6/5/21

2021 U.P. LABOR LAW

BAR REVIEW
THE BARE ESSENTIALS.
INCLUDING QUESTIONS FROM 2011-2019 BAR

DEAN ADA D. ABAD

Adamson University College of Law

I will beat you!!!

WHAT WOULD
THE LEONEN
BAR BE LIKE?

Hashtag:
#BestBarEver

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• Supreme Court Bar Bulletins

• Ada’s notes on Justice Marvic

Leonen’s speech at the Philippine
Association of Law Schools (PALS)
Convention, 25 November 2020 at 2:30
pm

ADA ABAD UP LABOR BAR REVIEW 05202021

1. QUESTIONS WILL BE
“CANONICAL AND TEXTUAL”
• Only text of the law, plus basic
principles and canons which are
consistently upheld by the Court
• Interpretation of the law
• Areas of strong dissent will not be
preferred

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2. IDENTIFICATION OF LEGAL
ISSUES

• Will require analysis of the given

facts and assess its relevance to
the question that you need to
answer

ADA ABAD UP LABOR BAR REVIEW 05202021

3. THREE BAR EXAMINERS

PER SUBJECT
• Approximately 10,000 to 12,000
examinees (2020, 2021 and repeaters)
• Examiners shall also grade the Bar
Examinations digitally, and hence,
need not be based in NCR.

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4. CUT-OFF PERIODS FOR THE

2021 BAR EXAMS:

• Supreme Court decisions until

30 September 2020

• Laws, rules and issuances until

30 June 2019

ADA ABAD UP LABOR BAR REVIEW 05202021

5. DIGITAL BUT NOT REMOTE

• Applications and payments online

• “Examinees will still walk into testing rooms

and will be proctored while taking the exams.
Surveillance cameras will also be installed in
all testing rooms.”

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Examinees will be assigned in testing

centers in a locality closest to their
residence or the school they graduated
from, or for any other consideration. This
determination shall depend on the final
list of schools that would qualify as local
testing sites

ADA ABAD UP LABOR BAR REVIEW 05202021

• Bar takers shall bring their own WiFi-enabled

laptops that run on Mac or Windows operating
systems for the exams.

• No other digital device will be allowed inside

the testing sites except their laptops.

• On the examination days, the computer

hardware shall be thoroughly checked by Court
personnel. à LONG LINES at entrance!
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• Examinees are advised not to store any file

in their laptops that has a reasonable
connection with the substance and
procedure of the examinations.

• Examinees are advised to start organizing

their digital filing system so that they may
offload their law-related files into an external
disk or other devices before taking the Bar
Examinations

ADA ABAD UP LABOR BAR REVIEW 05202021

The traditional mode of handwritten exams

will still be allowed, but “only in very
exceptional cases where it can be
adequately proven that the examinee
suffers from a physical disability that does
not permit them to take the examinations
through a computer.”

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6. “LOCALIZED AND PROCTORED

SETTING”

• Mock Bar: NCR, North

Luzon, Cebu and Davao
• Additional local venues – not
yet announced

ADA ABAD UP LABOR BAR REVIEW 05202021

7. COVID-19 PROTOCOLS IN PLACE

• Proper hygiene protocols will be observed during
the Bar Examinations, which will include COVID-19
testing and proper physical distancing inside the
testing rooms.

• The Court will explore arrangements for a

predominantly Saliva RT-PCR testing modality in
each of the testing sites.

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8. NO RANKING OF BAR EXAMINEES

BUT OF LAW SCHOOLS
• No bar topnotcher; no top-ten list
BUT will be categorized “with
distinction” AKO NA TO. ATTY. ALAYKA A. ANUDDIN, CPA
• Law school ranking according to
number of students taking the bar,
viz: less than 50; 50-99; 100 and
above
ADA ABAD UP LABOR BAR REVIEW 05202021

9. BAR EXAMINATION DATES

Day 1 (November 7):

Political and International Law, and Labor Law and Social
Legislation
Day 2 (November 14):
Civil Law and Taxation Law
Day 3 (November 21):
Commercial Law and Criminal Law
Day 4 (November 28):
Remedial Law and Legal and Judicial Ethics & Practical
Exercises

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The exam periods will be:

FIRST SUBJECT: 8:00 a.m. to 12:00

SECOND SUBJECT: 2:00 p.m. to 6:00 p.m.

ADA ABAD UP LABOR BAR REVIEW 05202021

Let me be clear about this, your

task is not to hope or seek a
better world – it is more than
that. Your purpose as a lawyer is
to use your life to shape law so
that it authentically contributes
to the achievement of the best
society for every human being.

-- Justice Marvic M.V.F. Leonen

Speech on the oath taking ceremony of
19 bar passers

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SOME STATISTICAL DATA

FROM LAST FOUR BAR
EXAMINATIONS

ADA ABAD UP LABOR BAR REVIEW 05202021

2019 LABOR LAW

BAR EXAMS (J. ESTELA
PERLAS-BERNABE)
100% ESSAY of 100 pts total

20 PROBLEMS WITH
43 QUESTIONS
SPREAD OVER FOUR HOURS

APPROXIMATELY 5.5 MINUTES

TO ANSWER EACH QUESTION
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NATURE OF QUESTIONS:

• 16 objective questions, on
definitions, explanations or
distinctions
• For essay type questions, some
had objective, lead-up question on
the problem followed by question
on application
ADA ABAD UP LABOR BAR REVIEW 05202021

LABOR STANDARDS:

• CONTROL TEST DEFINITION

• HOLIDAY PAY, LESS THAN 10 EMPLOYEES
• LABOR-ONLY CONTRACTING
• DEFINITION OF WAGE DISTORTION AND
APPLICATION
• COMPULSORY VS. VOLUNTARY/OPTIONAL
RETIREMENT

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WELFARE AND SOCIAL LEGISLATION

• SSS BENEFITS
• KASAMBAHAY, ON SERVICE INCENTIVE
LEAVE
• MIGRANT WORKERS’ CLAIMS; REDUCTION
OF SALARY AND LIABILITY OF RECRUITMENT
AGENCY
• THIRD DOCTOR CONFLICT RESOLUTION;
COMPENSABILITY OF DISEASE AND FAILURE
TO GO TO DOCTOR WITHIN 3 DAYS
ADA ABAD UP LABOR BAR REVIEW 05202021

LABOR RELATIONS
• DISTINCTIONS: JUST VS. AUTHORIZED CAUSE
SEASONAL VS. PROJECT
BONA FIDE OCCUPATIONAL QUALIFICATION
RESIGNATION VS. CONSTRUCTIVE
DISMISSAL
• CBA RENEGOTIATIONS; ECONOMIC VS.
REPRESENTATION ISSUE AND THE FREEDOM
PERIOD
• PROBATIONARY VS. FIXED TERM VS REGULAR
• ULP; CRITICAL POINT OF ANALYSIS
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JURISDICTION AND REMEDIES

• GRIEVANCE MACHINERY; DISTINCTION
• REINSTATEMENT WITH FULL BACKWAGES AND
SEPARATION PAY; PERIOD TO APPEAL
• PRESCRIPTIVE PERIOD: MONETARY CLAIMS
ILLEGAL DISMISSAL; OFFENSES IN LABOR
CODE; ILLEGAL RECRUITMENT
• POWERS AND RESPONSIBILITIES OF:
SECRETARY OF LABOR; BUREAU OF LABOR
RELATIONS; VOLUNTARY ARBITRATOR
• CORPORATE OFFICER; JURISDICTION
• PAYROLL REINSTATEMENT
ADA ABAD UP LABOR BAR REVIEW 05202021

2018 LABOR LAW

BAR EXAMS (DEL CASTILLO)
100% ESSAY of 100 pts total

20 PROBLEMS WITH
40 QUESTIONS
SPREAD OVER FOUR HOURS

APPROXIMATELY 6 MINUTES
TO ANSWER EACH QUESTION
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NATURE OF QUESTIONS:

• Case-based; straight to the point

• -- either you know it or you don’t.
• Some questions may have
alternative answers, because of
the way it was formulated
• Uniformly 2.5% each question;
good coverage of exam
ADA ABAD UP LABOR BAR REVIEW 05202021

LABOR STANDARDS:

• DEDUCTION OF FACILITIES 100% of his minimum wage (

daily Basic Wage and COLA)
• COMPUTATION OF HOLIDAY PAY 200% if work during that day

• WHETHER OR NOT PRODUCTIVITY

ALLOWANCE IS PART OF 13TH MONTH PAY
COMPUTATION
• MAY EMPLOYEE OF ALLEGED INDEP
CONTRACTOR FILE REGULARIZATION WITH
THE PRINCIPAL
• WAGE INCREASE NON-PAYMENT; ALTERNATIVE
MODES OF DISPUTE RESOLUTION
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WELFARE AND SOCIAL LEGISLATION

• RETIREMENT OF PART-TIME EMPLOYEES;
COMPUTATION
• RETIREMENT PLUS SEPARATION PAY
(GOODYEAR VS ANGUS)
• GSIS BENEFITS OF AFP/PNP;
COMPENSABILITY; LEGITIMATE VS LIVE-IN
PARTNER; MINOR CHILDREN’S ENTITLEMENT
TO SUPPORT WHEN ONLY PARTIAL BEING
GIVEN BY PARENT
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• KASAMBAHAY; LIVE-IN DRIVERS

• MATERNITY AND PATERNITY LEAVE
BENEFITS
• SEXUAL HARASSMENT
• MIGRANT WORKERS’ NATURE OF
ENGAGEMENT; COMPENSABILITY OF
DISABILITY CLAIMS FOR
HYPERTENSION AND DIABETES

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LABOR RELATIONS
• SELF-ORGANIZATION; CHARTER CERTIFICATE
VESTS LEGAL PERSONALITY FOR PURPOSES
OF FILING PETN FOR CE; EMPLOYER NOT A
BYSTANDER IN CANCELLATION
PROCEEDINGS
• CERTIFICATION ELECTION; SEALED
ENVELOPES
• SUPERVISORY EMPLOYEES
• UNION SECURITY CLAUSES
• MANAGEMENT PREROG ON TRANSFER
ADA ABAD UP LABOR BAR REVIEW 05202021

• UNION SECURITY CLAUSES VS

PURCHASER IN CORPORATE TAKE-OVER
• UNFAIR LABOR PRACTICES
• ASSUMPTION OF JURISDICTION BY
SECRETARY; RTW ORDER; VIOLENCE IN
CONDUCT OF STRIKE; READMISSION VIA
PAYROLL REINSTATEMENT
• TERMINATION OF EMPLOYMENT

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JURISDICTION AND REMEDIES

• NLRC JURISDICTION ON MONETARY CLAIMS

AND PRESCRIPTIVE PERIOD
• EMPLOYER’S ROLE IN CERTIF ELECTION AND
CANCELLATION OF UNION REGISTRATION
• GRIEVANCE MACHINERY AND ALTERNATIVE
MODES OF DISPUTE RESOLUTION
• MOTION FOR EXECUTION DURING APPEAL;
ILLEGAL TERMINATION CASES

ADA ABAD UP LABOR BAR REVIEW 05202021

2017 LABOR LAW

BAR EXAMS (BERSAMIN)
100% ESSAY of 100 pts total

15 PROBLEMS WITH
32 QUESTIONS
SPREAD OVER FOUR HOURS

APPROXIMATELY 7.5 MINUTES

TO ANSWER EACH QUESTION
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NATURE OF QUESTIONS:

17 QUESTIONS WERE OBJECTIVE,

REQUIRING ENUMERATION

THE REST REQUIRED

ARGUMENTATION AND ANALYSIS,
EASY TO MODERATE IN DEGREE
AND FAIRLY GRADED
ADA ABAD UP LABOR BAR REVIEW 05202021

GENERAL PRINCIPLES:
FOUR (4) QUESTIONS

•ER-EE RELN;
•JEEPNEY ON BOUNDARY SYSTEM; ER-EE

• INTERPRETATION OF LABOR LAWS

IN EVIDENCE ON TERMINATION;
•RESIDENT ALIEN;
•LA SALLE DOCTORS CASE
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LABOR STANDARDS:
SEVEN (7) QUESTIONS

•WAGE ORDER;
•PETN FOR WAGE INCREASES EXCEPTION
ON 12-MONTH RULE
•MEAL BREAK
•LEARNERSHIP VS. APPRENTICESHIP
•HOUSEHELPER VS HOMEWORKER
•SALARIES EXEMPT FROM GARNISHMT
•LABOR-ONLY CONTRACTING
ADA ABAD UP LABOR BAR REVIEW 05202021

LABOR RELATIONS:
TEN (10) QUESTIONS

•MGMT PREROG ON STIPULATION AGST

MARRIAGE;
•CLASSIFICATION ON RANKING (MGR
SUPERV/R&F)
•CONFIDENTIAL EMPLOYEES
•GROUNDS FOR TERMINATION
•DUE PROCESS IN TERMINATION

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• MODES IN DETERMINING
EXCLUSIVE BARG AGENT
• DISEASE AS A GROUND FOR
TERMINATION
• STRIKE
• SYMPATHETIC STRIKE
• RETRENCHMENT PAY

ADA ABAD UP LABOR BAR REVIEW 05202021

JURISDICTION:
FOUR (4) QUESTIONS

•JURISDICTION OF VOLUNTARY
ARBITRATOR/PANEL
•REMEDIES IN CASE OF APPEAL OF ILLEGAL
DISMISSAL CASE (PAYMENT OF SALARY DURING
APPEAL)
•ASSUMPTION OF JURISDICTION BY SECRETARY
OF LABOR, AND EFFECT OF DEFIANCE OF RTW
ORDER
•TERMINATION OF COMPANY OFFICIAL VS INTRA-
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MIGRANT WORKERS:
THREE (3) QUESTIONS

•LIABILITY OF AGENT WITH

PRINCIPAL
•DIRECT HIRING EXCEPTIONS
•NATURE OF CONTRACT

ADA ABAD UP LABOR BAR REVIEW 05202021

2016 LABOR LAW

BAR EXAMS (VELASCO)
100% ESSAY of 100 pts total

20 PROBLEMS WITH
30 QUESTIONS
SPREAD OVER FOUR HOURS

APPROXIMATELY 8 MINUTES
TO ANSWER EACH QUESTION
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90% OF THE QUESTIONS WERE

ON LABOR RELATIONS; WITH
MULTIPLE PROBLEMS ON:
• EMPLOYER-EMPLOYEE
RELATIONSHIP
• CLASSIFICATION OF
EMPLOYMENT; AND
• TERMINATION (8)
ADA ABAD UP LABOR BAR REVIEW 05202021

STATISTICS ACCORDING TO NUMBER AND NATURE OF QUESTIONS

Labor Labor Relations OFW/ Jurisdiction
Standards compen- Remedies
sability
Apprenticeship Ee classifc (2) SSS claim Regional Director
vs learnership
Er-Ee reln (2) Bargaining Quitclaim
Representative
Indep contracting Certification election Perfection of
Vs Labor only appeal
Strike (ULP) Piercing veil of
corporate fiction
Termination (7) Attys fees.
Ø due process
Ø Union security clause
Termination of
pregnant woman
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2015 LABOR LAW

BAR EXAMS (de CASTRO)
100% ESSAY of 100 pts total

22 PROBLEMS WITH
32 QUESTIONS
SPREAD OVER FOUR HOURS

APPROXIMATELY 7.5 MINUTES

TO ANSWER EACH QUESTION
ADA ABAD UP LABOR BAR REVIEW 05202021

2015 LABOR LAW

BAR EXAMS (de CASTRO)
100% ESSAY of 100 pts total

22 PROBLEMS WITH 32 QUESTIONS

LABOR STANDARDS: 9
LABOR RELATIONS: 14
OFW/COMPENSABILITY: 2
SSS/SOCIAL LEGIS: 3
JURISDICTION/PROCEDURE: 4
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2015 LABOR LAW

BAR EXAMS (de CASTRO)
100% ESSAY of 100 pts total

According to points

LABOR STANDARDS: 30
LABOR RELATIONS: 48
OFW/COMPENSABILITY: 7
SSS/SOCIAL LEGIS: 3
JURISDICTION/PROCEDURE: 12
ADA ABAD UP LABOR BAR REVIEW 05202021

STATISTICS ACCORDING TO NUMBER AND NATURE OF QUESTIONS

Labor Labor Relations OFW/ compen- Jurisdiction
Standards sability
Wages (2) Mgmt prerog (3) OFW compen- RTC vs labor (1)
Bonus (1) Ee classifc (1) sability (1) Intra-corp
controversy (1)
Minors (1) Prev suspension Police off-duty (1) Injunction (1)
(1)
Indep Cont/Er-Ee Termination (2) Corporate liability
reln (2) of officer (1)
Successor- principle
(1)
Strike (2)
Self-org (3)
CBA (2)
Equity of incumbent
ADA ABAD UP LABOR BAR REVIEW 05202021
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2014 LABOR LAW

BAR EXAMS (PERALTA)
80% ESSAY and 20% MCQ

27 QUESTIONS
LABOR STANDARDS: 7
LABOR RELATIONS: 15
POEA/MIGRANT: 1
SSS/SOCIAL LEGIS: 2
JURISDICTION/PROCEDURE: 5
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ASSUMING FORTY (40)

QUESTIONS SPREAD
OVER FOUR HOURS:

SIX (6) MINUTES

TO ANSWER EACH
QUESTION
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ASSUMING THIRTY (30)

QUESTIONS SPREAD
OVER FOUR HOURS:

EIGHT (8) MINUTES

TO ANSWER EACH
QUESTION
ADA ABAD UP LABOR BAR REVIEW 05202021

ASSUMING 12,000 WILL TAKE THE

BAR, 3 EXAMINERS WITH FOUR
(4) MONTHS TO CHECK:

PER EXAMINER: 4,000

BOOKLETS AT 4 MONTHS
= 12 MINUTES PER BOOKLET
(8HRS/DAY OF CHECKING)
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KEEP
IT
SHORT
SIMPLE
STRAIGHT TO THE POINT
ADA ABAD UP LABOR BAR REVIEW 05202021

KEY WORDS AND

KEY PHRASES

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USUAL TOPICS FOR LABOR

STANDARDS:

WAGES (2019, 2018, 2017, 2015,

2014, 2013)
BONUS (2015, 2014)
MINORS (2015, 2014, 2012)

ADA ABAD UP LABOR BAR REVIEW 05202021

INDEP CONTRACTING VS. LABOR-ONLY

CONTRACTING (2019, 2018, 2017, 2016,
2015, 2014, 2013, 2012)

MANAGEMENT PREROGATIVE
(2018, 2017, 2015, 2014, 2012)

EMPLOYMENT CLASSIFICATION
(2019, 2018, 2017, 2016, 2015, 2014, 2013)

TERMINATION (2019, 2018, 2017, 2016, 2015,

2014, 2013, 2012)ADA ABAD UP LABOR BAR REVIEW 05202021

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USUAL TOPICS FOR LABOR

RELATIONS:

STRIKES (2019, 2018, 2017, 2016,

2015, 2014, 2013, 2012)
ASSUMPTION (2018, 2017, 2014,
2012)
ADA ABAD UP LABOR BAR REVIEW 05202021

RIGHT TO SELF-ORGANIZATION
(2018, 2015, 2014, 2013, 2012)

CBA (2015, 2014, 2012)

on freedom period only - 2019

CERTIFICATION ELECTION
(2018, 2016, 2014, 2013)
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OTHER TOPICS:

COMPENSABILITY OF OFW DEATH

OR INJURY (2019, 2018, 2017, 2015, 2014)

JURISDICTION OF RTC VS LABOR (2019, 2017,

2016, 2015, 2014)

INTRA-CORPORATE CONTROVERSY (2019,

2017, 2015, 2014)

ADA ABAD UP LABOR BAR REVIEW 05202021

WHEN FACED WITH A PROBLEM

SOLVING ESSAY-TYPE
QUESTION IN THE BAR
EXAMINATIONS, REMEMBER:

• ALL relevant facts already

given, but some facts may be
immaterial.
• The intention of the examiner
here is to see if you can
determine which facts are
relevant or not, in answering
the question .
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• Do NOT add to the facts at hand, except

if it is an open-ended question.

• Most questions require you to decide as

follows –
ØComment on the action of one party
ØDecide if you were the Labor Arbiter
ØComment on the decision of the Labor
Arbiter (or Court)
ADA ABAD UP LABOR BAR REVIEW 05202021

How to answer bar question:

“IF YOU WERE THE LABOR

ARBITER, HOW WOULD YOUR
DECIDE?”

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START OF
MODULE 1:

GENERAL
PRINCIPLES IN
LABOR RELATIONS
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1. Constitutional and statutory

basis of labor law and social
legislation

2. Declaration of policy and

paradigm shift towards mutual
cooperation

ADA ABAD UP LABOR BAR REVIEW 05202021

FOR BASIC FRAMEWORK OF LABOR LAW, Articles

MEMORIZE ARTICLE 3, LABOR CODE:
DECLARATION OF POLICY 3
Mnemonic: PFE-SC-SJ 4
13(b)
ART. 3. Declaration of basic policy. - The State 34
shall afford Protection to labor, promote Full 38
employment, ensure Equal work opportunities 58
regardless of sex, race or creed and regulate the 73
relations between workers and employers. The 106
State shall assure the rights of workers to Self-
organization, Collective bargaining,
Security of tenure, and Just and humane
conditions of work.
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GENERAL RULE #1:

EXISTENCE OF AN EMPLOYER-
EMPLOYEE RELATIONSHIP IS
CONDITION SINE QUA NON
FOR THE APPLICATION OF
LABOR LAWS

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GENERAL RULE#2

PRINCIPLE OF INCORPORATION

the minimum labor standards and benefits in

Labor Code are considered inherent in every
employer-employee relationship even absent a
written employment contract
the existence of Er-E
even without contract
ADA ABAD UP LABOR BAR REVIEW 05202021

GENERAL RULE #3:

Burden of proof is
always upon
employer to show
validity of its exercise of
management prerogatives,
especially as regards
termination of employment.

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GENERAL RULE #4:

Only SUBSTANTIAL
EVIDENCE required.

ADA ABAD UP LABOR BAR REVIEW 05202021

GENERAL RULE #5

NO RETROACTIVE EFFECT OF
LABOR LAWS

EXCEPTION:
WHEN EXPLICITLY SO PROVIDED

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GENERAL RULE #6:

IN CASE OF DOUBT, INTERPRET IN
FAVOR OF LABOR

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SPECIFIC ISSUES ON
GENERAL PRINCIPLES:
FEARLESS FORECASTS

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VS
MANAGEMENT LABOR

• CAPITAL • WORK
• PROFIT • EQUITABLE SHARE IN
THE PROFITS
• Management • Workers’ rights
prerogatives Minimum standards;
Hiring, employee constitutional rights to security
classification, work of tenure, unionization,
methods, rules and collective bargaining and to
regulations strike

STATE
police power/social justice
interpretation in favor of labor

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In balancing the interest between labor and

capital, the prudent recourse in termination
cases is to safeguard the prized security of
tenure of employees and to require employers to
present the best evidence obtainable, especially
so because in most cases, the documents or
proof needed to resolve the validity of the
termination, are in the possession of employers.
(American Power Conversion Corp et. al. vs. Jason Yu Lim, G.R. No.
214291. 11 January 2018.)

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Principles of Social Justice,

Equity and Police Power:

• The tension of opposites, and

balancing of interests in case
workers’ and management’s
rights collide

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GENERAL RULE #1:

EXISTENCE OF AN
EMPLOYER-EMPLOYEE
RELATIONSHIP FOR THE
APPLICATION OF LABOR
LAWS
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PRINCIPLE OF
INCORPORATION
the minimum labor standards and
benefits in Labor Code are
considered inherent in every
employer-employee relationship even
absent a written employment contract
ADA ABAD UP LABOR BAR REVIEW 05202021

HOW DO YOU KNOW IF THE PERSON IS

YOUR EMPLOYEE?

APPLICATION OF FOUR-FOLD TEST TO

DETERMINE EXISTENCE OF AN EMPLOYER-
EMPLOYEE RELATIONSHIP

ELECTION AND HIRING

AGES

ISMISSAL

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ONTROL TEST need not exist all

• IS THE MOST IMPORTANT TEST TO DETERMINE
EXISTENCE OF EMPLOYMENT RELATIONSHIP

• an employer-employee relationship is deemed to

exist “where the employer has a right to CONTROL
the conduct of the employee in relation to his work.”

ADA ABAD UP LABOR BAR REVIEW 05202021

J. LEONEN: Paragele v. GMA Network, Inc., G.R. No.

235315, [July 13, 2020]

Complaint for regularization, which was subsequently

converted into one for "illegal dismissal, non-payment of
salary/wages, and regularization” filed by 30 camera men,
against respondent GMA Network, Inc., with work service
ranging from two (2) years to thirteen (13) years.

Case for GMA: No employer-employee relationship.

Camera men were engaged as mere "pinch-hitters or
relievers" whose services were engaged only when there
was a need for substitute or additional workforce.
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CASE FOR PETITIONERS:

As camera operators, petitioners performed

functions that were necessary and desirable to
GMA's usual business as a television and
broadcasting company.

They emphasize that their continuous employment

with GMA, despite the end of shooting and recording
for each television program to which they were
assigned, further demonstrates the necessity and
desirability of the functions they were performing.
Accordingly, they were regular employees.
ADA ABAD UP LABOR BAR REVIEW 05202021

Labor Arbiter: NO employer-employee

relationship; dismissed complaint

NLRC and Court of Appeals: There is

employer-employee relationship BUT it
does not automatically make the camera
men regular employees.

HOW DID THE SUPREME COURT DECIDE?

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J. LEONEN: Paragele v. GMA Network, Inc., G.R. No.

235315, [July 13, 2020]

THE CAMERA MEN ARE EMPLOYEES. The four-fold test has been
applied in determining the existence of an employer-employee relationship. In Begino v.
ABS-CBN:
To determine the existence of [an employer-employee relationship], case law
has consistently applied the four-fold test, to wit: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer's power to control the employee on the means
and methods by which the work is accomplished. Of these criteria, the so-
called "control test" is generally regarded as the most crucial and determinative
indicator of the presence or absence of an employer-employee relationship.
Under this test, an employer-employee relationship is said to
exist where the person for whom the services are performed
reserves the right to control not only the end result but also
the manner and means utilized to achieve the same. (Citations
omitted, emphasis supplied) ADA ABAD UP LABOR BAR REVIEW 05202021
|||

Petitioners were subject to GMA's control and supervision.

(1) Their recordings and shoots were never left to their own
discretion and craft;
(2) They were required to follow the work schedules which GMA
provided to them;
(3) They were not allowed to leave the work site during tapings,
which often lasted for days;
(4) They were also required to follow company rules like any
other employee.

GMA provided the equipment they used during tapings. GMA

also assigned supervisors to monitor their performance and
guarantee their compliance with company protocols and
standards.

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BUT ARE THEY REGULAR EMPLOYEES? Assuming casual employees, do they

need to have rendered 365 days before they could be considered regular?

REGULAR EMPLOYEES. Not even casual employees, because of the necessity or

desirability of the job.

Classifying employment, that is, whether an employee is engaged as a regular,

project, seasonal, casual, or fixed-term employee, is "determined by law, regardless of
any contract expressing otherwise.

Here, GMA argues that petitioners should have rendered "at least one (1) year of
service equivalent to 313 working days (6-day work per week) or 261 days (5-day
work per week)" before they are deemed to have attained regular status. It harps on
the March 3, 2017 Decision of the Court of Appeals which noted that petitioners
cannot be deemed regular employees since they failed to comply with the one-year
period supposedly required by law. Quite notably, GMA does not refute the finding that
petitioners performed functions necessary and desirable to its usual business, it
merely insists on a supposedly requisite duration.

ADA ABAD UP LABOR BAR REVIEW 05202021

From the plain language of the second paragraph of Article 295 of the Labor Code, it is
clear that the requirement of rendering "at least one (1) year of service[,]" before an
employee is deemed to have attained regular status, only applies to casual employees.

An employee is regarded a casual employee if he or she was engaged to perform

functions which are NOT necessary and desirable to the usual business and
trade of the employer.

Thus, when one is engaged to perform functions which are necessary and desirable to the
usual business and trade of the employer, engagement for a year-long duration is not a
controlling consideration.

GMA's claim that petitioners were required to render at least one (1) year of
service before they may be considered regular employees finds no basis in law.
Petitioners were never casual employees precisely because they
performed functions that were necessary and desirable to the usual
business of GMA. They did not need to render a year's worth of
service to be considered regular employees. (Paragele v. GMA Network, Inc.,
G.R. No. 235315, [July 13, 2020])

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2019 BAR: QUESTION 3 –

A, B, and C were hired as resident-doctors by MM

Medical Center, Inc. In the course of their
engagement, A, B and C maintained specific work
schedules as determined by the Medical Director.
The hospital also monitored their work through
supervisors who gave them specific instructions
on how they should perform their respective
tasks, including diagnosis, treatment, and
management of their patients.

ADA ABAD UP LABOR BAR REVIEW 05202021

One day, A, B, and C approached the Medical

Director and inquired about the non-payment of
their employment benefits.

In response, the Medical Director told them that

they are not entitled to any because they are mere
"independent contractors" as expressly stipulated
in the contracts which they admittedly signed. As
such, no employer-employee relationship exists
between them and the hospital.

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a) What is the control test in determining the

existence of an employer-employee? (2%)

b) Is the Medical Director's reliance on the

contracts signed by A, B, and C to refute the
existence of an employer-employee relationship
correct? If not, are A, B, and C employees of MM
Medical Center, Inc.? Explain (3%)

ADA ABAD UP LABOR BAR REVIEW 05202021

SUGGESTED ANSWER:

a) Control test has been defined as one where the

employer has reserved to himself the right to
control not only the ends to be achieved, but
also the manner and means to achieve such end.
(LVN Pictures vs. LVN Musician’s Guild, 1 SCRA 132; cf. J. PER LAS-BERNABE CASE:
FELICILDA V. UY, G.R. NO. 221241, [14 SEPTEMBER 2016])

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YOU ANSWER CLAC

b) No, the Medical Director’s reliance on the contracts signed by A,B
& C to refute the existence of an employer-employee relationship is
not correct. A, B & C are employees of MM Medical Center, Inc. Under
the “control test” the employment of relationship existed between the
physicians and the hospital because the hospital controlled the
means and the details of the process by which the resident doctors
accomplished their task.

In this case, the hospital maintained the specific work schedules of

A,B, & C. Moreover, the hospital monitored their specific
instructions on how they should perform their respective tasks,
including diagnosis, treatment and management of their patients.
The element of control having been established, A, B, & C are
employees of MM Medical Center, Inc. ( Calamba Medical Center, Inc. vs. NLRC,
et al., G.R. No. 176484, 25 November 2008.)
ADA ABAD UP LABOR BAR REVIEW 05202021

2017 LABOR BAR QUESTION (I).

A.What are the accepted tests to determine the

existence of an employer-employee relationship?
(5%)

B. Applying the tests to determine the existence of

an employer-employee relationship, is a jeepney
driver operating under the boundary system an
employee of his jeepney operator or a mere
lessee of the jeepney? Explain your answer. (3%)

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ANSWER (B):

The relationship is that of employer-employee, and not of

lessor-lessee.

In the case of jeepney operator and jeepney driver, the

former exercise supervision and control over the latter.
The owner-operator, as holder of the certificate of public
convenience, must see to it that the jeepney driver follows
the route prescribed by the franchising authority and the
rules promulgated as regards to its operation. Moreover,
jeepney drivers perform activities which are usually
necessary or desirable in the usual business or trade of
the jeepney operator. (Jardin, et al. V. NLRC, 326 SCRA 299
[2000].) ADA ABAD UP LABOR BAR REVIEW 05202021

CONTRA -- 2016 BAR QUESTION:

Jim is the holder of a certificate of public convenience for
a jeepney. He entered into a contract of lease with Nick,
whereby they agreed that the lease period is for one (1)
year unless sooner terminated by Jim for any of the
causes laid down in the contract.

The rental is thirty thousand pesos (P30,000.00) monthly.

All the expenses for the repair of the jeepney, together
with expenses for diesel, oil and service, shall be for the
account of Nick. Nick is required to make a deposit of
three (3) months to answer for the restoration of the
vehicle to its good operating condition when the contract
ends. ADA ABAD UP LABOR BAR REVIEW 05202021

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It is stipulated that Nick is not an employee of Jim

and he holds the latter free and harmless from all
suits or claims which may arise from the
implementation of the contract. Nick has the right to
use the jeepney at any hour of the day provided it is
operated on the approved line of operation.

After five (5) months of the lease and payment of the

rentals, Nick became delinquent in the payment of
the rentals for two (2) months. Jim, as authorized by
the contract, sent a letter of demand rescinding the
contract and asked for the arrearages.

ADA ABAD UP LABOR BAR REVIEW 05202021

Nick responded by filing a complaint with the

NLRC for illegal dismissal, claiming that the
contract is illegal and he was just forced by Jim to
sign it so he can drive. He claims he is really a
driver of Jim on a boundary system and the reason
he was removed is because he failed to pay the
complete daily boundary, of one thousand
(P1,000.00) for 2 months due to the increase in the
number of tricycles.

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[a] Jim files a motion to dismiss the NLRC

case on the ground that the regular court
has jurisdiction since the agreement is a
lease contract. Rule on the motion and
explain. (2.5%)

[b] Assuming that Nick is an employee of

Jim, was Nick validly dismissed? (2.5%)

ADA ABAD UP LABOR BAR REVIEW 05202021

ANSWER:

(A)This is a LEASE CONTRACT. xxx

(B) Not a valid dismissal. No due

process.

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CONTRA:
Royale Homes Marketing Corp. v. Alcantara, G.R.
No. 195190, 28 July 2014. ---

BUT not every form of control that a hiring party

imposes on the hired party is indicative of
employee-employer relationship. Rules and
regulations that merely serve as guidelines towards
the achievement of a mutually desired result
without dictating the means and methods of
accomplishing it do not establish employer-
employee relationship
ADA ABAD UP LABOR BAR REVIEW 05202021

RULES as WHAT
NO CONTROL, NO
GUIDELINES ER-EE RELN WHEN
WHO

RULES fixing CONTROL,

METHOD ER-EE RELN HOW

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GENERAL RULE #3:

Burden of proof is
always upon
employer to show
validity of its exercise of
management prerogatives,
especially as regards
termination of employment.

ADA ABAD UP LABOR BAR REVIEW 05202021

NOTE:

HOWEVER COMPLAINANT EMPLOYEE

INITIALLY HAS THE BURDEN OF
PROVING THE FACT OF HIRING (Danilo
“Bitoy” Javier vs. CA, G.R. No. 192558, 15 February 2012)
AND THE FACT OF FIRING (Remoticado v.
Typical Construction Trading Corp., G.R. No. 206529, [April
23, 2018], J. LEONEN).

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There can be no case for illegal termination of

employment when there was no termination by
the employer. While, in illegal termination
cases, the burden is upon the employer to
show just cause for termination of employment,
such a burden arises only if the complaining
employee has shown, by substantial evidence,
the fact of termination by the
employer.||| (Remoticado v. Typical Construction
Trading Corp., G.R. No. 206529, [April 23, 2018], J.
LEONEN).

ADA ABAD UP LABOR BAR REVIEW 05202021

'The burden of proof rests upon the party

who asserts the affirmative of an issue.'
Since it is Valencia here who is claiming to be an
employee of Classique Vinyl, it is thus incumbent upon
him to proffer evidence to prove the existence of
employer-employee relationship between them. He needs
to show by substantial evidence that he was indeed an
employee of the company against which he claims illegal
dismissal. Corollary, the burden to prove the elements of
an employer-employee relationship, viz.: (1) the selection
and engagement of the employee; (2) the payment of
wages; (3) the power of dismissal; and (4) power of
control. ADA ABAD UP LABOR BAR REVIEW 05202021

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Indeed, there is no hard and fast rule designed to

establish the afore-mentioned elements of employer-
employee relationship. "Any competent and relevant
evidence to prove the relationship may be admitted."

In this case, however, Valencia failed to

present competent evidence, documentary
or otherwise, to support his claimed employer-
employee relationship between him and Classique
Vinyl. All he advanced were mere factual assertions
unsupported by proof.
ADA ABAD UP LABOR BAR REVIEW 05202021

GENERAL RULE #4:

Only SUBSTANTIAL
EVIDENCE required.

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Valencia v. Classique Vinyl Products Corp., G.R. No.

206390, 30 January 2017] --

It is an oft-repeated rule that in labor cases, as in other

administrative and quasi-judicial proceedings, “the
quantum of proof necessary is substantial
evidence, or such amount of relevant evidence
which a reasonable mind might accept as
adequate to justify a conclusion.”

ADA ABAD UP LABOR BAR REVIEW 05202021

IMPORTANT
CASE ON
SUBSTANTIAL
EVIDENCE. –
Alilem Credit Cooperative
vs. Bandiola, G.R. No.
173489, 25 February 2013.

NOT ASKED IN PREVIOUS

BAR

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QUESTION: Are sworn statements of relatives and

friends of respondent attesting to the existence of an
extra-marital affair considered sufficient evidence to
prove immorality, as a just cause for termination?

ADA ABAD UP LABOR BAR REVIEW 05202021

Answer: YES.
The employer’s evidence
consists of sworn
statements of either
relatives or friends of
Thelma and respondent.

They either had direct

personal knowledge of
the illicit relationship or
revealed circumstances
indicating the existence
of such relationship.
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2017 BAR EXAM: (Question II)

Procopio was dismissed from

employment for stealing co-employee
Raul’s watch. Labor Arbiter ruled in
favor of Procopio on the ground that
Raul’s testimony was doubtful, and
hence should be resolved in favor of
Procopio.
ADA ABAD UP LABOR BAR REVIEW 05202021

On appeal, NLRC reversed because Art 4 of Labor

Code provides that all doubts in the interpretation
and implementation of Labor Code and impl rules,
shall be resolved in favor of labor – APPLIED ONLY
when the doubt involved “interpretation or
implementation of Labor Code.”

Hence, the doubt which involved application of

rules on evidence, not Labor Code, could not
necessarily be resolved in favor of Procopio. Was
the reversal correct? Explain your answer (3%)
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ANSWER:
The reversal is NOT correct.

The interpretation in favor of labor also

includes that regarding doubtful evidence.
In this case, there appears to be serious doubts in the
evidence on record as to the factual basis of the charges
against Procopio. These doubts should be resolved in his
favor in line with the policy under the Labor Code to afford
protection to labor and construe doubts in favor of labor.
Hence, the reversal is not correct. (Asuncion V. NLRC, 362 SCRA
56 [2001].)
ADA ABAD UP LABOR BAR REVIEW 05202021

GENERAL RULE N0. 4

NO RETROACTIVE EFFECT OF
LABOR LAWS

EXCEPTION:
WHEN EXPLICITLY SO PROVIDED

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GENERAL RULE #5:

IN CASE OF DOUBT OR AMBIGUITY,
INTERPRET IN FAVOR OF LABOR

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Where the contract of

“

employment, being a contract of

adhesion, is ambiguous, any
ambiguity therein should be
construed strictly against the
party who prepared it.”
Price vs. Innodata Phils., 567 SCRA 122 [2008]

ADA ABAD UP LABOR BAR REVIEW 05202021

THREE CASES ON
CONTRACT INTERPRETATION

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CASE1 ISSUE: (BPI vs. BPI Employees Union –

Metro Manila, G.R. No. 175678 [22 August 2012]).

In a CBA which provides for multipurpose

loans which may be availed of by the
employees, is the imposition of a “NO
NEGATIVE DATA BANK (No NDB)” policy
violative of the CBA obligation?
ADA ABAD UP LABOR BAR REVIEW 05202021

NO NDB POLICY:

“BEFORE AN EMPLOYEE OR HIS/HER

SPOUSE CAN AVAIL OF THE LOAN
BENEFITS UNDER THE CBA, THE SAID
EMPLOYEE OR HIS/HER SPOUSE MUST
NOT BE LISTED IN THE NEGATIVE
DATA BANK, OR IF PREVIOUSLY LISTED
THEREIN, MUST OBTAIN CLEARANCE OF
AT LEAST ONE (1) YEAR OR SIX MONTHS,
AS THE CASE MAY BE, PRIOR TO A LOAN
APPLICATION.” ADA ABAD UP LABOR BAR REVIEW 05202021

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SUPREME COURT
DECISION:

YES, it is violative
of CBA. For the
Union.

ADA ABAD UP LABOR BAR REVIEW 05202021

• The “No NDB policy” is a new

condition which was NEVER
CONTEMPLATED in the CBA

• UNREASONABLE to the
employees because some of them
may not be able to get a “NO NDB
CLEARANCE”

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If the Bank intended to include the

No NDB policy in the CBA, it should
have presented such proposal to
the union during negotiations.
To include such policy after the effectivity of
the CBA is deceptive and goes beyond the
original agreement between the parties. (BPI vs.
BPI Employees Union – Metro Manila, G.R. No. 175678 [22 August 2012].

ADA ABAD UP LABOR BAR REVIEW 05202021

IMPORTANT CASE2 ON FUNERAL AND BEREAVEMENT AID

FOR DEATH OF LEGAL DEPENDENTS:
(Philippine Journalist Inc. vs.Journal Employees Union, G.R. No. 192601, 03
June 2013)

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CBA PROVISION:

SECTION 4. Funeral/ Bereavement Aid. The

COMPANY agrees to grant a
funeral/bereavement aid in the following
instances:
a. Death of a regular employee in line of duty –
P50,000
b. Death of a regular employee not in line of
duty – P40,000
c. Death of legal dependent of a regular
employee – P15,000.
ADA ABAD UP LABOR BAR REVIEW 05202021

ISSUE:

In the availment of funeral and

bereavement aid under the CBA,
may the Company interpret “legal
dependent” in accordance with the
SSS definition of “beneficiary” and
hence, refuse payment of the
benefit?
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SUPREME
COURT
DECISION:

NO, the
Company
cannot do so.
For the Union.
ADA ABAD UP LABOR BAR REVIEW 05202021

If the CBA is silent, then the

coverage of the term legal
dependent in the CBA is to be
construed as similar to the
meaning that contemporaneous
social legislations have set.
For the protection of the management- set the parameters
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Accordingly, the concurrence of a

legitimate spouse does not disqualify
a child or a parent of the employee
from being a legal dependent,
provided substantial evidence is
adduced to prove the actual
dependency of the child or parent on
the support of the employee.”
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ØSOUTH WEST DISASTER CONTROL

ØEr-ee relationship as condition sine

qua non for application of labor
code: jurisdiction of labor courts

Ø"Reasonable causal connection

rule”

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THE ABS-CBN CASES

ADA ABAD UP LABOR BAR REVIEW 05202021

Jose Sonza vs. ABS-CBN, G.R. 138051,

10 June 2004. – Relationship of a big
name talent (Jay Sonza) and a
television-radio broadcasting company
is one of an independent contracting
arrangement. ABS-CBN engaged
SONZA’s services specifically to co-
host the "Mel & Jay" programs. ABS-
CBN did not assign any other work to
SONZA. To perform his work, SONZA
only needed his skills and talent. How
SONZA delivered his lines, appeared
on television, and sounded on radio
were outside ABS-CBN’s control.
SONZA did not have to render eight
hours of work per day.
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The Agreement required SONZA to attend only rehearsals

and tapings of the shows, as well as pre- and post-
production staff meetings. ABS-CBN could not dictate the
contents of SONZA’s script. We find that ABS-CBN was not
involved in the actual performance that produced the
finished product of SONZA’s work.33

ABS-CBN did not instruct SONZA how to perform

his job. ABS-CBN merely reserved the right to
modify the program format and airtime schedule
"for more effective programming."

ADA ABAD UP LABOR BAR REVIEW 05202021

FURLACHE VS ABS-CBN, JAN 2010:

CAMERAMAN, EDITOR, VTR, DRIVERS,
TELEPROMPTER cannot be considered “off-camera
talents”

ABS-CBN VS NAZARENO, Sept 2006

PRODUCTION ASSISTANTS cannot be considered
"talents" because they are not actors nor actresses
or radio specialists BUT mere clerks or utility
employees
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ABS-CBN Naga News Center

Complainants were hired as Manager, Cameramen/Editors and

Reporters, on project basis through Talent Contracts with
terms ranging from three (3) months to one (1) year with
correlative Project Assignment Forms. (Nelson Begino vs.
ABS-CBN, Apr 2015)
ADA ABAD UP LABOR BAR REVIEW 05202021

SUPREME COURT DECISION:

REGULAR EMPLOYEES

Notwithstanding the nomenclature of

their Talent Contracts and/or Project
Assignment Forms, the terms and
conditions of the engagement reveal one
of employer-employee relationship rather
than as independent contracting
arrangement.
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(FUJI TELEVISION NETWORK, INC. V. ESPIRITU, G.R. NOS.

204944-45, [DECEMBER 3, 2014], 749 PHIL 388-450)

In 2005, Arlene S. Espiritu ("Arlene") was engaged by

Fuji Television Network, Inc. ("Fuji") as a news
correspondent/producer "tasked to report Philippine
news to Fuji through its Manila Bureau field office."
• Arlene's employment contract initially provided for
a term of one (1) year
• Renewed four times, on a yearly basis with salary
adjustment upon every renewal.

ADA ABAD UP LABOR BAR REVIEW 05202021

In January 2009, Arlene was diagnosed with lung cancer. She

informed Fuji about her condition. Fuji, through News Head,
informed Arlene "that the company will have a problem
renewing her contract" since it would be difficult for her to
perform her job. She "insisted that she was still fit to work as
certified by her attending physician.”

After much negotiations, Arlene and Fuji signed a last non-

renewable contract on May 5, 2009, where it was stipulated
that her contract would no longer be renewed after its
expiration on May 31, 2009. The contract also provided that
the parties release each other from liabilities and
responsibilities under the employment contract.

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In consideration of the non-renewal

contract, Arlene "acknowledged receipt of
the total amount of US$18,050.00
representing her monthly salary from March
2009 to May 2009, year-end bonus, mid-year
bonus, and separation
pay." However, Arlene affixed her signature
on the non-renewal contract with the initials
"U.P." for "under protest."

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IS ARLENE ESPIRITU AN
EMPLOYEE OF FUJI
NETWORK, OR IS SHE AN
INDEPENDENT
CONTRACTOR?

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ARLENE’S WORK IS NECESSARY OR DESIRABLE IN

THE USUAL TRADE OR BUSINESS OF FUJI

Fuji is engaged in the business of

broadcasting, including news programming. It is based
in Japan and has overseas offices to cover international
news. Based on the record, Fuji's Manila Bureau Office is
a small unit and has a few employees. As
such, Arlene had to do all activities related to news
gathering. Although Fuji insists that Arlene was a
stringer, it alleges that her designation was "News
Talent/Reporter/Producer."
||| (Fuji Television Network, Inc. v. Espiritu, G.R. Nos. 204944-45, [December 3, 2014], 749 PHIL 388-450)

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• plans and supervises newscast . . . [and] work[s] with

reporters in the field planning and gathering
information. . . ."
• "[m]onitoring and [g]etting [n]ews [s]tories,
[r]eporting interviewing subjects in front of a video
camera,"
• "the timely submission of news and current events
reports pertaining to the Philippines[,] and
traveling [sic] to [Fuji's] regional office in Thailand."
• She also had to report for work in Fuji's office in
Manila from Mondays to Fridays, eight (8) hours per
day.
• She had no equipment and had to use the facilities of
Fuji to accomplish her tasks.
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The Court of Appeals correctly affirmed the finding of

the National Labor Relations Commission that the
successive renewals of Arlene's contract indicated
the necessity and desirability of her work in the
usual course of Fuji's business. Because of
this, Arlene had become a regular
employee with the right to security of
tenure

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Under this rule, if there is a reasonable causal

connection between the claim asserted and
the employer-employee relations, then the
case is within the jurisdiction of our labor
courts. In the absence of such nexus, it is the
regular courts that have jurisdiction.
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2014 CASE: Indophil Textile Mills Vs. Adviento,

G.R. No. 171212, 04 August 2014 – definition of
reasonable causal connection

Facts: Adviento was

hired as Civil Engineer
(of Indophil, whose
primary business is the
manufacture of textiles.
Adviento developed a
chronic allergy on
account of the textile
dust.
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He was eventually dismissed from employment, for

which reason he filed two cases against the
company, viz:
(a) NLRC for illegal termination; and
(b)Regional Trial Court for damages arising from
gross negligence and failure of company to
provide a safe, workable and healthy environment.

Company sought to dismiss the RTC case on

account of litis pendencia and lack of jurisdiction,
considering that the claim arises from an employer-
employee relationship.

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Question: Whether or not

RTC has jurisdiction?

Answer: YES! No reasonable

causal connection between
claim and employer-
employee relationship.

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While the maintenance of a safe and

healthy workplace may be a subject of
a labor case, note that the cause of
action is one for torts/quasi-delict
and that relief prayed for is the
payment for damages arising from
alleged gross negligence on the part
of the company to provide a safe,
healthy and workable environment
for its employees.
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De Roca v. Dabuyan, G.R. No. 215281, 05 March 2018–

"Contracts take effect only between the

parties, their assigns and heirs, except in
case where the rights and obligations
arising from the contract are not
transmissible by their nature, or by
stipulation or by provision of law."

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The contract of employment between respondents, on the

one hand, and Oceanic and Ewayan on the other, is
effective only between them; it does not extend to
petitioner, who is not a party thereto.

His only role is as lessor of the premises which

Oceanic leased to operate as a hotel; he cannot be
deemed as respondent's employer — not even under
the pretext that he took over as the "new management" of
the hotel operated by Oceanic. There simply is no truth to
such claim. Thus, to allow respondents to recover their
monetary claims from petitioner would necessarily result
in their unjust enrichment.
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IS A CAR PLAN GIVEN TO MANAGERS

A CIVIL OR LABOR DISPUTE?

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An employer’s demand for the payment

of the market value of the car, or in the
alternative, the surrender of a car, is not a
labor dispute but a civil one. Hence, this
demand properly falls within the jurisdiction of
the civil courts. No reasonable causal
connection between the claim to the issue of
an employer-employee relationship.SMART
Communications vs. Astorga, G.R. 148132, 28 Jan 2008.

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QUESTION: CAR LOAN BENEFIT

WHAT IF THE REIMBURSEMENT OF CAR
LOAN PAYMENTS WERE MADE AS A
PART OF THE CLAIMS IN THE ILLEGAL
TERMINATION CASE? MAY THE LABOR
COURTS STILL HAVE JURISDICTION
OVER THE CLAIM?

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Grandteq Industrial Steel

Products vs. Edna
Margallo, G.R. No.
181393, 28 July 2009. –

Margallo availed of car loan program offered by Grandteq,

as reward for being “Salesman of the Year.” She paid a
downpayment on brand new Toyota Corolla in amount of
P201,000.00 from her own personal money, plus half of
monthly amortizations (half company)

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with forfeiture clause

Claim by Margallo for reimbursement of car loan
payments under car loan agreement with Grandteq,
among others.

Labor Arbiter dismissed claim, finding that the

contract stipulation should be strictly followed as the
law between the parties.

On appeal, NLRC/CA reversed the Labor Arbiter’s

decision, and declared the forfeiture provision of the
car loan agreement as null and void.

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“Although not strictly a labor contract, a car loan

agreement herein involves a benefit extended by the
employers, Grandteq and Gonzales, to their employee
Margallo. It should benefit, and not unduly unburden
Margallo.

The court cannot, in any way, uphold a car loan

agreement that threatens the employee with the
forfeiture of all the car loan payments he/she had
previously made, plus loss of the possession of the car,
should the employee wish to resign; otherwise, said
agreement can then be used by employer as an
instrument to either hold said employee hostage to the
job or punish him/her for resigning.”
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IS THE TERMINATION
OF A HIGHER MANAGEMENT
OFFICER
“ASST. VICE-PRESIDENT”
“EXECUTIVE VICE-
PRESIDENT”, OR SIMPLY
“VICE-PRESIDENT”
A LABOR CASE OR
A CORPORATE CASE?
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WHO ARE CORPORATE

OFFICERS?
Corporation Code, Section 25. Corporate officers,
quorum. - Immediately after their election, the directors of a
corporation must formally organize by the election of a
president, who shall be a director, a treasurer who may
or may not be a director, a secretary who shall be a resident
and citizen of the Philippines, and such other officers as may be
provided for in the by-laws. Any two (2) or more positions may be
held concurrently by the same person, except that no one shall
act as president and secretary or as president and treasurer at
the same time.

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EXCEPTIONS:
• WHEN THE ARTICLES OR BY-LAWS PROVIDE
FOR OFFICERS OTHER THAN THAT REQUIRED
IN THE CORPORATION CODE

• BY RESOLUTION OF BOARD OF DIRECTORS, not sufficient

DULY EMPOWERED AND AUTHORIZED TO
CREATE SUCH ADDITIONAL CORPORATE alone
OFFICES, WHICH POSITIONS ARE ALSO
REFLECTED IN THE ARTICLES OR BY-LAWS
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Intra-corporate disputes.

A corporate officer ’s removal from his

office is a corporate act, and the case
partakes of the nature of an intra-corporate
dispute. ADA ABAD UP LABOR BAR REVIEW 05202021

Inasmuch as the matter comes within the area of

corporate affairs and management, such a corporate
controversy would necessarily require the
adjudicative expertise of the Securities and
Exchange Commission (SEC), and not the Labor
Arbiter or the NRLC. (De Rossi vs. NLRC, 314 SCRA 245 [1999]).
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The Supreme Court has

consistently held that it is the
SEC that has exclusive and
original jurisdiction over
controversies involving
removal from a corporate
office. (Union Motors Corp. vs. NLRC, 314 SCRA 531
[1999]).

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Is the controversy involving the

separation from the service of
one who is an employee, a
stockholder, and a Director of
the corporation all at the same
time, an intra-corporate dispute
or a labor termination case?
(Matling Industrial and Commercial Corporation vs. Coros G.R. No..
157802, 13 October 2010).

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This is a labor termination case within the

jurisdiction of the Labor Arbiter.

The criteria for distinguishing between corporate

officers who may be ousted from office at will, on
one hand, and ordinary corporate employees who
may only be terminated for just cause, on the other
hand, do not depend on the nature of the services
performed, but on the creation of the office.

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MATLING CASE
In the present case, the complainant rose
from the ranks from the position of
bookkeeper to become Vice President
for Finance and Administration after
21 years of service with the
company, which corporate position he
held for 13 years until he was terminated
from employment.

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Even though the complainant might have become a

stockholder of the company, his promotion to the
position of VP Finance & Administration was by virtue
of the length of service he had rendered as an
employee.

His subsequent acquisition of the status of

Director/Stockholder had no relation to his promotion.

Besides, his status as Director/Stockholder was

unaffected by his dismissal from employment as Vice
President for Finance and Administration.
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More importantly, the Company’s

By-laws did not mention his
position Vice President for Finance
and Administration as one of the
corporate officers and that his
position was not created by its
Board of Directors or stockholders
but only by the President or
Executive Vice President.
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VERY IMPORTANT CASE ON

EXISTENCE OF INTRA-CORPORATE
CONTROVERSY:

Real v. Sangu Philippines, Inc., G.R. No.

168757, 19 January 2011

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There is a two-tier test in determining the

existence of intra-corporate controversy
which must both be complied with:

1. RELATIONSHIP TEST; and

2. NATURE OF THE
CONTROVERSY TEST
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If not complied with,

then this is not an intra-
corporate controversy.

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Intra-Corporate Controversy; relationship test

a) between the corporation, partnership or

association and the public;
b) between the corporation, partnership or
association and its stockholders, partners,
members or officers;
c) between the corporation, partnership or
association and the State as far as its franchise,
permit or license to operate is concerned; and
d) among the stockholders, partners or associates
themselves.
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Intra-Corporate Controversy; nature of the

controversy test

The controversy must not only be rooted in

the existence of an intra-corporate
relationship, but must as well pertain to the
enforcement of the parties' correlative rights
and obligations under the Corporation
Code and the internal and intra-corporate
regulatory rules of the corporation.

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If the relationship and its incidents

are merely incidental to the
controversy; OR
if there will still be conflict even if the
relationship does not exist,

then no intra-corporate
controversy exists
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GENERAL RULE:

CORPORATE OFFICER NOT LIABLE

EXCEPT:
(A) BAD FAITH OF CORPORATE
OFFICER MUST BE ESTABLISHED
CLEARLY AND CONVINCINGLY;
AND
(B) CAN BE INDIVIDUALLY
ATTRIBUED TO THE OFFICER.
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GENERAL RULE:
JOINT LIABILITY ONLY

If bad faith established,

Decision must state that
liability is SOLIDARY;
otherwise, NOT.
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ADA’S TIP ON
HOW TO
DECIDE ON
JURISDICTION

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In determining the nature of

the case, check the principal
relief/ prayer sought by the
complainant.

That is the main factor that

determines jurisdiction.
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CASE RELIEF JURISDICTION

SMART VS. REPLEVIN; RETURN OF THE CAR OF REGIONAL TRIAL
ASTORGA THE MANAGER COURT
GRANDTEQ VS. ILLEGAL TERMINATION WITH PRAYER LABOR ARBITER
MARGALLO FOR REIMBURSEMENT OF
DOWNPAYMENT FOR CAR
INDOTEXTILE VS. DAMAGES FOR COMPANY’S FAILURE REGIONAL TRIAL
ADVIENTO TO PROVIDE SAFE AND HEALTHY COURT
WORKING ENVIRONMENT
MATLING VS. TERMINATION OF VP FOR FINANCE LABOR ARBITER
COROS AND ADMINISTRATION, WHICH
POSITION IS NOT IN ARTICLES OR BY-
LAWS
COSARE VS TERMINATION OF ASST VICE- LABOR ARBITER
BROADCOM PRESIDENT FOR SALES, WHO WAS
ALSO A STOCKHOLDER. AVP-SALES
NOT A CORP OFFICER
MALAYAN VS REPLEVIN; RETURN OF THE CAR OF REGIONAL TRIAL
ALIBUDBUD THE MANAGER COURT
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LEONEN, J: Malcaba v. ProHealth Pharma Philippines,

Inc., G.R. No. 209085 , [June 6, 2018]
This case involves fundamental principles in labor cases.

First, appeal bond must be complied with.

Second, before any labor tribunal takes cognizance of termination

disputes, it must first have jurisdiction over the action. The Labor
Arbiter and the National Labor Relations Commission only exercise jurisdiction
over termination disputes between an employer and an employee. They do
not exercise jurisdiction over termination disputes
between a corporation and a corporate officer.
Third, while this Court recognizes the inherent right of employers to discipline
their employees, the penalties imposed must be commensurate to the
infractions committed. Dismissal of employees for minor and negligible
offenses may be considered as illegal dismissal.
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SIX GENERAL
PRINCIPLES
IN LABOR LAW

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WHAT ARE THE FOUR TESTS

TO DETERMINE THE
EXISTENCE OF AN
EMPLOYER-EMPLOYEE
RELATIONSHIP?
(CLUE: SOUTH-WEST-
DISASTER CONTROL)
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WHAT ARE THE TWO

TESTS TO DETERMINE
JURISDICTION UNDER
CASTILLO’S REAL VS.
SANGYU CASE?
ADA ABAD UP LABOR BAR REVIEW 05202021

WHO ARE THE THREE

REQUIRED CORPORATE
OFFICERS OF A COMPANY?

ASIDE FROM THE THREE

CORPORATE OFFICERS ABOVE,
HOW CAN ONE BE A
CORPORATE OFFICER?
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QUESTIONS:

CAN YOU HOLD A CORPORATE

OFFICER PERSONALLY LIABLE FOR
CORPORATE DEBT?

GENERAL RULE?
EXCEPTION – ELEMENTS?

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BAR EXAM
EXERCISE

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2015 BAR EXAM QUESTION: VI

Ador is a student working on his master's

degree in horticulture. To make ends meet,
he takes on jobs to come up with flower
arrangements for friends. His neighbor,
Nico, is about to get married to Lucia and
needs a floral arranger.

ADA ABAD UP LABOR BAR REVIEW 05202021

Ador offers his services and Nico agrees.

They shake hands on it, agreeing that Nico
will pay Ador P20,000.00 for his services
but that Ador will take care of everything.

As Ador sets about to decorate the venue,

Nico changes all of Ador's plans and ends
up designing the arrangements himself
with Ador simply executing Nico's
instructions.
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(a) Is there an employer-employee

relationship between Nico and
Ador? (4%) Yes, the test of control.

(b) Will Nico need to register Ador with

the Social Security System (SSS)?

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2015 BAR EXAM QUESTION: VI

Ador is a student working on his master's

degree in horticulture. To make ends meet,
he takes on jobs to come up with flower
arrangements for friends. His neighbor,
Nico, is about to get married to Lucia and
needs a floral arranger.

ADA ABAD UP LABOR BAR REVIEW 05202021

Ador offers his services and Nico agrees.

They shake hands on it, agreeing that Nico
will pay Ador P20,000.00 for his services
but that Ador will take care of everything.

As Ador sets about to decorate the venue,

Nico changes all of Ador's plans and ends
up designing the arrangements himself
with Ador simply executing Nico's
instructions.
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ANSWER:

A. Yes. The relationship between Nico and Ador is one

of employment, there being an element of control on
the part of Nico. When Nico assumed the control of
both result and manner of performance from Ador, all
vestiges of independent contractorship disappeared.
What replaced it was employer- employee
relationship.

B. No. Casual employees are not subject to the

compulsory coverage of the SSS by express
provision of law. (Section 8 (-5) (3), RA1161, as
amended.)
ADA ABAD UP LABOR BAR REVIEW 05202021

END OF
MODULE 1:

GENERAL
PRINCIPLES IN
LABOR RELATIONS
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START OF
MODULE 2:

MANAGEMENT
PREROGATIVES
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1. MANAGEMENT PREROGATIVE

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Management controls and owns

CAPITAL

money workplace equipment

the disposition and direction of

which is ENTIRELY HIS OWN
PREROGATIVE.
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WHAT IS MANAGEMENT’S PREROGATIVE?

In its quest for profits, management may exercise its
management prerogatives – which is the discretionary
power to decide ALL ASPECTS OF OPERATIONS. In the
aspect of EMPLOYMENT, it includes everything -
From HIRING

To FIRING

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OTHER EXAMPLES OF
MANAGEMENT PREROGATIVES

work assignments and

working methods

time, place and

manner of work,
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tools to be used, processes to

be followed,

Supervision and
discipline of
employees
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Management is free to regulate, according to

its discretion and judgment, all aspects of
employment, including hiring, work
assignments, working methods, time, place
and manner of work, processes to be followed,
supervision of workers, working regulations,
transfer of employees, work supervision, lay-
off of workers, and discipline, dismissal and
recall of workers. Malcaba v. ProHealth Pharma Philippines, Inc., G.R.
No. 209085, 06 June 2018 ( J. Leonen), citing San MIguel Brewery Sales Force Union vs.
Ople.

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ELEMENTS FOR
A VALID EXERCISE OF
MANAGEMENT
PREROGATIVES:

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The free will of the management to conduct its

own affairs to achieve its purpose cannot be
denied, PROVIDED THAT THE SAME IS
EXERCISED:
• IN GOOD FAITH,
• FOR THE ADVANCEMENT OF THE
EMPLOYER’S INTEREST; AND
• NOT TO CIRCUMVENT THE RIGHTS OF THE
EMPLOYEES. (San Miguel Brewery and Union
Carbide cases).
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An employer is entitled to prescribe reasonable

work standards, rules, and regulations necessary
for the conduct of its business, to provide certain
disciplinary measures in order to implement
them, and to assure that the same would be
complied with. This management prerogative of
requiring standards may be availed of so long as
they are exercised in good faith for the
advancement of the employer's interest.
Telephilippines, Inc. v. Jacolbe, G.R. No. 233999, [February 18,
2019])

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As long as no arbitrary or malicious action

on the part of an employer is
shown, the wisdom of a business
judgment to implement a cost saving device
is beyond this court's determination. After all,
the free will of management to conduct its
own business affairs to achieve its purposes
cannot be denied. (citing Maya Farms Employees
Org. vs NLRC, GR No. 106256, 28 Dec 1994)
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LIMITS ON THE EXERCISE

OF MANAGEMENT
PREROGATIVES

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TRANSFER OF
EMPLOYEES

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It is the prerogative
of management to
transfer an
employee where he
can be most useful
to the company.

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IMPORTANT CASE:
Jurisprudential guidelines in the transfer of
employees: ICT Marketing Services, Inc., etc. vs. Mariphil
L. Sales, G.R. No. 202090, 09 September 2015.

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ØTransfer is a movement from one position to another of

equivalent rank, level or salary without break in the
service or a lateral movement from one position to
another of equivalent rank or salary;

ØThe employer has the inherent right to transfer or

reassign an employee for legitimate business purposes;

ØA transfer becomes unlawful where it is motivated by

discrimination or bad faith or is affected as a form of
punishment or is a demotion without sufficient cause;

ØThe employer must be able to show that the transfer is

not unreasonable, inconvenient or prejudicial to the
employee. ADA ABAD UP LABOR BAR REVIEW 05202021

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LATERAL TRANSFER:

No demotion in rank, nor diminution

in pay or benefit

“Not unduly inconvenience the

employee”

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Chateau Royale Sports and Country

Club, Inc. vs. Rachelle G. Balba, et al.,
G.R. No. 197492, 18 January 2017

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When three (3) Account Managers and the

Director of Sales and Marketing in Petitioner’s
Manila Office resigned, an order was issued
directing respondent employee Balba et al to
transfer from the Nasugbu, Batangas office to the
main office in Manila.

Respondents declined on the ground that their

families were living in Nasugbu, Batangas.
Hence, respondents filed a complaint for
constructive dismissal.
ADA ABAD UP LABOR BAR REVIEW 05202021

QUESTION:

IS THIS A
VALID
TRANSFER
OR NOT?

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ANSWER:
YES, VALID TRANSFER!!!!
Management prerogative to determine
the place where the employee is best
qualified to serve the interest of the
business given the qualifications,
training and performance of the
affected employee.
ADA ABAD UP LABOR BAR REVIEW 05202021

NO evidence that the COMPANY was

acting in bad faith or had ill-motive in
ordering their transfer.

In contrast, the urgency

and
genuine business necessity
justifying the transfer negated bad
faith on the part of the petitioner.

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CONTRA case:
Julie’s Bakeshop vs. Arnaiz, G.R. No.
173882, 15 Feb 2012.

Transfer as demotion, viz from baker to

utility personnel, gives rise to
constructive dismissal --

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In constructive dismissal cases, the employer

has the burden of proving that the transfer of
an employee is for just or valid ground, such
as genuine business necessity. The employer
must demonstrate that the transfer is not
unreasonable, inconvenient, or prejudicial to
the employee and that the transfer does not
involve a demotion in rank or a diminution in
salary and other benefits. "If the employer
fails to overcome this burden of proof, the
employee's transfer is tantamount to unlawful
constructive dismissal."
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In this case, petitioners insist that the transfer of

respondents was a measure of self-preservation and was
prompted by a desire to protect the health of the buying
public, claiming that respondents should be transferred to
a position where they could not sabotage the business
pending resolution of their cases.

According to petitioners, the possibility that respondents

might introduce harmful substances to the bread while in
the performance of their duties as chief bakers is not
imaginary but real as borne out by what Tolores did in one
of the bakeshops in Culasi, Antique where he was
assigned as baker.
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MANILA PAVILLION VS. HENRY DELADA, GR

189947, 25 JANUARY 2012 SERENO

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Delada was the Union President of the

Manila Pavilion Supervisors Association
at MPH. He was originally assigned as
Head Waiter of Rotisserie, a fine-dining
restaurant operated by petitioner.

Pursuant to a supervisory personnel

reorganization program, MPH reassigned
him as Head Waiter of Seasons Coffee
Shop, another restaurant operated by
petitioner at the same hotel.
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Respondent declined the inter-outlet

transfer and instead asked for a
grievance meeting on the matter,
pursuant to their Collective Bargaining
Agreement (CBA). He also
requested his retention as Head
Waiter of Rotisserie while the
grievance procedure was ongoing.

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MPH: YOU TRANSFER, without

prejudice to the resolution of the
grievance involving the transfer.
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Delado: NO!
I will stay in the
Rostisserie until
resolution of the
grievance .

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Disciplinary case for:

serious misconduct; willful disobedience
of the lawful orders of the employer;
gross insubordination; gross and habitual
neglect of duties; and willful breach of
trust.

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QUESTION:

CAN EMPLOYEE REFUSE TO

COMPLY WITH TRANSFER BY
RAISING THIS AS A GRIEVANCE
ISSUE? IN SHORT, CAN DELADA
RIGHTFULLY STAY IN THE
ROTISSERIE?

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NO!!! The refusal to obey a valid transfer

order constitutes willful disobedience of a
lawful order of an employer. Employees may
object to, negotiate and seek redress against
employers for rules or orders that they regard
as unjust or illegal. However, until and
unless these rules or orders are declared
illegal or improper by competent
authority, the employees ignore or
disobey them at their peril.

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In fact, Delada cannot hide under the legal INITIALLY TO BE

cloak of the grievance machinery of the PRESUMED VALID
CBA or the voluntary arbitration
UNLESS DECLARED
proceedings to disobey a valid order of
ILLEGAL BY
transfer from the management of the hotel.
COMPETENT
While it is true that Delada’s transfer to
Seasons is the subject of the grievance AUTHORITY OR
machinery in accordance with the LABOR COURT
provisions of their CBA, Delada is expected DECISION
to comply first with the said lawful directive WHATEVER THE
while awaiting the results of the decision in MANAGEMENT
the grievance proceedings. SAYS IS A LAW
Hence, employee
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comply first

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OBEY
FIRST

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CONTRA; Prince Transport, Inc. vs. Garcia, et al. G.R.

No. 167291, 12 January 2011; When transfer is done in
bad faith. –

When the President of Prince Transport, Inc. (PTI)

suspected that the drivers, conductors, mechanics or
inspectors were about to form a union, he made known
his objection to the formation of the same. In order to
block the continued formation of the union, PTI caused
the transfer of all union members and sympathizers to
one of its sub-companies, Lubas Transport (Lubas). The
transfer of the workers to Lubas was designed by PTI as
a subterfuge to foil the former’s right to organize
themselves into a union. This is ULP as it interferes
with, restrains or coerces the workers of PTI in the
exercise of their right to self-organization.
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FOR POSSIBLE BAR QUESTION:

May a company terminate an

employee who refused to take a
random drug test?

Mirant Philippines vs. Joselito A. Caro, G.R.

No. 181490, 23 April 2014. –

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Mirant Phils conducted a drug test where Caro was randomly

chosen among its employees who would be tested for illegal
drug use. Caro and the selected employees duly received an
Intra-company Correspondence that the random drug testing
was to be conducted after lunch on the same day.
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However at 11:30 a.m. of

the same day, Caro
received an emergency
phone call from his wife’s
colleague who informed
him that a bombing
incident occurred near his
wife’s work station in Tel
Aviv, Israel where his wife
was then working as a
caregiver.
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Caro thereafter informed the company that

he will go to the Israeli Embassy first to
attend to his wife’s concerns, and that he
will submit to a drug test the following
day at his own expense.

For his failure to undergo drug testing,

company terminated him after due
process.
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While the adoption and enforcement by petitioner

corporation of its Anti-Drugs Policy is recognized as a
valid exercise of its management prerogative as an
employer, such exercise is not absolute and unbridled.

In the exercise of its management prerogative, an

employer must therefore ensure that the policies, rules REASONABLE OF
and regulations on work-related activities of the THE
employees must always be fair and reasonable and the CIRCUMSTANCES
corresponding penalties, when prescribed, NOT INDICATED
commensurate to the offense involved and to the degree
of the infraction.47 The Anti-Drugs Policy of Mirant fell IN THE
short of these requirements. COMPANY
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Bughaw Jr. Vs. Treasure Island, 550 SCRA 307 [2008];

serious misconduct; drug abuse

The Supreme Court has taken judicial notice of

scientific findings that drug abuse can damage
the mental faculties of the user.

It is beyond question that any employee under

the influence of drugs cannot possibly
continue doing his duties without posing a
serious threat to the lives and property of his
co-workers, and even his employer.
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REQUIREMTS FOR VALID DRUG TEST under

Rep. Act No, 9165: (AER vs. Progresibong Union sa AER, 15 July
2011 citing Nacague vs. Suplicio Case, Aug 2010)

• The drug tests shall be performed only by any

government forensic laboratories or authorized
drug testing centers accredited by the Dept. Of
Health, (list of accredited centers at
www.oshc.dole.gov.ph)
• Drug testing shall conform with procedure
prescribed by the Dept. of Health
• Two testing methods: screening text and
confirmatory test
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WHERE THERE IS FRAUD OR ERROR IN

THE DRUG TEST, THEN COMPANY
CANNOT TERMINATE THE EMPLOYEE.
(Plantation Bay vs. Dubrico, GR 188216, 04
Dec 2009)

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Records show the following timeline, based on the

reports on respondents respective drug
tests administered by Martell and confirmatory tests[
undertaken by the Phil. Drug:

Name Drug Test Confirmatory Test

Romel Dubrico Urine sample received on Issued on 09/29/04
09/29/04 at 5:14 p.m. at 3:57 p.m.
Godfrey Ngujo Urine sample received on Issued on 09/29/04
09/29/04 at 5:24 p.m. at 3:57 p.m.
Julius Villaflor Urine sample received on Issued on 09/29/04
09/29/04 at 5:32 p.m. at 4:15 p.m.

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The importance of the confirmatory test is

underscored in Plantation Bays own Policy and
Procedures, in compliance with Republic Act No. 9165,
requiring that a confirmatory test must be conducted if
an employee is found positive for drugs in the
Employees Prior Screening Test, and that both tests
must arrive at the same positive result.

As reflected in the above matrix, the confirmatory test

results were released earlier than those of the drug test,
thereby casting doubts on the veracity of the
confirmatory results.

ADA ABAD UP LABOR BAR REVIEW 05202021

Armando Puncia vs. Toyota Shaw, G.R. No. 214399,

28 June 2016.
MANAGEMENT PREROGATIVE TO IMPOSE
PRODUCTIVITY STANDARDS.

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Facts:

Records reveal that as a Marketing Professional

for Toyota, Puncia had a monthly sales quota of
seven (7) vehicles from March 2011 to June 2011.
As he was having trouble complying with said
quota, Toyota even extended him a modicum of
leniency by lowering his monthly sales quota to
just three (3) vehicles for the months of July and
August 2011; but even then, he still failed to
comply.

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Issue: Whether or not

management may
impose productivity
standards to determine
efficiency of
employee?

Answer: YES!!!
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Decision:

Puncia’s repeated failure to perform his duties, i.e., reaching

his monthly sales quota for such a period of time, falls under
the concept of gross inefficiency.

In Aliling vs. Feliciano (686 Phil. 910 [2012], citing Lim vs. NLRC, 328
Phil. 843 [1996]), the SC held that an employer is entitled to impose
productivity standards for its employees, and the latter’s non-
compliance therewith can lead to his termination from work.
In this regard, case law instructs that “gross inefficiency” is
analogous to “gross neglect of duty”, a just cause of dismissal
under Article 297 of the Labor Code, for both involve specific acts
of omission on the part of the employee resulting in damage to the
employer or to his business.ADA ABAD UP LABOR BAR REVIEW 05202021

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GENERAL RULE:

A bonus is a gratuity or an act of liberality

which the recipient has no right to demand as
a matter of right.

EXCEPTION: WHEN DEMANDABLE AS A

MATTER OF RIGHT –

A bonus, however, is a demandable or

enforceable obligation when it is made part of
the wage or salary or compensation of the
employee.
ADA ABAD UP LABOR BAR REVIEW 05202021

Whether or not a bonus

forms part of wages
depends upon the
circumstances and
conditions for its
payment.
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SITUATION A:
• THE AMOUNT TAKEN FROM THE
ANNUAL NET INCOME OF THE
COMPANY IS GIVEN TO THE
EMPLOYEES AT THE END OF THE
YEAR
• THE AMOUNT IS NOT FIXED BUT
DEPENDENT ON THE COMPANY’S
NET INCOME
• PAYMENT WAS DISCRETIONARY
ON THE PART OF THE CHAIRMAN
ADA ABAD UP LABOR BAR REVIEW 05202021

AND THE PRESIDENT.

IS THE YEAR-
END LUMP-
SUM
PAYMENT
PART OF THE
SALARY, OR A
BONUS?
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ANSWER:

THIS IS A BONUS, NOT

FORMING PART OF THE
WAGES/SALARY.
(PROTACIO VS. LAYA MANANGHAYA CASE)

ADA ABAD UP LABOR BAR REVIEW 05202021

If it is additional compensation
which the employer promised
and agreed to give without any
conditions imposed for its
payment, such as success of
business or greater production
or output, then it is part of the
wage.
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But if it is paid only if profits are

realized or if a certain level of
productivity is achieved, it can not
be considered part of the wage.

Where it is not payable to all but only

to some employees and only when
their labor becomes more efficient or
more productive, it is only an
inducement for efficiency, a prize
therefor, not a part of the wage.
ADA ABAD UP LABOR BAR REVIEW 05202021

SITUATION B:
• REDUNDANCY PROGRAM
IMPLEMENTED, AND SEPARATION
PAY GIVEN TO EMPLOYEES
• SEPARATION PAY INCLUDED
PAYMENT OF ACCRUED VACATION
LEAVE AND 50% UNUSED SICK
LEAVE PLUS 3 MOS SALARY FOR
EVERY YEAR OF SERVICE PLUS
ADDITIONAL CASH IN LIEU OF
BENEFITS PROVIDED BY COMPANY
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• TWO EMPLOYEES WERE TO

RECEIVE SERVICE AWARDS FOR
YEARS OF SERVICE A FEW
MONTHS BEFORE THE
IMPLEMENTATION OF THE
REDUNDANCY PROGRAM.
• THEY NOW INSIST THAT THE
SERVICE AWARD (IN FORM OF
MONEY AND PRO-RATED BONUS)
SHOULD LIKEWISE FORM PART OF
THEIR REDUNDANCY PAY.
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ANSWER: Since pre-agreed by parties

YES, THE SERVICE AWARDS ARE

GOVERNED IN THE EMPLOYEES’
MANUAL AND HENCE, CONTRACTUAL IN
NATURE. AS SUCH, NO LONGER A
BONUS BUT A BENEFIT FORMING PART
OF SALARY.

PERFORMANCE AND ANNIVERSARY

BONUS MAY HOWEVER BE PRO-RATED
TO THE NUMBER OF MONTHS ACTUALLY
ADA ABAD UP LABOR BAR REVIEW 05202021
SERVED IN THE YEAR, FOR REASONS
OF EQUITY.

SITUATION C:
CHRISTMAS GIFT
PACKAGE OR BONUS
WHICH IS STATED IN
THE COLLECTIVE
BARGAINING
AGREEMENT – IS
THIS A BONUS OR
PART OF THE ADA ABAD UP LABOR BAR REVIEW 05202021

WAGE/SALARY?

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ANSWER: PART OF
WAGE/SALARY

YES. A reading of the CBA reveals

that the giving of “Christmas gift
package/bonus is without
qualification. It was not made
dependent on the company’s
financial standing.
Even assuming there were business
losses, it is a benefit under a
ADA ABAD UP LABOR BAR REVIEW 05202021

contractual stipulation which cannot

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GENERAL RULE:

BONUS IS AN ACT OF LIBERALITY

AND GENEROSITY ON PART OF THE
EMPLOYER, AND HENCE, NOT
DEMANDABLE AS A MATTER OF
RIGHT

ADA ABAD UP LABOR BAR REVIEW 05202021

EXCEPTIONS WHEN BONUS CAN

BE DEMANDED AS A MATTER OF
RIGHT:
1. BONUS GIVEN WITHOUT CONDITION, AND
HENCE, PART OF WAGE OR SALARY;
2. GRANT IS THE RESULT OF AN
AGREEMENT OR UNDERTAKING, SUCH AS CBA
IN A CBA
3. GIVEN ON ACCOUNT OF COMPANY POLICY
OR PRACTICE PERMANENCY, VOLUNTARY, LONG PERIOD
4. GIVEN AS A MANDATE OF LAW.
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GENERAL RULE:

Nothing in the Labor Code shall be construed

to eliminate or in any way diminish
supplements, or other employee benefits
being enjoyed at the time of promulgation of
the Labor Code.

Benefits being given to employees shall not

be taken back or reduced unilaterally by the
employer because the benefit has become
part of the employment contract, written or
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EXCEPTION:

1. IF employee also consents to the

deduction
2. To correct an error.

EXCEPTION TO THE EXCEPTION:

If the error is left uncorrected for a

reasonable period of time, it ripens into a
company policy and employees can demand
for it as a matter of right.

ADA ABAD UP LABOR BAR REVIEW 05202021

SITUATION:

BOSTSIP ADA ISSUED A

MEMORANDUM CHANGING WORK
HOURS EVERY TUESDAY AND
THURSDAY, FROM THE USUAL 9AM-
5PM, TO 1PM-8PM. MWF STILL SAME
AT 9AM-5PM

REASON:
TO ENSURE WINE AND LIQUOR
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DELIVERY REQUIREMENTS ARE MET

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THE UNION THEN

QUESTIONED THE
CHANGE IN
SCHEDULE, STATING
THE RIGHT TO
OVERTIME PAY FOR
TUESDAYS AND
THURSDAYS HAS
BEEN EFFECTIVELY
ELIMINATED OR
DIMINISHED.

ADA ABAD UP LABOR BAR REVIEW 05202021

IS OVERTIME PAY A
BENEFIT OR AN
ADDED
COMPENSATION?
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ANSWER: (Manila Jockey Club case)

NO DIMINUTION OF BENEFITS. NOTE

THAT OVERTIME PAY IS SIMPLY ADDED
COMPENSATION FOR WORK DONE BEYOND
THE 8-HOUR WORK DAY.

COMPANY HAD VALID JUSTIFICATION TO

CHANGE THE SCHEDULE OF THE
EMPLOYEES, AS A VALID EXERCISE OF
MANAGEMENT PREROGATIVES.

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2013 BAR MCQ ON NON-DIMINUTION

OF BENEFITS
In order to improve the Cebu service and sales, Ricardo
decided to assign some of its Makati-based employees to
Cebu to train Cebu employees and expose them to the
Makati standard of service. A chef and three waiters were
assigned to Cebu for the task.

While in Cebu, the assigned personnel shared in the Cebu

service charge collection and thus received service charge
benefits lesser than what they were receiving in Makati.

If you were the lawyer for the assigned personnel, what

would you advice them to do? (1%)
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(A) I would advise them to file a complaint for

unlawful diminution of service charge benefits and
for payment of differentials.
(B) I would advise them to file a complaint for illegal
transfer because work in Cebu is highly
prejudicial to them in terms of convenience and
service charge benefits.
(C) I would advise them to file a complaint for
discrimination in the grant of service charge
benefits.
(D) I would advise them to accept their Cebu training
assignment as an exercise of the company's
management prerogative.
(E) I would advise them to demand the continuation of
their Makati-based benefits and to file a complaint
under (B)aboveADAifABADthe demand is not heeded.
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GENERAL RULE:

If there is no work performed by the

employee, there can be no wage or
pay

EXCEPTION:
Where the employee was able, willing,
and ready to work but was prevented
by management or was illegally
locked out, suspended or dismissed.
ADA ABAD UP LABOR BAR REVIEW 05202021

But where the failure of employees to

work was not due to the employer’s
fault (absence or participation in
strike such as in AKLAN
COOPERATIVE CASE), the burden of
economic loss suffered by the
employers should not be shifted to
the employer. Each party must bear
his own loss.

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REPUBLIC ACT NO. 11165

[20 December 2018]

TELECOMMUTING ACT

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The measure could also address traffic

congestion and its "tremendous effect on the
country's economy, Villanueva said.
P3.5 billion lost daily due to traffic jams: JICA

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SECTION 3. Telecommuting Defined. —

As used in this Act, the term
"telecommuting" refers to a work
arrangement that allows an employee in
the private sector to work from an
alternative workplace with the use of
telecommunication and/or computer
technologies. (Telecommuting Act, Republic
|||

Act No. 11165, [December 20, 2018])

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SECTION 4. Telecommuting Program. — An employer in the private

may offer a telecommuting

sector

program to its employees on a

voluntary basis, and upon such terms and conditions
as they may mutually agree upon

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Provided:

• That such terms and conditions

shall not be less than the minimum
labor standards set by law, and
shall include compensable work
hours, minimum number of work
hours, overtime, rest days, and
entitlement to leave benefits.
• H|||

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In all cases, the employer shall

provide the telecommuting employee
with relevant written information in
order to adequately apprise the
individual of the terms and conditions
of the telecommuting program, and
the responsibilities of the employee.

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SECTION 5. Fair Treatment. — The

employer shall ensure that the
telecommuting employees are given the
same treatment as that of comparable
employees working at the employer's
premises. All telecommuting employees
shall:

ADA ABAD UP LABOR BAR REVIEW 05202021

(a) Receive a rate of pay, including

overtime and night shift differential, 10% 10pm-6pm
Everybody
and other similar monetary benefitsE.R. pregnant and lactating women
not lower than those provided in agricultural business

applicable laws, and collective

bargaining agreements.
(b) Have the right to rest periods,
regular holidays, and special
nonworking days.

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(c) Have the same or equivalent workload

and performance standards as those of
comparable workers at the employer's
premises.

d) Have the same access to training and

career development opportunities as
those of comparable workers at the
employer's premises, and be subject to
the same appraisal policies covering
these workers.

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(e) Receive appropriate training on the

technical equipment at their disposal,
and the characteristics and conditions
of telecommuting.

(f) Have the same collective rights as the

workers at the employer's premises,
and shall not be barred from
communicating with workers'
representatives.
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INTERNATIONAL SCHOOL VS. QUISUMBING

AND PHILEX GOLD VS. PHILEX SUPERVISORS
UNION

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Employees who work with

substantially equal
qualifications, skill, effort and
responsibility, under similar
conditions should be paid
similar salaries (International School
Alliance of Educators vs. Quisumbing, GR
No.128845, June 1, 2000).

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CHANGE IN
WORKING HOURS

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REPUBLIC ACT NO. 10151 ALLOWING THE

EMPLOYMENT OF NIGHT WORKERS (21
JUNE 2011)

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old provisions in the Labor Code were

no longer relevant, especially as regards
the business process outsourcing industry
or call centers.

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OLD LAW:
Women were prohibited
from working the
nightshift between the
hours of 10:00 p.m. and
6:00 a.m. of the
following day, whether
with or without
compensation.

This prohibition has

thus been repealed by
Republic Act No.ADA10151 .
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Night Shift
Differential OT

Payment for work Payment for the

done during the night excess of the regular
() 8-hour work
10% of the basic 25% or 30% of the 25% ordinary day
30% special day
wage basic wage

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WHO MAY BE ALLOWED AS

NIGHT WORKERS:
all workers who shall be
employed or permitted or
suffered to work at night,

EXCEPT:
(a) pregnant women or
nursing mothers, subject to
certain conditions; and
(b) those workers employed
in agriculture, stock raising,
fishing, maritime transport
and inland navigation.
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Pregnant women or
nursing mothers at
least sixteen (16)
weeks before or after
childbirth, are to be
allowed
ALTERNATIVE to
night work, such as:
(a) transfer to day
work where this is
possible; (b) the
provision of social
security benefits; or
(c) an extension of
maternity leave

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Pregnant women and

nursing mothers may be
allowed to work at night
only if a competent
physician, other than the
company physician, shall
certify their fitness to
render night work, and
specify, in the case of
pregnant employees, the
period of the pregnancy
that they can safely work
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RIGHTS OF PREGNANT WOMAN NIGHT

WORKER -- During the periods referred to above,
a woman night worker shall

• NOT be dismissed or given notice of

dismissal, EXCEPT for just or authorized causes
provided for in this Code that are not connected
with pregnancy, childbirth and childcare
responsibilities.

• NOT lose the benefits regarding her

status, seniority and access to promotion which
may attach to her regular night work position.

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Ø Right to health assessment

Ø Right to safe and healthful working

conditions

Ø Right to compel employer to

provide the following mandatory
facilities
(a) Suitable first aid facilities
(b) Adequate or reasonable facilities such as sleeping
or resting quarters in the establishment
(c) Adequate transportation from the work premises
to the nearest point of their residence
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DOLE Department Order No. 119-12 [24 January 2012] --

Implementing Rules of RA 10151 mandates that there
should always be facilities for transportation or
sleeping/resting quarters for the night workers. This is in due regard to BPO industries

EXCEPTIONS:
• When there is already an existing company policy or
CBA providing for an equivalent or superior benefit i.e.
there is already transportation allowance;
• Start or end of work rendered does not fall between
12mn to 5am;
• Where the workplace is located in an area that is
accessible twenty four (24) hours to public
transportation; and
• Insufficient number or night workers to warrant the
necessity for sleeping/resting facilities.
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NON-COMPETE
CLAUSES

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EXCLUSIVITY CLAUSE- YOU CANNOT WORK ELSEWHERE

Non-compete agreements are becoming an

increasingly popular way for employers to
try to protect themselves by:
• prohibiting or limiting their employees
and/or former employees from working for
a competitor, or
• from misappropriating or divulging trade
secrets or other proprietary data, or
•unfairly solicit former customers to their
own benefit, to the prejudice of the
employer.
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Both Philippine and American courts also

recognize the need to protect the employer’s
interests in trade secrets and customer
contacts.
This must be so, because the former employee –
in whom the employer had invested time,
training and other resources -- could potentially
cause significant business losses to the
employer if he/she is allowed to work with a
competitor or set up his/her own business upon
resignation or termination from the employer’s
business.
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WHAT IF THE PRODUCTS

WERE NOT IN DIRECT
COMPETITION:

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AVON COSMETICS VS. LETICIA

LUNA, GR No. 153674, 20 Dec 2006
Leticia Luna was a Supervisor at Avon,
where the arrangement was that she will
purchase products from company
exclusively for resale on retain. She was
eventually invited by former Avon employee
to join Sandre Philippines as a Group
Franchise Director, to sell vitamins and food
supplements.

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Issue: Valid termination or

unfair competition?
There is nothing invalid or contrary to public
policy either in the objectives sought to be
attained by paragraph 5, i.e., the exclusivity
clause, in prohibiting respondent Luna, and
all other Avon supervisors, from selling
products other than those manufactured by
petitioner Avon.

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THERE IS CONFLICT OF INTERESTS

Such prohibition is
neither directed to
eliminate the
competition like
Sandré Phils., Inc. nor
foreclose new entrants
to the market but to
safeguard the network
that it has cultivated
through the years.

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It was not by chance that Sandré Philippines,

Inc. made respondent Luna one of its Group
Franchise Directors. It doesn’t take a genius to
realize that by making her an important part of
its distribution arm, Sandré Philippines, Inc., a
newly formed direct-selling business, would
be saving time, effort and money as it will no
longer have to recruit, train and motivate
supervisors and dealers

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STIPULATIONS
AGAINST MARRIAGE
AND OTHER BONA
FIDE OCCUPATIONAL
QUALIFICATIONS

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Art. 136, LC. Stipulation against

marriage. -- It shall be unlawful for an
employer to require as a condition of
employment or continuation of employment
that a woman employee shall not get
married, or to stipulate expressly or tacitly
that upon getting married, a woman
employee shall be deemed resigned or
separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman
employee merely by reason of her marriage.
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Duncan Association of Detailman-PTGWO and

Pedro Tecson v. Glaxo Wellcome Philippines,
Inc., G.R. No. 162994, September 17, 2004; 438
SCRA 434. ADA ABAD UP LABOR BAR REVIEW 05202021

Stipulation in employment contract:

“TO INFORM MANAGEMENT OF ANY

EXISTING OR FUTURE RELATIONSHIP BY
CONSANGUINITY OR AFFINITY WITH CO-
EMPLOYEES OR EMPLOYEES OF
COMPETING COMPANIES.
IF MANAGEMENT PERCEIVES CONFLICT
OF INTEREST, WHETHER POTENTIAL OR
OTHERWISE, POSSIBILTY OF TRANSFER
TO ANOTHER DEPARTMENT OR
PREPARATION FOR EMPLOYMENT
OUTSIDE COMPANY WITHIN SIX MONTHS.”
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Pedro Tecson, a medical

representative of Glaxo,
fell in love with Bettsy, a
Branch coordinator/
supervisor of competitor
Astra Pharma.
Even before marriage,
Tecson warned by his
superiors of the conflict of
interest. In any event,
love prevailed and Tecson
married Bettsy.

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ISSUE:
MAY THE COMPANY VALIDLY
IMPLEMENT THE STIPULATION
AGAINST MARRIAGE HERE?

Supreme Court upheld the validity of the

policy of a pharmaceutical company
prohibiting its employees from marrying
employees of any competitor company

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The prohibition against personal or marital

relationships with employees of competitor
companies upon Glaxo’s employees was
considered reasonable under the
circumstances because relationships of
that nature might compromise the interests
of Glaxo .

In laying down the assailed company

policy, Glaxo only aims to protect its
interests against the possibility that a
competitor company will gain access
to its secrets and procedures.
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STAR PAPER
VS. SIMBOL
G.R. No. 164774, April 12,
2006; 487 SCRA 228

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Company policy:
1. New applicants will not be allowed to be
hired if in case he/she has [a] relative, up to
[the] 3rd degree of relationship, already
employed by the company.

2. In case of two of our employees (both

singles [sic], one male and another female)
developed a friendly relationship during the
course of their employment and then
decided to get married, one of them should
resign to preserve the policy stated above.3
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IS THE COMPANY POLICY

A VALID EXERCISE OF
MANAGEMENT
PREROGATIVES, OR A
VIOLATION OF THE
CONSTITUTIONAL RIGHTS
OF THE EMPLOYEES?
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Where employer has not been able to prove

how marriage of two co-employees will be
detrimental or prejudicial to the business
operations (BONA FIDE OCCUPATIONAL
QUALIFICATION), then policy violates the
rights of the employee under the Constitution
and the Labor Code. Not a valid exercise of
management prerogative.
Qualification to be valid, must reasonably
related to essential operation of the job;
factual basis for believing that the person
meeting the qualification will be UNABLE to
properly perform the duties of the job (Glaxo
case) ADA ABAD UP LABOR BAR REVIEW 05202021

Under the disparate treatment

analysis, the plaintiff must prove that an
employment policy is discriminatory ON
ITS FACE. No-spouse employment
policies requiring an employee of a
particular sex to either quit, transfer, or
be fired are facially discriminatory.

Example: Employment policy prohibiting

the employer from hiring wives of male
employees, but not husbands of female
employees, is discriminatory on its face.
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 ON ITS FACE,
NEUTRAL
BUT UPON
APPLICATION IT IS
DISCRIMINATORY 6/5/21

Disparate impact analysis: the

complainants must prove that a facially
neutral policy has a disproportionate effect
on a particular class.

Example: Company policy which requires

the other spouse to transfer or leave the
company (without stating who shall do so)

If the application of the policy often

disproportionately affects one sex, then
this is discriminatory
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CAN YOU
TERMINATE
AN EMPLOYEE
FOR BEING
OBESE?!?

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ARMANDO G. YRASUEGUI VS PHILIPPINE AIRLINES,

[G.R. No. 168081, October 17, 2008]

THIS case portrays the peculiar story of an international

flight steward who was dismissed because of his failure
to adhere to the weight standards of the airline company
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ARGUMENTS OF THE FLIGHT

STEWARD:
(1) his dismissal does not fall under 282(e) of the
Labor Code;
(2) continuing adherence to the weight standards
of the company is not a bona fide occupational
qualification; and
(3) he was discriminated against because other
overweight employees were promoted instead
of being disciplined.

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The most important activity of the

cabin crew is to care for the safety
of passengers and the evacuation
of the aircraft when an emergency
occurs. Passenger safety goes
to the core of the job of a cabin
attendant.

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In other words, the primary objective of

PAL in the imposition of the weight
standards for cabin crew is flight
safety. It cannot be gainsaid that cabin
attendants must maintain agility at all
times in order to inspire passenger
confidence on their ability to care for
the passengers when something goes
wrong.
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END OF MODULE 2:

MANAGEMENT
PREROGATIVES

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