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

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:
o The union security clause is applicable;
o 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
5th 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.