Bar Exam 2018 Labor Law

I

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

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

SUGGESTED ANSWER:

(a)     As a part-time employee with fixed-term employment, Narciso   is entitled to retirement benefits. Book VI, Rule II of the Rules Implementing the Labor Code states that the rule on  retirement shall apply to all employees in the private sector, regardless of their position, designation or status and irrespective of the method by which their wages are paid, except to those specifically exempted. Part-time faculty members do not fall under the exemption. Based also on the Retirement Pay Law, and its Implementing Rules, part-time faculty members of private educational institutions are entitled to full retirement benefits even if the services are not continuous, and even if their contracts have been renewed after their mandatory age of retirement.

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

SUGGESTED ANSWER:

(b) In the absence of any contract providing for higher retirement benefits, private educational institutions, including Norte University, are obligated to set aside funds for the retirement pay of all its part-time faculty members. A covered employee who retires pursuant to the Retirement Pay Law shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six(6) months being considered as one whole year. One-half  month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days service incentive leaves. In total, this should amount to 22.5 days for every year of service (De La Salle Araneta University v. Bernardo, G.R. No.  190809,  February 13, 2017).

II

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

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

SUGGESTED ANSWER:

• No. The motion should be denied. Under Article 240 of the Labor Code (LC), a petition for certification election may be filed on the basis of a valid charter certificate issued to a chartered local by a duly registered federation.
• The employer likewise filed a petition for cancellation of union registration against New Neuman Employees Union, alleging that Nayon Federation already had a chartered local rank-and-file  union, Neuman Employees Union, pertaining to the same bargaining unit within the establishment. Should the petition for cancellation prosper? (2.5%)

SUGGESTED ANSWER:

(b) No. The existence of another chartered local under the same federation within the same bargaining unit is not among the grounds to cancel union registration under Article 247 LC, as amended by RA 9481.

III

Due to his employer’s dire financial situation, Nicanor was  prevailed upon by his employer to voluntarily resign. In exchange, he demanded payment of salary differentials, 13^th month pay, and financial assistance, as promised by his employer. Management promised to pay him as soon as it is able to pay off all retrenched rank-and-file employees. Five years later, and  before  management was able to pay Nicanor the amount promised to  him,  Nicanor died of a heart attack. His widow, Norie. filed a money claim against the company before the National Labor Relations Commission (NLRC), including interest on the amount of the unpaid claim. She also claimed  additional  damages arguing that the supposed resignation letter was obtained from her spouse through undue pressure and influence. The employer filed a motion to dismiss on the ground that (A) the NLRC did not have jurisdiction over money claims, and (8) the action has prescribed.

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

SUGGESTED ANSWER:

• The NLRC has jurisdiction over money claims arising from an employer-employee relationship where the amount claimed is  in excess of PhP 5,000, including interest, regardless of whether or not there is a claim for reinstatement. (Sec. 10, RA 8042, as amended by RA 10022.
• Assuming that the NLRC has jurisdiction, has the action prescribed?(2.5%)

SUGGESTED ANSWER:

(b)  In Accessories Specialists, Inc. v. Alabama,  (G.R. No. 168985,  July 23, 2008), the Supreme Court held that the principle of promissory estoppel can apply as a recognized exception to the three-year prescriptive period under Article 291 (now 306) of the Labor Code. Nicanor relied on the promise of  the  employer that he would be paid as soon as the claims of retrenched employees were paid. If not for this promise, there would have been no reason why Nicanor would delay the filing

of the complaint. Great injustice would be committed if the employee’s claim were brushed aside on mere technicality, especially when it was the employer’s action that prevented Nicanor from filing the claims within the required period.

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

SUGGESTED ANSWER:

(c)  Norrie failed to establish that Nicanor’s consent was vitiated  when he filed his resignation letter. In BMG  Record  v. Aparecio, (G.R. No. 153290, September 5, 2007), the SC ruled that the matter of “financial assistance” was an act of generosity on the part of management. Under the circumstances, Nicanor had the intention to resign. Once management had accepted the resignation, Nicanor could not unilaterally withdraw this voluntary act of termination of employment.

IV

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

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

SUGGESTED ANSWER:

• The parties may resolve this through plant-level mechanisms such as a labor-management committee or a grievance machinery under a collective bargaining agreement.

• Can the workers claim both separation pay and retirement benefits? (2.5%)

SUGGESTED ANSWER:

(b) In Santos v. Senior Philippines, (G.R. No. 166377, November 28, 2008), the Supreme Court held that retirement benefits and separation pay are not mutually exclusive, and both benefits may be paid in the absence of a contrary stipulation in the retirement plan and/or in the CBA.

V

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

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

SUGGESTED ANSWER:

(a) In Mabeza v. NLRC, (271  SCRA  670  [1997]),  the  Supreme  Court established three requirements before the value of “facilities” such as food and lodging may be deducted from an employee’s wages: first, proof must be shown that  such facilities are customarily furnished by the trade; second, the provision of deductible facilities must be voluntarily accepted  in writing by the employee; and finally, facilities must be charged at fair and reasonable value. In the case at hand, the second and third requisites on voluntary acceptance of deductible facilities in writing, at fair and reasonable  value, was not established.

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

SUGGESTED ANSWER:

(b) As an employee paid PhP 70 an hour, Nelda was entitled to an additional 100% of her hourly wage for working on a Good Friday, plus 10% for night differential pay. Nelda should be paid a total of PhP 154.00 for working that day.

VI

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

Union Nana: 45 votes Union Nada: 40 votes Union Nara: 30 votes No Union: 80 votes

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

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

SUGGESTED ANSWER:

• Union Nana cannot be immediately declared as the winner. A run-off election pursuant to Article 268 of the Labor  Code (LC) must be first be conducted. A run-off election is required since the present case involves an election which provided for three or more choices, with no choice receiving a majority of the valid votes cast, and the total number of votes for all contending unions being at least 50% of the number of votes cast.

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

SUGGESTED ANSWER:

(b) Since the challenged  votes  may  materially  affect  the  results of the election, and may in fact even give Union Nada or Union Nara an absolute majority, then the said

challenged votes should be opened. Pursuant to Rule IX, Section 11 of the Rules Implementing Book V of the Labor Code, the envelope with the challenged votes shall be opened and the question of eligibility shall be passed upon by the DOLE med­arbiter.

VII

Nico is a medical representative engaged in the promotion of pharmaceutical products and medical devices for Northern  Pharmaceuticals, Inc. He regularly visits physicians’ clinics to inform them of the chemical composition and benefits of his employer’s products.  At the end of every day,  he receives a basic wage of PhP700.00 plus a PhP150.00 “productivity allowance.” For purposes of computing Nico’s 13th month  pay,  should  the daily “productivity allowance” be included? (2.5%)

SUGGESTED ANSWER:

No. The second paragraph of Section 5(a) of the Revised Guidelines Implementing the 13th Month Pay Law states that “employees who  are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay, based on their total earnings during the calendar year, i.e., on both their fixed or guaranteed wage and commission.” However, the SC in Philippine  Duplicators,  Inc.  v. NLRC, 241 SCRA 380 (G.R. No. 110068 February 15, 1995), declared the aforesaid provision as null and void with respect to those medical  representatives who do not obtain productivity allowances by virtue of generated sales. Such allowances are in the nature of profit-sharing bonuses  or  commissions that should be properly excluded from the ambit of the term “basic salary” for purposes of computing 13th month pay due  to employees.

VIII

Nathaniel has been a salesman assigned by Newmark Enterprises (Newmark) for nearly two years at the Manila office of Nutrition City, Inc. (Nutrition City). He was deployed pursuant to a service agreement between Newmark and Nutrition City, the salient provisions of which were as follows:

• the Contractor (Newmark) agrees to perform and provide the  Client (Nutrition City), on a non-exclusive basis, such tasks or activities that are considered contractible under existing laws, as may be needed by the Client from time to time;

• the Contractor shall employ the necessary personnel like helpers, salesmen, and drivers who are determined by the Contractor to be efficiently trained;

• the Client may request replacement of the Contractor’s personnel if quality of the desired result is not achieved;

• the Contractor’s personnel will comply with the Client’s policies, rules, and regulations; and

• the Contractor’s two service vehicles and necessary equipment will be utilized in carrying out the provisions of this Agreement.

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

SUGGESTED ANSWER:

Yes, Nathaniel is correct. Similar to the case of Coca-Cola Bottlers Philippines, Inc. v. Agito, (G.R. No. 179546, February 13, 2009), the lack of control by the Contractor (Newmark) over the worker Nathaniel can be gleaned from the Service Agreement. It is apparent that Newmark has to comply with Nutrition City’s regulations, and that Nutrition City has the right to request the replacement of Newmark’s personnel. It is likewise apparent that the Agreement did not identify the work needed to be performed and the final result to be accomplished, pointing to the conclusion that Newmark did not obligate itself to perform an identifiable job, work, or service. Nathaniel, thus, was under the control of Nutrition City.

With respect to the service vehicles and equipment, these may not be considered as substantial capital on the part of Newmark, as the facts do not establish their sufficiency to carry out the Agreement. The presence of

Newmark’s vehicles and equipment did not necessarily preclude the use of Nutrition City’s own capital and assets.

IX

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

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

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

SUGGESTED ANSWER:

• The death of Sgt. Nemesis arose out of and in the course of his employment as a soldier on active duty in the AFP and hence,

compensable. The concept of a “workplace” cannot always be literally applied to a soldier on active duty. Sgt. Nemesis had permission to go to Nueva Vizcaya and he and his companions had permit to carry their firearms which they could use to defend themselves when attacked. A soldier on active duty is really on duty 24 hours a day since he can be called upon anytime by his superiors, except when he is on vacation leave status, which Sgt. Nemesis was not, at the time of his death (Hinoguin v. ECC, G.R. No. 8430, April 17, 1989).

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

SUGGESTED ANSWER:

• To be considered as a beneficiary, the spouse must be the legal spouse and living with the employee at the time of his death. Nelda, as the surviving spouse who has been separated de facto from the deceased employee, may still however be entitled if  the separation was due to the covered employee’s  abandonment of the spouse without valid reason, or for other justifiable reasons. Narda, not being a  legitimate spouse,  is  not entitled to the benefits; however, the ECC may act as referee and arbitrator between two (2) claimants to help each other reach a mutually acceptable compromise settlement of allocating the compensation among themselves and their dependent children (Samar Mining Co. Inc. v. WCC, G.R. No. L-29938-39, March 31, 1971).

• Are the minor children entitled to the benefits considering that they were not fully dependent on Sgt. Nemesis for support? (2.5%)

SUGGESTED ANSWER:

(c) Being a dependent does not mean absolute dependency for the necessities of life, but rather, that the claimant looked up to  and relied on the contribution of the covered employee for his means of living as determined by his position in life. One need not be in the deceased’s household in order to be a dependent. (Malate Taxicab v. Del Villar G.R. No. L-7489, Feb. 29, 1956).

X

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

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

SUGGESTED ANSWER:

(a) No. Seafarers are considered contractual  employees.  They  cannot be considered as regular  employees under Article 280  of the Labor Code. Their employment is governed by the contracts they sign every time they are hired or rehired and their employment is terminated when the contract expires. Their employment is contractually fixed for a certain period of time (Millares v. NLRC, G.R. No. 110524, July 29, 2002).

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

SUGGESTED ANSWER:

• No. Nonato was repatriated due to a finished contract and not due to any accident or illness he suffered while on board N- Train’s vessel. Moreover, Nonato was declared fit-to-work by the company-designated physician. Under the 2010 POEA- SEC, if a doctor appointed by the seafarer disagrees with the assessment of the company-designated physician, a  third doctor may be agreed upon jointly between the employer and the seafarer. The third doctor’s decision shall be final and binding on both parties. In this case, no third doctor was appointed. Thus, the fit-to-work assessment by the company- designated physician stands.

XI

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

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

SUGGESTED ANSWER:

• Tita Nilda is incorrect. The relationship between Tita Nilda  and Noray is an employer-employee arrangement that is

regulated by the police power of the State. Through the Batas Kasambahay (R.A. 10361), the State recognizes this employment relationship and establishes minimum labor standards for domestic workers, toward decent employment and income, enhanced coverage of social protection and respect for human rights, and strengthened social dialogue. Also, since domestic workers are generally working women in vulnerable working conditions, the State regulates domestic worker employment to prevent abuse and exploitation and uphold the gender rights of domestic workers.

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

SUGGESTED ANSWER:

• Yes. Such a stipulation  is legal  as it states that Noray may  only be “requested” to work on a rest day, thereby recognizing that the consent of Noray is needed in order to waive her right to a weekly rest day. Section 21 of the  Kasambahay  Law allows both the employer and domestic worker to agree on certain arrangements to offset, waive, or accumulate rest days, subject to payment of appropriate wages and benefits.
• Are stay-in family drivers included under the Kasambahay Law?

(2.5%)

SUGGESTED ANSWER:

(c)  No.  Family drivers are not included under the Kasambahay  Law. A “Kasambahay” refers to any person engaged in domestic work within an employment relationship such as, but not limited to, the following: general househelp, nursemaid or “yaya”, cook, gardener, or laundry person, but shall exclude any person who performs domestic work only occasionally or sporadically and not on an occupational basis.

XII

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

SUGGESTED ANSWER:

Nesting’s argument on lack of sexual favor is incorrect. While his actions require further proof of being a “sexual favor” in terms of criminal liability under RA 7877, he may still be held liable under the just causes of termination in Article 297 of the Labor Code.  In Villarama v. NLRC and

Golden Donuts, (G.R. No. 106341, September 2, 1994), the Supreme Court held that a managerial employee is bound by more exacting work ethics, with a high standard of responsibility. Sexual harassment of a subordinate amounts to “moral perversity” which provides a justifiable ground for dismissal due to lack of trust and confidence.

XIII

Nicodemus was employed as a computer programmer by Network Corporation, a telecommunications firm. He has been coming to work in short and sneakers, in violation of the “prescribed uniform policy” based on company rules and regulations. The company human resources manager wrote him a letter, giving him 10 days to comply with the company uniform policy.

Nicodemus asserted that wearing shorts and sneakers made him more productive, and cited his above-average output. When he came to work still in violation of the uniform  policy,  the  company sent him a letter of termination  of employment. Nicodemus filed an illegal dismissal case. The Labor Arbiter ruled in favor of Nicodemus and ordered his reinstatement with backwages. Network Corporation, however, refused to reinstate him. The NLRC 1^st  Division sustained the Labor Arbiter’s judgment. Network Corporation still refused to reinstate Nicodemus. Eventually, the Court of Appeals reversed the decision of the NLRC and ruled that the dismissal was valid. Despite the reversal, Nicodemus still filed a motion for execution with respect to  his accrued backwages.

• Were there valid legal grounds to dismiss Nicodemus from his employment?2.5%)

SUGGESTED ANSWER:

(a) Yes. Nicodemus clearly  committed  willful  disobedience  of  lawful orders issued by the Network Corporation, with respect to the uniform policy. This is a ground for termination under Article 288(a) of the Labor Code.

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

SUGGESTED ANSWER:

(b) Yes. In Garcia v. Philippine Airlines, Inc.,( G.R. No. 164856, January 20, 2009), the employer who did not reinstate an employee pending appeal may be held liable for wages of the dismissed employee covering the period from the time he was ordered reinstated by the Labor Arbiter to the reversal of the NLRC’s decision by the Court of Appeals.

XIV

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

(a)     Was DOLE’s action to conduct mandatory conciliation in light of Nelson’s complaint valid? (2.5%)

SUGGESTED ANSWER:

• Yes. In relation to R.A. 10396 or the “Mandatory Conciliation-Mediation Law”, Article 234 of the Labor Code provides that “all issues arising from labor and employment shall be subject to mandatory conciliation-mediation. The Labor Arbiter or appropriate DOLE agency or office that has jurisdiction over the dispute shall entertain only endorsed or referred cases by the duly authorized officer.”
• Should the Regional Director sustain Needy Corporation’s argument? (2.5%)

SUGGESTED ANSWER:

(b) No. Article 239 of the Labor  Code  provides  that  the  information and statements given in confidence at the conciliation-mediation proceedings shall be treated as privileged communication and shall not be used as evidence in any arbitration proceeding, except when there is a waiver of confidentiality. In the present case, Nelson’s willingness to  settle for 75% of his money claim may not be used against him in the money claims case before the Regional Director due to the confidentiality rule.

XV

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

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

SUGGESTED ANSWER:

(a) Yes. Nini and Nono, in effect, are supervisors as defined under Article 219(m) who may join a supervisory union pursuant to Article 255 of the Labor Code.

• May the two unions be affiliated with the same Union Federation? (2.5%)

SUGGESTED ANSWER:

(b) Yes. Article 255, as amended by Republic Act 9481, allows a rank-and-file union and a supervisors’ union operating within the same establishment to join one and the same federation or national union as affiliates thereof.

XVI

Nagrab Union and Nagrab Corporation have an existing CBA which contains the following provision: “New employees within the coverage of the bargaining unit who may be regularly employed shall become members of Nagrab Union. Membership in good standing with the Nagrab Union is a

requirement for continued employment with Nagrab Corporation.” Nagrab Corporation subsequently acquired all the assets and rights of Nuber  Corporation and absorbed all of the latter’s employees. Nagrab Union immediately demanded enforcement of the above-stated CBA provision with respect to the absorbed employees. Nagrab Corporation refused on the ground that this should not apply to the absorbed employees who were former employees of another corporation whose assets and rights it had acquired.

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

May a newly-regularized employee of Nagrab Corporation (who is not part of the absorbed employees) refuse to join Nagrab Union?

SUGGESTED ANSWER:

• Nagrab Corporation’s argument that the union security clause should not apply to absorbed employees resulting from the acquisition is untenable. In BPI Employees Union-Davao City- FUBU (BPIEU-Davao City-FUBU) v. Bank of the Philippine Islands, (G.R. No. 174912, July 24, 2013), the Supreme Court ruled that the subject union security clause does not make a distinction as to how a regular employee should attain such status as a “new employee” in order to be covered by the  clause. Absorbed employees as a result of merger or  acquisition of assets and rights between two corporations, therefore, should be considered as “new employees” of the surviving or acquiring corporation.
• How would you advise the human resources manager of Nagrab Corporation to proceed? (2.5%)

SUGGESTED ANSWER:

• The HR Manager should heed the Supreme Court’s proscription in Alabang Country Club, Inc. v. NLRC, (G.R. No. 170287, February 14, 2008), in cases involving termination of employment due to enforcement of a union  security  clause. The following requirements must be observed:
  • The union security clause is applicable;
  • The certified bargaining agent is requesting for enforcement of such clause; and

• There is sufficient evidence to support the sole and exclusive bargaining agent’s decision to expel the employee from membership.

XVII

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

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

SUGGESTED ANSWER:

(a) Yes. Under Article 278(g) of the Labor Code, all striking employees shall immediately return to work and the employer shall immediately resume operations and re-admit all workers under the same terms and conditions prevailing before the strike or lockout.

Regarding the striking union members who damaged company property, the employer should still reinstate  them, but after their reinstatement, the employer may institute the appropriate disciplinary proceedings, or raise the matter on  the illegality of the strike on the ground of violence and illegal acts committed during the strike before the Secretary of Labor and Employment assumed jurisdiction.

• May the company readmit strikers only by restoring them to the payroll? (2.5%)

SUGGESTED ANSWER:

(b) As a general rule the answer is no, as actual reinstatement is envisioned by Article 278(g) of the Labor Code.  The purpose  of the law is to bring back the workers to their original work under the same terms and conditions prevailing before the strike.

XVIII

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

(a) Can Nadine’s employer legally deny her claim  for  maternity  benefits? (2.5%) .

SUGGESTED ANSWER:

• Yes, Nadine is not entitled to maternity benefits since it is only available for the first four (4) deliveries or miscarriages. On  the other hand, her employer cannot refuse on the ground that Nadine was only living in with her partner since a valid marriage is not a condition for the grant of maternity leave benefits.

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

SUGGESTED ANSWER:

(b) Yes, Nestor is not entitled to paternity benefits since it is only available for the first four (4) deliveries or miscarriages of his legitimate spouse with whom he is living with.

XIX

Northeast Airlines sent notices of transfer,  without diminution in salary  or rank, to 50 ground crew personnel who were front-liners at Northeast  Airlines counters at the Ninoy Aquino International Airport (NAIA). The 50 employees were informed that they would be distributed to various airports in Mindanao to anticipate robust passenger volume growth in the area. North

Union, representing rank-and-file employees, filed unfair labor practice and illegal dismissal cases before the NLRC, citing, among others, the  inconvenience of the 50 concerned employees and union discrimination, as 8 of the 50 concerned ground crew personnel were union officers. Also, the Union argued that Northeast Airlines could easily hire additional employees from Mindanao to boost its ground operations in the Mindanao airports.

(a) Will the transfer of the 50 ground crew personnel amount to illegal dismissal? (2.5%)

SUGGESTED ANSWER:

(a) Yes. The transfer of an employee is an exercise of a managerial prerogative, which must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Such transfer cannot be used as a subterfuge by the employer to rid itself of an undesirable worker. In particular, the employer must be able to show that the transfer is not undesirable, inconvenient or prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his salaries, privileges, and other benefits.  Should the employer  fail to overcome this burden of proof, the employee’s transfer shall be tantamount to constructive dismissal which  exists when an act of clear discrimination, insensibility or disdain by an employer has become so unbearable to the employee,  leaving him with no option but to forego with his continued employment (Best Wear Garments v. De Lemos, G.R. No. 191281, December 5, 2012).

In the present case, the impending transfer of 50 employees based in Luzon to Mindanao, allegedly borne out of business necessity, is unreasonable and inconvenient to the concerned employees and their families. It was not shown also  if Northeast Airlines looked into the option of hiring workers from Mindanao to run its counters in the Mindanao airports.

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

SUGGESTED ANSWER:

(b) No. In ascertaining whether Northeast Airlines’ proposed  transfer amounted to an unfair labor practice or interference with, restraint or coercion of the employees’ exercise of their right to self-organization, the “totality of  conduct  doctrine” test should be applied, Insular Life Assurance Co., Ltd. Employees Association-NATU v. Insular Life Assurance Co., Ltd., G.R. No. L-25291, January 30, 1971. A finding  of  an unfair labor practice should not be based on a single act in isolation, but should be viewed on the basis of the employer’s acts outside of the bigger context of the accompanying labor relation situation. In the  case at hand, Northeast Airlines’ act of transferring the 50 employees, while it may amount to constructive dismissals, cannot translate into an unfair labor practice, absent any other indicia of anti-union bias on the part of the Company.

XX

In Northern Lights Corporation, union members Nad, Ned, and Nod sought permission from the company to distribute flyers with respect to a weekend union activity. The company HR manager granted the request through a text message sent to another union member, Norlyn.

While Nad, Ned, and Nod were distributing the flyers at the company assembly plant, a company supervisor barged in and demanded that they cease from distributing the flyers, stating that the assembly line employees  were trying to beat a production deadline and were thoroughly distracted. Norlyn  tried to show the HR manager’s text message authorizing flyer distribution during work hours, but the supervisor brushed it aside.

As a result, Nad, Ned,  and  Nod  were  suspended  for  violating  company rules on trespass and highly-limited union activities during work  hours. The Union filed an unfair labor practice (ULP) case before the NLRC for union discrimination.

(a)      Will the ULP case filed by the Union prosper? (2.5%)

SUGGESTED ANSWER:

(a)  Yes.  The supervisor of Nad, Ned and Nod directly interfered  with union activities and ultimately with the right to self- organization. Good faith can be ascribed to Nad, Ned  and Nod’s actions, as prior permission was obtained thru the HR Manager who apparently failed to communicate such permission to the plant supervisor.

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

SUGGESTED ANSWER:

(b) No. In Digitel Telecommunications Philippines, Inc. v. Digitel Employees Union (DEU), G.R. No. 184903-04, October 10, 2012, the Supreme Court ruled that the award of moral and exemplary damages in illegal dismissal cases (applicable to suspension) resulting from unfair labor practices may be made in individual or aggregate amounts. If the offended parties can be identified, then damages may be awarded individually, such as in the case at hand.