or Stay Order prohibiting the sale or disposition of assets of the debtor and
ordering the suspension of all actions against the debtor and/or the debtor’s estate.

Exceptions: Sec. 18, FRIA

(a) to cases already pending appeal in the Supreme Court as of

commencement date: Provided, That any final and executory judgment arising from such
appeal shall be referred to the court for appropriate action;
(b) subject to the discretion of the court, to cases pending or filed at a
specialized court or quasi-judicial agency which, upon determination by the court, is capable
of resolving the claim more quickly, fairly and efficiently than the court: Provided, That any
final and executory judgment of such court or agency shall be referred to the court and
shall be treated as a non-disputed claim;
(c) to the enforcement of claims against sureties and other persons solidarily
liable with the debtor, and third party or accommodation mortgagors as well as issuers
 of letters of credit, unless the property subject of the third party or accommodation mortgage
is necessary for the rehabilitation of the debtor as determined by the court upon
recommendation by the rehabilitation receiver;
(d) to any form of action of customers or clients of a securities market
participant to recover or otherwise claim moneys or securities entrusted to the latter in
the ordinary course of the latter’s business as well as any action of such securities
market participant or the appropriate regulatory agency or self-regulating organization to
pay of settle such claims or liabilities;
(e) to the actions of a licensed broker or dealer to sell pledged securities of a
debtor pursuant to a securities pledge

Note: The stay order suspends the proceedings and not just the enforcement of the
claim. However, the 2008 Rules allow the commencement of actions to prevent prescription of
actions (Philippine Airlines v. Court of Appeals, GR No. 150592, 20 January 2009).

(iii) Issuance of TRO or Writ of Injunction under Rule XII, 2011 NLRC Rules of
Procedure, as amended, against LA proceedings.

(b) Jurisdiction should not be exercised because:

(i) Forum Non Conveniens. Philippine labor tribunal may be conferred

jurisdiction; however, it should not exercise it – although it has acquired it - because it is not a
convenient forum. E.g.: If it cannot enforce its judgment outside Philippine territory then it should
not hear and resolve the case before it.

Marcelo Santos, a direct hire, applied for a job with Manila Hotel International Corp. in
China while he was working in the Sultanate of Oman. He was later retrenched as an aftermath of
the Tiannamen Square massacre. He sued Manila Hotel Corp. , a domestic corporation and
stockholder of Manila Hotel International Corp. which, in turn, was a foreign corporation doing
business in China. All the elements of the case (from hiring to dismissal took place in China) were
foreign, except that complainant Santos was a Filipino national. The proper defendant was not a
resident of the Philippines. Neither was it doing business in the country. The main witnesses were
outside the country. Hence, the NLRC was a forum non conveniens. (Manila Hotel Corp. v.
NLRC, G.R. No. 120077, 13 Oct. 2000). If all the elements of the case were Filipino, except that
the respondent was a foreigner, in that the complainants were Filipinos, the employment contracts
sued upon were entered into in the Philippines, they were partially executed in the Philippines, and
Pakistan International Arlines Corp. had a local office, the DOLE was a convenient forum.
(Pakistan International Airlines Corp. v. Hon. Blas F. Ople, et al., G.R. No. 61594, 28 September
1990).
(ii) Inhibition. An inhibition order issued by the LA is subject to approval by the
Executive Labor Arbiter (ELA).

8
Evidence in Labor Proceedings

(a) Twin-Aspects of Substantial Evidence (Masing & Sons Dev’t Corp. v. Gregorio Rogelio, G.R. No.
161787, 27 April 2011):

(i) Quantitative Substantial Evidence

(ii) Qualitative Substantial Evidence

(b) Burden of Evidence

(i) Manalo v. Confessor, G.R. No. 102358 19 May 1992 (1st Division). Burden is always
substantial evidence; it does not change
(ii) SMC v. NLRC, G.R. No. 153983, 26 May 2009 (1st Division. The employer must prove
the validity of the dismissal clearly and convincingly with substantial evidence.
(iii) Duty Free Phil. v. Tria,G.R. No. 174809, 27 June 2012 (Third Division). The employer
must prove the validity of the dismissal with clear and convincing evidence.

Question: Has the SC elevated substantial evidence (No. 4) to clear and convincing evidence
(No. 2)?
 Answer: No. Evidence is not numbered but weighed. For an employer who relies on a just
cause, however, he has requisites to establish (requisites of just causes). Therefore, his evidence must
amount to quantitative substantial evidence. For his part, an employee has less to prove when proving the
fact of his dismissal (EER, complete severance, and overt act). If the employer relies on an authorized
cause, his evidence must be admissible and relevant evidence. As to prescribed forms of evidence, he has
forms to observe, viz.:Financial Statements duly certified by an independent external auditor (retrenchment)
and Feasibility Study showing that the reduced manpower can meet the same business target
(redundancy). In contrast, there is no prescribed form of evidence to establish EER. The burden does not
really change; it is always substantial evidence.

(c) Related Matters

(i) Graphology. LA can determine genuineness of signature even if not a graphologist; and
the signatures of union officers on a receipt need not be testified on by a graphologist (Mitsubishi Case).
(ii) Conspiracy. It shall be established independently of the infraction (Garcasco Case)
(iii) Instigation. A defense in a criminal case, but not in a labor case (PAL Case).

9
Appeals

(a) CA as a Rule 65 Court

(i) Requisites of Certiorari (PALEA v. Hon. Cacdac, G.R. No. 155097, 27 Sept 2010)
(i.i) Respondent is a tribunal board or officer (TBO) exercising judicial or quasi-
judicial powers;
(i.ii) There is no appeal or any plain, speedy or adequate (PSA) remedy in the
ordinary course of law.

Note: The Labor Code provides for no system of appeals after the SOLE, NLRC and
BLR render decisions in the exercise of their review powers (No appeal). A motion for
reconsideration is a PSA remedy (Jennifer Abraham v. NLRC, G.R. No. 143823, 6 March 2001).

(ii) Not Quasi- Judicial Bodies

(ii.i) DOLE-RD when implementing a final BLR decision to conduct a general election
(PALEA, supra.). Incidental orders of RD are not in the exercise of quasi-judicial power.

(ii.ii) A mere task force (Rivera v, Espiritu, G.R. No. 135547, 23 January 2002)

(iii) Grave abuse of discretion. It is the whimsical and capricious exercise of judgment so
patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law, as where the power is exercised in an arbitrary and despotic manner because of passion or
hostility. (Cuison v. CA, G.R No. 128540, 15 April 1998).

(b) Supreme Court. From CA to SC, the mode of review is thru a petition for review on certiorari
(Rule 45), not Rule 65 because there is an appeal. If grave abuse of certiorari power is raised, Rule 65 is available
(Tomas Claudio Memorial College, Inc. v. CA, G.R. No. 152568, 16 Feb. 2007).

Update: Even if grave abuse of discretion is alleged, the remedy must be petition for review on certiorari
under Rule 45 (Wenceslao, et al v. Makati Dev’t Corp. G.R. No. 230696, 30 Aug. 2017).

IX
PENAL LABOR LAWS
1

Penal Labor Laws

1. The Recruitment Law (R.A. 10022, Arts. 13 & 38-39, Labor Code)

1.1. Types of Illegal Recruitment (IR)

1.1.1. Simple IR
1.1.2. Economic Sabotage (EcoSab)
(a) Syndicated IR
(b) Large Scale IR

Simple IR v. EcoSab

As to number, there are less than 3 perpetrators and less than 3 victims in Simple IR;
whereas, there are 3 or more perpetrators or 3 or more victims in EcoSab;

As to penalty, Simple IR is punishable with less than life imprisonment; whereas,

EcoSab is punishable with life imprisonment;

As to prescription, Simple IR prescribes in 5 years; whereas, EcoSab prescribes in 20

years.

Pp. v. Navarra
G.R. No.119361, 19 February 2001

Three Navarras were indicted for EcoSab. The 2 male Navarras were arrested, tried, and
imposed life imprisonment, while the female Navarra evaded arrest, was never tied, and was never
convicted. On appeal, the convicts argued that they could not be imposed life imprisonment because
they just numbered 2 whereas the law required 3 or more (syndicated IR). Unfortunately, the
Supreme Court counted 6 victims. Therefore, the IR was still EcoSab (large scale).

1.2. Modes of Commission

1.2.1. Non-Licensee/Non-Holder of Authority commits Acts of Recruitment;

1.2.2. Licensee/Holder of Authority commits a Prohibited Act;
1.2.3. Non-Licensee/Non-Holder of Authority commits a Prohibited Act.

1.3. Acts of Recruitment: CUTE CPAs Have Cute Red Peanuts

C - Canvassing
U - Utilizing
T - Transporting
E - Enlisting

C - Contracts, entering into (1st)

P - Procuring
A - Advertizing

H - Hiring
C - Contracts, entering into (2nd)
R - Referring
P - Promising

Note: Distinct Impression Rule

This rule requires promise of employment thru misrepresentation of authority,

influence or ability. Absent such promise, no criminal liability is incurred (Pp. v. Goce;
Darvin v. CA, infra.). Under R.A. 10022, employment has to be overseas employment
and not local employment. Local recruitment is regulated by DO.____.

1.4. Pohibited Acts (PAs)

1.4.1. Original PAs under Art. 34, Labor Code: A THIFF Reports OCI

A - Amount

T - Travel
H - Harmful
 I - Induce
F - Fraud
F - Fraud

O - Obstruct
C - Contracts
I - Influence

1.4.2. Additional PAs under Sec. 7, R.A. 10022

(a) Failure to RD
(i) R - Reimburse
(ii) D - Deploy

(b) Requiring exclusive MLTs

(i) M - Medical certificate
(ii) L - Loan
(iii) T - Traning certificate

(c) Others
(i) Requiring issuance of PDCs
(ii) Charging more than 8% annual interest

1.5. Defenses

1.5.1. Feasible Defenses

(a) The accused made no distict impression that he could procure

employment (Darvin v. CA).

(b) Pp v. Goce (used in Darvin v. CA, same rule).

(c) If prosecution is under R.A. 10022, the promise is for local employment.

(d) Non-deployment is is by reason of the recruit’s fault.

1.5.2. Non-Feasible Defenses

(a) Pp v. Panis. Recruitment by 1 is not a ground for acquittal because the

term “promise of employment for a fee to 2 or more” in Art. 13(b), Labor Code, is
not an element of IR.

(b) Pp v. Comila. Lack of knowledge amounts to good faith which is not

an available defense in prosecutions for acts mala prohibita. Hence, a husband’s alleged
lack of knowledge that his passengers were his wife’s recruits will fail.

(c) Pp v. Jamilosa. Non-presentation of receipts during trial is not a

defense because the law says “whether for profit or not.”

(d) Rodolfo v. Pp. Referral is an act of recruitment; hence, a recruitment

license is required. Remittance to a licensed recruiter of amounts collected is not a
defense under the “whether for profit or not” clause.

(e) Pp v. Navarra, supra.

(f) Pp v. Chua. A recruitment license is prospective; hence, a belatedly

issued license cannot be used to legitimize an act of recruitment committed before its
issuance.

2. The Anti-Sexual Harassment Act (R.A. 7877)

2.1. Questions to Ask (Tool for Analysis)

2.1.1. WHERE was the act complained of committed?

Answer: WET environment (Work, Education, Training)

 2.1.2. WHO committed the act?

Answer: Pastor TETE with MIA (Pastors/Priests, Teachers, Employers,

Trainors, Employees with Moral Ascendancy, Influence or
Authority)

2.1.3. HOW was the act committed?

Answer: Thru DRR 4 Sexual Favor (Demand, Request or Requirement

for Sexual Favor)

2.1.4. WHY should the DRR be granted?

Answer: W Env’t - COER (Continuing employment, Other considerations,

Employment, Re-employment)

ET Env’t - GASHOS (Grade, Allowance, Scholarship,

Honors, Other considerations, Stipend)

2.1.5. WHAT reaction is generated by the DRR?

Answer: Rejection, or
Acceptance (acceptance is not a defense)

2.1.6. WHAT is the result of the rejection?

Answer: WET becomes HOI (Hostile, Offensive, or Intimidating)

2.2. Explanatory Notes

2.2.1. Did “A” commit theft is a more manageable question than “Did “B” commit sexual
harassment?”. The reason is this: a felony is approached with the use of the list of its
elements; hence, the task ahead is to do a one-to-one correspondence between those elements
and the facts of the problem. In a manner of speaking, it is as neat as that. Based on decided
cases, approach to sexual harassment (SH) is not as neat. To illustrate, even absent proof of
DRR 4 Sexual Favor, one may still be found liable for SH - as when there is clear evidence that
the complainant’s work environment has been rendered hostile, offensive or intimidating by the act
complained of (Domingo v. Rayala, infra).

2.2.2. The Tool for Analysis, supra., has been devised to help examinees answer
hypothetical problems. In this regard, it has been observed that until 2006 (last time a question on
SH was asked), examiners were more inclined to craft hypos.

Bar Question

During a job interview, the lady applicant was the one asking questions,
e.g., “Do I have the physical attributes required by the position?” “Yes, if you start
wearing micro mini dresses without underwear.” Did the interviewer commit SH?

1.2.3. WET to HOI Formula

(a) Based on 3 decided cases ( the cases of Comm. Rayala, Judge Carpio
and Justice Acosta), a trusted formula for SH is the transformation of WET Env’t to HOI
Env’t owing to the respondent’s unwelcome acts.

(b) If , as shown by evidence, such transformation does not take place

then SH is not committed:

(i) When there is transformation (The 2000 Chua Case).

By reason of the lady employee’s rejection of her superior’s DRR, the

latter’s attitude towards her changed; her office table was relocated; and she
was ultimately dismissed.

(ii) When there is no transformation (The 2002 Acosta Case;

The 2007 Carpio Case).
 In the first, the lady lawyer continued to report for work at the CTA
without any incident as she and the respondent justice, who made beso-beso on
her, were working on different floors of the CTA building. In the second, the
stenographer continued to enter the chamber of the respondent judge. That was
taken against her.

(c) Totality of Circumstances Rule

In the Rayala Case, J Nachura concluded the commission of SH from

the totality of the circumstances. The respondent argued that there was no
allegation at all that he demanded, requested or required sexual favour from the
complainant – which was true. However, it was ruled that it is not necessary
that DRR be articulated in a categorical oral or written statement. “It may be
discerned, with equal certitude, from the acts of the offender.” If the
combined acts “resound with deafening clarity the unspoken request for
sexual favour”, SH is deemed committed.

(d) Burden of Proof

Comm. Rayala argued that there was no proof beyond reasonable

doubt of DRR. However, J Nachura invited his attention to the Threefold
Liability Rule. Under the rule, an act may result in 3 types of liabilities, viz.,
criminal, civil and administrative liabilities. And they are established as follows:
criminality liability,with proof beyond reasonable doubt; civil liability, with
preponderance of evidence; and administrative liability, with substantial
evidence. Since he was dismissed for grave misconduct under Civil Service
Law, his case was an administrative case; hence, the Court was just looking for
substantial evidence.

Note:

If asked whether or not a dismissal for SH is valid (and one cannot

remember any of these), all he has to do is support a finding of serious
misconduct.

3. The Double Indemnity Law (R.A. 8188)

Payment of the unlawfully withheld wages does not bar criminal prosecution (Sapio v. Undaloc
Construction, supra).

4. The Social Security Act (R.A. 8282)

4.1. Corporate Officers

Personal liability is incurred by those who commit the act (non-remittance of SSS contributions),
ratify the wrongdoing, or act in a grossly negligent manner as to cause its commission.

4.2. Double Jeopardy

Simultaneous prosecution under R.A. 8282 and the RPC will not amount to double jeorpardy since
the accused is not put twice in jeopardy for the same crime,i.e., one is an offense (violation of R.A. 8282, a
malum prohibitum) and the other is a felony (estafa, a malum in se).

4.3. Prior SSS Consent

For purposes of criminal prosecution, prior SSS consent is not required.

5. The Seafarers Protection Act (R.A. 10706)

5.1. It limits ordinary attorney’s fees to 10% only; hence, it is unlawful to stipulate beyond this
limit. Understandably, quantum meruit does not apply.

5.2. It criminalizes ambulance-chasing.

Note:

Ambulance-chasing is a crime but charging more than 10% is not (nullum crimen sine poena
lege).
 6. Arts. 133, 134 & 135, Labor Code

Of these 3 provisions, only Art. 135 is a penal provision.

X
SOCIAL LEGISLATION
1
The Social Security Act of 1997 (R.A. 8282)

1.1. Characteristics of the Social Security Law (R.A. 8282)

(a) Non-discriminatory: No distinction between

(i) Married Women and Unmarried Women; hence, the maternity leave benefits
claim of a single mom (always given in the Bar) must be granted; provided she has complied with
the reportorial requirements and paid the required contributions;

(ii) Natural Parents and Adoptive Parents; hence, in the event of the death of the
adoptive parent during the minority of the deceased adopted SSS member, his natural parent
shall be granted death benefits per Bartolome v. SSS, G.R. No. 192531, 12 November 2014 (not
yet given in the Bar); and

(iii) Legitimate Children and Illegitimate Children; hence, subject to the 1:1/2
sharing rule, all kinds of children are considered as primary beneficiaries.

(b) Morality-free

(i) A Law student, an SSS member since joining “The unFirm” as an under-Bar
associate, ends up being impregnated by the married 75-year old Managing Partner (MP). Even if
immoral, she will get maternity benefits as many times as MP’s wife does not storm the firm to
prevent her 4 deliveries.

(ii) If she delivers twins on 1 January 2019 and another set of twins on 31 December
2019, she has 2 more deliveries to enjoy, i.e, even if the third yields triplets and the fourth yields
quadruplets. What is the lesson? Do not count her babies, just her ouches.

1.2. Coverage

(a) Compulsory: Start of Coverage

(i) Employers. All employers shall be covered on the first day of business
operation.

(ii) Employees
(ii.i) With employers. Their coverage starts on the first day of work.
(ii.ii) Self-employed and Voluntary Members. Their coverage starts on the
first day they report themselves for SSS coverage.

Note: Compulsory SSS employee coverage applies to: (i) employees who are
not over 60 years old; (ii) self-employed; and (iii) kasambahay.

(b) Voluntary

(i) Spouses of SSS members who fully devote their time to the management of the
home and family affairs;
(ii) OFWs and Seafarers;
(ii) Employees of foreign governments and international organizations covered by
administrative agreements between their employers and the SSS.

Note: Compulsory Coverage (CC) v. Voluntary Coverage (VC)

 Members with CC will get 2 sets of benefits, viz., SSS benefits and EC benefits.
On the other hand, members with VC will only get SSS benefits. EC benefits are: cash
income benefit, rehabilitation benefit, hospitalization benefit, and funeral benefit.

(c) Disqualification: CAFGO

(i) Purely casual employees;

(ii) Filipinos hired by alien vessels while outside Philippine territory;
(iii) Employees of foreign governments and international organizations (without
administrative agreements);
(iv) Government employees; and
(iv) Other employees excluded by the Social Security Commission.

Note: R.A. 8282 with R.A. 10361; 2014 Bar

Don Luis was approached by Lando at church for work. Not needing his
services, he turned down Lando. Later in the day, Don Luis realized the need to trim his
plants, so he looked for Lando and engaged him for that purpose.

(a) Was there employer-employee relationship between Don Luis and

Lando?

(b) Did Don Luis have the duty to report Lando for SSS coverage.

Note:

The examiner was targeting “purely casual” employee who had no SSS
coverage. Lando, in the problem, was a purely casual employee. But to be such, he
must be considered an employee first because a casual employee is an employee. So
the answer to (a) must be Yes. Just tell the examiner that Don Luis would not have
allowed Lando to trim his plants without exercising control over his means and methods,
or else he would ruin the plants (Control Test).

Lando was also a gardener. Regardless, he was not a kasambahay with SSS
coverage because his engagement was occasional or sporadic only. Hence, the answer
to (b) must be No. Firstly, Lando was a purely casual employee; hence, he had no SSS
coverage. Secondly, he was hired occasionally or sporadically as a gardener; hence, he
was not a kasambahay with SSS Coverage.

1.3. Maternity Benefits

(a) Nature . It is an income replacement (daily cash allowance) given to a member who
cannot work by reason of normal delivery, miscarriage, or cesarean section.

(b) Requisites

(i) Reportorial requirements: The employee shall immediately report the fact of
her pregnancy and expected date of delivery to employer thru the SSS Maternity Notification Form
(SSS MNF). The employer, in turn, shall immediately submit to the SSS said form with proof of
pregnancy thru the SSS counter or online.

If self-employed, unemployed or voluntary member, she must file the SSS MNF directly
with the SSS.

(ii) Payment of 3 monthly contributions. If the employer does not remit the
contributions, the SSS will advance the benefit. However, the employer will be proceeded against
for damages equivalent to the benefit paid (called damages), legal interest, and penalty.

(c) Computation: Steps

(i) Determine the semester of delivery, miscarriage or cesarean section (1st Sem:
January – June; 2nd Sem: July – December).

E.g. Delivery takes place in March; hence, 1st Semester.

(ii) Count 12 months back from start of the semester of contingency.

 Note:
Since the semester of contingency is 1st Semester (January-June), the
12 months shall be counted from January backwards.

(iii) Within said 12-month period, look for:

(iii.i) 3 monthly contributions; and

(iii.ii) the 6 highest average monthly salary credits (AMSC).

i. Add the 6 highest AMSCs and divide the sum by 180 days to
arrive at average daily salary credit (ADSC);

ii. Multiply ADSC by 100%

(iv) Multiply the product by:

(iv.i) 60 days if normal delivery or miscarriage; or

(iv.ii) days if cesarean section.

(v) Subject to reimbursement by the SSS, the employer shall advance the benefit
within 30 days from the filing of the corresponding maternity leave application. Payment shall bar
any claim for sickness benefits.

1.4. Sickness Benefits

(a) Nature . It is an income replacement occasioned by a sick member’s inability to work by

reason of his confinement, at home or in a hospital, for at least 4 days due to sickness. Unlike under the
POEA-SEC and Amended Rules on Employees’ Compensation (AREC), we do not ask whether the
illness is work-connected. What controls is SSS membership only. Hence, there is no list of diseases
similar to Sec. 32-A of the POEA-SEC and Annex “A” of the Amended Rules on Employees Compensation
(AREC).

(b) Requisites

(i) The member is confined (at home or at a hospital) for at least 4 days;
(ii) He/she has exhausted all his/her sick leave credits.

(c) Computation: Steps

(i) Determine the semester of confinement (1st Sem: January – June; 2nd Sem:
July – December).
(ii) Count 12 months back from start of the semester of contingency.
(iii) Within said 12-month period, look for:
(iii.i) 3 monthly contributions; and
(iii.ii) the 6 highest average monthly salary credits (AMSC).
(iv) Add the 6 highest AMSCs and divide the sum by 180 days to arrive at average
daily salary credit (ADSC);
(v) Multiply ADSC by 90%; and
(vi) Multiply the product by the number of days of confinement.

Note: Maternity Benefits (MB) v. Sickness Benefits (SB)

As to the 1st multiplier, MB’s multiplier is 100%; whereas, SB’s multiplier is 90%.

As to the 2nd multiplier, MB’s multiplier is 60/78 days; whereas, SB’s multiplier is
number of days confined.

1.5. Other Benefits

(a) Death Benefits

(b) Retirement Benefits

(i) Retirement benefits under R.A. 8282 are apart from the retirement benefits
under P.D. 442 (Masing & Sons Dev’t Corp. v. Gregorio Rogelio, G.R. No. 161787, 27 April
2011).
 (ii) Retirement benefits under the Pag-Ibig Fund Act are substitutes for retirement
benefits under P.D. 442 (Sec. 21). In the event Pag-Ibig pays less than what P.D. 442 requires,
the employer shall pay the deficiency.

(c) Pension and 13th Month Pension

1.6. Beneficiaries

(a) Primary Beneficiaries

(i) Spouses
(i.i) Legal; and
(i.ii) Living with the member.

(ii) Children (all kinds)

(ii.i) Below 21;
(ii.ii) Unmarried; and
(ii.iii) Unemployed (not gainfuly employed).

(b) Secondary Beneficiaries

Parents, who must be wholly dependent for support on the member.

(c) Order of Succession

(i) Primary beneficiaries;

(ii) Secondary beneficiaries;
(iii) Whoever is instituted as beneficiary;
(iv) Heirs (in accordance with the law on instestate succession); and
(v) The State.

(d) The Sygney Ruling: “Living with” is not a qualification for children.

Yolanda Sygney v. SSS

G.R. No. 173582, 28 January 2008

Robert’s legal wife Greta, with whom he had a child Robbie but who died early, left him to
cohabit with Roy. Thereafter, Robert fathered Rex and Raymond with Gracia. He again fathered two
children, this time with Gigi, who were fondly called Nic Nic and Bok Bok by their half-brothers. Later,
Robert died on top of Geraldine. In time, Greta surfaced to claim death benefits from the SSS which
disqualified her because, at the time of Robert’s death, she was not living with him. Next to surface was
Gracia who presented a marriage contract between her and Robert. However, the SSS disqualified her
also because the document was spurious. Armed with a waiver she secured from Greta, Gracia
returned to the SSS. However, she was still disqualified because the waiver was deemed void in view
of the prior disqualification of Greta. She then assisted Rex and Raymond in filing a similar claim.
However, her children were above 21 already; hence, they too were disqualified. At the end of the day,
the SSS granted the death pay to Nic Nic (15 years old and studying) and Bok Bok (13 years old and
studying too). The award was contested by the disqualified claimants on the ground that the
awardees were not living with their father at the time of his death. Decide. (2 %)

Answer

The award of death pay to Nic Nic and Bok Bok was proper.

For children, including illegitimate ones, the only qualifications are: (1) below 21; (2) unmarried;
and (3) not gainfully employed. “Living with” is a qualification for spouses but not for children. Hence, the
ground invoked to assail the award was misplaced.

(e) The Bartolome Ruling: Social security law does not distinguish between natural
parents and adoptive parents.
 Bernardina Bartolome v. SSS
G.R. No. 192531, 12 November 2014

Question (based on the case)

During his minority, Mario was adopted by Mr. Cabatbat. Before becoming of age, he lost his
adoptive father to lung cancer. Years later, he died on his job as a bank manager. His mother, Celia,
filed a claim with the SSS for death benefits. However, she was disqualified because of the adoption.
Decide. (2%)

Answer

The disqualification is baseless.

Social security law is non-discriminatory; hence, it does not set apart natural parents from
adoptive parents. When Mr. Cabatbat died during the minority of Mario, his death had the effect of
restoring parental authority to Celia. Hence, she could validly claim the benefit since Mario had no
primary beneficiaries.

Note: In the case, the natural parent was instituted as a beneficiary. But even if not instituted,
the death of the adoptive parent during the minority of the member was of consequence.

Comment:

If the death occured after minority, the institution should be stressed. What if there was no
institution? The Utmost Liberality Rule should be applied. After all, the purpose of social legislation is to
give and not to withhold compensation.

5.4. Modified Previous Bar Probem

Pascual, husband of Cheska and father of Tintin, was transferred from TI Clark to TI Baguio.
In his absence, his father supported his family, especially 6-year old Tintin. While in Baguio City,
Pascual fell in love with Clitty. They had a child whom they named Pascualito. After 2 years, he
returned to Pampanga to be welcomed home by his wife and two little girls, namely, Tintin and Fatfat.
Surprised, he asked his wife who the other child was. Cheska told him she was their second child and
that she had reported her to the SSS as his beneficiary already. After making serious calculations, he
was convinced that Fatfat was not his child. Hence, he banished Cheska and the two minors from the
family home for good. That night, Pascual had a heart attack. After two months, he died in Baguio City
in the arms of Clitty. Who are his beneficiaries?

Answer

The beneficiaries of Pascual are as follows:

1. As to his primary beneficiaries, they are Tintin who is his legitimate child
with Cheska; and Pascualito, his illegitimate child with Clitty. Fatfat is not his child; hence,
she is not a beneficiary.

As to Cheska, she was no longer living with him at the time of his death; hence, she
cannot be deemed his primary beneficiary although she is his legal wife. And as to Clitty, not
being his legal wife, she cannot be his beneficiary although living with him at the time of his
death.

2. As to secondary beneficiaries, the father of Pascual is not his secondary

beneficiary because he was not dependent for support on him. In fact, he was the one
supporting his family while he was away.

2
The Government Service Insurance System Act of 1997 (R.A. 8291)

2.1. Coverage. All government employees

(a) appointive or elective;

(b) not over 65; and
 (c) with basic salary.

Note: Four-Fold Test is used to determine EER.

Exclusions. Those paid honoraria/per diems only are not covered.

2.2. Benefits

(a) Disability/Death Benefits: Compensation Rules

(i) Caused by Disease

Rule: To be compensable, the disability or death must be caused by an AOO

(Arising Out Of) Disease. An AOO disease is a listed disease (Annex “A”, Amended
Rules on Employees’ Compensation).

If not listed, there is no disputable presumption of work-connection unlike under

the POEA-SEC. Hence, the claimant must prove work-connection outside Annex “A” with
substantial evidence by employing either Proximate Cause Theory or Increased Risk
Theory.

Proximate Cause Theory

Question: Is their a chain of causes, unbroken by any efficient intervening

cause (notorious negligence, attempt against the member’s life or that of another, or
intoxication) connecting the member’s performance of his work and his disability or
death?

Answer: Yes. The disability or death is compensable.

Increased Risk Theory

Question: Has performance by the member of his work increased his risk
of contracting the unlisted disease?

Answer: Yes. Compensable.

(ii) Caused by Injury

Rule: To be compensable, the disability or death must be caused by an ICO

(In the Course Of) injury. An ICO injury is one which is sustained at the member’s
place of work, while performing his assigned work; or elsewhere, as long as he is
performing an assigned work.

Note: Off-Premises Rules, infra.

(b) Other Benefits (DR SUDS)

3.2.1. Disability (supra)
3.2.2. Retirement
3.2.3. Sickness
3.2.4. Unemployment
3.2.5. Death (supra)
3.2.6. Separation

3
Amended Rules on Employee Compensation (AREC)

3.1. Continuing Act Rule (Resolution 3914-A)

Compensation claims used to be denied under the Going To-Coming From Rule by reason of lack
of proximity between place of work and place of contingency. Proximity is no longer a consideration under
Resolution 3914-A which presumes that the contingency (injury) could have only resulted from one’s having
to go to work, or his having to come from work. In other words, going to work and the injury are deemed as
 continuing acts, just as coming from work and injury are continuing acts. Hence, distances are not
measured anymore.

Exceptions & Illustrations:

(a) Unreasonable Diversion

Instead of going straight to work following his usual route, a member makes a side trip to
drop off his paramour. At the drop-off point, he is shot to death by his paramour’s husband.

(b) Unreasonable Departure

Instead of going straight home from work, a member joins a shabu session and gets
killed in an anti-drugs operation.

3.2. Marked Men Rule (Resolution 3908)

Claims by or on behalf of men in uniform used to be denied for the simple reason that their injuries
or deaths took place outside their official places of assignment. Under Resolution 3908, they are now
considered marked for liquidation; hence, it does not matter where they are killed. In fact, they are
deemed on 24-hour duty under the 24-Hour Duty Rule, unless on official leave (De La Rea Ruling).

3.3. No Reimbursement Rule (Resolution 14-07-20)

Should a member be presumed dead after four years and the corresponding benefit be paid, the
beneficiaries shall not be made to reimburse if he reappears.

3.4. Personal Comfort Doctrine (Resolution 93-08-0068)

Acts of self-ministration performed outside the assigned place of work, as long as performed
within the time and space limits of a member’s employment, will not bar EC claims. Hence, in a case
where a member cannot use any of the comfort rooms of the company for being occupied and, for this
reason, he has to do his thing behind a perimeter fence – where he gets injured - his compensation claim
cannot be denied on the ground that he is injured outside company premises.

Exceptions:

(a) Outside the time limit of employment.

If the member is on the 8:00 a.m. to 5:00 p.m. work shift and he gets injured at 7:00 p.m.,
the resulting disability or death is not compensable – unless required to render overtime work.

(b) Outside the space limit of employment.

If the injury is sustained inside a comfort room of SM which is 5 kilometers away from the
government office, the resulting disability or death is not compensable – unless expressly
instructed to go to SM.

3.5. Successive Disability Rule (Resolution 10-09-114)

The GSIS used to deduct benefits paid for temporary total disability (TTD) from benefits to be paid
should such disability become permanent partial disability (PPD). Under Resolution 14-07-20, no such
deduction shall be made.

3.6. Incidental Findings Rule (Resolution 10-05-65)

The denial of a claim for the reason that the disease complained of is not work-related is without
prejudice to compensation based on an incidental medical finding that the member is afflicted with other
work-related disease/s.

4
The Limited Portability Law (R.A. 7699)

Question
 What is limited, and what is portable, in the Limited Portability Law?

Answer

1. Portability. As one moves from one system (SSS/GSIS) to another (GSIS/SSS), he

carries with him: (a) his length of service; and (b) his contributions. As to length of service, he will be
allowed to totalize his service credits under SSS with his service credits under GSIS, infra. As to
contributions, they are his property which he carries with him wherever he goes. In Lledo v. Lledo, the SC
ordered the GSIS to return the personal contributions of a dismissed clerk of court (despite the forfeiture
rule) because they were Atty. Lledo’s property.

2. Limited. Totalization of service credits can only be availed of once, and only if a
member is disqualified from availing of a benefit (e.g., retirement benefit) by reason of lack of length of
service - and nothing else more.

Gamogamo v. PNOC
G.R. No. 141707, 7 May 2002

After 14 years with DOH, Dr. Gamogamo joined LUSTEVECO which was later absorbed by
PNOC Shipping & Transport Corp. Subsequently, PNOC floated a Manpower Reduction Program which
promised separation pay based on 2 months salary. Dr. Gamogamo applied for retrenchment but his
application was denied. As a result, he continued working for PNOC until he retired. Upon retirement,
he was paid retirement pay based on 1 month salary. Later, two of his former co-employees were
retrenched and paid separation pay based on 2 months salary. He then sued PNOC for full retirment
pay, arguing that his 14 years with DOH should have been totalized with his 17 years with
LUSTEVECO and PNOC as provided by the Limited Portability Law.

The money claim was dismissed.

The totalization provision of the Limited Portability Law has a limited purpose. It applies only
when a member is disqualified from availing of a benefit due to lack of length of service (Sec. 3, R.A.
7699). But in the case of Dr. Gamogamo, he had the requisite service credits (14 years) to avail of
GSIS retirement pay, i.e., if he has not yet availed thereof. Sec. 12 (old GSIS Act) qualified for
retirement pay a member with 3-15 years of service.

Questions Asked Already & Answers

1. What are the benefits under the Limited Portability Law?

1.1. Portability of both service credits and contributions; and

1.2. Tacking of creditable service.

2. How many times can service credits be tacked?

Once only.

XI

TOOLS FOR ANALYSIS

A
DEFINITIONS
(Read-to-Apply)

1
Field Personnel

Application: Ejusdem Generis; Taxi Driver & Butcher

1.1. For a worker paid on task basis to be excluded from the coverage of holiday pay (HP, Art. 94,
Labor Code) and service incentive leave (SIL, Art. 95, Labor Code), he must at the same be a field personnel, or
“one who regularly performs his work away from the place of business of his employer and whose work hours
cannot be determined with reasonable certainty.”

1.2. Reason: In the ORILCs for Arts. 94 and 95, the term “field personnel” is ahead of the term
“worker paid on task basis”. Hence, applying Ejusdem Generis, when a specific term (field personnel) precedes
a generic term (worker paid on task basis), the specific term is deemed as a qualifier, limiter or modifier of the
generic term. The long and short of it is that “worker paid on task basis” must at the same time be a “field personnel”
in order to be denied HP and SIL coverage.

1.3. Memory Tools:

1.3.1. An employee has no HP and SIL if he performs his “Task” in the “Field” (Task-paid
Worker + Field Personnel).

1.3.2. This same rule applies to an employee paid on purely commission basis. Hence,
Commissioner “F” will not get HP and SIL by force of Ejusdem Generis.

1.4. Applications

1.4.1. Taxi Driver (The R&E Transport Case)

A taxi driver is both a worker paid on task basis and a field personnel; hence, he is not
entitled to both HP and SIL.

1.4.2. Butcher (The David Case)

A butcher paid P700.00 per engagement, and working under the supervision of his
employer, is a worker paid on task basis. However, being supervised, he is not a field personnel.
Therefore, he is entitled to both HP and SIL.

2
Labor Dispute

Application: Reference to Labor Law Rule (The Halaguena Case)

2.1. Art. 219 (l) defines a labor dispute as “any controversy or matter concerning terms and conditions
of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate
relation of employer and employee.”

2.2. An issue arising from a labor dispute, when resolvable thru the application solely of Labor Law, is
for a labor tribunal to hear and resolve.

2.3. In inter-union and intra-union disputes, the disputants do not stand in the proximate relation of
employer and employee. However, these disputes are for labor tribunals to hear and resolve because they are labor
disputes.

3
Employer

Application: Carag v. NLRC, Sec. 31, Corporation Code

3.1. An employer is one acting in the interest of an employer (Art. 219(e), Labor Code), e.g., corporate
officer.

3.2. In determining his personal liability, however, Sec. 31 of the Corporation Code is the law to apply
and not Art. 219(e).
 3.3. Hence, the questions to ask are: (a) Has he participated in the illegality?; (b) Has he ratified the
illegal act?; and (c) Has he acted with gross negligence as to cause the legal injury complained of?

4
Employee

Application: Labor Relations Rights, D.O. 40-03; Forum of Appropriate Jurisdiction

4.1. An employee includes one whose work has ceased under these conditions: (a) his termination is
by reason of ULP or current labor dispute; (b) he has not yet found a substantially equivalent and regular position
(Art. 219, Labor Code); and (c) he has contested his dismissal before a forum of appropriate jurisdiction (D.O. 40-
03).

4.2. His rights are (a) right to join a union; (b) right to vote in a CE; and (c) right to participate in a
strike.

4.3. Absent any of the 3 requisites, a dismissed employee should be considered counted among the
ineligible voters in CEs.

4.4. Other ineligibles are: non-employees, non-CBU members, new hires who are CBU members for
less than 3 months, confidential employees, legal secretaries, and corporate secretaries.

5
Wage

Application: Talent fee; Double Indemnity Law

5.1. Remuneration capable of being expressed in terms of money, however designated, whether on a
fixed basis or based on result of work, payable under a contract of employment for work done or to be done or
services rendered or to be rendered, including the reasonable value of facilities customarily provided by the employer
(Art. 97, Labor Code).

5.2. Stipulation in an engagement contract designating compensation as talent fees, where the amount
approximates the amount of wage, does not bar employer-employee relationship. However designated, the
compensation is a compensation for an employee’s work or service (The Lagend Hotel Manila Case).

5.3. Use of the term salaries on payslips, of itself, does not indicate employer-employee relationship
(The Glaucoma Foundation, Inc. Case).

5.4. The Double Indemnity Law applies to wages only (The Sapio Case); hence, 13th month pay and
other mandatory benefits cannot be doubled.

6
Wage Distortion

Application: Wage Distortion Adjustment; Pre-empted Wage Distortion

6.1. Wage distortion is the elimination or serious compression of the wage gap/s between 2 or
more wage groups - where said wage gap/s are the outcome of a wage structure adopted by the employer
based on rational considerations - as a result of a wage law, wage order, merger of companies, or CBA
negotiations.

6.2. There is no wage distortion if:

6.2.1. There is only 1 wage group involved because a wage distortion is inter-wage group.

6.2.2. There are 2 wage regions involved because a wage distortion is intra-wage region.
 6.2.3. The cause of the elimination or compression is a promotion because it is not a
recognized cause (The NFL Case).

6.2.4. The elimination about to be occasioned by law does not take place because the
elimination is prevented by the retroactivity of the economic provisions of a CBA (The PIMI Case).

7
Night Worker

Application: Insubordination; Night Shifter

7.1. Night Worker (NW) v. Night Shifter (NS)

NW is one who renders not less than 7 consecutive hours of work between 10:00 p.m. and 6:00 a.m.
the following day (D.O. 119-12; R.A. 10151); whereas, a NS is one who renders work between 10:00 p.m. and 6:00
a.m. the following day for less than 7 consecutive hours (implied definition).

7.2. Among the rights of an employee being assigned to night work is the right to be medically cleared
first; hence, this right cannot be invoked by an NS.

7.3. Therefore, refusal to render 2 hours of nightshift when required on justifiable grounds, e.g., to
cover for a late reliever, for want of a medical clearance can be a ground for disciplinary action by reason of
insubordination.

8
Red-Circle Position

Application: Redundancy

8.1. Red-circle position is a redundant position.

8.2. When an employer’s manpower is in excess of the actual manpower requirement of his business,
he can redundate red-circle positions and dissociate their occupants.

9
Preventive Retrenchment

Application: Expected Losses

9.1. Redundancy based on expected losses is a preventive retrenchment.

9.2. The expected losses must be sufficiently supported.

10
Lucrum Cessans

Application: Computation

10.1 . It means backwages.

10.2. The components of lucrum cessans are salaries, including regular allowances, and other
benefits or their monetary equivalent.
10.3. Hence, the base figure shall consist of the last salary and regular allowances (Sadac Ruling,
based on the Paramount Case).

11
Secondment
 Application: Theory of Secondment

11.1. A secondment is a continuing employment status despite movement from one employer to another.
In a secondment, the sending company does not cease to be the employer of the employee whose means and
methods are temporarily controlled by the host company.

11.2. One who enjoys a secondment does not suffer from a break in the period of his employment;
hence, his years of service are uninterrupted as to be able to claim retirement pay.

11.3. If the movement is permanent, as when the transferred employee prevents his recall by accepting
the job offer of the other company, the period of employment is deemed cut; hence, years of service stop.

12
Piecerater

Application: Sec. 8(b), Rule IV, Bk III, ORILC; Holiday Pay

12.1. One paid a fixed compensation per unit or piece of work he produces, without regard to the number
of hours used by him to produce his work.

12.2. Therefore, he is a worker paid by result.

12.3. Despite Art. 82, which excludes him from the coverage of holiday pay being a worker paid by
result, Sec. 8(b), Rule IV, Bk III, ORILC, entitles him to holiday pay.

13
Self-Descriptive Position

Application: Failure to Qualify & Nominal Damages

13.1 .A self-descriptive position is one which places its occupant on automatic notice of acts he ought to
do and ought not to do, e.g., a taxi driver ought to know that he should follow all traffic rules.

13.2. In dismissing a probationary employee for failure to qualify, the employer is not required to serve
notice as long as he has made known his regularization standards upon engagement. As an exception to this
exception, even if he has not made known said standards, he can dismiss his probationary employee sans notice if
the latter occupies a self-descriptive position.

13.3. Nominal damages shall be awarded, therefore, if the position is not self-descriptive, e.g., call center
agent, and the employer has unceremoniously dismissed a probationary employee without having informed him of
his regularization standards upon engagement.

14
Confidential Employee

Application: Right to vote in a CE

14.1. A confidential employee reports to, or assists another employee who possesses labor relations
information, e.g., the employer’s plan to relocate/ plan to redundate the positions of union officers, and he has
access to that information as a necessary consequence of his fiduciary position.

14.2. The relationship must be fiduciary, e.g., company in-house counsel and legal secretary.

14.3. The access to the information must be inherent in the assisting emloyee’s position; hence,
accidental access will not make one a confidential employee.
 14.4. A confidential employee, being a managerial employee by necessary implication, cannot join a
union.

14.5. A confidential employee is different from one occupying a position of trust and confidence. Hence,
a rank-and-filer given custody of company funds and property as to hold a position of trust and confidence is not
disqualified.

15
Double Jeopardy

Application: Illegal Recruitment & SS Violation

15.1. What the law prohibits is double trial and double conviction for identical crimes. Non-remittance of
deducted SSS contributions is a felony under the RPC. At the same time, it is an offense under R.A. 8282.
Therefore, there is no double jeopardy in a simultaneous prosecution under both laws.

15.2. Same applies to prosecution for illegal recruitment under R.A. 10022 and for estafa under the
RPC.

16
Forum Non-Conveniens

Application: Exercise of jurisdiction

16.1. A local court has jurisdiction; however

16.2. It is not a convenient court to bring a case to because, among others, even if it can render a vaid
judgment, the same cannot be effectively enforced due to a foreign element.

16.3. As a result, jurisdiction should not be exercised in favor of the convenient forum.

17
Equity Jurisdiction

Application: Error of Judgment

17.1. Equity jurisdiction, in one sense, is the power of the CA as a Rule 65 court to correct error of
judgment. It is exercisable in a case where the factual findings of the NLRC are opposed to those of the LA. When
the CA makes a finding opposed to that of the NLRC, the SC can also exercise equity jurisdiction even if, as a rule it
is not a trier of facts.

17.2. When the factual findings of the CA and the NLRC are uniform, i.e., the CA affirms the NLRC, but
the NLRC’s findings are opposed to the LA’s, the SC can review the evidence in the exercise of its equity jurisdiction.

18
Judicial Courtesy

Application: Enforcement of judgments

18.1. Judicial courtesy requires that proceedings below should be put on hold while the appellate court is
in the process of determining an appeal.

18.2. However, even if a Rule 65 petition is pending, the LA can enforce the final judgment of the NLRC,
except if the employer presents to him a TRO enjoining enforcement of judgment.

18.3. The employer cannot invoke judicial courtesy because the present Sec. 7, Rule 65 of the Rules
of Court requires him to enforce final judgments within 10 days from entry under pain of administrative sanction.
19
Novation

Application: Employer-Employee Relationship (The Villarama case)

19.1. There is novation if two contracts generating obligations cannot stand side by side on material
points.

19.2. An employment contract between a jeepney owner and his driver overtaken by a kasunduan
whereby the former undertakes to execute a deed of absolute sale over his jeepney in favour of the latter upon full
payment of its price with his boundaries (boundary-hulog system) is not deemed novated by said kasunduan which
is in the nature of a contract to sell.

19.3. Therefore, the parties will remain related as employer and employee, not vendor and vendee.

20
Workplace Democracy

Application: Right to participate; 4 pillars of labor relations (Prof. Azucena)

20.1. Workplace democracy means participation (Sec. 3, Art. XIII, Constitution).

20.2. It is one of the 4 pillars of labor relations.

20.3. The 3 others are: productivity, education of workers and re-orientation of unionism, and business
success.

21
Non-Compete Clause

Application: Confidentiality Clause, Non-solicitation Clause, Non-poaching Clause

21.1. An undertaking not to join the employ of a competitor company within a given period of time after
separation.

21.2. Requisites
(a) limted as to time;
(b) limited as to trade;
(c) limited as to place.
21.3. A counterclaim based on violation of a non-cmpete clause is a post-employent claim; hence, the
NLRC has no jurisdiction.

21.4. Exception

If the non-compete clause is made to apply during and after employment and it prohibits joining a
competitor company as an employee, agent or consultant. Hence, if while employed, the employee becomes an
agent or consultant of a competitor company during the period of prohibition, his employer’s claim for liquidated
damages will no longer be a post-employment claim.

22
Contract of Adhesion

Application: Dumpit-Murillo Case

22.1. One prepared entirely by the employer and in which the employee’s only participation is the affixing
of his signature.
 22.2. If there are several fixed-term employment contracts, involving the same nature of work (vital,
indispensable, necessary) and separated by short intervals, they shall be struck down as a scheme to prevent
regularization.

22.3. In Brent, there was a one-time 4-year contract; hence, the SC applied Art. 1306, NCC. Brent will
not apply if there are several employment contracts which are contracts of adhesion.

B
DISTINCTIONS

1. Rule 65, Rules of Court v. Rule XII, 2011 NLRC Rules of Procedure, as amended.

1.1. As to Reglementary Period. A Rule 65 petition must be filed in 60 calendar days; whereas, a
Rule XII petition must be filed in 10 calendar days.

1.2. As to Grounds. A Rule 65 petition is gounded on grave abuse of discretion; whereas, a Rule XII
petition is ancored on different grounds, viz.: prima facie abuse of discretion by the LA; serious errors in the findings
of facts which, if not corrected, would casue grave or irreparable damage or injury; FAME; pure questions of law;
and injustice will result if subject order or resolution is not corrected.

2. ULP: Violation of Duty to Bargain v. Violation of CBA

2.1. Under Art. 259. Duty to bargain is violated when the company:

2.1.1. Refuses, but not when it only fails, to bargain collectively with the EBR or SEBA as when
it refuses to reply to the CB demand within 10 days from receipt; or evades its duty to bargain over
mandatory subjects. If the subject is non-mandatory, e.g., color of uniform (or the subject of the demand
has no CBA history) , the evasion will not amount to ULP.

2.1.2. On the other hand, the CBA is violated if its economic provisions are violated and the
violation is gross and flagrant.

2.2. Under Art. 260. It is unimaginable for an EBR or SEBA not to want to collectively bargain.
Hence, refusal to collectively bargain under Art. 260 is out of the question. And why would it violate the economic
provisions when it should want them enforced? If the EBR does not want to bargain over a no strike clause then
perhaps it would commit ULP based on evasion of a mandatory subject (since the clause has always been part of
previous CBAs). But in real life, a no-strike clause always comes with a no-lockout clause. With this, it is safe to
expect the examiner not to give a question in this area.

3. Cooling-Off Period v. Strike Ban

3.1. As to period, cooling-off period is 30-15-0 days; whereas, strike ban is 7 days.

3.2. As to point of reckoning, the 30-15-0 is counted from date of service of the strike notice; whereas,
the 7 is counted from date of submission to the NCMB of the strike vote result.

What if ?:

Based on 3.2, supra, the 7 should run separatey from the 30-15-0. But if the strike vote result is
submitted within 30-15 (assuming this happens), the cooling-off period stops; hence, the strike ban can
begin. In a manner of speaking, the 7 runs with the 30-15. But if the 30-15 days are exceeded, the 7 must
run independently because these periods are separate mandatory requirements. Of course, where the
cooling-off period is 0 then the 7 will definitely run separately from 0. In this regard, there can be no instant
strike even if the ground were union busting. Notably, examiners are afraid to ask this. See the NCMB
Primer on Strike, Picketing and Lockout which provides that the 2 periods run separately.
4. Disputable Presumption: Work-Connection v. Compensability

For diseases not listed under Sec. 32-A of the POEA-SEC, they are disputably presumed to be work-
connected (1st requisite). But to prove compensability, the claimant must prove that the unlisted disease was
contracted during the period of the seafarer’s contract (2nd requisite) as follows: (a) prove that the seafarer’s
work involves the risk factors of the unlisted disease; (b) prove that the seafarer was exposed to said risks; (c)
prove that the period of his exposure was sufficient for him to contract the disease; and (d) prove that he contracted
it not by reason of his notorious negligence.

Note: Letters “b” and “c” imply that the disease was contracted during the period of the seafarer’s
employment (2nd requisite).

5. Backwages v. Reinstatement Wages

Backwages are replacement wages awarded as a consequence of a finding of illegal dismissal; whereas,
reinstatement wages are replacement wages awarded by reason of the employer’s refusal to reinstate during the
period of his appeal. Backwages are compted from the time compensation is withheld to actual reinstatement or
finality of judgment; whereas, reinstatement wages are computed from the lapse of the 10-day period to reinstate to
date of reversal of the reinstatement order.

1. NLRC: Filing of Appeal v. Perfection of Appeal

When, within 10 days, the employer files his appeal memorandum and motion to reduce appeal bond, he is
deemed to have timely filed his appeal; however, to perfect it, he must comply with the adverse resolution of his
motion to reduce appeal bond by posting the deficiency.

2. Visitorial Power (VP) v. Adjudicatory Power (AP)

2.1. As to seat of power, VP is given to both SOLE and RD; whereas, AP is given to the RD only.

7.2. As to extent of power, VP covers money claims and health & safety issues; whereas, AP
covers simple money claims only.

7.3. As to acquisition of jurisdiction, VP jurisdiction is acquired thru routine inspection or complaint

inspection (and service of notice of inspection); whereas, AP jurisdiction is acquired thru a complaint.

7.4. As to 5 K jurisdictional threshold, it applies to AP but not to VP.

7.5. As to ouster of jurisdiction, it applies to VP but not to AP.

7.6. As to power to suspend/close, it is available in the exercise of VP power but not of AP power.

7.7. As to appeal period, VP orders are appealable to the SOLE in 10 days; whereas, AP decisions are
appealable to the NLRC in 5 days only.

7.8. As to motion to reduce appeal bond, it is available when appealing an AP decision but not a VP
order (prohibited by D.O. 183, s. 2017).

8. License v. Authority

8.1. A recruitment license has 2 characteristics: it is place-specific and it is prospective. As to the

first, the authorized place of operation per license excludes all other places; unless, the licensee procures an
authority to recruit elsewhere.

8.2. If the licensee is a corporate entity, its license is limited to it; hence, unless an authority is given
by the POEA to third persons (natural) acting on its behalf, illegal recruitment will be committed by them.

9. Overseas Recruitment v. Local Recruitment (D.O. 141-14)

 9.1. R.A. 10022 applies to overseas recruitment; whereas, D.O. 141-14 applies to local employment;

9.2. The additional prohibited acts under R.A. 10022 are not found under D.O. 141-14. Since the D.O.
covers local employment, these prohibited acts under R.A. 10022 have no application: failure to deploy and
withholding of travel documents.

10. Learner (L) v. Apprentice (A) : (PONDACA QC)

10.1. Period. L is 3 months; whereas, A is 6 months.

10.2. Obligation to regularize. Employer of L is imposed the obligation; whereas, employer of A is not.

10.3. Nature of work. L performs semi-skilled work; whereas, A performs highy technical work.

10.4. Dismissal, effect of illegal. ID of L makes him a regular employee; whereas, ID of A does
not.

10.5. Approval by TESDA. There can be an L even without approval; whereas, there can only be an A
with approval.

10.6. Complaint, where filed. L files with the LA; whereas, A files with the RD subject to exhaustion
of his PAC remedy.

10.7. Appeal, where taken. L takes it to the NLRC in 10 days; whereas, A takes it to the SOLE in 5
days only.

10.8. Qualifications.

10.9. Compensation.

11. Contributory Retirement Plan v. Non-Contributory Retirement Plan (Art. 1378, NCC)

A contributory retirement plan is participated in by both employer and employee thru their contributions;
whereas, a non-contributory retirement plan is funded exclusively by the employer. Both are contracts. As to the
latter, it is a gratuitous contract. Hence, it is covered by Art. 1378 of the New Civil Code (Principle of Least
Transmission of Rights).

12. No Strike Clause v. Compulsory Arbitration Clause

The first is the twin-clause of a No Lockout Clause; whereas, the second stands alone and requires even
strikable disputes to be submitted to voluntary arbitration. The distinction between economic strike and ULP strike is
observed only when determining whether or not to apply the Agreement Test. Hence, if the clause is a compulsory
arbitration clause, the type of strike is immaterial.

13. Economic Strike v. ULP Strike

13.1. In an economic strike:

13.1.1. The strike notice shall be served by the EBR;

13.1.2. The ground must be collective bargaining deadlock;
13.1.3. The cooling-off period is 30 days; and
13.1.4. Backwages do not accrue during the period of the strike even if valid.

13.2. In a ULP strike:

 13.2.1.The strike notice shall be served by the EBR; but, in the event it refuses to, the victim union
may serve it;
13.2.2. The ground must be ULP or union busting;
13.2.3. The cooling-off period is 15 days, or 0 day (union-busting);
13.2.4. Backwages accrue during the period of the strike if valid.

14. Retrenchment v. Redundancy

14.1. As to validty test, retrenchment requires evidence of substantial losses (actual or imminent);
whereas, redundancy does not require such evidence – unless it is in the nature of preventive retrenchment;

14.2. As to evidence, retrenchment must be supported with financial statements duly certified by an
independent external auditor; whereas, redundancy must be supported with a feasibility study approved by
management;

14.3. As to separation pay, retrenchment pay is based on ½ month salary; whereas, redundancy pay
is based on 1 month salary.

15. Sickness Allowance (POEA-SEC) v. Sickness Benefit (SSS)

Sickness allowance is an income replacement payable by the employer to a seafarer from date of medical
repatriation to date: (a) it is determined that his disability is not work-connected; (b) his disability is declared
resolved; or (c) his disability continues up to 240 days (in the event of a justifiable extension of medical treatment).
In contrast, sickness benefit is an income replacement payable by the SSS to a sick member from date of
confinement to date of recovery from illness or injury.

16. Four-Fold Test v. Two-Fold Test

The Four-Fold Test, the heart of which is the Control Test, determines employer-employee relationship;
whereas, the Two-Fold Test determines liability for reinstatement wages.

C
ENUMERATIONS

1. Types of Homework

1.1. Homework thru Delivery of GAM. Goods, articles or materials (GAM) are delivered, directly or
indirectly thru an agent, to a homeworker for purposes of fabrication or processing. Once the
finished products are ready, it becomes the duty of the worker to deliver them to the principal or to
distribute them according to the latter’s instructions – subject to compensation in both instances.

1.2. Homework thru Sale of GAM. Goods, articles, or materials (GAM) are sold to a homeworker for
fabrication or processing. Once the finished products are ready, the worker will sell them to the
principal.

2. 4 Pillars of Labor Relations (Prof. Azucena)

2.1. Workplace democracy;

2.2. Business success;
2.3. Productivity; and
2.4. Workers’ education and reorientation of unionism.

3. Salient Features of the Protection to Labor Provision of the 1987 Const’n (1998 Bar)

3.1. Extent:
Full protection to labor.
3.2. Coverage:
Local and overseas;
Organized and unorganized labor.
3.3. Principles:
Old: Full employment; equality of employment opportunities for all;
 New: Participation; shared-responsibility; just share in the fruits of production; and
preferential use of voluntary modes of disputes settlement.
3.4. Guarantees:
Individual: Security of tenure; living wage; just and humane conditions; self-
organization (it is an individual right per Art. 292, Labor Code);
Collective: Collective bargaining; collective negotiations; peaceful concerted
activities, including the right to strike in accordance with law.

4. Some Unlisted Diseases vis-a-vis Sec. 32-A, POEA-SEC

4.1. Cardiovacular disease;

4.2. Essential hypertension; hypertensive cardio-vascular disease;
4.3. Lung cancer; cancer of the bladder; cancer of the throat;
4.4. TB;
4.5. Diabetes milletus;
4.6. Hemolytic Anemia;
4.7. Myocardial Infarction;
4.8. Hyperthyroidism

Note: If working conditions aggravate these diseases, the resulting disability or death becomes
compensable. Working conditions include perils of the sea, exposure to the elements, on-board diet, nature of work
performed, and related conditions. For essential hypertension, it must impair the functions of a body organ.

5. Requisites for Compensability vis-vis Unlisted Diseases

5.1. Evidence that the work involves the risks factors of the disease;
5.2. Evidence that the seafarer was exposed to said risks;
5.3. Evidence that the period of his exposure to said risks was sufficient for him to contract the
unlisted disease; and
5.4. Evidence that the unlisted disease was not contracted by reason of his notorious negligence.

6. Valid Waiver

6.1. It represents a fair and reasonable compromise;

6.2. It is for an adequate consideration;
6.3. It is in writing and signed by the employee;
6.4. It is witnessed by 2 persons;
6.5. If practicable, it must contain the amount of the original claim and the amount of the compromise;
and
6.6. It is notarized by the hearing officer, or other authorized persons.

7. Promissory Estoppel

7.1. A promise is made by the employer;

7.2. It is likely to induce belief or inaction on the part of the employee;
7.3. The employee believes in said promise;
7.4. The employee’s reliance on the promise, if taken against him, will unduly prejudice him; therefore,
the employer must be bound to his promise.

Note: Promise of payment resulting in the non-filing of the money claim within 3 years should be
taken against the employer based on promissory estoppel (ASI v. Alabanza).

8. Authorized Causes

8.1. Redundancy (procedural requisites re-stated)

8.1.1. Feasibility study (FS);
8.1.2. FS is duly approved by management ;
8.1.3. FS shows the new staffing pattern (SP); and
8.1.4. The SP shows that the reduced manpower can meet the same business target.

8.2. Retrenchment ( memorize the guidelines)

9. Run-off Election

9.1. Valid CE;

 9.2. 3 or more participants, including No Union;
9.3. None got majority vote based on valid votes;
9.4. Total votes garnered by the participants, excluding No Union, is at least 50% of the ballots cast;
and
9.5. No election contest that might materially alter the result of the CE.

10. Strike Procedure

10.1. Strike notice;

10.2. Cooling-off period;
10.3. Strike vote notice;
10.4. Strike vote;
10.5. Submission of strike vote result; and
10.6. Strike ban.

11. Retirement Benefits (Labor Code)

11.1. 60/65 years old (50/60 for underground workers);

11.2. at least 5 years of service;
11.3. more than 10 employees (11 and above);
11.4. no CBA or retirement plan.

12. Grounds for Appeal (LA to NLRC)

12.1. prima facie evidence of abuse of discretion;

12.2. decision is secured thru fraud, coercion, or graft and corruption;
12.3. pure questions of law; and
12.4. serious errors in the findings of fact which, if not corrected, will cause irreparable damage or injury
to the appellant.

Note: The appeal memorandum need not exactly parrot these grounds. This would be a
sufficient ground: “The appealed decision is contrary to both evidence and law.”

13. Petition for Extraordinary Remedy: Grounds

13.1. prima facie evidence of abuse of discretion;

13.2. serious in findings of fact which, if not corrected, will cause irreparable damage or injury to the
petitioner;
13.3. FAME;
13.4. questions of law; and
13.5. order or resolution will cause injustice if not rectified.

Note: Despite 13.2., Rule XII is not a substitute for an appeal. It is more of a post-judgment
remedy.

14. Exceptions to 1 MR Rule

14.1. Patent nullity of decision;

14.2. Issues raised in Rule 65 petition have been passed upon by the NLRC, or are the same as those
resolved by it;
14.3. Urgent necessity;
14.4. MR would be useless under the circumstances;
14.5. Deprivation of due process and there is extreme urgency for relief;
14.6. Nullity of proceedings due to violtion of due process; or
14.7. Pure questions of law or public interest is involved.

15. Instances when Third Physician Rule does not apply:

15.1. The company-designated physician certifies that the disability is no work-connected;

15.2. The company-designated physician exceeds the 120/240 days without an assessment; and
15.3. The company-designated physician does not disclose his assessment to the seafarer.

16. Grounds for Disregarding Third Medical Opinion

16.1. Evident partiality;

16.2. Corruption;
16.3. Fraud and other undue means;
 16.4. Lack of basis to support the assessment; and
16.5. Opinion is contrary to law and jurisprudence.

17. Non-Grounds for CR Cancellation

17.1. Mixed-union membership;

17.2. Dual unionism;
17.3. Old FAMECAD Grounds under the old Art. 239, Labor Code, except FM:
17.3.1. A - Acting as cabo
17.3.2. E - Entering into sweetheart CBA
17.3.3. C - Check-off without written consent
17.3.4. A - Accepting attorney’s fees
17.3.5. D - Documents/lists not submitted

Note: F is Fraud; M is misrepresentation. The old grounds, although no longer grounds for
cancellation, may amount to ULP.

18. Art. 259 ULPs

18.1. CIR Acts (Coercion, Interference & Restraint)

18.2. Violation of
18.4.1. duty to bargain; or
18.4.2. CBA
18.3. Acts of Reprisal
18.4. Yellow Dog Practice

19. Art. 260 ULPs

19.1. Acts against the employer;

19.2. Acts against a union member;
19.3. Acts against the union membership; and
19.4. Violation of
(a) duty to bargain
(b) CBA

20. Registration Requirements: Registration fee, Plus

20.1. Workers’ Association (NaMin FiCon)

Na - Name of LO, etc.

Min - Minutes , etc.
Fi - Financial reports
Con - CBL

20.2. Independent Union (NaMin NamAn Con 20%)

Na - Name of LO, etc.

Min - Minutes, etc.
Nam - Name of members (20% of CBU)
An - Annual financial reports (1 year existence)
Con - CBL
20% - List of members comprising at least 20% of the CBU membership.

20.3. Federations & National Unions (NaMin NamAn ResCon)

Na - Name of LO, etc.

Min - Minutes
Nam - Names of companies where it operates
An - Annual financial reports (1 year in existence)
Res - Resolution of affiliation
Con - CBL

D
PREREQUISITES

1. Petition for Certification Election

 1.1. Formal Validity of Petition
(a) In writing
(b) Signed
(c) Verified

1.2. Substantial Validity of Petition

(a) Statement that the petitioner is an LLO (attach CR);
(b) Description of the CBU to be represented (e.g., R-n-F CBU);
(c) Statement that the CE is not barred (freedom period has set in; CB has not been
commenced by the EBR within 1 year from last certification; or the issue/s obtaining are not the subject of
mediation or valid notice of strike); and
(e) Statement that majority of CBU members support it.

1.3. Appropriate CBU: Appropriateness Tests

(a) Globe Doctrine
(b) Mutuality of Interest Principle
(c) CBA History
(d) Employment History

2. CE Bars

2.1. Contract Bar

Requisite: The CBA must be registered.

Exceptions:

2.1.1.
2.1.2.
2.1.3.
2.1.4.

2.2. Certification Year Bar

The EBR must commence CB and sustain it within 12 months from date of certification.

2.3. Deadlock Bar

The CE will not have the effect of resolving an issue submitted to mediation or arbitration, or an
issue subject of a valid notice of strike.

3. CE Protest

3.1. Challenged votes must be placed inside envelopes on which must be written the name of the
challenger, the name of the voter, and the ground for protest; and

3.2. The protest must be formalized within 5 days from close of election.

4. Initiation of CE Proceedings

4.1. By petition of an EBR or SEBA in both organized and unorganized establishments; or by the
employer if called upon to bargain collectively in an unorganized establishment; or

4.2. By referral under D.O. 40-1-15, if a SEBA request is made but there are 2 or more unions in an
unorganized establishment.

5. Crew Claims (Seafarers)

5.1. The seafarer

6.1.1. must report within 3 days for post-medical examination; if not, his compensation will be
forfeited;

6.1.2. must submit to medical examination; if not, his claim will be barred by abandonment of
treatment;
 6.1.3. must discharge his duty of self-protection; if not, his claim will be barred by notorious
negligence;

6.1.4. must disclose the second medical opinion; if not, the first medical opinion will be
controlling;

6.1.5. must avail of the dispute resolution mechanism before filing his complaint; if not, it will be
dismissed for lack of cause of action;

6.1.6. must undergo SEnA proceedings; if not, his complaint will not be accepted.

5.2. The Company- Designated Physician

5.2.1. Within 120 days from referral, he must certify that the disability is not work-related; he has
resolved it; or he must assign it a grade; if not, the disability becomes total and permanent after 120 days;

5.2.2. If he extends the 120 days, he must justify it; if not, permanent disability shall be deemed
to have set in after 120 days;

5.2.3. His medical assessment must be final and categorical; if not, it will not be binding;

6.2.4. He must support his medical opinion with the results of laboratory tests, and prolonged
medical management; if not, the second medical opinion will be controlling.

6. Apprentices

An apprentice, seeking to vindicate the violation of his rights under the apprenticeship agreement before the
RD, must first:

7.1. Ventilate his cause before the Plant Apprenticeship Committee (PAC); and
7.2. Undergo SEnA proceedings.

7. Multi-Employer Bargaining

There must be one EBR/SEBA per employer.

9. Perfection of Appeal (Appeal Bond)

9.1. Employee Appellant

9.1.1. Appeal memorandum; and
9.1.2. Docket and research fees.

9.2. Employer Appellant

9.2.1. Appeal memorandum;
9.2.2. Appeal bond; and
9.2.3. Docket and research fees.

9.3. Motion to Reduce Appeal Bond

9.3.1. Filed within 10 days;
9.3.2. Meritorious ground/s; and
9.3.3. Accompanying bond (10% of monetary award).

9.4. Grounds for Appeal

9.4.1. In general, as worded by law;
9.4.2. As exception, worded in substantially similar manner.

10. Holiday Pay Entitlement

10.1. General Rule: All employees in all establishments, whether for profit or not.

10.2. Exception: MOM GF WPD

10.3. Exception to Exception:

10.3.1. Workers paid on task basis who are at the same time field personnel; and
 10.3.2. Workers paid on purely commission basis who are at the same time field personnel.

10.4. Exception to Exception to Exception:

The worker paid on task basis or on purely commission basis (who is at the same time a field
personnel) is the 9th employee of his employer who is engaged in retail or service business.

11. Payment of Replacement Wages (Art. 128, Labor Code)

11.1. The closure or suspension resuted in loss of wages; and

11.2. The order was issued by the DOLE-RD (not other government agencies).

12. Ouster of Jurisdiction (Art. 128, Labor Code)

12.1. Issue was not considered during summary inspection;

12.2. Issue is grounded on documentary evidence;
12.3. Documentary evidence was not verifiable in the course of summary inspection.

13. Improper Venue: How Challenged

13.1. Motion to dismiss based on improper venue; and

13.2. Filed before the first mediation conference before the LA.

14. Writ of Habeas Data

14.1. The respondent is engaged in collecting and storing data;

14.2. There is threat to the safety, privacy of the petitioner;
14.3. Property or commercial interest is not sought to be protected;

D
FALLBACK PRINCIPLES

Social Legislation

1. Reasonable Nexus Rule. Absence from place of assignment must have reasonable connection
to presence at place of contingency in order for the resulting disability or death to be compensable.

What makes the connection between absence from place of work and presence at place of contingency
reasonable (read as justifiable)?

1.1. A night pass to travel (The Honoguin Case);

1.2. 24-hour duty (The Nitura Case);
1.3. Performance of peace-keeping mission (The Alvaran Case); and
1.4. Reliable information resulting in change of route (The Rogrin Case).

Note:

There is no reasonable connection in performance of “purely personal mission” (The Alegre Case).

2. Proximate Cause Theory (The Belarmino Case). Performance of work and disability or death
must be connected by a chain of causes unbroken by notorious negligence, habitual intoxication or intentional
attempt against the member’s life or that of another.

3. Increased Risk Theory (The Garupa Case). Performance by the member of his work has
increased his risk of contracting the unlisted disease.

4. Utmost Liberality Rule (The Rogrin Case). The purpose of social legislation is to give and not to
withhold compensation; hence, doubts must be resolved in favor of the member.

5. Principle of Unjust Enrichment (The Lledo Case). The GSIS must return the personal
contributions of a dismissed clerk of court, which are his personal property; otherwise, it will be enriched at his
expense.
Labor Standards Law

1. Operative Fact Doctrine. A void law or rule is valid and will continue to produce legal effects until
nullified).

2. Distinct Impression Rule (Pp v. Goce; Darvin v. CA). Respondent must have misrepresented
his authority, ability, or influence to procure employment, reason the recruit parted with his money.

3. Principle of Total Insulation. The buying corporation is totally insulated from the liabilities of the
selling corporation to its employees.

2.3. Basis: Principle of Separate Legal Personalities

2.4. Exceptions:

3.2.1. Principle of Merger of Legal Personalities

3.2.2. Instrumentality Rule
3.2.3. Principle of Unaltered Responsibility
3.2.4. Principle of Piercing the Veil of Corporate Fiction
3.2.5. Merger of Companies

4. Theory of Imputed Knowledge (The Sunace Case)

Proper Application: Knowledge of the agent, by reason of his agency, is knowledge of his principal.

Improper Application (reverse order): Knowledge of the foreign employer of an extension contract
executed abroad without POEA approval is knowledge of its local agent; hence, the latter cannot escape solidary
liability arising from violations of that second contract despite its allegation that it was not aware thereof, nor had it
consented thereto; and despite its invocation of the rule that his solidary liability arises only from violations of the
POEA-approved contract. In the Sunace Case, the Supreme Court told the LA, NLRC and CA that they erroneously
applied the theory in the reverse order. To stress, the Theory of Imputed Knowledge has it that knowledge of the
agent, on account of his agency, is knowledge of his principal – not the other way around.

5. Principle of Unjust Enrichment (The Wallem Maritime Case). Even absent judicial order of
restitution, the LA must order restitution; otherwise, the seafarer would be enriched at his employer’s expense.

Labor Relations Law

1. Principle of the Necessitous Person (Orchard Golf & Country Club Case). A necessitous
person is not a free person. Left with no option except to continue working in a state of demotion (which was an
over-punishment for the same offense), the demoted employee is deemed constructvely dismissed.

2. Principle of Equity of the Incumbent. All existing federations and national unions, possessing
all the qualifications and none of the disqualifications of an LLO, shall continue to maintain their existing affiliates
regardless of their location and industry to which they belong (Art. 249, Labor Code). In case of dissociation,
affiliates are not equired to observe the one industry one union rule (E.O. 111).

3. Principle of the Least Transmission of Rights (Art. 1378, NCC). Gratituitous contracts, e.g.,
non-contributory retirement plans, shall be construed in accordance with the NCC provisions on the interpretation of
gratutitous contracts whenever applicable; otherwise, the interpretation which will transmit the least right and
benefits shall be adopted.

4. Doctrine of Preferred Freedoms. Concerted activities may either be strikes or preferred

freedoms, e.g., freedom of assembly, right to petition for redress of grievances, or freedom of expression. Strike
rules will not apply to preferred freedoms.

5. Threefold Liability Rule. Depending on the type of liability being determined, the quantum of
proof is either proof beyond reasonable doubt, preponderance of evidence, or substantial evidence. A single act may
result in criminal liability, civil liability, or administrative liability. If the subject of determination is administrative
liability, the respondent cannot insist on proof beyond reasonable doubt (Rayala Ruling).

6. Totality of Circumstances Rule. In the absence of direct evidence, the factum probandum may
be appreciated based on the combination of all attending circumstances. Thus, sexual harassment need not be
established with evidence of verbal, written or physical acts as it is discernible with equal certitude from the totality of
the circumstances (Rayala Ruling).

7. Principle of the Strong Arm of Equity. Injunction represents the strong arm of equity; hence, it
must be issued on the preservative principle.

8. To Each His Loss Rule. Absent intent to dismiss and absent intent to abandon, the parties shall
be restored to their pre-litigation status. In effect, they shall be made to bear their own losses. Hence, the employee
shall be ordered back to work without backwages. Consequently, the employer shall bear the burden of answering
to the replacement employee he might have hired who must give way to the complaining employee.

E
OTHER LABOR STATUTES

1. Sec. 5, Magna Carta of Persons with Disability (The Bernardo Case)

Formula: Qualified & Able = Qualified & Disabled

Hence: Qualified & Able Qualified & Disabled

Right to security of tenure same

Regular by reason of nature of work same
Just or authorized cause same
Question

Bank of River gave 43 deaf-mutes 6-month employment contracts, which it renewed upon
their expiration, to sort and count coins. When their last contracts expired, they were not renewed in
favour of the hiring of able-bodied individuals to continue the work during the day and at night in order to
allow the bank to comply with a BSP circular requiring the turnover of all deposits at the end of the day.
The bank believed that the deaf-mutes should not be required to work at night for safety reasons. For
losing their jobs, the 43 sued the bank for illegal dismissal. In defense, it invoked the Brent ruling. Is the
defense tenable?

Answer

No.

Sec. 5 of the Magna Carta for Persons with Disability guarantees rights equality between qualified
able-bodied workers and qualified disabled workers. Hence, if the former enjoy security of tenure then this
same right is guaranteed to the latter. And if the former attain regular employment status for performing
work usually necessary or desirable to the usual trade of their employer then the latter enjoy exactly the
same regularization right. Finally, if regular able-bodied workers can only be dismissed for a just or
authorized cause then these same grounds are the only grounds for dissociating the latter. For performing
work necessary to the business of Bank of River, the 43 deaf-mutes were regular employees. Hence, the
expiration of their last contracts which was neither a just nor authorized cause could not excuse their
termination.

Therefore, the defense is not tenable.

Reformat

The defense is not tenable.

Sec. 5 of the Magna Carta for Persons with Disability guarantees equality of rights between
qualified able-bodied workers and qualified disabled workers. Since the former enjoy security of tenure
then this same right is guaranteed to the latter. Likewise, since the former attain regular employment
status for performing work usually necessary or desirable to the usual trade of their employer then the latter
enjoy exactly the same regularization right. Finally, since regular able-bodied workers can only be
dismissed for a just or authorized cause then these same grounds are the only grounds for dissociating the
latter.
 For performing work necessary to the business of Bank of River, the 43 deaf-mutes were regular
employees. Therefore, their dissociation based on expiration of contract, which is neither a just nor
authorized cause, cannot be defended with the Brent ruling.

2. Sec. 5, Expanded Senior Citizens Act, R.A. 9994 (right to employment; 15% tax deduction)

Question

After mandatory retirement at 65, Miguel went into prawn farming. After two years, however, he
retired his business. He regretted having lost his retirement pay to a bad investment. For want of
livelihood, he applied as a meter reader with Meralco. However, his job application was rejected although
he was the most qualified among 5 applicants. The reason was he was 67 already. He was told that the
company was hiring the fourth applicant, 35-year old Rogelio. Miguel then argued that the other four
applicants, including Rogelio, did not know how to read and write. Did Meralco violate any of Miguel’s
legal rights?

Answer

Yes.

Sec. 5 of the Expanded Senior Citizens Act guarantees to senior citizens right to employment.
Since the ground for Miguel’s disqualification was his being 67 years old, and nothing else more, the
rejection of his job application amounted to discrimination. What made the discrimination clear was the
announced hiring of a disqualified job applicant.

Meralco could have hired Miguel as a meter reader under a fixed-term employment contract.
However, it did not. Thus, it violated his right to earn a living.

Note: Not yet given in the Bar. The provision can be regarded as an exception to the
prerogative of an employer to choose whom to employ. Another limitation is a closed shop agreement.

3. Magna Carta for Women, R.A. 9710 (Gynecological Disorder)

3.1. Gynecological disorder pertains to a woman’s reproductive system.

3.2. If she has to undergo surgical procedure by reason of a gynecological disorder, it becomes the
duty of her employer to pay salaries covering:
(a) 2 weeks or less for minor surgery;
(b) 3 weeks to 60 days for major surgery.

2.5. Examples of covered medical procedures: procedures on breast, vulva, perineum, introitus,
vagina, cervix, uterus, oviduct and ovary (healthphilippines.net).

2.6. To be entitled, she should have rendered continuous aggregate employment service of at least 6
months for the last 12 months.

Question

Angelica has to undergo surgery in order to remove the wedding ring of Buddy, husband of
Wendy, which was mysteriously imbedded in her uterus. Assuming she has more than 6 continuous
months of service behind her for the last 12 months, would she be entitled to leave benefits under the
Magna Carta for Women? (.001%)

Answer

This kind of a woman does not exist. Re-write the problem. Ability to compose a correct and
decent problem reflects one’s knowledge and understanding of the law.

4. Solo Parents Welfare Act, R.A. 8972 (IF NO DADS, unfair to DULU children who are Less than 18)

4.1. Rights of a Solo Parent (SP may be male or female):

4.1.1. 7 days parental leave with pay; provided

(a) he/she has rendered 1 year of service, broken or continuous;
(b) she presents to her employer his/her Solo Parent ID issued by the DSWD; and
(c) she notifies hs/her employer of his/her intent to avail of the leave within a
reasonable time;
 4.1.2. Flexible work schedule:
(a) Right to adjust time-in and time-out; or
(b) Right to leave work, but subject to 3 conditions: (i) must complete normal hours
of work; (ii) cannot use right during core work hours; and (iii) cannot use right if
it will impair company or individual productivity); and
4.1.3. Right against discrimination.

4.2. Qualifiers

4.2.1. A solo parent is one who is left alone or solo in discharging parental responsibility by
reason of IF NO DADS.

I - Incapacity of one spouse

F - infra

N - Nullity/annulment of marriage
O - infra

D - Death of one spouse

A - Abandonment for 1 year
D - Detention of one spouse
S - Separation (legal or de facto)

U - infra
C - Crime

UFO Solo Parents

U - Unmarried parent who assumes parent responsibility.

F - Family member to whom parental responsibility is shifted.
O - Other persons who assume parental responsibility.

4.2.2. Dependent is Less than 18 DULU.

(a) The dependent must be less than 18; and

(b) Dependent on the SP, Unmarried, Living with the SP, and Unemployed.

Note: Material change in the personal circumstances of parent or dependent will have
a corresponding effect on the solo parent status of the employee. Hence, if the dependent turns 18
then the employee ceases to be a solo parent.

Question

At 16, Cindy gave birth to baby girl Princess from her being raped. Cindy was
conceived by her mother, Ingrid, who was also raped more than 16 years ago. All three females
live under one roof, with Ingrid providing for everybody while Cindy is awaiting the return from
Guam of Ms. Jinky Santos who promised to take her in as her kasambahay. Who between Cindy
and Ingrid is the solo parent? (.02%)

Answer

Practise your handwriting and formatting skill. Write fast!

Note: Under the Expanded Maternity Leave Act of 2019, a solo parent is entitled to “+15” days;
hence, she will get 120 days of maternity leave with pay. A single parent is not necessarily a solo parent. Take
note of above requisites.

H
TESTS

1. Divisor Test (Holiday Pay of Monthly-Paid Employees)

If the employer uses the lower divisor in arriving at daily rate (for the purpose of computing other benefits,
e.g., SIL), he has not paid the holiday pay of his monthly-paid employees.

SIL = Daily Rate x 5 days; or P500.00 x 5 = P2,500.00

 Daily Rate = Total Annual Salary
365 (supposed to be; however, one does not work all the days of the
year; hence, there are days which are unpaid days. They have
to be subtracted from 365 because, since they are unpaid, they
should not be used to divide the Total Annual Salary).

- 104 (Saturdays and Sundays, if work is from Monday to Friday

only).

261 (If this is the divisor used, the employer has paid holiday pay)
- 12 (12 regular holidays)
249 (If is this the divisor used, the employer has not paid holiday pay).
Note:

The minus sign (-) indicates non-payment. Thus, – 104 means the 104
Saturdays and Sundays in a year are unpaid days, being unworked days. Therefore, -12
means non-payment of regular holiday, the 12 being the legal holidays.

2. Distinct Impression Test

Whether or not one is liable for illegal recruitment depends on the import of his acts. Did he make a distinct
impression (representation) that he had the authority, influence, or ability to procure employment and was that the
reason his recruit parted with his money?

3. Two-Tiered Test

Work, of such nature as to be vital, indispensable, desirable and necessary to the usual trade of another,
may be given to an employee, independent contractor, or corporate officer. Is the worker (generic term) an
employee or not? If he is under the control (Labor Law concept of control) of the engaging party and he is
economically dependent on the latter then he is an employee.

3.1. Non-Means & Methods Control:

(a) Sound business practice;

(b) Editorial right;
(c) Post-production control;
(d) Time control;
(e) Quality control;
(f) Built-in control in insurance.

3.2. Non-Economic Dependence:

(a) Freedom to offer services to others for compensation;

(b) Freedom to negotiate economic terms of engagement;
(c) Co-investment in the business.

I
COMPUTATIONS

1. Wage Distortion Adjustment

Wage Group “A”: Casuals and paid P300.00 per day

Wage Group “B”: Regulars and paid P350.00 per day
Wage Gap P50.00
Prescribed Increase c/o CBA: Plus P50.00 for Wage Group “A”
Minimum Wage: P300.00 per day
Q:
(a) Is there a wage distortion?
(b) If so, adjust it.
A:
(a) Yes. The prescribed increase of P50.00 in favor of Wage Group “A” has
increased its wage rate to P350.00; hence, the wage advantage of P50.00 enjoyed by Wage Group “B”
has been eliminated. Since the elimination is due to a CBA, a recognized cause, said elimination amounts
to a wage distortion.
 (b) WDA = Minimum Wage x Prescribed Increase
Actual Salary (of complainant)

= P300.00 x P50.00
P350.00
= P.86 x P50.00
= P42.86

Hence, I will add the P42.86 to the P350.00 of Wage Group “B” to restore its wage advantage.
Although short by P7.14, the restoration is substantial already.

2. Retirement Benefits (Art. 302, Labor Code)

Formula: (22.5 days x Daily Rate) x Lenght of Service

2.1. With SIL & 13th Month Pay

15 days (Constant)
5 (SIL)
2.5 (1/12 of 13th MP)
22.5 x Daily Rate x Lenght of Service

2.2. Without SIL & 13th Month Pay (Taxi Driver)

15 (Constant) x Daily Rate x Lenght of Service

2.3. With SIL but No 13th Month Pay (Butcher)

15 days (Constant)
5 (SIL)
20 x Daily Rate x Lenght of Service

3. Backwages (Equitable Bank v. Ricardo Sadac)

3.1. Formula
(Last Monthly Salary & Regular Allowances)
x
Period of Illegal Dismissal

+
Monetary Equivalent of Benefits

3.2. Benefits include SIL & 13th Month Pay

3.3. How to compute period of illegal dismissal:

Date of ID: 8 August 2017

Date of Actual Reinstatement or Finality of Judgment: 5 June 2018

2018 6 5
- 2017 8 8
0 7 27 (7.27 months)

3.4. Sample Data: Daily Rate = P382.00; Regular Daily Allowances = P60.00; Period of Illegal
Dismissal = 7.27 months

3.5. With SIL & 13th Month Pay ( All employees, except WPD – G – MES)

(P382.00 + P60.00) (26 days) 7.27 months

(P442 x 26 days) 7.27 months
(P11,492.00) 7.27 months
P83,546.84

SIL & 13th Month Pay

Note:
 1. The “base figure”, as held in Equitable Banking Corp. v. Ricardo Sadac, G.R. No.
164772, 8 June 2006 (citing the Paramount Case), is the basic salary and regular allowances.

The text of Art. 279 (old) of the Labor Code reads:

“... An employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the time his compensation was withheld
from him up to the time of his actual reinstatement.”

Meaning: The base figure shall be the basic salary and regular allowances (e.g., COLA,
transportation allowance). After multiplying their sum by the period of illegal dismissal, the benefits
(including SIL & 13th month pay) earned during the year of dismissal shall be added on top of the product.

3.6. Without SIL & 13th Month Pay (e.g., worker paid on task basis who is a field personnel)

(Last Monthl Salary & Regular Allowances)

Number of months between date salaries were withheld to date of reinstatement/

Number of months between date salaries were withheld to finality of judgment.

3.7. How a Labor Arbiter computes backwages (No Allowances):

October 21, 2008 to May 29, 2009 = 7.27 mos.

(P382.00 x 26 days) 7.27 mos. = P72, 205.64

4. Separation Pay

4.1. In lieu of reinstatement (1 month salary x years of service; fraction of 6 motnhs is 1 year).

4.2. Retrenchment & Closure not due to serious business Losses (1/2 month salary x years of service;
fraction of 6 motnhs is 1 year).

4.3. Redundancy and Automation (1 month salary x years of service; fraction of 6 motnhs is 1 year).

4.4. Computation is from date engaged to finality of judgment.

Limitation:

4.4.1. Retirement before finality;

4.4.2. Death before finality;
4.4.3. Total & permanent disability before finality.

Note: “1 month salary” or “1 month salary for every year of service”, whichever is higher. When is “1
month salary” higher than “1 month salary for every year of service”?

Illustration: When an employee, receiving P25,000.00/month, is retrenched after just 5 months of

work. Notably, 5 months do not constitute 1 year; hence, P25,000.00 x 0 = P0. So P25,000.00 is higher
than 0.

5. Overtime Pay

Data: Work Shift: 8:00 a.m. to 5:00 p.m.; Daily Rate: P550.00; Hourly Rate (P550.00/8):
P68.75; OT: 2 hours; Applicable Overtime Rate: 25% (ordinary day).

Basic Pay = P550.00

Overtime Pay = (2 hours x P68.75) + 25%
= P137.50 + 25% of P137.50
= P137.50 + P34.37
= P171.87

6. Holiday Pay
 Legend: Regular Holiday (RH); Special Day (SD); Rest Day (RD)

6.1. Work is rendered on RH = (P550.00 x 2)

6.2. Work is rendered on a day which is both RH and RD
6.3. Work is rendered on SD = P550.00
6.4. Work is rendered on a day which is both SD and RD =
6.5. Work is rendered on a day on which 2 RHs fall = P550.00 x 300%

Note:

1. When work is required on a day when work should not be rendered (because it is a
regular holiday or it is the worker’s rest day), the employer is penalized with a premium (holiday premium if a
regular holiday is worked, or rest day premium if a rest day is worked). The penalty (30%, 50%) applies to
the first 8 hours.

2. When OT is rendered on the worked holiday, the applicable OT rate (50%) shall be
imposed.

3. When work is required on a holiday and on that day OT is rendered, therefore, there
are 2 penalties imposed: (a) the premium on the first 8 hours worked; and (b) the overtime rate on the
number of hours overtimed.

7. Nightshift Differential (NSD)

Data: Work Shift: 5:00 p.m. to 1:00 a.m.; Daily Rate: P550.00; Hourly Rate (P550.00/8):
P68.75.

10:00 p.m. – 1:00 a.m. Work = (3 hrs x P68.75) x 10%

= P206.25 x 10%
= P20.62
Take-home Pay = P550.00 + P20.62
= P570.62

Note: In computing OT, NSD is computed first. But it can be stipulated in a CBA that NSD shall not be
computed before OT (Lepanto Case, supra) in which case the basis of the 25% OT rate will be smaller.
Absent such stipulation, OT shall be computed based on basic salary which includes NSD. Thus:

Data: Work Shift: 5:00 p.m. to 1:00 a.m.; Daily Rate: P550.00; Hourly Rate (P550.00/8):
P68.75; 1 hr OT (1:00 a.m. – 2:00 a.m.)

10:00 p.m. – 1:00 a.m. Work = (3 hrs x P68.75) x 10%

= P206.25 x 10%
= P20.62
Basic Salary = P550.00 + P20.62
= P570.62

OT = (P570.62/8 hrs) x 1 hr OT + 25% of OT

= (P71.32 x 1 hr) + 25% of OT
= P71.32 + 17.83
= P89.15
Take-home Pay = P550.00 + P89.15
= P639.15

8. 13th Month Pay

Actual Salaries Received: January = P22,500.00; February P25,000.00; March = P20,000.00; April
(Dismissed. Last salary not paid.)

Total Annual Basic Salary = P67,500.00

13th Month Pay = P67,500.00
12
= P5,625.00

XI
 JURISPRUDENCE

2016 DECISIONS

1
Alma Covita v. SSM Maritime Services, Inc.
G.R. No. 206600, 7 Dec. 2016

Seafarer is a contractual employee

A seafarer is governed by the contract he signs everytime he is rehired and his employment is
terminated when his contract expires.

2
Peninsula Employees Union v. Michael Esquivel, et al.
G.R. No. 218454, 1 Dec. 2016

Agency Fee

The union’s right to agency fee is neither contractual nor statutory, but quasi-contractual, deriving
from the established principle that non-union employees may not unjustly enrich themselves by benefiting
from employment conditions negotiated by the bargaining union.

3
Marina’s Creation Enterprises, et al. v. Romeo Ancheta
G.R No. 218333, 7 Dec. 2016

Medical Termination

Non-submission of a fit-to-work certificate after illness does not justify denial of work. The ORILC
allows medical termination on the basis only of a medical certificate issued by a competent public health
authority that the employee’s disease is of such nature or at such stage that it is incurable in 6 months even
with adequate medical attention.

4
Buenaflor Car Services, Inc. v. Cesar David Jr.
G.R. No. 222730, 7 Nov. 2016

Purchase Orders; Loss of Trust & Confidence

The spurious purchase orders commenced the procurement process. Said purchase orders had to
be approved by the Service Manager, David, Jr. before the delivery and payment process could even
commence. Hence, being the approving authority, he cannot disclaim culpability in the resultant issuance of
the questioned checks. Only substantial evidence is required to establish the basis of loss of trust and
confidence.

5
Philippine Auto Components, Inc. v. Ronnie Jumadla, et al.
G.R. Nos. 218980 & 219124, 28 Nov. 2016

Loss of Trust & Confidence;

Qualified Theft; Substantial Evidence

The employees were charged with the delicate task of ensuring the safety, proper handling and
distributing of company products, e.g., radiator fans. Hence, a high degree of honesty and responsibility was
required and expected of them. Being managers, i.e., for being officers or members of the managerial staff,
they could be terminated for loss of trust and confidence based on substantial evidence of the pilferage, i.e.,
sworn statements of apprehended employees who acted on the complainant’s instructions, delivery
receipts, police blotter, police certification, photographs of the stolen radiator fan assembly units, resolution
of the City Prosecutor finding a prima facie case of qualified theft, and the information for qualified theft.

6
Gerino Yukit, et al. v. Tritran, Inc.
G.R. No. 184841, 21 Nov. 2016

Closure;Serious Business Losses;

 Substantial business losses (serious) must be proven with financial statements duly certified by an
independent external auditor. Although no separation pay should be paid owing to proof of closure with
substantial evidence of serious business losses, the employer voluntarily assumed the obligation to pay;
hence, it must be ordered to pay it.

7
Dee Jay’s Inn Cafe, et al. v. Lorina Rañeses
G.R. No. 191825, 5 Oct. 2016

Burden of Proof; Abandonment

It is the burden of the employee to prove the fact of her dismissal before the employer can be
burdened with the duty to justify it. The employer never raised abandonment as a defense as there was no
dismissal in the first place. It did not argue that the employee abandoned her work which justified her
dismissal. It merely alleged the fact that she, after being scolded, no longer returned to work.

8
Sonedco Workers Free Labor Union (SWOFLU),
et al. v. Universal Robina Corp., Sugar Division –
Southern Negro’s Dev’t Corp. (SONEDCO).
G.R. No. 220383, 5 Oct. 2016

ULP; CBA provision in print.

6 May 2002 - SONEDCO and PACIWU entered into a CBA for 2002-2006.

17 May 2002- SWOFLU won the CE and replaced PACIWU. The latter questioned the CE result.
Meantime, the company refused to collectively bargain with SWOFLU.

6 Dec. 2006- Although it was still the EBR, SWOFLU filed a CE petition in view of the impending
expiration of the 2002-2006 CBA.

28 Aug. 2007- Still without a CBA with SWOFLU, the company offered financial benefits to its
workers on condition that they signed a waiver to the effect that, in case of a new CBA, it shall take effect
starting 1 January 2008 only. It explained that said waiver would prevent double compensation.

20 Aug. 2008- SWOFLU won the CE. It demanded to collectively bargain with the company.
Finally, a CBA for January 2009- December 2013 was perfected.

2 July 2009- Workers who refused to sign the waiver sued the company for ULP. Allegedly, the
waiver violated their right to self-organization, collective bargaining and concerted activity. The LA
dismissed the complaint; the NLRC affirmed; and the CA dismissed the workers petition for certiorari.

Held: The company committed ULP when it refused to collectively bargain with SWOFLU on the
basis of the 2002-2006 CBA. That CBA, in view of the filing of the CE petition, was to apply temporarily only;
hence, its refusal amounted to ULP under Art. 259, LC, although – as wrongly argued by the company – the
workers’ right to self-organization was not violated.

As to the continuing payment of the 2007 financial benefits, they cannot be carried over to the
2009-2013 CBA. Hence, they cannot be demanded under said CBA because only printed provisions can be
implemented. At any rate, the new CBA provides for salary increases already.

9
Geraldine Michelle Failarme, et al. v.
San Juan de Dios Educational Foundation, et al.
G.R. Nos. 190015 & 190019, 14 Sept. 2016

Teachers; Regularization Requisites

While the LC provides general rules as to probationary employment, they are supplemented by the
Manual of Regulations for Private Schools (MRPS) as follows: (a) full-time teaching; (b) 3 years/ 6
consecutive semesters; and (c) satisfactory service (Note: 4th is master’s degree, 2013 UE v. Pepanio
Ruling).

10
Mario Felicilda v. Manchester Uy
G.R. No. 221241, 14 Sept. 2016
 Wage

While the compensation was determined on a “per trip” or commission basis, such did not negate
employer-employee relationship. The definition of wage in Art. 97, LC, includes the phrase “however
designated.”

11
Atty. Marcos D. Risonar, Jr. v. Cor Jesu College, et al.
G.R. No. 198350, 14 Sept. 2016

Automatic Renewal of Law Dean’s

Fixed-Term Employment Contract

Non-service of 30-day notice and allowing a Law Dean to continue acting as such beyond the date
of expiry of his contact indicates intent of the employer to renew. A contrary interpretation would render
inutile the self-imposed contractual duty to serve notice of non-renewal. If there be any ambiguity in the
contract, Art. 1377, NCC, provides that the party who prepared it should not be favored.

12
Jakerson Gargallo v. DOHLE Seafront Crewing (Mla), et al.
G.R. No. 215551, 17 Aug. 2016

Solidary Liability of Corporate Officers

Corporate officers are solidarily liable with their corporations for 2 reasons: (a) it is imposed by Sec.
10, R.A. 8042 (now Sec. 7, R.A. 10022); and (b) the manning agent corporation is deemed to have
submitted a verified undertaking by its officers and directors that they will be jointly and severally liable with
the company over claims arising from EER when it applied for a license to operate a seafarer’s manning
agency as required by the POEA-SEC.

13
Holcim Phils., Inc. v. Renante Obra
G.R. No. 220998, 8 Aug. 2016

Harsh Penalty

Dismissal for theft is harsh under these circumstances: the employee took a piece of wire and tried
to bring it outside company premises under the belief that same was for disposal already; the company
never denied that the wire was of no value already; after discovery, the employee returned it; hence, the
company suffered no loss; and the employees showed remorse.

14
Antonio Valeroso, et al. v. Skycable Corp.
G.R. No. 202015, 13 July 2016

Control

As account executives whose task was to solicit cable subscriptions, complainants claim employee
status based on an employment certification issued by the Territory Manager; 2001-2006 payslips showing
payment of commissions and allowance; and guidelines.

There is no EER. The certification was an accommodation to allow the complainants to apply for
loans and credit cards, and it does not specify the true nature of their engagement. The alleged guidelines
simply pertained to updates on new promos, new price listings, meetings and trainings of new account
executives, imposition of quotas, penalties, and giving commendations for meritorious performance – not to
means and methods of performance.

15
Rowena Santos v. Integrated Pharmaceutical, Inc.
G.R. No. 204620, 11 July 2016

Padding of Expense Report

The first memo charged expense report padding. The notice of termination stated different
infractions of which the employee was not notified, viz., habitual tardiness, insubordination, and dishonesty.
 Past offenses may be taken into consideration in imposing the appropriate penalty. However, due
process is violated.

16
Sugarsteel Industrial Inc., et al. v. Victor Albina, et al.
G.R. No. 168749, 6 June 2016

Corrective Jurisdiction; Grounds for Appeal

Even if the factual findings of the LA and NLRC are uniform, the CA can review the evidence when
warranted by the circumstances, e.g., said findings are not it accordance with the evidence on record and
the applicable law and jurisprudence, because the NLRC is not infallible.

The NLRC’s dismissal of the employer’s appeal – which was grounded on its submittal that the
LA’s decision was “not supported by evidence” and was “contrary to the facts obtaining.” – on the ground
that it was not based on any of the grounds specified by Art. 223 (now Art. 229), LC, amounted to grave
abuse of discretion. The enumeration of the grounds for an appeal need not be exactly followed. The
employer’s articulation of its ground for reversal is contemplated by the first and last grounds listed under
Art. 229. At any rate, the decision affirmed by the NLRC which awarded separation pay based on ½ month
salary despite the finding of a valid dismissal contravened the law.

17
South Cotabato Communication Corp.v. Hon. Sto. Tomas
G.R. No. 217575, 15 June 2016

Visitorial Power; Employer-Employee Relationship

The exercise of visitorial power rests on employer-employee relationship. The RD/SOLE must
make an express finding of its existence; otherwise, it cannot exercise visitorial power or the power to order
the rectification of labor standards law violations. Moreover, Sec. 14, Art. VIII of the Constitution requires
courts to express clearly and distinctly the facts and law on which decisions are based. Here, both RD and
SOLE made no factual findings at all.

18
Divine Word College of Laoag (DWCL) v. Shirley Mina, as Substitute of the Late Delfin Mina
G.R. No. 195155, 13 April 2016

Portability Clause; Retirement Pay;

Backwages and Separation Pay

The Society of Divine Word Educational Association, under SVD which ran
DWCLaoag, established a Retirement Plan which contained the following portability
clause:

When a member, who resigns from an Participating Employer and who is

employed by another Participating Employer, the member will carry the credit he earned
under his former Participating Employer to his new Employer and the length of Service in
both will be taken into consideration in determining, his total years of continuous service
on the following conditions:

a. The transfer is approved by both the Participating Employer whose service he is

leaving and the new Participating Employer;
b. The Retirement Board is notified of the transfer; and
c. The member is employed by another Participating Employer on the next working day
following his resignation.

In 1971, Delfin Mina was hired by the Academy of St. Joseph (ASJ) as a highschool teacher; in
1979, he transferred to DWCL; in 2003, he was unlawfully transferred (hence, constructively dismissed); in
2004, he was offered early retirement; invoking the portability provision, he asked that his 8 years with the
ASJ be added to his 25 years (he requested that his retirement be adjusted to September 2004 in order to
avail of the 25-year benefits); his request having been denied, he sued for constructive dismissal; in June
2005, he died on the case.

How much is Mina’s:

(a) Backwages
(b) Separation Pay; and
(c) Retirement Pay
 As to backwages, the computation shall be from date of constructive dismissal (1 June 2003) to
actual reinstatement or finality of judgment.

As to separation pay, the computation shall be from date of hiring by DWCL(1979) to date of death
(2005), or 26 years.

As to retirement pay, the computation shall be from 1979 (not 1971 because he did not comply with
portability conditions) to date of retirement/death).

Note: The CA erroneously computed backwages from 1979 (instead of date of constructive
dismissal which was 2003) to date of death (2005).

19
Industrial Personnel & Management Services, Inc., et al. v. Jose de Vera, et al.
G.R. No. 205703, 7 March 2016

Lex Loci Celebrationis

Philippine laws apply even to overseas employment contracts by force of Sec. 3, Art. XIII of the
Constitution (Full Protection Clause).

As exception, the parties may agree that a foreign law shall govern the employment contract,
subject to these conditions:

1. It must be expressly stipulated that a specific foreign law shall apply;

2. The foreign law invoked must be proven pursuant the Philippine-rules on evidence;
3. The foreign law must not be contrary to law, morals, good customs, public order or
public policy in the Philippines; and
4. The employment must be processed thru the POEA.

20
Alumamay Jamias, et al., v. NLRC, et al.
G.R. No. 159350, 9 March 2016

Evidence Aliunde;
Project Employment; Fixed-Term Contracts

The fixing by the employer of the period specified in the employment contracts do not indicated ill-
motive to circumvent security of tenure. It cannot be presumed that the fixing of the 1-year term was
intended to evade or avoid the protection to tenure under Art. 280 (now Art. 295), LC, in the absence of
other evidence establishing such intention. This presumption must be based on some other aspect of the
contract other than its fixed-term, or on evidence aliunde of the intent to evade.

21
Universal Robina Sugar Milling Corp. v. Elmer Albay, et al.
G.R. No. 218172, 16 March 2016

The Helpful Employees

The employees committed misconduct when they assisted the Sheriff in effecting levy on their
employer’s forklift and depositing same with the municipal hall for safekeeping in order to finally collect the
balance of their unpaid claims. However, their misconduct is not serious absent intent to gain or wrongful
intent. They were just impelled, although wrongly, by their belief that they were merely facilitating
enforcement of a favorable decision in a labor standards case. Hence, a penalty less punitive than a
dismissal should have been imposed.

22
Manila Memorial Park Cemetery Inc. v. Ezard D. Lluz, et al.
G.R. No. 208451, 3 Feb. 2016

Substanitial Capital or Investment

 The Contract of Services provides that Ward Trading has substanitial capital or investment, as well
as adequate workers. However, the CS contains stipulations indicating otherwise, such as: Manila Memorial
retained the right to control the performance of the employees concerned; the contractor shall purchase
₱1.4M worth of equipment belonging to the principal but no actual sale took place because the contractor
realized income of ₱53K only from its business; the contractor shall store subject equipment inside the
principal’s premises where it shall hold office also; and, in case of poor performance, the principal shall take
over the work.

23
Arlene T. Samonte, et al. v. La Salle Greenhills, Inc., et al.
G.R. No. 199683, 10 Feb. 2016

Inconsistent Defenses

Independent contractor defense is inconsistent with fixed-term employee defense. The first is a
non-employee, whereas the second is an employee. Therefore, based on these inconsistent defenses,
employer-employee relationship is deemed admitted.

24
Albert Austria v. Crystal Shipping Inc., et al.
G.R No. 206256, 24 Feb 2016

Theory of Aggravation

Every workingman brings with him to his employment certain infirmities, and while the employer is
not the insurer of the health of his employees, he takes them as he finds them, and assumes that risk of
having the weakened condition aggravated by some injury which might not hurt or bother a perfectly normal,
healthy person. The degree of contribution of the employment to the worsening of the seafarer’s condition is
not significant to the compensability of the illness.

The employer argues that “Dilated Cardiomyopathy, Biscupid Aortic Stenosis” is congenital and is
not caused or aggravated by the working conditions of a Chief Cook. Moreover, PEME is non-exploratory;
hence, the seafarer cannot argue that he could have developed his disease owing to his working conditions.
This argument must be rejected. The seafarer is a Chief Cook as to be exposed to heat all throughout the
day. The steady and prolonged exposure to heat naturally causes exhaustion which could unduly burden his
heart and interfere with the normal functioning of his cardio-vascular system.

Even assuming the disease is congenital, pre-existence of a disease does not bar compensability
because disability laws still grant compensation as long as working conditions have contributed even in a
small measure to the aggravation thereof.

25
Lorelei Iladan v. La Suerte Int’l Manpower Agency, Inc., et al.
G.R. No. 203882, 11 Jan. 2016

Resignation Letter;
Intimidation as Vice of Consent

To vitiate consent, the following must be present:

(a) The intimidation caused the consent to be given;

(b) The threatened act must be unjust or unlawful;
(c) The threat must be real or serious, there being evident disproportion between the evil and the
resistance which all men can offer, leading to the choice of doing the act which is forced on the person to do
as the lesser evil; and
(d) It produces a well-grounded fear from the fact that the person from whom it comes has the
necessary means or ability to inflicit to his person or property.

The employee executed a resignation letter in her own handwriting. She also accepted ₱35K as
financial assistance and executed an Affidavit of Release, Waiver and Quitclaim and an Agreement, as
settlement and waiver of any cause of action against the employer. The waiver and settlement were
subscribed before the Labor Attache and duly authenticated by Philippine Consulate.

26
Emma Quiro-Quiro v. Balagtas Credit Cooperative & Communication Dev’t, Inc.
G.R. No. 209921, 13 Jan. 2016

Execution Pending Appeal

Unless execution is enjoined by the CA, the NLRC’s decision attains finality after 10 days from
receipt by counsel thereof; hence, the LA can issue the writ of execution motu proprio or on motion (Sec.14,
Rule VII and Sec.1 Rule XI, respectively, of the NLRC Rules of Procedure)

Before the NLRC’s decision declaring the dismissal as illegal could be reversed by the CA, a writ of
execution was issued by the LA. In view thereof, the employer offered to pay the judgment award. Based on
said offer, the employee argued before the SC that there was an offer of compromise which put an end to
the litigation (as to make her the ultimate winner). But the SC did not regard the offer to satisfy judgment as
an offer of compromise. Due to the employee’s motion for issuance of the writ, the employer was forced to
satisfy the judgment.

2017 DECISIONS
Dean Albano’s Compilation

1
Dagasdas v. Grand Placement General Services Corp.
G.R. No. 205727, 18 January 2017, Del Castillo, J

Dismissal of a Probationary Employee

A probationary employee can be terminated if he fails to qualify pursuant to reasonable standards made
known to him at the time of his engagement (Sameer Overseas Placement Agency, Inc. v. Cabiles; Dagasdas v.
Grand Placement General Services Corp., G.R. No. 205727, 18 Jan. 2017, J Del Castillo). If dismissed for cause,
he must be accorded due process. Here, no prior notice of the purported infraction and such opportunity to explain
any accusation against him was given. He was simply given a notice of termination. In fact, it appears that ITM
intended not to comply with the twin-notice requirement in that, under the new contract, ITM reserved in its favor the
right to terminate the contract without serving any notice to Dagasdas in specified cases, which included such
situation where the employer decides to dismiss the employee within the probationary period. Without doubt, ITM
violated the due process requirement in dismissing an employee.

2
Panaligan, et al. v. Phyvita Ent. Corp.
G.R. No. 202086, 21 June 2017

KIP Breach vs. CHIT Breach

Loss of trust and confidence to be a valid cause for dismissal must be work related such as would show
the employee concerned to be unfit to continue working for the employer and it must be based on a willful breach of
trust and founded on clearly established facts. Such breach is willful if it is done intentionally, knowingly , and
purposely (KIP), without justifiable excuse as distinguished from an act done carelessly, thoughtlessly, heedlessly or
inadvertently (CHIT). The loss of trust and confidence must spring from the voluntary or willful act of the employee, or
by reason of some blameworthy act or omission on the part of the employee.

3
Brown v. Marswin Marketing Inc., et al.
G.R. No. 206891, 15 March 2017, Del Castillo, J

Burden to Proof

Thus, in order for the employer to discharge its burden to prove that the employee committed
abandonment, which constitutes neglect of duty, and is a just cause for dismissal, the employer must prove that the
employee 1) failed to report for work or had been absent without valid reason; and 2) had a dear intention to
discontinue his or her employment. The second requirement must be manifested by overt ads and is more
determinative in concluding that the employee is guilty of abandonment. This is because abandonment is a matter of
intention and cannot be lightly presumed from indefinite acts.

4
Grande v. Phil. Nautical Training College
G.R. No. 213137, 1 March 2017

Art. 294

Under Article 279 (now Art. 294) of the Labor Code, an employee unjustly dismissed from work is entitled to
reinstatement and backwages, among others. Reinstatement restores the employee who was unjustly dismissed to
the position from which he was removed, that is, to his status quo ante dismissal, while the grant of backwages
allows the same employee to recover from the employer that which he had lost by way of wages as a result of his
dismissal. These twin remedies - reinstatement and payment of backwages - make the dismissed employee whole
who can then look forward to continued employment. Thus, do these two remedies give meaning and substance to
the constitutional right of labor to security of tenure (Verdadero v. Barney Autolines Group of Companies Transport,
Inc., et al., 693 Phil. 646, 659 [2012]). Petitioner is, therefore, entitled to reinstatement with full backwages.

5
Rodriguez v. Park N Ride, Inc., et al.
G.R. No. 222980, 20 March 2017

Constructive Dismissal

The unreasonably harsh conditions that compel resignation on the part of an employee must be way beyond
the occasional discomforts brought about by the misunderstandings between the employer and employee. Strong
words may sometimes be exchanged as the employer describes her expectations or as the employee narrates the
conditions of her work environment and the obstacles she encounters as she accomplishes her assigned tasks. As in
every human relationship, there are bound to be disagreements.

However, when these strong words from the employer happen without palpable reason or are expressed
only for the purpose of degrading the dignity of the employee, then a hostile work environment will be created. In a
sense, the doctrine of constructive dismissal has been a consistent vehicle by the Court to assert the dignity of labor

6
Panaligan, et al. v. Pyvita Ent., Corp.
G.R. No. 202086, 21 June 2017

Serious Misconduct

Misconduct is improper or wrong conduct; it is the 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. The misconduct, to be serious within the meaning of the Labor Code, must be of
such a grave and aggravated character and not merely trivial or unimportant. Thus, for misconduct or
improper behavior to be a just cause for dismissal, (a) it must be serious; (b) it must relate to the
performance of the employee's duties; and (c) it must show that the employee has become unfit to continue
working for the employer

7
Maula v. Ximex Delivery Express, Inc.
G.R. No. 207838, 25 Jan. 2017

Two Facets of Dismissal

Dismissal from employment have two facets: first, the legality of the act of dismissal, which constitutes
substantive due process; and, second, the legality of the manner of dismissal, which constitutes procedural due
process (See NDC Tagum Foundation, Inc. v. Sumakote, G.R. No. 190644, June 13, 2016 and Agullano v. Christian
Publishing, et al., 588 Phil. 43, 49 [2008]). The burden of proof rests upon the employer to show that the disciplinary
action was made for lawful cause or that the termination of employment was valid. In administrative and quasi-judicial
proceedings, the quantum of evidence required is substantial evidence or "such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion." Thus, unsubstantiated suspicions, accusations, and
conclusions of the employer do not provide legal justification for dismissing the employee. When in doubt, the case
should be resolved in favor of labor pursuant to the social justice policy of our labor laws and the 1987 Constitution

The following are the guiding principles in connection with the hearing requirement in dismissal
cases:

(a) "ample opportunity to be heard" means any meaningful opportunity (verbal or written)
given to the employee to answer the charges against him and submit evidence in support of his
defense, whether in a hearing, conference or some other fair, just and reasonable way.

(b) a formal hearing or conference becomes mandatory only when requested by the
employee in writing or substantial evidentiary disputes exist or a company rule or practice requires
it, or when similar circumstances justify it.

(c) the "ample opportunity to be heard" standard in the Labor Code prevails over the
"hearing or conference" requirement in the implementing rules and regulations (Perez, et al. v. Phil.
Telegraph and Telephone Co., et al., 602 Phil. 522, 537-542 [2009]).

8
Sumifru (Phils.) Corp. v. Baya
G.R. No. 188296, 17 April 2017

Floating Status

Respondent should have deployed petitioner to a specific client within six (6) months from his last
assignment. The correspondences allegedly sent to petitioner merely required him to explain why he did not report to
work. He was never assigned to a particular client. Thus, even if petitioner actually received the letters of respondent,
he was still constructively dismissed because none of these letters indicated his reassignment to another client.
Unlike in Ecoxet Security and JFLP Investigation, respondent is guilty of constructive dismissal because it never
attempted to redeploy petitioner to a definite assignment or security detail.

Strained Relationship

"Under the doctrine of strained relations, the payment of separation pay is considered an acceptable
alternative to reinstatement when the latter option is no longer desirable or viable. On one hand, such payment
liberates the employee from what could be a highly oppressive work environment. On the other hand, it releases the
employer from the grossly unpalatable obligation of maintaining in its employ a worker it could no longer trust."Thus,
it is more prudent that the employee be awarded separation pay, instead of being reinstated, as computed by the CA.

9
Spectrum Security Services, Inc. v. Grave, et al.
G.R. No. 196650, 7 June 2017

Abandonment

The security guards intended to sever their employer-employee relationship with the petitioner because they
applied for and obtained employment with other security agencies while they were on reserved status. Their having
done so constituted a clear and unequivocal intent to abandon and sever their employment with the petitioner.
Thereby, the filing of their complaint for illegal dismissal was inconsistent with the established fact of their
abandonment

10
Manggagawa ng Komunikasyon sa Pilipinas v. PLDT
G.R. No. 190383, April 18, 2017

Redundancy
 While a declaration of redundancy is ultimately a management decision in exercising its business judgment,
and the employer is not obligated to keep in its payroll more employees than are needed for its day-to-day
operations, management must not violate the law nor declare redundancy without sufficient basis. . . To establish
good faith, the company must provide substantial proof that the services of the employees are in excess of what is
required of the company, and that fair and reasonable criteria were used to determine the redundant positions.

Separation Pay v. Retirement Benefits

Separation pay is required in the cases enumerated in Articles 283 and 284 of the Labor Code, which
include retrenchment, and is computed at, at least one month salary or at the rate of one-half month salary for every
month of service, whichever is higher. We have held that it is a statutory right designed to provide the employee with
the wherewithal during the period that he is looking for another employment. Retirement benefits, where not
mandated by law, may be granted by agreement of the employees and their employer or as a voluntary act on the
part of the employer. Retirement benefits are intended to help the employee enjoy the remaining years of his life,
lessening the burden of worrying for his financial support, and are a form of reward for his loyalty and service to the
employer.

Reinstatement Order v. Return-to-Work Order

The award of reinstatement, including backwages, is awarded by a Labor Arbiter to an illegally dismissed
employee pursuant to Article 294 (formerly Art. 279) of the Labor Code: If actual reinstatement is no longer possible,
the employee becomes entitled to separation pay in lieu of reinstatement (Golden Ace Builders, et al. v. Talde, 634
Phil. 364, 370 (2010). On the other hand, a return-to-work order is issued by the Secretary of Labor and Employment
when he or she assumes jurisdiction over a labor dispute in an industry that is considered indispensable to the
national interest. Article 278(g) of the Labor Code provides that the assumption and certification of the Secretary of
Labor and Employment shall automatically enjoin the intended or impending strike. Return-to-work and
reinstatement orders are both immediately executory; however, a return-to-work order is interlocutory in nature, and
is merely meant to maintain status quo while the main issue is being threshed out in the proper forum. In contrast, an
order of reinstatement is a judgment on the merits handed down by the Labor Arbiter pursuant to the original and
exclusive jurisdiction provided for under Article 224(a)of the Labor Code. Clearly, Garcia is not applicable in the case
at bar, and there is no basis to reinstate the employees who were terminated as a result of redundancy.

11
Valencia v. Classique Vinyl Products Corp., et al.
G.R. No. 206390, 30 January 2017, Del Castillo, J

Labor Only Contracting and Project Employee

In labor-only contracting, the statute creates an employer-employee relationship for a comprehensive

purpose: to prevent a circumvention of labor laws. The contractor is considered merely an agent of the principal
employer and the latter is responsible to the employees of the labor-only contractor as if such employees had been
directly employed by the principal employer. The principal employer therefore becomes solidarily liable with the labor-
only contractor for all the rightful claims of the employees.

12
Herma Shipyard, Inc., et al. v. Oliveros, et al.
G.R. No. 208936, 17 April 2017, Del Castillo, J

Project Employee Test

 The principal test in determining whether particular employees were engaged as project-based employees,
as distinguished from regular employees, is whether they were assigned to carry out a specific project or
undertaking, the duration and scope of which was specified at, and made known to them, at the time of their
engagement (ALU-TUCP v. National Labor Relations Commission, supra.). It is crucial that the employees were
informed of their status as project employees at the time of hiring and that the period of their employment must be
knowingly and voluntarily agreed upon by the parties, without any force, duress, or improper pressure being brought
to bear upon the employees or any of other circumstances vitiating their consent

DSI Within v. DSI Not Within

The fact that the job is usually necessary or desirable in the business operation of the employer does not
automatically imply regular employment; neither does it impair the validity of the project employment contract
stipulating a fixed duration of employment (Palomares v. National Labor Relations Commission, 343 Phil. 213, 223
[1997]). As the Court held in AL U-TUCP v. National Labor Relations Commission:

In the realm of business and industry, we note that 'project' could refer to one or the other
of at least two (2) distinguishable types of activities. Firstly, a project could refer to a particular job
or undertaking that is within the regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other undertakings of the company. Such
job or undertaking begins and ends at determined or determinable times. The typical example of
this first type of project is a particular construction job or project of a construction company. A
construction company ordinarily carries out two or more discrete identifiable construction projects:
e.g., a twenty-five-storey hotel in Makati; a residential condominium building in Baguio City; and a
domestic air terminal in Iloilo City. Employees who are hired for the carrying out of one of these
separate projects, the scope and duration of which has been determined and made known to the
employees at the time of employment, are properly treated as 'project employees,' and their
services may be lawfully terminated at completion of the project.

The term 'project' could also refer to, secondly, a particular job or undertaking that is not
within the regular business of the corporation. Such a job or undertaking must also be identifiably
separate and distinct from the ordinary or regular business operations of the employer. The job or
undertaking also begins and ends at determined or determinable times.

Here, while the tasks assigned to the respondents were indeed necessary and desirable in the usual
business of Herma Shipyard, the same were distinct, separate, and identifiable from the other projects or contract
services.

13
Herma Shipyard, Inc., et al. v. Oliveros, et al.
G.R. No. 208936, 17 April 2017, Del Castillo, J

Not Engaged in Building & Selling Ships

Considering the nature of business of the employer, it is clear that it only hired workers when it has existing
contracts for shipbuilding and repair. It is not engaged in the business of building vessels for sale which would require
it to continuously construct vessels for its inventory and consequently hire a number of permanent employees.
Hence, Herma Shipyard is allowed “to reduce its work force into a number suited for the remaining work to be done
upon the completion or proximate accomplishment of each particular project (Villa v. National Labor Relations
Commission). As for respondent, since they were assigned to a project or a phase thereof which begins and ends at
determined or determinable times, their services were lawfully terminated upon the completion of such project or
phase thereof

14
UST v. Samahang Manggagawa ng UST, et al.
G.R. No. 184262, 24 April 2017

Primary Standard
 The primary standard, therefore, of determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade or business of the
employer. The test is whether the former is usually necessary or desirable in the usual business or trade of
the employer. The connection can be determined by considering the nature of work performed and its
relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been
performing the job for at least a year, even if the performance is not continuous and merely intermittent, the
law deems repeated and continuing need for its performance as sufficient evidence of the necessity if not
indispensability of that activity to the business. Hence, the employment is considered regular, but only with
respect to such activity and while such activity exists

Totality of Circumstances

If it is apparent from the circumstances of the case "that periods have been imposed to preclude acquisition
of tenurial security by the employee," such project or fixed term contracts are disregarded for being contrary to public
policy.

15
Seapower Shipping Ent. Inc. v. Heirs of Warren M. Sabanal
G.R. No. 198544, 19 June 2017

Direct Attribution Rule

Q: May a seaman’s death, which resulted from his act of jumping overboard, be considered as directly
attributable to him?

A: Yes. The term “willful” means “voluntary and intentional”, but not necessarily malicious. In the case
of Macabuhay Shipping Services, Inv. National Relations Commission, the seaman, in a state of intoxication, ran
amuck and committed an unlawful aggression against another, inflicting injury on the latter, so that in his own
defense the latter fought back and in the process killed the seaman. The circumstances of the death of the seaman
could be categorized as a deliberate and willful act on his own life directly attributable to him. In the same manner, in
the instant case, the seaman’s intentionally jumping overboard, while in a state of intoxication, could be considered
as a deliberate and willful act on his own life which is directly attributable to him. Under the POEA-SEC, the
employer is generally liable for death compensation benefits when a seafarer dies during the term of employment.
This rule, however, is not absolute. Part II, Section C(6) of the POEA-SEC exempts the employer from liability if it can
successfully prove that the seafarer's death was caused by an injury directly attributable to his deliberate or willful
act.

16
Dutch Movers, Inc., et al. v. Lequin, et al.
G.R. No. 210032, 25 April 2017, Del Castillo, J

Liability of Stockholders

Q: During the execution stage, DMI ceased its operation, and the same did not file any formal notice
regarding it. Added to this, in their Opposition to the Motion to Implead, spouses Smith revealed that they only lent
their names to petitioners, and they were included as incorporators just to assist the latter in forming DMI; after such
undertaking, spouses Smith immediately transferred their rights in DMI to petitioners, which proved that petitioners
were the ones in control of DMI, and used the same in furthering their business interests. Are the spouses liable?
Why?

A: Yes. A corporation has a separate and distinct personality from its stockholders, and from other
corporations it may be connected with. However, such personality may be disregarded, or the veil of corporate fiction
may be pierced attaching personal liability against responsible person if the corporation's personality "is used to
defeat public convenience, justify wrong, protect fraud or defend crime, or is used as a device to defeat the labor
laws x x x" (Concept Builders, Inc. v. National Labor Relations Commission, 326 Phil. 955, 965 [1996]). By
responsible person, we refer to an individual or entity responsible for, and who acted in bad faith in committing illegal
dismissal or in violation of the Labor Code; or one who actively participated in the management of the corporation.
Also, piercing the veil of corporate fiction is allowed where a corporation is a mere alter ego or a conduit of a person,
or another corporation (Guillermo v. Uson, G.R. No. 198967, March 7, 2016).

Here, the veil of corporate fiction must be pierced and accordingly, petitioners should be held personally
liable for judgment awards because the peculiarity of the situation shows that they controlled DMI; they actively
participated in its operation such that DMI existed not as a separate entity but only as business conduit of petitioners

Piercing the veil of corporate fiction is allowed, and responsible persons may be impleaded, and be held
solidarily liable even after final judgment and on execution, provided that such persons deliberately used the
corporate vehicle to unjustly evade the judgment obligation, or resorted to fraud, bad faith, or malice in evading their
obligation (Guillermo v. Uson).

17
MST Marine Services (Phil.) Inc., et al. v. Asuncion
G.R. No. 211335, 27 March 2017

Disability Benefits

The mere lapse of the 120-day period itself does not automatically warrant the payment of total and
permanent disability benefits (Tagalog v. Crossworld Marine Services, Inc., G.R. No. 191899, June 22, 2015, 759
SCRA 632). In Vergara v. Hammonia Maritime Services, et al., 588 Phil. 895 [2008], the Court ruled that a temporary
total disability becomes permanent when so declared by the company-designated physician within the period
allowed, or upon expiration of the maximum 240-day medical treatment period in case of absence of a declaration of
fitness or permanent disability.

Besides, permanent disability benefits will be given based on the schedule provided under Section 32 of the
POEA-SEC. In Scanmar Maritime Services, Inc., et al. v. Emilio Conag, G.R. No. 212382, April 6, 2016,the Court
reiterated that:

[F]or work-related illnesses acquired by seafarers from the time the 2010 amendment to
the POEA-SEC took effect, the declaration of disability should no longer be based on the number
of days the seafarer was treated or paid his sickness allowance, but rather on the disability grading
he received, whether from the company-designated physician or from the third independent
physician, if the medical findings of the physician chosen by the seafarer conflicts with that of the
company-designated doctor.

Moreover, while a seafarer is not precluded from seeking a second opinion or consulting his own physician,
if his physician's conclusion is contrary to that of the company-designated physician, the rule is clear that a third
physician must be jointly appointed by the employer and the seafarer for a final assessment.54 Without a third-doctor
consultation and in the absence of any indication which would cast doubt on the veracity of the company-designated
physician's assessment, the company-designated physician's findings shall prevail.

18
Maula v. Ximex Delivery Express, Inc.
G.R. No. 207838, 25 January 2017

Preventive Suspension

Preventive suspension is justified where the employee's continued employment poses a serious and
imminent threat to the life or property of the employer or of the employee's co-workers. Without this kind of threat,
preventive suspension is not proper. Here, it cannot be said that petitioner posed a danger on the lives of the officers
or employees of respondent or their properties. Being one of the Operation Staff, which was a rank and file position,
he could not and would not be able to sabotage the operations of respondent. The difficulty of finding a logical and
reasonable connection between his assigned tasks and the necessity of his preventive suspension is apparent from
the fact that even respondent was not able to present concrete evidence to support its general allegation.
19
Asian Institute of Management v. Asian Institute of Management Faculty Assn.
G.R. No. 207971, 23 January 2017, Del Castillo, J

Union; Cancellation of Certificate of Registration

In case of alleged inclusion of disqualified in a union, the proper procedure for an employer is to directly file
a petition for cancellation of the union’s certificate of registration due to misrepresentation, false statement or fraud
under the circumstances enumerated in Article 239 of the Labor Code, as amended (Holy Child Catholic School v.
Hon. Sto. Tomas, 714 Phil. 427, 453 [2013], citing Sta. Lucia East Commercial Corporation v. Secretary of Labor and
Employment, 612 Phil. 998, 1007-1008 [2009]).

Petitioner’s sole ground for seeking cancellation of respondent’s certificate of registration – that its members
are managerial employees and for this reason, its registration is thus a patent nullity for being an absolute violation of
Article 245 of the Labor Code which declares that managerial employees are ineligible to join any labor organization
– is, in a sense, an accusation that respondent is guilty misrepresentation for registering under the claim that its
members are not managerial employees.

Note: Under R.A. 9481, to be grounds for CR cancellation, the representation, fraud or false statement
must pertain to either adoption of the CBL or election of union officers. At any rate, another Division of te SC is still
determining the validity of the constitution of the union and J del Castillo has observed the Principe of Judicial
Courtesy. In other words, he did not cancel the CR of the union.

20
De La Salle Araneta Univ. v. Bernardo
G.R. No. 190809, 13 February 2017

Part-time Lecturer

For a private school teacher to acquire permanent status, viz.: (1) the teacher is a full-time teacher; (2) the
teacher must have rendered three consecutive years of service; and (3) such service must have been satisfactory
(St. Mary’s University v. Court of Appeals, 493 Phil. 232, 237 [2005]). In addition, he must have a master’s degree
(UE v. Pepanio, 2013). Bernardo was a part-time lecturer at DLS-AU, with a fixed-term employment. As a part-time
lecturer, he did not attain permanent status. Nonetheless, Bernardo did not sue for illegal dismissal nor claim
separation pay. He simply asserted his right to retirement benefits given the termination of his employment with
DLS-AU when he was already 75 years old.

Q: Since Bernardo has not been granted retirement benefits under any agreement with or by voluntary
act of DLS-AU, the next question then is, can Bernardo claim retirement benefits by mandate of any law?

A: Yes. Republic Act No. 7641 is a curative social legislation. It precisely intends to give the minimum
retirement benefits to employees not entitled to the same under collective bargaining and other agreements. It also
applies to establishments with existing collective bargaining or other agreements or voluntary retirement plans whose
benefits are Jess than those prescribed in said law.

Article 302 [287] of the Labor Code, as amended by Republic Act No. 7641, reads:

Art. 302 [287]. Retirement. -Any employee may be retired upon reaching the retirement
age established in the collective bargaining agreement or other applicable employment contract.

In case of retirement, the employee shall be entitled to receive such retirement benefits as
he may have earned under existing Jaws and any collective bargaining agreement and other
 agreements: Provided however, That an employee's retirement benefits under any collective
bargaining and other agreement shall not be less than those provided herein.

In the absence of retirement plan or agreement providing for retirement benefits of

employees in the establishment. an employee upon reaching the age of sixty (60) years or more,
but not beyond sixty five (65) years which is hereby declared the compulsory retirement age, who
has served at least five (5) years in said establishment, may retire and shall be entitled to
retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction
of at least six (6) months being considered as one whole year.

Unless the parties provide for broader inclusions, the term one-half month salary shall
mean fifteen (15) days plus one twelfth (1/12) of the 13th month pay and the cash equivalent of not
more than five (5) days of service incentive leaves.

Bernardo's employment was extended beyond the

compulsory retirement age and the cause of
action for his retirement benefits accrued only
upon the termination of his extended employment
with DLSAU.

Article 306 [291] of the Labor Code mandates:

Art. 306 [291]. Money claims. - All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three years from the time
the cause of action accrued; otherwise they shall be forever barred.

Q: DLS-AU invokes UST Faculty Union v. National Labor Relations Commission, 266 Phil. 441, 448
[1990], wherein it was held that when an employee or official has reached the compulsory retirement age, he is
thereby effectively separated from the service. And so, DLS-AU maintains that Bernardo's cause of action for his
retirement benefits, which is patently a money claim, accrued when he reached the compulsory retirement age of 65
years old, and had already prescribed when Bernardo filed his complaint only 10 years later, when he was already 75
years old. Is the contention correct? Why?

A: No. The case of UST Faculty Union is not in point as the issue involved therein was the right of a
union to intervene in the extension of the service of a retired employee. Professor Tranquilina J. Marilio (Prof. Marilio)
already reached the compulsory retirement age of 65 years old, but was granted by the University of Sto. Tomas
(UST) an extension of two years tenure. UST no longer needed to consult the union before refusing to further extend
Prof. Marilio' s tenure.

Bernardo's right to retirement benefits and the obligation of DLS-AU to pay such benefits are already
established under Article 302 [287] of the Labor Code, as amended by Republic Act No. 7641. However, there was a
violation of Bernardo's right only after DLS-AU informed him on November 8, 2003 that the university no longer
intended to offer him another contract of employment, and already accepting his separation from service, Bernardo
sought his retirement benefits, but was denied by DLSAU. Therefore, the cause of action for Bernardo's retirement
benefits only accrued after the refusal of DLS-AU to pay him the same, clearly expressed in Dr. Bautista's letter
dated February 12, 2004. Hence, Bernardo's complaint, filed with the NLRC on February 26, 2004, was filed within
the three-year prescriptive period provided under Article 291 of the Labor Code.

DLS-AU, in this case, not only kept its silence that Bernardo had already reached the compulsory retirement
age of 65 years old, but even continuously offered him contracts of employment for the next 10 years. It should not
be allowed to escape its obligation to pay Bernardo's retirement benefits by putting entirely the blame for the deferred
claim on Bernardo's shoulders.

21
GSIS v. Pauig
G.R. No. 210328, 30 January 2017
 Retirement Benefits: Concept; Coverage

Retirement benefits are given to government employees to reward them for giving the best years of their
lives to the service of their country. This is especially true with those in government service occupying positions of
leadership or positions requiring management skills because the years they devote to government service could be
spent more profitably elsewhere, such as in lucrative appointments in the private sector. Hence, in exchange for their
selfless dedication to government service, they should enjoy security of tenure and be ensured of a reasonable
amount of support after they leave the government (Government Service Insurance System v. Civil Service
Commission, 315 Phil. 159, 171 [1995]).

Compulsory coverage under the GSIS had previously and consistently included regular and permanent
employees, and expressly excluded casual, substitute or temporary employees from its retirement insurance plan. A
permanent appointment is one issued to a person who has met the requirements of the position to which
appointment is made, in accordance with the provisions of the Civil Service Act and the Rules and Standards, while
temporary appointment is made in the absence of appropriate eligibles and it becomes necessary in the public
interest to fill a vacancy. Casual employment, on the other hand, is not permanent but occasional, unpredictable,
sporadic and brief in nature (Chua v. Civil Service Commission, 282 Phil. 970, 982 [1992]).Based on the records,
Pauig began his career in the government on February 12, 1964 as Emergency Laborer on a casual status. Then, he
became a temporary employee from July 5, 1972 to July 18, 1977. However, the Court notes that it was not until
1997 that the compulsory membership in the GSIS was extended to employees other than those on permanent
status. Her casual and temporary service must necessarily be excluded from the creditable period for retirement
purposes.

22
Wesleyan Univ. of the Phils. v. Maglaya, Sr.
G.R. No. 212774, 23 January 2017

Jurisdiction Over Corporate Officers

In case, WUP presented its amended By-Laws dated November 28, 1988 submitted to the SEC to prove
that Maglaya, as the University President, was a corporate officer whose rights do not fall within the jurisdiction of the
labor tribunal.

It is apparent from the By-laws of WUP that the president was one of the officers of the corporation, and was
an honorary member of the Board. He was appointed by the Board and not by a managing officer of the corporation.
One who is included in the by-laws of a corporation in its roster of corporate officers is an officer of said corporation
and not a mere employee (Garcia v. Eastern Telecommunication Phils., Inc., supra.).

The alleged "appointment" of Maglaya instead of "election" as provided by the by-laws neither convert the
president of university as a mere employee, nor amend its nature as a corporate officer. With the office specifically
mentioned in the by-laws, the NLRC erred in taking cognizance of the case, and in concluding that Maglaya was a
mere employee and subordinate official because of the manner of his appointment, his duties and responsibilities,
salaries and allowances.

A corporate officer's dismissal is always a corporate act, or an intracorporate controversy which arises
between a stockholder and a corporation, and the nature is not altered by the reason or wisdom with which the Board
of Directors may have in taking such action (Okol v. Slimmers World International, 623 Phil. 13 [2009]). The issue of
the alleged termination involving a corporate officer, not a mere employee, is not a simple labor problem but a matter
that comes within the area of corporate affairs and management and is a corporate controversy in contemplation of
the Corporation Code.

The long-established rule is that the jurisdiction over a subject matter is conferred by law (Union Motors
Corp. v. National Labor Relations Commission, 373 Phil. 310 [1999]).Perforce, Section 5 (c) of PD 902-A, as
amended by Subsection 5.2, Section 5 of Republic Act No. 8799, which provides that the regional trial courts
exercise exclusive jurisdiction over all controversies in the election or appointment of directors, trustees, officers or
managers of corporations, partnerships or associations, applies in the case at bar (Okol v. Slimmers World
International).
 To emphasize, the determination of the rights of a corporate officer dismissed from his employment, as well
as the corresponding liability of a corporation, if any, is an intra-corporate dispute subject to the jurisdiction of the
regular courts (Wesleyan Univ. of the Phils. v. Maglaya, Sr., G.R. No. 212774, January 23, 2017, Peralta).

23
Chateau Royale Sports and Country Club, Inc. v. Balba, et al.
G.R. No. 197492, 18 January 2017

Transfer of Employee

In the resolution of whether the transfer of the employees from one area of operation to another was valid,
finding a balance between the scope and limitation of the exercise of management prerogative and the employees'
right to security of tenure is necessary (Benguet Electric Cooperative v. Fianza, G.R. No. 158606, March 9, 2004,
425 SCRA 41, 50). The Court have to weigh and consider, on the one hand, that management has a wide discretion
to regulate all aspects of employment, including the transfer and re-assignment of employees according to the
exigencies of the business; and, on the other, that the transfer constitutes constructive dismissal when it is
unreasonable, inconvenient or prejudicial to the employee, or involves a demotion in rank or diminution of salaries,
benefits and other privileges, or when the acts of discrimination, insensibility or disdain on the part of the employer
become unbearable for the employee, forcing him to forego her employment (Tinio v. Court of Appeals, G.R. No.
171764, June 8, 2007, 524 SCRA 533, 541).

In Benguet Electric Cooperative v. Fianza, G.R. No. 158606, March 9, 2004, management has the
prerogative to determine the place where the employee is best qualified to serve the interests of the business given
the qualification, training and performance of the affected employee.

An employee having voluntarily affixed their signatures on their respective letters of appointment, acceded
to the terms and conditions of the employment incorporated therein. One of the terms and conditions thus
incorporated was the prerogative of management to transfer and re-assign its employees from one job to another “as
it may deem necessary or advisable.”

Having expressly consented to the foregoing, the respondent had no basis for objecting to their transfer.
According to Abbot Laboratories (Phils.), Inc. v. National Labor Relations Commission, No. L-76959, October 12,
1987, 154 SCRA 713, 719, the employee who has consented to the company’s policy of hiring sales staff willing to
be assigned anywhere in the Philippines as demanded by the employer’s business has no reason to disobey the
transfer order of management. Verily, the right of the employee to security of tenure does not give her a vested right
to her position as to deprive management of its authority to transfer or re-assign her where she will be most useful
(Tinio v. Court of Appeals, supra; Mendoza v. Rural Bank of Lucban, G.R. No. 155421, July 7, 2004, 433 SCRA 756,
766; Chateau Royale Sports and Country Club, Inc. v. Balba, et al., G.R. No. 197492, January 18, 2017, Bersamin,
J).

24
C.J.M. Mission Seminaries School of Theology, Inc., et al. v. Perez
G.R. No. 220506, 18 January 2017

Backwages: Computation

In the event the aspect of reinstatement is disputed, backwages, including separation pay, shall be
computed from the time of dismissal until the finality of the decision ordering the separation pay. In Gaco v. NLRC,
300 Phil. 261 [1994],it was ruled that with respect to the payment of backwages and separation pay in lieu of
reinstatement of an illegally dismissed employee, the period shall be reckoned from the time compensation was
withheld up to the finality of this Court's decision (Surima v. NLRC, 353 Phil. 461 [1998] and Session Delights Ice
Cream and Fast Foods v. CA, 625 Phil. 612 [2010]).

The reason for this was explained in Bani Rural Bank, Inc. v. De Guzman., 721 Phil. 84 [2013].When there
is an order of separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or subsequently
ordered in light of a supervening event making the award of reinstatement no longer possible), the employment
relationship is terminated only upon the finality of the decision ordering the separation pay. The finality of the decision
cuts-off the employment relationship and represents the final settlement of the rights and obligations of the parties
against each other. Hence, backwages no longer accumulate upon the finality of the decision ordering the payment
of separation pay because the employee is no longer entitled to any compensation from the employer by reason of
the severance of his employment. One cannot, therefore, attribute patent error on the part of the CA when it merely
affirmed the NLRC's conclusion, which was clearly based on jurisprudence.

To All 2019 Bar Candidates, Good Luck! We Are Praying For You!

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