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SUGGESTED ANSWERS IN THE 2018 BAR EXAMINATIONS IN LABOR LAW

Narciso filed a complaint against Norte University for the payment of retirement benefits after having been a
part-time professional lecturer in the same school since 1974. Narciso taught for two semesters and a summer
term for the school year 1975, took a leave of absence from 1975 to 1977, and resumed teaching until 2003.
Since then, his contract has been renewed at the start of every semester and summer, until November 2005
when he was told that he could no longer teach because he was already 75 years old. Norte University also
denied Narciso’s claim for retirement benefits stating that only full-time permanent faculty, who have served
for at least five years immediately preceding the termination of their employment, can avail themselves of
post-employment benefits. As part-time faculty member, Narciso did not acquire permanent employment
status under the Manual of Regulations for Private Schools, in relation to the Labor Code, regardless of his
length service.

(a) Is Narciso entitled to retirement benefits? (2.5%)

SUGGESTED ANSWER:

Yes, Narciso is entitled to retirement benefits. A part-time lecturer, with a fixed-term employment, who did not
attain permanent status, is entitled to retirement pay. This was ruled by the Supreme Court in De La Salle Araneta
University v. Bernardo, G. R. No. 190809, February 13, 2017 as follows: Republic Act No. 7641 states that "any
employee may be retired upon reaching the retirement age x x x;" and "[i]n case of retirement, the employee shall be
entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining
agreement and other agreements." The Implementing Rules provide that Republic Act No. 7641 applies to "all
employees in the private sector, regardless of their position, designation or status and irrespective of the method by
which their wages are paid, except to those specifically exempted x x x." And Secretary Quisumbing' s Labor
Advisory further clarifies that the employees covered by Republic Act No. 7641 shall "include part-time employees,
employees of service and other job contractors and domestic helpers or persons in the personal service of another."

(b) If he is entitled to retirement benefits, how should retirement pay be computed in the absence of any
contract between him and Norte University providing for such benefits? (2.5%)

SUGGESTED ANSWER:
The retirement will be 22.5 days salary, exclusive of leave conversion benefits because he is a retiring employee that
is not subject to any CBA or employment contract. According to Capitol Wireless, Inc. v. Honorable Secretary Ma.
Nieves R. Confessor, G.R. No. 117174, November 13,1996:
For purposes of computing compulsory and optional retirement benefits and to align the current retirement plan with
the minimum standards of Art. 287 of the Labor Code, as amended by R.A. 7641, and Sec. 5 (5.2) of its
implementing rules, “1/2 month salary” means 22.5 days salary, exclusive of leave conversion benefits.
xxx xxx xxx
Unless the parties provide for broader inclusions, the term ‘one-half (1/2) 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 x x x x (italics supplied).

II. Nayon Federation issued a charter certificate creating a rank-and-file Neuman Employees Union. On the
same day, New Neuman Employees filed a petition for certification election with the Department of Labor
and Employment (DOLE) Regional Office, attaching the appropriate charter certificate.

a) The employer, Neuman Corporation, filed a motion to dismiss the petition for lack of legal personality on
the part of the petitioner union. Should the motion be granted? (2.5%)
SUGGESTED ANSWER:

The motion should be denied. For purposes of filing a petition for certification election, New Neuman Employees
has legal personality from the time it was issued with a charter certificate. This clear under the Labor Code, which
provides, The chapter shall acquire legal personality only for purposes of filing a petition for certification election
from the date it was issued a charter certificate. (Article 241 [234-A], As inserted by Section 2, Republic Act No.
9481 which lapsed into law on May 25, 2007 and became effective on June 14, 2007)

b) The employer likewise filed a petition for cancellation of union registration against New Neuman
Employees Union, alleging that Nayon Federation already had a chartered local rank-and-file union, Neuman
Employees Union, pertaining to the same bargaining unit within the establishment. Should the petition for
cancellation prosper? (2.5%)

SUGGESTED ANSWER:

No, the petition for cancellation cannot prosper. Under Article 247 of the Labor Code, the following are the
relevant grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or ratification of the constitution and
by-laws or amendments thereto, the minutes of ratification, and the list of members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of officers, minutes of the election of
officers, and the list of voters;
(c) Voluntary dissolution by the members.

Unless the employer can prove that any of the foregoing grounds are present the petition for cancellation will not
prosper.

III

Due to his employer’s dire financial situation, Nicanor was prevailed upon by his employer to voluntarily
resign. In exchange, he demanded payment of salary differentials, 13th month pay, and financial assistance,
as promised by his employer. Management promised to pay him as soon as it is able to pay off all retrenched
rank-and-file employees. Five years later, and before management was able to pay Nicanor the amount
promised to him, Nicanor died of a heart attack. His widow, Norie, filed a money claim against the company
before the National Labor Relations Commission (NLRC), including interest on the amount of the unpaid
claim. She also claimed additional damages arguing that the supposed resignation letter was obtained from
her spouse through undue pressure and influence. The employer filed a motion to dismiss on the ground that
(A) the NLRC did not have jurisdiction over money claims, and (B) the action has prescribed.

(a) Does the NLRC have jurisdiction to award money claims including interest on the amount unpaid? (2.5%)

SUGGESTED ANSWER:

Jurisdiction will depend on the amount being claimed by Nicanor’s surviving spouse. If the amount exceeds Five
Thousand Pesos (PhP5,000.00) as provided in Article 224 (a [6]) of the Labor Code then jurisdiction belongs to the
Arbitration Branch of the NLRC. However, if the amount did not exceed Five Thousand Pesos (PhP5,000.00) and
then jurisdiction belongs to the Regional Director under Article 129 of the Labor Code involving recovery of wages,
simple money claims and other benefits. Either of the said quasi-judicial body can award interest in the concept of
actual and compensatory damages in accordance. The award of interest in money claim was explained in Limlingan
v. Asian Institute Management, Inc., G.R. No. 220481, February 17, 2016, that the rate of interest in the concept of
actual and compensatory damages as well as its accrual are as follows:

1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of
money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall
itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest
shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to
the provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with
reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin
to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty
cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date
the judgment of the court is made (at which time the quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount
finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest,
whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its
satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.

NOTE: The foregoing answer can be found in page 26 of the book entitled Principles and Cases Labor Relations,
Second Edition 2018, by Atty. Voltaire T. Duano and in pages 589-590 of the book entitled Principles and Cases
Labor Standards and Social Legislation, Second Edition 2018, by Atty. Voltaire T. Duano. Questions involving the
same subject matter were given during the 2011 and 2016 (on award of interest in money claim) Bar Examinations.

(b) Assuming that the NLRC has jurisdiction, has the action prescribed? (2.5%)

SUGGESTED ANSWER:

The action has not prescribed. This is because Nicanor’s surviving spouse’s cause of action will accrue upon the
categorical denial of the claim. In this case, there was demand for its payment, however, the management had
promised to pay as soon as it is able to pay off all retrenched rank-and-file employees. However, it is was only after
five (5) years that the management was able to pay. Moreover, there was no denial of the claim. Therefore,
prescription did not set in. In the Degamo v. Avantgarde Shipping Corp., G.R. No. 154460, November 22, 2005 and
Serrano v. Court of Appeals, G.R. No. 139420, August 15, 2001, following cases, the Supreme Court explained the
accrual of a cause of action under Article 306 [291].

NOTE: The foregoing answer can be found in pages 943-946 of the book entitled Principles and Cases Labor
Relations, Second Edition 2018, by Atty. Voltaire T. Duano. Questions involving the same subject matter was given
during the 2010 Bar Examination.

(c) May Nicanor’s spouse successfully claim additional damages as a result of the alleged undue pressure and
influence? (2.5%)

SUGGESTED ANSWER:

Yes, Nicanor’s spouse can successfully claim additional damages as a result of the alleged undue pressure and
influence. This is provided under Article 224 (a [4] of the Labor Code which provides for claims for actual, moral,
exemplary and other forms of damages arising from employer-employee relationship within the jurisdictional
authority of the Arbitration Branch of the NLRC.

In the alternative, it can be argued that Nicanor’s spouse cannot successfully claim additional damages because it is
the jurisdictional authority of the Arbitration Branch of the NLRC. The employer-employee relationship is only
incidental and the cause of action arises from other sources like torts and damages. Therefore, jurisdiction belongs to
the regular courts.
IV

Natasha Shoe Company adopted an organizational streamlining program that resulted in the retrenchment
of 550 employees in its main plant. After having been paid their separation benefits, the retrenched workers
demanded payment of retirement benefits under a CBA between their union and management Natasha Shoe
Company denied the workers’ demand.

(a) What is the most procedurally peaceful means to resolve this dispute? (2.5%)

SUGGESTED ANSWER:

Since this is a money claim involving the interpretation and implementation of the CBA, the retrenched workers can
refer the matter to the grievance machinery and if it remained unresolved within seven (7) days from the date of its
submission the same shall be automatically referred to the voluntary arbitration prescribed in the CBA.

In the alternative it can be argued, that since this is a dispute between the retrenched workers and the employer the
same cannot be a subject matter of grievance and voluntary arbitration. This is because only disputes between the
union and the company as ruled in Tabique v. International Copra Export Corporation, G. R. No. 183335, December
23, 2009, shall be referred to grievance machinery or voluntary arbitrators. Thus, the dispute should be resolved by
way of mandatory conciliation-mediation in accordance with Article 234 of the Labor Code.

(b) Can the workers claim both separation pay and retirement benefits. (2.5%)

SUGGESTED ANSWER:

Yes, the workers can claim both separation pay and retirement benefits. This was settled rule in the case of
Goodyear v. Marina Angus, G.R. No. 185499, 14 November 2014 where it was ruled that in the absence of an
express or implied prohibition against it, collection of both retirement benefits and separation pay upon severance
from employment is allowed. This is grounded on the social justice policy that doubts should always be resolved
in favor of labor rights. (Aquino v. National Labor Relations Commission, G.R. No. 87653, February 11, 1992)

Nelda worked as a chambermaid in Hotel Neverland with a basic wage of PhP560.00 for an eight-hour
workday. On Good Friday, she worked for one (1) hour from 10:00 PM to 11:00 PM. Her employer paid her
only PhP480 for each 8-hour workday, and PhP70.00 for work done on Good Friday. She sued for
underpayment of wages and non-payment of holiday pay and night shit differential for working on a Good
Friday. Hotel Neverland denied the alleged underpayment, arguing that based on long-standing unwritten
tradition, food and lodging costs were partially shouldered by the employer and partially paid for by the
employee through salary deduction. According to the employer, such valid deduction caused the payment of
Nelda’s wage to be below the prescribed minim m. The hotel also claimed that she was not entitled to holiday
pay and night shift differential pay hotel workers have to work on holidays and may be be assigned to work
at night.

(a) Does the hotel have valid legal grounds to deduct food and lodging costs from Nelda's basis salary? (2.5%)

SUGGESTED ANSWER:

No, it does not. As held in Mabeza v. National Labor Relations Commission, G.R. No. 118506, April 18, 1997:
Granting that meals and lodging were provided and indeed constituted facilities, such facilities could not be
deducted without the employer complying first with certain legal requirements. Without satisfying these
requirements, the employer simply cannot deduct the value from the employee’s wages. First, proof must be shown
that such facilities are customarily furnished by the trade. Second, the provision of deductible facilities must be
voluntarily accepted in writing by the employee. Finally, facilities must be charged at fair and reasonable value.
(Labor Code, Art. 97 [f])
Applying the above, unless the hotel can comply with the legal requirements it has no valid legal grounds to deduct
food and lodging costs from Nelda's basis salary.

(b) Applying labor standards law, how much should Nelda be paid for work done Good Friday? Show the
computation in your test booklet and encircle your final answer. (2.5%)

SUGGESTED ANSWER:

It can be argued:

The rule in order to be paid regular holiday like two successive holidays provides as follows, Where there are two
(2) successive regular holidays, like Holy Thursday and Good Friday, an employee may not be paid for both
holidays if he absents himself from work on the day immediately preceding the first holiday, unless he works on the
first holiday, in which case he is entitled to his holiday pay on the second holiday.(Section 10, Rule IV, Book III,
Rules to Implement the Labor Code)

Applying the above rule, unless Nelda had complied with the rules on absences she is not entitled for her holiday
pay for work done on Good Friday.

However, on the assumption that she complied with the rules Nelda should be paid as follows: P560 x
200%=P1,120.00 or since he only worked for one hour the pay should be as follows: 70 x 200% = P140.00

VI

A certification election was conducted in Nation Manufacturing Corporation, whereby 55% of eligible voters
in the bargaining unit cast their votes. The results were as follows:

Union Nana : 45 votes


Union Nada : 40 votes
Union Nara : 30 votes
No Union : 80 votes

Union Nana moved to be declared as the winner of the certification election.

a) Can Union Nana be declared as the winner? (2.5%)

SUGGESTED ANSWER:

Union Nana cannot be declared as the winner. This is because the said union did not obtain the majority of the valid
votes casts as provided under Article 268 of the Labor Code, “The labor union receiving the majority of the valid
votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit.”.

b) Assume that the eligibility of 30 voters was challenged during pre-election conference. The ballots of the 30
challenged voters were placed inside an envelope sealed by the DOLE Election Office. Considering the said
envelope remains sealed, what should be the next course of action with respect to the said challenged votes?
(2.5%)
SUGGESTED ANSWER:

The procedure in the Challenge of Votes provides as follows:

 The ballot of the voter who has been properly challenged during the Pre-Election conferences, shall be
placed in an envelope which shall be sealed by the Election Officer in the presence of the voter and the
representatives of the contending unions.
 The election Officer shall indicate on the envelope the voter’s name, the union challenging the voter, and
the ground for the challenged.
 The sealed envelope shall then be signed by the Election Officer and the representatives of the contending
unions.
 The Election Officer shall note all challenges in the minutes of the election proceedings and shall have
custody of all envelops containing the challenged votes.
 The envelopes shall be opened and the question of eligibility shall be passed upon by the Mediator-Arbiter
only if the number of segregated votes will materially alter the results of the election. (Section 11, Rule IX,
Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-F-03, Series of
2008 and renumbered by Department Order No. 40-I-15, Series of 2015)
 Applying the said procedure, if the number of segregated votes will materially alter the results of the
election the next course of action with respect to the said challenged votes is to open the said envelopes and
the question of eligibility shall be passed upon by the Mediator-Arbiter.

VII

Nico is a medical representative engaged in the promotion of Pharmaceutical products and medical devices
for North Pharmaceuticals, Inc. He regularly visits. physicians' clinics to inform them of the chemical
composition and benefits of his employer's products. A the end of everyday, he receives a basis wage of
PhP700.00 plus a PhP150.00 "productivity allowance." For purposes of computing Nico's 13th month pay,
should the daily "productivity allowance" be included? (2.5%)

SUGGESTED ANSWER:

For purposes of computing Nico's 13th month pay his daily "productivity allowance" cannot be included.
In Philippine Spring Water Resources, Inc. v. Court of Appeals, G.R. No. 205278, June 11, 2014, clarified as to
when a commission forms part of basic salary to be considered in the computation of 13th month pay. The High
Court said: It is well-established in jurisprudence that the determination of whether or not a commission forms part
of the basic salary depends upon the circumstances or conditions for its payment. In Phil Duplicators, Inc. v. NLRC,
G.R. No. 110068, November 11, 1993, 227 SCRA 747, the Court held that commissions earned by salesmen form
part of their basic salary. The salesmen’s commissions, comprising a pre-determined percentage of the selling price
of the goods sold by each salesman, were properly included in the term basic salary for purposes of computing the
13th month pay. The salesmen’s commissions are not overtime payments, nor profit-sharing payments nor any other
fringe benefit, but a portion of the salary structure which represents an automatic increment to the monetary value
initially assigned to each unit of work rendered by a salesman. On the other hand, in Boie-Takeda Chemicals, Inc. v.
De la Serna, G.R. Nos. 92174 and 102552, December 10, 1993, 228 SCRA 329, the so-called commissions paid to
or received by medical representatives were excluded from the term basic salary because these were paid to the
medical representatives and rank-and-file employees as productivity bonuses, which were generally tied to the
productivity, or capacity for revenue production, of a corporation and such bonuses closely resemble profit-sharing
payments and had no clear direct or necessary relation to the amount of work actually done by each individual
employee.
Applying the above rule, the productivity allowance cannot be included.

NOTE: The foregoing answer can be found in page 492 of the book entitled Principles and Cases Labor Standards
and Social Legislation, Second Edition 2018. Question involving the same subject matter was given during the 2011
Bar Examination. An alternative answer can be given by stating that it will depend as to whether the productivity
bonus form part of the salary. In fine, whether or not the productivity bonus forms part of the basic salary depends
upon the circumstances or conditions for its payment, which indubitably are factual in nature. If the productivity
bonuses were because they were generally tied to the productivity, or capacity for revenue production it will not
form part of the salary. However, if has a clear direct or necessary relation to the amount of work actually done by
each individual employee then it form part of the salary. This was the distinction given by the case of Reyes v.
NLRC, G.R. No. 160233, August 8, 2007 citing the cases of Phil Duplicators, Inc. v. NLRC, G.R. No. 110068,
November 11, 1993 and monetary value initially assigned to each unit of work rendered by a salesman. On the other
hand, in Boie-Takeda Chemicals, Inc. v. De la Serna, G.R. Nos. 92174 and 102552, December 10, 1993.

VIII

Nathaniel has been a salesman assigned by Newmark Enterprises (Newmark) for nearly two years at the
Manila office of Nutrition City, Inc. (Nutrition City). He was deployed pursuant to a service agreement
between Newmark and Nutrition City, the salient provisions of which were as follows:
a) the Contractor (Newmark) agrees to perform and provide the Client (Nutrition City), on a non-exclusive
basis, such tasks or activities that are considered contractible under existing laws, as may be needed by the
Client from time to time;
b) the Contractor shall employ the necessary personnel like helpers, salesmen, and drivers who are
determined by the Contractor to be efficiently trained;
c) the Client may request replacement of the Contractor’s personnel if quality of the desired result is not
achieved;
d) the Contractors personnel will comply with the Client's policies, rules, and regulations; and
e) the Contractor’s two service vehicles and necessary equipment will be utilized in carrying out the
provisions of this Agreement.

When Newmark fired Nathaniel, he filed an illegal dismissal case against the wealthier company, Nutrition
City, Inc., alleging that he was a regular employee of the same. Is Nathaniel correct? (2.5%)

SUGGESTED ANSWER: (SERVICE AGREEMENT AND REGULAR EES)

Nathaniel is correct in so far as the existence of employer-employee relationship between him and the principal.

The rules requires that the Service Agreement between the principal and the contractor shall include the following:
i. The specific description of the job or work being subcontracted, including its term or duration.
ii. The place of work and terms and conditions governing the contracting arrangement, to include the agreed amount
of the contracted job or work as well as the standard administrative fee of not less than ten percent (10%) of the total
contract cost; and
iii. A provision on the issuance of the bond/s defined under Section 3(a) renewable every year. (Section 11, D.O.
No. 174, Series of 2017)
On the other hand, a finding of violation of 11 shall render the principal the direct employer of the employees of the
contractor or subcontractor, pursuant to Article 109 of the Labor Code, as amended. (Section 12, D.O. No. 174,
Series of 2017)
Applying the above rules, since Newmark and Nutrition City violated the required terms to be stated in the Service
Agreement then Nutrition City is the direct employer of Nathaniel.
As to whether Nathaniel is a regular employee of Nutrition City, the rules are as follows:
Regular employees are further classified into: (1) regular employees by nature of work; and (2) regular employees
by years of service. (E. Ganzon, Inc. vs. National Labor Relations Commission, G.R. No. 123769, 22 December
1999, 321 SCRA 434, 440) The former refers to those employees who perform a particular activity which is
necessary or desirable in the usual business or trade of the employer, regardless of their length of service; while the
latter refers to those employees who have been performing the job, regardless of the nature thereof, for at least a
year. (Pangilinan vs. General Milling Corporation, G.R. No. 149329, 12 July 2004)
Tested from the nature of his work and the activity of the principal Nathaniel could be a regular employee while if it
is tested on the length of service then Nathaniel is a regular employee as he has been employed with the principal for
a least a year. In fact he was employed for nearly two years.
NOTE: The foregoing answer can be found in page 561 of the book entitled Principles and Cases Labor Standards
and Social Legislation, Second Edition 2018, and page 676 of the book entitled Principles and Cases Labor
Relations, Second Edition 2018, by Atty. Voltaire T. Duano. Questions involving the same subject matter were
given during the 2009 (on terms of Service Agreement) and 22013 and 2008 (on regular employees) Bar
Examinations. An alternative answer can be given by characterizing the relationship of the principal with the
contractor as to whether it is a job contracting or LOC. Then as to who would be the direct employer and extent of
liability can be determined or concluded.

IX

Sgt. Nemesis was a detachment non-commissioned officer of the Armed Forces of the Philippines in Nueva
Ecija. He and some other members of his detachment sought permission from their Company Commander
for an overnight pass to Nueva Vizcaya to settle some important matters. The Company Commander orally
approved their request and allowed them to carry their firearms as the place they were going to was classified
as a “critical place.” They arrived at the place past midnight; and as they were alighting from a tricycle, one
of his companions accidentally dropped his rifle, which fired a single shot, and in the process hit Sgt. Nemesis
fatally. The shooting was purely accidental. At the time of his death, he was still legally married_to Nelda but
had been separated de facto from her for 17 years. For the last 15 years of his life, he was living in with
Narda, with whom he has two minor children. Since Narda works as a kasambahay, the two children lived
with their grandparents, who provided their daily- support. Sgt. Nemesis and Narda only sent money to them
every year to them for their school tuition.

Nelda and Narda, both for themselves and the latter, also on behalf of her minor children, separately filed
claims for compensation as a result of the death of Sgt. Nemesis. The Line of Duty Board of the AFP declared
Sgt. Nemesis’ death to have been “in line of duty’, and recommended that all benefits due to Sgt. Nemesis be
given to his dependents. However, the claims were denied by GSIS because Sgt. Nemesis was not in his
workplace nor performing his duty as a soldier of the Philippine Army when he died.

(a) Are the dependents of Sgt. Nemesis entitled to compensation as a result of his death? (2.5%)

SUGGESTED ANSWER:
The death of Sgt. Nemesis is compensable because it is work-connected. However, in so far as entitlement of the
dependents of Sgt. Nemesis for compensation as a result of his death the dependent spouse cannot claim
compensation. The law requires that the dependent spouse should be a legitimate spouse living with the employee.
(Article 173 [i], Labor Code).

In this case, the legitimate spouse Nelda is not entitled because she is not living with Sgt. Nemesis while Narda will
not qualify as dependent spouses as she is not a legitimate spouse of Sgt. Nemesis although she is living with the
latter. On the other hand, in so far as the dependent child the law requires that the dependent child be legitimate,
legitimated, legally adopted or xxx, who is unmarried, not gainfully employed, not over 21 years of age provided he
is incapacitated and incapable of self-support due to physical or mental defect which is congenital or acquired during
minority. The two minor children are therefore qualified as dependent children. Hence, entitled to compensation.

(b) As between Nelda and Narda, who should be entitled to the benefits? (2.5%)

SUGGESTED ANSWER:

NONE. Nelda and Narda are not entitled to the benefits because they failed to qualify within the definition (Article
173 [i], Labor Code) of dependent spouse.
X

Nonato had been continuously employed and deployed as a seaman who performed services that were
necessary and desirable to the business of N-Train hipping, through its local agent, Narita Maritime Services
(Agency), in accordance with the 2010 Philippine Overseas Employment Administration Standard
Employment Contract (2010 POEA-SEC). Nonato's last contract (for ye months) expired on November 15,
2016. Nonato was then repatriated due to "finished contract." He immediately reported to the Agency and
complained that he had been experiencing dizziness, weakness, and difficulty in breathing. The agency
referred him to Dr. Neri, who examined, treated, and prescribed him with medications. After a few months of
treatment and consultations, Nonato was declared fit to resume work as a seaman. Nonato went back to the
Agency to ask for re-deployment but the Agency rejected his application. Nonato filed an illegal dismissal
case against the Agency and its principal, with a claim for total disability benefits based on the ailments that
he developed on board N-Train hipping-vessels. The claim was based on the certification of his own
physician, Dr. Nunez, that he was unfit for sea duties because of his hypertension and diabetes.

a) Was Nonato a regular employee of N-Train Shipping? (2.5%)

SUGGESTED ANSWER:

Nonato is not a regular employee of N-Train Shipping. The fact that seafarers are not regular employees is already a
settled rule.
In Petroleum Shipping Limited (formerly Esso International Shipping (Bahamas) Co., Ltd.) v. NLRC, G.R. No.
148130, June 16,2006, the Supreme Court said that the issue on whether seafarers are regular employees is already a
settled matter. Thus, the High Court said:
It was in Ravago v. Esso Eastern Marine, Ltd., G.R. No. 158324, 14 March 2005, 453 SCRA 381 where the
Honorable Supreme Court traced its ruling in a number of cases that seafarers are contractual, not regular,
employees. Thus, in Brent School, Inc. v. Zamora, G.R. No. 48494, 5 February 1990, 181 SCRA 702 the Supreme
Court cited overseas employment contract as an example of contracts where the concept of regular employment does
not apply, whatever the nature of the engagement and despite the provisions of Article 280 of the Labor Code. In
Coyoca v. NLRC, G.R. No. 113658 March 31, 1995, the Supreme Court held that the agency is liable for payment
of a seaman’s medical and disability benefits in the event that the principal fails or refuses to pay the benefits or
wages due the seaman although the seaman may not be a regular employee of the agency.
The Supreme Court squarely passed upon the issue in Millares v. NLRC, G.R. No. 110524, July 29, 2002, where
one of the issues raised was whether seafarers are regular or contractual employees whose employment are
terminated every time their contracts of employment expire. The Supreme Court explained:
[I]t is clear that seafarers are considered contractual employees. They can not be considered as regular employees
under Article 280 of the Labor Code. Their employment is governed by the contracts they sign everytime they are
rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a
certain period of time. They fall under the exception of Article 280 whose employment has been fixed for a specific
project or undertaking the completion or termination of which has been determined at the time of engagement of the
employee or where the work or services to be performed is seasonal in nature and the employment is for the duration
of the season. We need not depart from the rulings of the Court in the two aforementioned cases which indeed
constitute stare decisis with respect to the employment status of seafarers.

b) Can Nonato successfully claim disability benefits against N-Train Shipping and its agent Narita Maritime
Services? (2.5%)

SUGGESTED ANSWER:
The claim for disability benefits of Nonato against N-Train Shipping and its agent Narita Maritime Services will not
prosper for prematurity.
The Supreme Court laid down the procedures for filing disability benefits and its effect in case of failure to comply
with the procedures in Daraug v. KGJS Fleet Management Manila, G.R. No. 211211, January 14, 2015. Thus, in
denying the claim for disability benefits due to prematurity the Supreme Court ruled:
Petitioner Did Not Comply With The Procedures
In Vergara v. Hammonia Maritime Services, Inc.31 (Vergara), it was stated that the Department of Labor and
Employment (DOLE), through the POEA, has simplified the determination of liability for work-related death, illness
or injury in the case of Filipino seamen working on foreign oceangoing vessels. Every seaman and the vessel owner
(directly or represented by a local manning agency) are required to execute the POEA Standard Employment
Contract (POEA-SEC) as a condition sine qua non prior to the deployment of the seaman for overseas work. The
POEA-SEC is supplemented by the Collective Bargaining Agreement (CBA) between the owner of the vessel and
the covered seaman. In this case, the parties entered in to a contract of employment in accordance with the POEA-
SEC and they agreed to be bound by the CBA.
Thus, in resolving petitioner’s claim for disability compensation, the Court will be guided by the procedures
laid down in the POEA-SEC and in the CBA. On this point, Section 20(B)(3) of the POEA-SEC provides:
Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his
basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the company-
designated physician but in no case shall this period exceed one hundred twenty (120) days.
For this purpose, the seafarer shall submit himself to a post-employment medical examination by a company-
designated physician within three working days upon his return except when he is physically incapacitated to so, in
which case, a written notice to the agency within the same period is deemed a compliance. Failure of the seafarer to
comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above
benefits.
If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the
Employer and the seafarer. The third doctor’s decision shall be final and binding on both parties.

Xl

Your favorite relative, Tita Nilda, approaches you and seeks your advice n her treatment of her kasambahay,
Noray. Tita Nilda shows you a document called a “Contract of Engagement” for your review. Under the
Contract of Engagement, Noray shall be entitled to a rest day every week, provided that she may be
requested to work on a rest day if Tita Nilda should need her services that day. Tita Nilda also claims that
this Contract of Engagement should embody the terms and conditions of Noray’s work as the engagement of
a kasambahay is a private matter and should not be regulated by the State.

a) Is Tita Nilda correct in saying that this is a private matter and should not be regulated by the State?
(2.5%)

SUGGESTED ANSWER:

Tita Nilda is not correct in saying that engagement of a kasambahay is a private matter and should not be regulated
by the State. This is a valid subject matter of the exercise of police power to give effect to the declared policy of the
law such as the need to protect the rights of domestic workers against abuse, harassment, violence, economic
exploitation and performance of work that is hazardous to their physical and mental health; and in protecting
domestic workers and recognizing their special needs to ensure safe and healthful working conditions, promotes
gender-sensitive measures in the formulation and implementation of policies and programs affecting the local
domestic work. (Section 2, Article I, Republic Act No. 10361)

b) is the stipulation that she may be requested to work on a rest day legal? (2.5%)

SUGGESTED ANSWER:
The stipulation that Noray may be requested to work on a rest day is legal. The law provides that, “ Nothing in this
provision shall deprive the domestic worker and the employer from agreeing to the following:
(a) Offsetting a day of absence with a particular rest day;
(b) Waiving a particular rest day in return for an equivalent daily rate of pay;
(c) Accumulating rest days not exceeding five (5) days; or
(d) Other similar arrangements. (Section 21, Article IV, Republic Act No. 10361)
c) Are stay-in family drivers included under the Kasambahay Law?(2.5%)

SUGGESTED ANSWER:

Stay-in family drivers are not included under the Kasambahay Law. This was very clear in the Rules
Implementing the Kasambahay Law providing as follows:
The following are not covered:
(a) Service providers;
(b) Family drivers;
(c) Children under foster family arrangement; and
(d) Any other person who performs work occasionally or sporadically and not on an occupational basis. (Section 2,
Rule I, Implementing Rules and Regulations of Republic Act 10361)

XII
Nena worked as an Executive Assistant for Nesting, CEO of Now Corporation. One day, Nesting called Nena
into his office and showed her lewd pictures of women in seductive poses which Nena found offensive. Nena
complained before the General Manager who, in turn, investigated the matter and recommended the
dismissal of Nesting to the Board of Directors. Before the Board of Directors, Nesting argued, that-since the
Anti-Sexual Harassment Law requires the existence of “sexual favors,” he should not be dismissed from the
service since he did not ask for any-sexual favor from Nena. Is Nesting correct? (2.5%)

SUGGESTED ANSWER:

Nesting is not correct.

The law penalizing sexual harassment in our jurisdiction is RA 7877. Section 3 thereof defines work-related sexual
harassment in this wise:

Sec. 3. Work, Education or Training-related Sexual Harassment Defined.—Work, education or training-related


sexual harassment is committed by an employer, manager, supervisor, agent of the employer, teacher, instructor,
professor, coach, trainor, or any other person who, having authority, influence or moral ascendancy over another in a
work or training or education environment, demands, requests or otherwise requires any sexual favor from the other,
regardless of whether the demand, request or requirement for submission is accepted by the object of said Act.

(a) In a work-related or employment environment, sexual harassment is committed when: xxx (3) The above acts
would result in an intimidating, hostile, or offensive environment for the employee.

Contrary to Nesting’s claim, it is enough that his acts result in creating an intimidating, hostile or offensive
environment for the employee.

XIII

Nicodemus was employed as a computer programmer by Network Corporation, a telecommunications firm.


He has been coming to work in shorts and sneakers, in violation of the “prescribed uniform policy” based on
company rules and regulations. The company human resources manager wrote him a letter, giving him 10
days to comply with the company uniform policy. Nicodemus asserted that wearing shorts and sneakers made
him more productive, and cited his above-average output. When he came to work still in violation of the
uniform policy, the company sent him a letter of termination of employment. Nicodemus filed an illegal
dismissal case. The Labor Arbiter ruled in favor of Nicodemus and ordered his reinstatement with
backwages. Network Corporation, however, refused to reinstate him. The NLRC 1st Division sustained the
Labor Arbiter’s judgment. Network Corporation still refused to reinstate Nicodemus. Eventually, the Court
of Appeals reversed the decision of the NLRC and ruled that the dismissal was valid. Despite the reversal,
Nicodemus still filed a motion for execution with respect to his accrued backwages.
(a) Were there valid legal grounds to dismiss Nicodemus from his employment? (2.5%)

SUGGESTED ANSWER:

Yes, Nicodemus can be dismissed on based on willful disobedience to the lawful order under Article 297 (a) of the
Labor Code and the “prescribed uniform policy” of the company.

The basis is the case of St. Luke’s v. Sanchez, G.R. No. 212054, March 11, 2015 were it was ruled: At the same
time, the employee has the corollary duty to obey all reasonable rules, orders, and instructions of the employer; and
willful or intentional disobedience thereto, as a general rule, justifies termination of the contract of service and the
dismissal of the employee. (Malabago v. NLRC, 533 Phil. 292, 300 [2006]) x x x x. Note that for an employee to be
validly dismissed on this ground, the employer’s orders, regulations, or instructions must be: (1) reasonable and
lawful, (2) sufficiently known to the employee, and (3) in connection with the duties which the employee has been
engaged to discharge.”

(b) Should Nicodemus’ motion for execution be granted? (2.5%)

SUGGESTED ANSWER:

Yes, Nicodemus’ motion for execution should be granted. He is entitled to his accrued salary.

The accrued wages/salaries (reinstatement wages/salaries) is the consequence of the reinstatement aspect of the
decision of the Labor Arbiter referred in paragraph 3, Article 229 [223] of the Labor Code. This means that a
dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive wages pending
appeal upon reinstatement, which is immediately executory. In other words, it refers to the wages or salaries which
automatically accrued to a dismissed employee from the notice of the Labor Arbiter’s order of reinstatement until its
ultimate reversal by the higher court, which could be the NLRC, the Court of Appeals or the Supreme Court. The
entitlement to accrued wages/salaries (reinstatement wages/salaries ) of a dismissed employee was discussed in the
cases of Roquero v. Philippine Airlines, G.R. No. 152329, 449 Phil. 437 (2003), Garcia v. Philippine Airlines, G.R.
No. 164856, January 20, 2009, 576 SCRA 479, Islriz Trading v. Capada, G.R. No. 168501, January 31, 2011, Pfizer
Inc. v. Velasco, G.R. No. 177467, March 9, 2011 and Wenphil Corporation v. Abing, G.R. No. 207983, April 7,
2014.

In resolving the rule on entitlement to accrued wages between the period where the Labor Arbiter’s order of
reinstatement is pending appeal and the NLRC Resolution overturning that of the Labor Arbiter, the case of Garcia
v. Philippine Airlines, Inc., G.R. No. 164856, January 20, 2009, 576 SCRA 479, is in point. The Supreme Court
examined its conflicting rulings with respect to the application of paragraph 3 of Article 223 of the Labor Code, viz:

The core of the seeming divergence is the application of paragraph 3 of Article 223 of the Labor Code which reads:
‘In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the
reinstatement aspect is concerned, shall immediately be executory, pending appeal. The employee shall either be
admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the
option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the
execution for reinstatement provided herein.’
The view as maintained in a number of cases is that:
‘x x x [E]ven if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of
the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by
the higher court. On the other hand, if the employee has been reinstated during the appeal period and such
reinstatement order is reversed with finality, the employee is not required to reimburse whatever salary he received
for he is entitled to such, more so if he actually rendered services during the period.
In other words, a dismissed employee whose case was favorably decided by the Labor Arbiter is entitled to receive
wages pending appeal upon reinstatement, which is immediately executory. Unless there is a restraining order, it is
ministerial upon the Labor Arbiter to implement the order of reinstatement and it is mandatory on the employer to
comply therewith.
XIV

Nelson complained before the DOLE Regional Office about Needy Corporation's failure to pay his wage
increase amounting to PhP5,000.00 as mandated in a Wage Order issued by the Regional Tripartite Wages
and Productivity Board. Consequently, Nelson-asked the DOLE to immediately issue an Order sustaining his
money claim. To his surprise, he received a notice from the DOLE to appear before the Regional Director for
purposes of conciliating the dispute between him and Needy Corporation. When conciliation before the
Regional Director the latter proceeded to direct both parties to submit their respective position papers in
relation to the dispute. Needy Corporation argued, that since Nelson was willing to settle for 75% of his
money claim during conciliation proceedings, only a maximum of 75% of the said money claim may be
awarded to him.
(a) Was DOLE’s action to conduct mandatory conciliation in light of Nelson’s complaint valid? (2.5%)

SUGGESTED ANSWER:

Yes, the DOLE’s action to conduct mandatory conciliation is valid. This is mandated by Article 234 of the Labor
Code, except as provided in Title VII-A, Book V of this Code, as amended, or as may be excepted by the Secretary
of Labor and Employment, all issues arising from labor and employment shall be subject to mandatory conciliation-
mediation.

(b) Should the Regional Director sustain Needy Corporation’s argument? (2.5%)

SUGGESTED ANSWER:

The Regional Director should not sustain Needy Corporation’s argument. This is because under Article 239 of the
Labor Cod, information and statements made at conciliation proceedings shall be treated as privileged
communication and shall not be used as evidence in the Commission. Conciliators and similar officials shall not
testify in any court or body regarding any matters taken up at conciliation proceedings conducted by them. Thus,
Needy Corporation cannot raise the argument that Nelson was willing to settle for 75% of his money claim during
conciliation proceedings.

XV

Nexturn Corporation employed Nini and Nono, whose tasks involved directing and supervising rank-and-file
employees engaged in company operations. Nini and Nono are required to ensure that such employees obey
company rules and regulations, and recommend to the company's Human Resources Department any
required disciplinary action against erring employees. In Nexturn Corporation, there are independent
unions, representing rank- and-file and supervisory employees, respectively.

a) May Nini and Nono join a union? (2.5%)

SUGGESTED ANSWER:

Yes, Nini and Nono can join a union because they are considered as supervisors. A Supervisory employees are those
who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority
is not merely routinary or clerical in nature but requires the use of independent judgment. This is clearly allowed
under Article 255 of the Labor Code which provides in substance that supervisory employees may join, assist or
form separate collective bargaining units and/or legitimate labor organizations of their own.
b) May the two unions be affiliated with the same Union Federation? (2.5%)
SUGGESTED ANSWER:

Yes, the two unions can be affiliated with the same Union Federation. This is clearly allowed under Article 255 of
the Labor Code which provides in substance that the rank-and-file union and the supervisors’ union operating within
the same establishment may join the same federation or national union.

XVI

Nagrab Union and Nagrab Corporation have an existing CBA which contains the following provision:
“New_employees within the coverage of the bargaining unit who may be regularly employed shall become
members of Nagrab Union. Membership in good standing with the Nagrab Union is a requirement for
continued employment with Nagrab Corporation.” Nagrab Corporation subsequently acquired all the assets
and rights of Nuber Corporation and absorbed all of the latter’s employees. Nagrab Union immediately
demanded enforcement of the above-stated CBA provision with respect to the absorbed employees. Nagrab
Corporation refused on the ground that this should not apply fo the absorbed employees who were former
employees of another corporation whose assets and rights it had acquired.

(a) Was Nagrab Corporation correct in refusing to enforce the CBA 4 provision with respect to the absorbed
employees? (2.5%)

SUGGESTED ANSWER:

Nagrab Corporation was not correct in refusing to enforce the CBA provision with respect to the absorbed
employees. This is because it cannot invoke its merger with another corporation as a valid ground to exempt its
absorbed employees from the coverage of a union shop clause contained in its existing Collective Bargaining
Agreement (CBA) with its own certified labor union. In BANK OF THE PHILIPPINE ISLANDS V. BPI
EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, G.R. No. 164301,
August 10, 2010, the High Court resolved the question in this manner: At the outset, we should call to mind the
spirit and the letter of the Labor Code provisions on union security clauses, specifically Article 248 (e), which states,
x x x Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized
collective bargaining agent as a condition for employment, except those employees who are already members of
another union at the time of the signing of the collective bargaining agreement. This case which involves the
application of a collective bargaining agreement with a union shop clause should be resolved principally from the
standpoint of the clear provisions of our labor laws, and the express terms of the CBA in question, and not by
inference from the general consequence of the merger of corporations under the Corporation Code, which obviously
does not deal with and, therefore, is silent on the terms and conditions of employment in corporations or juridical
entities.

(b) May a newly-regularized employee of Nagrab Corporation (who is not-part of the absorbed employees)
refuse to join Nagrab Union? How would you advise the human resources manager of Nagrab Corporation to
proceed? (2.5%)

SUGGESTED ANSWER:

The newly-regularized employee of Nagrab Corporation (who is not-part of the absorbed employees) cannot refuse
to join Nagrab Union in view of the union security clause provision of the CBA. While the right to join includes the
right not to join, however, the exception is the UNION SECURITY CLAUSE where it imposes upon employees the
obligation to acquire or retain union membership as a condition affecting employment. Thus, I will advise the
human resources manager of Nagrab Corporation to comply with the provision of the CAB stating that :
“New_employees within the coverage of the bargaining unit who may be regularly employed shall become
members of Nagrab Union.
XVII

Upon compliance with the legal requirements on the conduct of a strike, Navarra Union staged a strike
against Newfound Corporation on account of a collective bargaining deadlock. During the strike, some
members of Navarra Union broke the windows and punctured the tires of the company-owned buses. The
Secretary of Labor and Employment assumed jurisdiction over the dispute.

(a) Should all striking employees be admitted back to work upon the assumption of jurisdiction by the
Secretary of Labor and Employment? Will these include striking employees who damaged company
properties? (2.5%)

SUGGESTED ANSWER:

Yes, all striking employees be admitted back to work and including striking employees who damaged company
properties. The effect of assumption of jurisdiction of the Secretary of Labor is clear under Article 278 (g) which
provides in substance that such assumption shall have the effect of automatically enjoining the intended or
impending strike or lockout as specified in the assumption or certification order. If a strike has already taken place at
the time of assumption or certification, all striking or locked out employees shall immediately return-to-work and
the employer shall immediately resume operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout.

NOTE: The foregoing answer can be found in page 478 of the book entitled Principles and Cases Labor Relations,
Second Edition 2018. Questions involving the same subject matter were given during the 2003 and 1997 Bar
Examinations.

(b) May the company, readmit strikers only by restoring them to the payroll? 5%)

SUGGESTED ANSWER:

The company may not readmit strikers by restoring them to the payroll. The phrase “under the same terms and
conditions” found in Article 278 (g) [263 (g)] of the Labor Code was interpreted by the Supreme Court in the
case of the University of Immaculate Concepcion, Inc. v. Secretary of Labor, G.R. No. 151379, January 14, 2005 as
follows:
With respect to the Secretary’s Order allowing payroll reinstatement instead of actual reinstatement for the
individual respondents herein, an amendment to the previous Orders issued by her office, the same is usually not
allowed. Article 263(g) of the Labor Code aforementioned states that all workers must immediately return to work
and all employers must readmit all of them under the same terms and conditions prevailing before the strike or
lockout. The phrase “under the same terms and conditions” makes it clear that the norm is actual reinstatement.
This is consistent with the idea that any work stoppage or slowdown in that particular industry can be detrimental to
the national interest.

Clearly, reinstatement should be actual and not payroll reinstatement.

XVIII

Nestor and Nadine have been living in for the last 10 years without the benefit of marriage. Their union has
produced four children. Nadine was three months pregnant with her 5th child when Nestor left her for
another woman. When Nadine was eight months pregnant with her 5th child, she applied for maternity leave
benefits. Her employer refused on the ground that this was already her 5" pregnancy and that she was only
living in with the father of her child, who is now in a relationship with another woman. When Nadine gave
birth, Nestor applied for paternity leave benefits. His employer also denied the application on the same
grounds that Nadine’s employer denied her application.
(a) Can Nadine’s employer legally deny her claim for maternity benefits? (2.5%)

SUGGESTED ANSWER:

Yes, Nadine’s employer can legally deny her claim for maternity benefits. This is because the maternity benefits
shall be paid only for the first four (4) deliveries or miscarriages. (See Section 14-A, RA 8282) In this case, the said
pregnancy was the 5th child of Nadine. Thus, she already exhausted the limitations for entitlement to maternity
benefits under the law.

(b) Can Nestor’s employer legally deny his claim for paternity benefits? (2.5%)

SUGGESTED ANSWER:

Nestor’s employer can legally deny his claim for paternity benefits for his failure to comply with the conditions for
entitlement to paternity benefits.
Under the law, a married male employee shall be entitled to paternity benefits provided that:
a. he is an employee at the time of delivery of his child;
b. he is cohabiting with his spouse at the time she gives birth or suffers a miscarriage.
c. he has applied for paternity leave in accordance with Section 4 hereof; and
d. his wife has given birth or suffered a miscarriage. (Section 3, Revised Implementing Rules and Regulations of
Republic Act No. 8187 for the Private Sector)

In this case, Nadine is not Nestor’s lawful wife to whom he is cohabiting.

XIX

Northeast Airlines sent notices to transfer without diminution in salary or rank, to 50 ground crew personnel
who were front-liners at Northeast Airlines counters at the Ninoy Aquino International Airport (NAIA). The
50 employees were informed that they would be distributed to various airports in Mindanao to anticipate
robust passenger volume growth in the area. Northeast Union representing rank-and-file employees, filed
unfair labor practice and illegal dismissal cases before the NLRC, citing, among others, the inconvenience of
the 50 concerned employees and union discrimination, as 8 of the 50 concerned round crew personnel were
union officers. Also, the Union argued that Northeast Airlines could easily hire additional employees from
Mindanao to boost ground operations in the Mindanao airports.

a) Will the transfer of the 50 ground crew personnel amount to Illegal dismissal (5%)

SUGGESTED ANSWER: (MANAGEMENT PREROGATIVE)

The transfer of the 50 ground crew personnel does not amount to Illegal dismissal. This is because their transfer is a
valid exercise of management prerogatives.

In Gemina, Jr. v. Bankwise, Inc. (Thrift Bank) G.R. No. 175365, October 23, 2013, it was held: The employer’s
right to conduct the affairs of its business, according to its own discretion and judgment, is well-recognized. An
employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment and the only
criterion to guide the exercise of its management prerogative is that the policies, rules and regulations on work-
related activities of the employees must always be fair and reasonable. (The Coca-Cola Export Corporation v.
Gacayan, G.R. No. 149433, December 15, 2010, 638 SCRA 377, 398-399)

According to Endico v. Quantum Foods Distribution Center, G.R. 161615, January 30,2009, “Managerial
prerogatives, however, are subject to limitations provided by law, collective bargaining agreements, and general
principles of fair play and justice. The test for determining the validity of the transfer of employees was explained in
the case of Blue Dairy Corporation v. NLRC, G.R. No. 129843, 14 September 1999, 314 SCRA 401, 408-409 the
Supreme Court explained the test for determining the validity of the transfer of employees, as follows:

But, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised
without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right
should not be confused with the manner in which that right is exercised. Thus, it cannot be used as a subterfuge by
the employer to rid himself of an undesirable worker. In particular, the employer must be able to show that the
transfer is not unreasonable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits.

As their employer, Northeast Airlines has the right to regulate, according to its discretion and best judgment, work
assignments, work methods, work supervision, and work regulations, including the hiring, firing and discipline of its
employees. The Supreme Court upholds these management prerogatives so long as they are exercised in good faith
for the advancement of the employer’s interest and not for the purpose of defeating or circumventing the rights of
the employees under special laws and valid agreements. (Challenge Socks Corporation v. Court of Appeals, G.R.
No. 165268, November 8, 2005, 474 SCRA 356, 362-363)

In this case it does not show that Northeast Airlines implemented the transfer for the purpose of defeating or
circumventing the rights of the said 50 ground crew personnel.

b) Will the unfair labor practice case prosper? (2.5%)

SUGGESTED ANSWER:

The unfair labor practice case will not prosper. This is because the act did not constitute an act of interfering,
restraining or coercing the said employees in the exercise of their right to self-organization under Article 259 [a] of
the Labor Code.

In T & T Shoplifters Corporation/Gin Queen Corporation v. T&T Shoplifters Corporation/Gin Queen Corporation
Workers Union, G.R. No. 191714, February 26, 2014 citing the case of Insular Life Assurance Co., Ltd. Employees
Association – NATU v. Insular Life Assurance Co., Ltd., (147 Phil. 194 [1971]) the Supreme Court had occasion to
lay down the test of whether an employer has interfered with and coerced employees in the exercise of their right to
self-organization, that is, whether the employer has engaged in conduct which, it may reasonably be said, tends to
interfere with the free exercise of employees’ rights; and that it is not necessary that there be direct evidence that any
employee was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable
inference that anti-union conduct of the employer does have an adverse effect on self-organization and collective
bargaining.

In the given facts, it does not show that the act of Northern Airlines in sending notices of transfer relates to the
commission of acts that transgress their right to organize or it was made to interfere, restrain or coerce them with the
exercise of their right to self-organization.

XX

In Northern Lights Corporation, union members Nad, Ned and Nod sought permission from the company to
distribute flyers with respect to a weekend union activity. The company HR manager granted the request
through a text message sent to another union member, Norlyn. While Nad, Ned, and Nod re distributing the
flyers at the company assembly plant, a Company supervisor barged in and demanded that they cease from
distributing the flyers, stating that the assembly line employees were trying to beat a production deadline and
were thoroughly distracted. Norlyn tried to show the HR manager's text message authorizing flyer
distribution during work hours, but the supervisor brushed it aside. As a result, Nad, Ned, and Nod were
suspended for violating company rules on trespass and highly-limited union activities during work hours. The
Union filed an unfair labor practice (ULP) case before the NLRC for union discrimination.
a) Will the ULP case filed by the Union prosper? (2.5%)

SUGGESTED ANSWER:

The ULP case filed by the Union will not prosper. This is because the act did not constitute an act of interfering,
restraining or coercing the said employees in the exercise of their right to self-organization under Article 259 [a] of
the Labor Code.

In T & T Shoplifters Corporation/Gin Queen Corporation v. T&T Shoplifters Corporation/Gin Queen Corporation
Workers Union, G.R. No. 191714, February 26, 2014 citing the case of Insular Life Assurance Co., Ltd. Employees
Association – NATU v. Insular Life Assurance Co., Ltd., (147 Phil. 194 [1971]) the Supreme Court had occasion to
lay down the test of whether an employer has interfered with and coerced employees in the exercise of their right to
self-organization, that is, whether the employer has engaged in conduct which, it may reasonably be said, tends to
interfere with the free exercise of employees’ rights; and that it is not necessary that there be direct evidence that any
employee was in fact intimidated or coerced by statements of threats of the employer if there is a reasonable
inference that anti-union conduct of the employer does have an adverse effect on self-organization and collective
bargaining.

In the given facts, it does not show that the act of the company supervisor in barging in and demanding for Nad,
Ned, and Nod to cease from distributing the flyers relates to the commission of acts that transgress their right to
organize or it was made to interfere, restrain or coerce them with the exercise of their right to self-organization.

NOTE: The foregoing answer can be found in page 282-284 of the book entitled Principles and Cases Labor
Relations, Second Edition 2018. . Questions involving the same subject matter were given during the 2004 Bar
Examinations.

b) Assume the NLRC ruled in favor of the Union. The Labor Arbiter's judgment included, among others, an
award for moral and exemplary damages at PhP50,000.00 each for Nad, Ned, and Nod. Northern Lights
Corporation argued that any award of damages should be given to the Union and not individually to its
members. Is Northern Lights Corporation correct? (2.5%)

SUGGESTED ANSWER:

Northern Lights Corporation is not correct. The rights that were violated belongs to the union members, Nad, Ned,
and Nod, and not the union itself. Further, the said union members were the real party in interest in the said case for
ULP filed by the union against the corporation and not the union itself. The union is a juridical person and as a rule
it cannot not suffer moral damages.