SUGESTED ANSWERS TO THE 2002 BAR

EXAMINATION QUESTIONS IN
LABOR AND SOCIAL LEGISLATION
I.
A.
State your agreement or disagreement with the following statement and explain your
answer briefly: A criminal case filed against an employee does not have the effect of
suspending or interrupting the running of prescriptive period for the filing of an action for illegal
dismissal. (2%)
B.
State your agreement or disagreement with the following statement and explain your
answer briefly: the period of prescription in Article 219 of the Labor Code applies only to money
claims so that the period of prescription for other cases of injury to the rights of employees is
governed by the Civil Code. Thus, an action for reinstatement for injury to an employees rights
prescribes in four (4) years as provided in Article 1146 of the Civil Code. (3%)
SUGGESTED ANSWER:
A.
I agree. The two (2) cases, namely: the criminal case where the employee is the
accused; and the case for illegal dismissal, where the employee would be the complainant, are
two (2) separate and independent actions governed by different rules, venues, and procedures.
The criminal case is within the jurisdiction of the regular courts of law and governed by the rules
of procedure in criminal cases. The action for the administrative aspect of the illegal dismissal
would be filed in the NLRC and governed by the procedural rules of the Labor Code.
ANOTHER SUGGESTED ANSWER:
I agree. An action for illegal dismissal is an administrative case which is entirely
separate and distinct from a criminal action. Each may proceed independently of each other.
The right to file an action for illegal dismissal is not dependent upon the outcome of the
criminal case. Guilt or innocence in the criminal case is not determinative of the existence of a
just or authorized cause for a dismissal. [Pepsi-Cola Bottling Co. v. Guanzon 172 SCRA 571
(1989)]
B.

I agree with the statement.

A case of illegal dismissal filed by an employee who has been terminated without a just
or authorized cause is not a money claim covered by Article 291 of the Labor code. An
employee who is unjustly dismissed from work is entitled to reinstatement and to his
backwages. A case of illegal dismissal is based upon an injury to the right to security of tenure
of an employee. Thus, in accordance with Article 1146, it must be instituted within four years.
[Callanta v. Carnation Phil. 145 SCRA 268 (1986); Baliwag Transit v. Ople 171 SCRA 250
(1989); International Harvester Macleod, inc. Inc. v NLRC, 200 SCRA 817 (1991)]
II.
Design Consultants, Inc. was engaged by the PNCC to supervise the construction of the
South Expressway Extension. Design Consultants, Inc. hired Omar as a driver for two (2)
years. After his two-year contract expired, he was extended another contract for nine (9)
months. These contracts were entered into during the various stages and before the completion

of the extension project. Omar claims that because of these repeated contracts he is now a
regular employee of Design Consultants, Inc. Is he correct? Explain briefly. (5%)
SUGGESTED ANSWER:
Yes. The principal test for determining whether a particular employee is a project
employee as distinguished from a regular employee is whether or not the project employee
was assigned to carry out a specific project or undertaking, the duration and scope of which
are specified at the time the employee was engaged for the projects.
In the problem given, there is no showing that Omar was informed that he was to be
assigned to a specific project or undertaking. Neither has it been established that he was
informed of the duration and scope of such project or undertaking at the time of his
engagement. [Philex Mining Corp. v NLRC, 312 SCRA 119 (1999)]
Moreover, the re-hiring of Omar is sufficient evidence of the necessity or the
indispensability of his services to the companys business. [Aurora land Projects Corp. v. NLRC,
266 SCRA 48 (1997)]
Hence, Omar is correct in claiming that he is a regular employee of Design Consultants,
Inc.
ANOTHER SUGGESTED ANSWER:
Omar is not correct. Omar is a project employee as defined by Article 280 of the Labor
Code. He was hired for a specific project with fixed periods of employment, specifically: two (2)
years for the first contract, and nine months for the second contract. A project employee who is
hired for a specific project only, is not a regular employee notwithstanding an extension of the
project provided that the contract of project employment clearly specifies the project and the
duration thereof. [Palomares v. NLRC, 277 SCRA 439 (1997)]
III.
Socorro is a clerk typist in the Hospicio de San Jose, a charitable institution dependent
for its existence on contributions and donations from well wishers. She renders work eleven
(11) hours a day but has not been given overtime pay since her place of work is a charitable
institution. Is Socorro entitled to overtime pay? Explain briefly. (5%)
SUGGESTED ANSWER:
Yes. Socorro is entitled to overtime compensation. She does not fall under any of the
exceptions to the coverage of Art. 82, under the provisions of Hours of Work. The Labor Code
is equally applicable to non-profit institutions. A covered employee who works beyond eight (8)
hours is entitled to overtime compensation.
IV.
Pandoy, an electronics technician, worked within the premises of Perfect Triangle, an
auto accessory shop. He file a complaint for illegal dismissal, overtime pay an other benefits
against Perfect Triangle, which refused to pay his claims on the ground that Pandoy was not its
employee but was an independent contractors at the end of each week. The auto shop
explained that Pandoy was like a partner who worked within the premises, using parts provided
by the shop, but otherwise Pandoy was free to render service in other auto shops. On the other
hand, Pandoy insisted that he still was entitled to the benefits because he was loyal to Perfect
Triangle, it being a fact that he did not perform work for anyone else. Is Pandoy correct?
Explain briefly. (5%)

SUGGESTED ANSWER:
Pandoy is not correct.
He is not an employee because he does not meet the four-fold test for him to be an
employee of Perfect Triangle. All that he could claim is: he worked within the premises of
Perfect Triangle. He was not paid wages by Perfect Triangle. Perfect Triangle does NOT have
the power to dismiss him (although Perfect Triangle may not continue to allow to work within its
premises). And most important of it all, Pandoy was NOT under the control of Perfect Triangle
as regards the work he performs for customers.
The Supreme Court has ruled: In stark contrast to the Companys regular employees,
there are independent, free lance operators who are permitted by the Company to position
themselves proximate to the company premises. These independent operators are allowed by
the Company to wait on Company customers who would be requiring their services. In
exchange for the privileges of favorable recommendation by the Company and immediate
access to the customers in need of their services, these independent operators allow the
Company to collect their service fee form the customer and this fee is given back to the
independent operator at the end of the week. In effect, they do not earn fixed wages from the
Company as their variable fees are earned by them from the customers of the Company. The
Company has no control over and does not restrict the methodology or the means and manner
by which these operators perform their work. These operators are not supervised by any
employee of the Company since the results of their work is controlled by the customers who hire
them. Likewise, the Company has no control as an employer over these operators. They are
not subject to regular hours and days of work and may come and go as they wish. They are not
subject to any disciplinary measures from the Company, save merely for the inherent rules of
general behavior and good conduct. [Ushio Marketing v NLRC, 294 SCRA 673 (1998)]
V.
Nemia earns P7.00 for every manicure she does in the barber shop of a friend which has
nineteen (19) employees. At times she take home P175.00 a day and at other times she earns
nothing. She now claims holiday pay. Is Nemia entitled to this benefit? Explain briefly (5%)
SUGGESTED ANSWER:
No. Nemia is not entitled to holiday pay.
Art. 82 of the Labor Code provides that workers who are paid by results are, among
others, not entitled to holiday pay. Nemia is a worker who is paid by results. She earns P7.00
for every manicure she does.
ANOTHER SUGGESTED ANSWER:
Yes. Nemia is entitled to holiday pay.
The Supreme Court has rules: As to other benefits, namely, holiday pay, premium pay,
th
13 month pay, and service incentive leave which the labor arbiter failed to rule on but which the
petitioners prayed for in their complaint, we hold that petitioners are entitled to these benefits.
Three (3) factors lead us to conclude that petitioners, although piece rate workers, were regular
employees of private respondents. First as to the nature of the petitioners task, their job of
repacking snack food was necessary in the manufacture and selling of such food products;
second, petitioners worked for private respondents throughout the year, their employment not
having been dependent on a specific project or season; and third, the length of time that
petitioners worked fro private respondents. Thus, while petitioners mode of compensation was
on a per piece basis, the status and nature of their employment was that of regular
employees.

VI.
A.
Malou is the Executive Secretary of the Senior Vice-President of a bank while Ana is the
legal Secretary of the banks lawyer. They and other executive secretaries would like to join the
union rank and file employees of the bank. Are they eligible to join the union? Why? Explain
briefly. (2%)
B.
Mang Bally, owner of a shoe repair shop with only nine (9) workers in his establishment,
received proposals for collective bargaining from the Bally Shoe Union. Mang Bally refused to
bargain with the workers for several reasons. First, his shoe business is just a service
establishment. Second, his workers are paid on a piecework basis (i.e., per shoe repaired) and
not on a time basis. Which reason or reasons is/are tenable? Explain briefly. (2%)
SUGGESTED ANSWER:
A.
The following rules will govern the right to self organization of Malou, Ana and the
Executive Secretaries;
1. No Right to Self-Organization confidential employees who act in a confidential
capacity to persons who formulate, determine, and effectuate management policies
in the field of labor-management relation. The two criteria are cumulative and must
both be met. [San Miguel Corporation Union v Laguesma, 277 SCRA 370 (1997)]
2. With Right to Self Organization when the employee does not have access to
confidential labor relations information, there is no legal prohibition against
confidential employees from forming, assisting, or joining a labor organization
[Sugbuanon Rural Bank, Inc. v Laguesma, 324 SCRA 425 (2000)]
No right to self organization for Legal Secretaries Legal Secretaries fall under the
category of confidential employees with no right to self-organization. [Pier & Arrastre
Stevedoring Services, Inc. v. Confessor, 241 SCRA 294 (1995)]
B.
None. First, Mang Ballys shoe business is a commercial enterprise, albeit, a service
establishment. Second, the mere fact that the workers are paid on a piece-rate basis does not
negate the status of regular employees. Payment by piece is just a method of compensation
and does not define the essence of the relation. [Lambo v. NLRC, 317 SCRA 420 (1999). Third,
the employees right to self-organization is not delimited by their number.
The right to self-organization covers all persons employed in commercial, industrial and
agricultural enterprises and in religious, charitable, medical or educational institutions whether
operating for profit or not. [Art. 243, Labor Code]
VII.
The union deducted P20.00 from Rogelios wages for January. Upon inquiry he learned
that it was for the death aid benefits and that the deduction was made pursuant to a board
resolution of the directors of the union. Can Rogelio object to the deduction? Explain briefly.
(5%)
SUGGESTED ANSWER:
Yes. In order that the special assessment (death aid benefit) may be upheld as valid,
the following requisites must be complied with: (1) Authorization by a written resolution of the
majority of all members at a general membership meeting duly called for the purpose; (2)
Secretarys record of the meeting; and (3) Individual written authorization for the check-off duly

signed by the employee concerned. [ABS-CBN Supervisors Employees Union Members v.

ABS-CBN Broadcasting Corp. and Union Officers, 304 SCRA 489 (1999)]
In the problem given, none of the above requisites were complied with by the union.
Hence, Rogelio can object to the deduction made by the union for being invalid.
VIII.
Sta. Monica Plywood Corporation entered into a contract with Arnold for the milling of
lumber as well as the hauling of waste wood products. The Company provided the equipment
and tools because Arnold had neither tools and equipment nor capital for the job. Arnold, on the
other hand, hired his friends, relatives and neighbors for the job. Their wages were paid by Sat.
Monica Plywood Corporation to Arnold, based on their production or the number of workers and
the time used in certain areas of work. All work activities and schedules were fixed by the
company?
A.
B.

Is Arnold a job contractor? Explain briefly. (2%)

Who is liable for the claims of the workers hired by Arnold? Explain briefly. (3%)

SUGGESTED ANSWER:
A.
No. In the two cases decided by the Supreme Court, it was held that there is job
contracting where (1) the contractor carries on an independent business and undertakes the
contract work on his own account, under his own responsibility according to his own manner
and method, free form the control and direction of his employer or principal in all matters
connected with the performance of the work except as to the results thereof; and (2) the
contractor has substantial capital or investment in the form of tools, equipment, machineries,
work premises and other materials which are necessary in the conduct of the business. [Lim v
NLRC, 202 SCRA 465 (1991)]
In the problem given, Arnold did not have sufficient capital or investment for one. For
another Arnold was not free from the control and direction of Sta. Monica Plywood Corporation
because all the work activities and schedules were fixed by the company. Therefore, Arnold is
not job contractor He is engaged in labor-only contracting.
B.
Sta. Monica Plywood Corp. is liable for the claims of the workers hired by Arnold. A
finding that Arnold is a labor only contractor is equivalent to declaring that there exist an
employer-employee relationship between Sta. Monica Plywood Corp. and workers hired by
Arnold. This is so because Arnold is considered a mere agent of Sta. Monica plywood Corp.
[Lim v NLRC, 303 SCRA 432, (1999); Baguio et. Al. v. NLRC, 202 SCRA 465 (1991)]

IX.
Lyric Theater Corp. issued a memorandum prohibiting all ticket sellers from encashing
any check from their cash collection and requiring them instead to turn over all cash collections
to the management at the end of the day. In violation of this memorandum, Melody, a ticket
seller, encashed five (5) checks from her cash collection. Subsequently the checks were
dishonored when deposited in the account of Lyric Theater. For this action, melody was placed
under a 20-day suspension and directed to explain why she should not be dismissed for
violation of the companys memorandum. In her explanation, she admitted having encashed the
checks without the companys permission. While on investigation was pending, Melody filed a
complaint against Lyric Theater for backwages and separation pay. The Labor Arbiter ordered
Lyric Theater to pay Melody P115,420 representing separation pay and backwages. The NLRC
affirmed the ruling of the Labor Arbiter. Is the ruling of the NLRC correct? Explain briefly. (5%)

SUGGESTED ANSWER:
The ruling of the NLRC affirming the Labor Arbiters decision ordering Lyric Theater to
pay P115,420.79 representing separation pay and backwages is wrong.
The Labor Arbiters decision is wrong because:
1.
It is premature. There is still no termination. All was done by the employer (Lyric
Theater) was to place the employee (Melody) under a 20-day suspension,
meanwhile directing her to explain why she should not be dismissed for violation of
the companys memoranda.
2.
The order for Lyric to pay separation pay has no factual basis. Separation pay is to
be paid to an employee who is terminated due to the installation of labor saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment undertaking. Neither is separation pay here in lieu of
reinstatement. Melody is not entitled to reinstatement because there is a just cause
for her termination.
3.
The order for Lyric Theater to pay backwages has no factual basis. If after
investigation, Lyric Theater dismisses melody, there is a just cause for such
termination. There is willful disobedience by the employee of the lawful orders of her
employer in connection with her work. She violated it five times. Melody did not give
any justifiable reason for violating the companys memorandum prohibiting the
encashment of checks. [Jo Cinema Corp. v. Avellana, GR No. 132837, June
28,2001]
X.
Eaglestar Company required a 24-hour operation and embodied this requirement in the
employment contracts of its employees. The employees agreed to work on Sundays and
Holidays if their work schedule required them to do for which they would be paid additional
compensation as provided by law. Last March 2000, the union filed a notice of strike. Upon
Eaglestars petition, the Secretary of Labor certified the labor dispute to the NLRC for
compulsory arbitration. On April 20,2000 (Maundy Thursday), while conciliation meetings were
pending, the union officers and members who were supposed to be on duty did not report for
work. Neither did they report for work on April 21 (Good Friday) and on (April 22 (Black
Saturday), disrupting the factorys operations and causing it huge losses. The union denied it
had gone on a strike because the days when its officers and members were absent from work
were legal holidays. Is the contention of the union correct? Explain briefly. (5%)
SUGGESTED ANSWER:
The contention of the union is NOT correct.
In the case, it is clear that the employees agreed to work on Sundays and Holidays if
their work schedule required them to do so for which they would be paid additional
compensation as provided by law.
The above-mentioned agreement that the employees voluntarily entered into is valid. It
is not contrary to law. It is provided in the agreement that if they will work on Sundays and
Holidays that they will be paid additional compensation as provided by law. Neither is the
agreement contrary to morals, good customs, public order or public policy.
Thus, when the workers did not report for work when by agreement they were supposed
to be on duty, this was a temporary stoppage of work by the concerted action of the employees
as a result of an industrial or labor dispute. Thus, they were on strike. [See Interphil
Laboratories Employees Union-FFW v Interphil Laboratories Inc., GR No. 142824, December
19,2001]

XI.
Tomas and Cruz have been employed for the last 22 years in various capacities on
board the ships of BARKO Shipping Company. Their employment was made through a local
manning company. They have signed several tem (10)-month employment contracts with the
BARKO Shipping. The NLRC ruled that they were contractual employees and that their
employment was terminated each time their contracts expired. Is the ruling of the NLRC
correct. Explain your answer fully. (5%)
SUGGESTED ANSWER:
Yes. A contract of employment for a definite period terminated by its own terms at the
end of each period. Since Tomas and Cruz signed ten (10)-month contracts, their employment
terminates by its own terms at the end of each ten (10)-month period.
The decisive determinant in term employment should not be the activities that the
employee is called upon to perform but the day certain agreed upon by the parties for the
commencement and termination of their employment relation (not the character of his duties as
being usually necessary or desirable in the usual business of the employer).
Stipulation in the employment contracts providing for the term employment or fixed
period employment are valid when the period are agreed upon knowingly and voluntarily by the
parties without force, duress or improper pressure exerted on the employee; and when such
stipulations were not designed to circumvent the laws on security of tenure. [Brent Scholl v.
Zamora, 181 SCRA 702 (1990)]
Moreover, in Brent School v. Zamora, supra, the Supreme court stated that Art. 280 of
the Labor Code does no apply to overseas employment.
In Pablo Coyoca v NLRC, 243 SCRA 190, (1995), the Supreme Court also held that a
seafarer is not a regular employee and Filipino seamen are governed by the rules and
regulations governing overseas employment and the said rules do not provide for separation or
termination pay.
From the foregoing cases, it is clear that seafarers are considered contractual
employees. They cannot be considered as regular employees under At. 280 of the Labor Code.
Their employment is governed by the contracts they sign ever time they are rehired and their
employment is terminated when the contract expires. Their employment is contractually fixed
for a certain period of time. They fall under the exception of At. 280 whose employment has
been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of engagement of the employee or where the work or services to be
performed is seasonal in nature and the employment is for a duration of the season. We need
not depart from the rulings of this court in the two aforementioned cases which indeed constitute
stare decisis with respect to the employment status of seafarers. [Douglas Millares v NLRC,
et.al. 328 SCRA 79, (2000)]
Therefore, Tomas and Cruz are contractual employees. The ruling of the NLRC is
correct.
ANOTHER SUGGESTED ANSWER:
No. The ruling of the NLRC is not correct. Such repeated re-hiring, which continued for
twenty years cannot but be appreciated as sufficient evidence of the necessity and
indispensability of petitioners service to the [employers] trade. Verily, as petitioners had
rendered 20 years of service, performing activities that were necessary and e\desirable in the
trade (of the employer), they are by express provision of Art. 280 of the Labor Code, considered
as regular employees. [Millares v. NLRC, 328 SCRA 79 (2000)]

XII.
The owners of FALCON Factory, a company engaged in the assembling of automotive
components, decided to have their building renovated. Fifty (50) persons, composed of
engineers, architects and other construction workers, were hired by the company for this
purpose. The work was estimate to be completed in three (3) years. The employees contended
that since the work would be completed after more than one (1) year, they should be subject to
compulsory coverage under the Social Security Law. Do you agree with their contention?
Explain fully. (5%)
SUGGESTED ANSWER:
No. Under Section 8 (j) of RA 1161, as amended, employment of purely casual and not
for the purpose of the occupation or business of the employer are excepted from compulsory
coverage.
An employment is purely casual if it is not for the purpose of occupation or business of
the employer.
In the problem given, Falcon Factory is a company engaged in the assembling of
automotive components.
The fifty (50) persons (engineers, architects and construction workers) were hired by
Falcon Factory to renovate its building. The work to be performed by these fifty (50) people is
not inc connection with the purpose of the business of the factory. Hence, the employ of these
fifty (50) persons is purely casual. They are therefore excepted form the compulsory coverage
of the SSS law.
ANOTHER SUGGESTED ANSWER:
I agree with the contention that the employees hired by the owners of FALCON factory
as construction workers in the renovation of the building should be under the compulsory
coverage of the Social Security Law.
It is true that in connection with FALCON factory, which is engaged in the assembling of
automotive components, the construction workers may be considered casual employees
because their employment is not for the purpose of occupation of business of FALCON factory.
As such, in accordance with Section8(j) of the Social Security Law, they are excepted from the
compulsory coverage of the Social Security System.
But they could also be considered project employees of FALCON factory and as such
could be under the compulsory coverage of the SSS, applying Art. 4 of the Labor Code that
provides that all doubts in the implementation and interpretation of the provisions of the Labor
Law shall be resolved in favor of labor. The employees here therefore, should be considered as
under the compulsory coverage of the SSS.
XIII.
A.
As tireman in a gasoline station, open twenty four (24) hours a day with only five (5)
employees, Goma worked from 10:00 P.P. until 7:00 A.M. of the following day. He claims to be
entitled to night shift differential. Is he correct? Explain briefly. (3%)
B.
On orders of his superior, Efren, a high-speed sewing machine technician, worked on
May 1, Labor Day. If he worked eight hours on that day, how much should he receive if his daily
rate is P400.00? (2%)
SUGGESTED ANSWER:

A.
Yes. Under Art. 86 of the Labor Code, night shift differential shall be paid to every
employee for work performed between 10:00 oclock in the evening to six oclock in the morning.
Therefore, Goma is entitled to night shift differential for work performed from 10:00pm
until 6:00am of the following day; but not from 6:00 am to 7:00 am of the same day.
ANOTHER SUGGESTED ANSWER:
The Omnibus Rules of Implementing the Labor Code (in Book III, Rule II dealing with
night shift differential) provides that its provisions on night shift differential shall NOT apply to
employees of retail and service establishments regularly employing not more that five (5)
workers. Because of this provision, Goma is not entitled to night shift differential because the
gasoline station where he works has only five employees.
SUGGESTED ANSWER:
B.
Efren should receive P800.00. Art. 92 of the Labor Code provides that the employer
may require an employee to work on any regular holiday but such employee shall be paid a
compensation equivalent to twice his regular rate.

XIV.
This year, national Heroes Day (August 25) falls on a Sunday. Sunday is the rest day of
Bonifacio whose daily rate is P500.00.
A.
B.

If Bonifacio is required to by his employer to work on that day for eight (8) hours, how
mush should he be paid for his work? Explain. (3%)
If he works for ten (10) hours on that day, how much should he receive for his work?
Explain. (2%)

SUGGESTED ANSWER:
A.
For working on his scheduled rest day, according to Art. 93(a), Bonifacio should be paid
P500.00 (his daily rate) plus P150.00 (30% of his daily rate = P650.00. This amount P650.00
should be multiplied by 2 = P1,300.00. this is the amount that Bonifacio as employee working
on his scheduled rest day which is also a regular holiday should receive. Art. 94(c) of the Labor
Code provides that an employee shall be paid a compensation equivalent to twice his regular
rate for working on any regular holiday. The regular rate of Bonifacio on May 1,2002 with an
additional thirty percent because the day is also his scheduled rest day.
B.
P1,300.00 which is the amount that Bonifacio is to receive for working on May 1, 2002
should be divided by 8 to determine his hourly rate of P162.5. This hourly rate should be
multiplied by 2 (the number of hours he worked overtime). Thus, the amount that Bonifacio is
entitled to receive for his overtime work on May 1, 2002 is P325.00.

A.
(3%)

XV.
When is illegal recruitment considered a crime of economic sabotage? Explain briefly.

B.
Is a corporation, seventy percent (70%) of the authorized and voting capital is owned
and controlled by Filipino citizens, allowed to engage in the recruitment and placement of
workers, locally or overseas? Explain briefly. (2%)

SUGGESTED ANSWER:
A.
According to Art. 28 of the Labor Code, illegal recruitment is considered a crime of
economic sabotage when committed by a syndicate or in large scale.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three
(3) or more persons conspiring and/or confederating with one another in carrying out any
unlawful or illegal transaction, enterprise or scheme which is an act of illegal recruitment.
Illegal recruitment is deemed committed in large scale if committed against three (3) or
more persons individually or as a group.
B.
No. A corporation, seventy percent (70%) of the authorized and voting capital stock of
which is owned and controlled by Filipino citizens cannot permitted to participate in the
recruitment and placement of workers, locally or overseas, because At. 27 of the Labor Code
requires at least seventy-five percent (75%).

XVI.
A.
How many time may a male employee go on Paternity Leave? Can he avail himself of
the benefit, for example, 50 days after the first delivery by his wife? (3%)
B.
The projected bonus for the employees of Suerte Co. was 50% of their monthly
compensation. Unfortunately, due to slump in the business, the president reduced the bonus to
5% of their compensation. Can the company unilaterally reduce the amount of bonus? Explain
briefly. (2%)
SUGGESTED ANSWER:
A.
A male employee may go on Paternity leave up to four (4) children. (Sec. 2, RA 8187).
On the question of whether or not he can avail himself of the this benefit 50 days after the
delivery of his wife, the answer is: Yes, he can because the Rules Implementing Paternity
Leave Act says that the availment should not be later than 60 days after the date of delivery.
B.
Yes. The granting of a bonus is a management prerogative, something given in addition
to what is ordinarily received by or strictly due the recipient.
An employer, like Suerte Co., cannot be forced to distribute bonus when it can no longer
afford to pay. To hold otherwise would be to penalize the employer for his past generosity.
[Producers bank of the Phil v. NLRC, 355 SCRA 489, (2001)]
ANOTHER SUGGESTED ANSWER:
It depends. If there is a legal obligation on the part of Suerte Co. to pay a bonus of its
employees equivalent to 50% of their monthly compensation, because said obligation is
included in a collective bargaining agreement, then Suerte Co. cannot reduce the bonus to 5%
of their monthly compensation. But if the payment of the bonus is not a legal obligation but only
a voluntary act on the part of the employer, said employer, unilaterally, can only reduce the
bonus fro 50% to 5% of the monthly compensation of its employees; the employer can, in fact,
not give bonus at all.
XVII.
A.
How should a wage distortion be resolved (1) in case there is c\a collective bargaining
agreement and (2) in case there is none? Explain briefly. (3%)

B.
You were asked by a paint manufacturing company regarding the possible employment
as a mixer of a person, aged seventeen (17), who shall be directly under the care of the section
supervisor. What advice would you give? Explain briefly. (2%)
SUGGESTED ANSWER:
A.
According to Art. 124 of the Labor Code, in case there is a collective bargaining
agreement, a dispute arising from wage distortions shall be resolves through the grievance
machinery provided in the CBA, and if remains unresolved, through voluntary arbitration. In
case there is no collective bargaining agreement, the employers and workers shall endeavor to
correct such distortions. Any dispute arising therefrom shall be settled through the National
conciliation and Mediation Board and if it remains unresolved after ten (10) calendar days of
conciliations, then the dispute is referred to the appropriate branch of the national Labor
Relations Commission.
B.
I will advise the paint manufacturing company that it cannot hire a person aged
seventeen (17). Art. 139 (c) of the Labor Code provides that a person below eighteen (18)
years of age shall not be allowed to work in an undertaking which is hazardous or deleterious in
nature as determined by the Secretary of Labor. Paint manufacturing has been classified by the
Secretary of Labor as hazardous work.

A.
B.

XVIII.
Distinguish managerial employees from supervisory employees. (3%)
Do employees of a cooperative have a right to form a union? Explain briefly. (2%)

SUGGESTED ANSWER:
A.
A managerial employee is one who is vested with powers or prerogatives to lay down
and execute management policies and/or hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees. Supervisory employees, on the other hand, are those who in
the interest of the employer, effectively recommend such managerial actions and such authority
is not merely routinary and clerical in nature but requires the use of independent judgment. [Art.
212 (m), Labor Code]
In a case, the Supreme Court said: In the petition before us, a thorough dissection of
the job description of the concerned supervisory employees and section heads indisputably
show that they are not actually managerial but only supervisory employees since they do not lay
down company policies. PICOPS contention that the subject section heads and unit managers
exercise the authority to hire and fire is ambiguous and quite misleading for the reason that any
authority they exercise is not supreme but merely advisory in character. Theirs is not a final
determination of the company policies inasmuch as any action taken by them on matters
relative to hiring, promotion, transfer, suspension and termination of employees is still subject to
confirmation and approval by their respective superior. [See Atlas lithographic Services , Inc. v.
Laguesma, 205 SCRA 12, 17 (1992)]
Thus, where such power, which is in effect
recommendatory in character, is subject to evaluation, review and final action by the department
heads and higher executives of the company, the same, although present, is not effective and
not an exercise of independent judgment as required by law. [Philippine Appliance Corp. v
Laguesma, 226 SCRA 730, 737 (1993) citing Franklin baker Company of the Philippines v.
Trajano, 157 SCRA 416, 422-433 (1988). (Paper Industries Corp. of the Philippines v.
Bienvenido Laguesma, 330 SCRA 295, (2000)]

B.
Employees who are members of a cooperative cannot form a union because, as
members, they are owners and owners cannot bargain with themselves. However, employees
who are not members of the cooperative can form a union. [San Jose Electric Service
Cooperative v. Ministry of Labor, 173 SCRA 697 (1987)]

XIX.
A.
On what ground or grounds may a union member be expelled from the organization?
(3%)
B.
May a general manager of a company be held jointly and severally liable for backwages
of an illegally dismissed employee? (2%)
SUGGESTED ANSWER:
A.
Union members may be expelled fro the labor organization only on valid grounds
provided for in the Constitution; By-laws; or conditions for union membership.
ANOTHER SUGGESTED ANSWER:
Whenever appropriate for any violation of the rights as:
1. Refusal to pay union dues and special assessments;
2. Disloyalty to the union; and
3. violation of the constitution and by-laws of the union.
SUGGESTED ANSWER:
B.
Yes. If it is shown that he acted in bad faith, or without or in excess of authority, or was
motivated by personal ill-will in dismissing the employee, the general manager may be held
jointly and severally liable for backwages of an illegally dismissed employee. [ARB Construction
v. Court of appeals, 332 SCRA 427, 2000), Lim v NLRC, 303 SCRA 432 (1999)]
ANOTHER SUGGESTED ANSWER:
Yes. The General manager may be held jointly and severally liable for backwages of an
illegally dismissed employee if he or she actually authorized or ratified the wrongful dismissal of
the employee under the rule of respondeat superior. In case of illegal dismissal, corporate
directors and officers are solidarily liable with the corporation where the termination of
employment are done with malice or bad faith. [Bogo-Medellin Sugar Planters Assoc., Inc. v.
NLRC, 296 SCRA 108, (1998)]
XX.
A.
An employee was ordered reinstated with backwages. Is he entitled to the benefits and
increases granted during the period of his lay-off? Explain briefly. (3%)
B.
Aside form the just causes enumerated in Article 282 of the Labor code for the
termination of employment, state three (3) lawful or authorized causes for the dismissal of an
employee. (2%)
SUGGESTED ANSWER:
A.
Yes. An employee who is ordered reinstated with backwages is entitled to the benefits
and increases during the period of his lay-off. The supreme Court has rule: Backwages are
granted for earnings a worker lost due to his illegal dismissal and an employer is obliged to pay
an illegally dismissed employee the whole amount of salaries plus all other benefits and

bonuses and general increases to which the latter should have been normally entitled had he
not been dismissed. [Sigma Personnel Services v. NLRC, 224 SCRA 181 (1993)]
B.
According to Art 283 of the Labor code, the lawful or authorized causes for the
termination of an employee are:
1. installation of labor saving devices
2. redundancy
3. retrenchment to prevent losses or;
4. closing or cessation of operation of the establishment or undertaking, unless the closing
is for the purpose of circumventing the provisions of the labor Code. Art. 284 also that
an employer may terminate the services of an employee who has been found to be
suffering to any disease and whose continued employment is prohibited by law or is
prejudicial to his health as well as to the health of his co-employees.