Labor Practice

a) The Principle of Participation is a constitutional right guaranteed under Article XIII of the
1987 Constitution. It pertains to the co-participation and co-determination by and

between the management and the labor force in the decision-making or policy-making
processes with respect to the rights and benefits such as the terms and conditions of the
employment as well as the manner and methods and results of work performance for
the success of the business. However, matters pertaining to management prerogative
and those purely business in nature are not subject to this principle. By this principle, it
fosters harmony, peace and unity between the employers and employee. An instance
applying said principle is collective bargaining.
b) The extent of the worker’s right to participate in the adoption of company policies
covers all terms and condition of the employment in compliance with the constitutional
rights and the minimum standards prescribed by the Labor Code and other relevant
statutes and in accordance with existing collective bargaining agreement, if any.
c) Yes, X Co’s employment policy against the use of mobile phones at work is valid.
The Supreme Court has held in several cases favoring management prerogatives. The
management of a company has the right to set policies and rules for the interest of the
company business by imposing productivity standards, provided the employment policy
is not unreasonable, not arbitrary and not oppressive, and the exercise of such right is in
good faith and subject to compliance with the due process of law.
In this case, X Co has adopted a policy against the use of mobile phones at work for the
reason that production had to maximize by getting its workers focused on their jobs. It is
only during work hours that the employees are not allowed to use their mobile phones
for personal transactions. This policy is not unreasonable, not arbitrary and not
oppressive. Hence, the company policy against the use of mobile phones at work as a
management prerogative of X Co. is valid.
d) No, the Regional Trial Court (RTC) has no jurisdiction over the union’s petition to nullify
the company policy in violation of the Principle of Participation.
Under the Labor Code and other relevant laws, rules and regulations, the RTC has
jurisdiction over intra-corporate controversies, which was previously vested in the
Security and Exchange Commission. Intra-corporate controversies does not include the
issues on labor and employment. In fact, the Labor Code has provided that all labor and
employment disputes shall be subject to mandatory conciliation and mediation, and not
to immediately resort to judicial remedy.
The issue of the petition filed by the union is the implementation of a company policy
without consultation with the employees. This is clearly a labor and employment
dispute. Since labor and employment dispute is a case not falling under the jurisdiction
of the RTC, hence the RTC cannot take cognizance of the petition for lack of jurisdiction.
a) The Full Protection Clause refers to the constitutional right enshrined in Article XIII
of the Constitution, which provides that the State shall afford full protection to
labor, whether local or abroad, organized or unorganized and shall promote
equality in employment opportunities for all. On the other hand, Social Justice
Clause as enshrined in Article II of the Constitution is a state policy which promotes
social justice in all phases of national development and affirms labor as a primary
social economic force. The state shall protect the rights of the workers.
In view of the foregoing two (2) clauses, the interest of labor is given more weight
than the interest of the capital in case of conflict through sympathy and compassion
especially to those underprivileged. However, these clauses are used if there is
injustice.
b) No, the wife should be paid Denver’s retirement benefits under the plan.
A retirement plan is an agreement whereby the employee agrees to terminate his

employment after reaching a certain age. It may contain conditions for eligibility
provided such conditions are consistent with the requirements prescribed by the
Labor Code and the Retirement Pay Act. The purpose of retirement pay is to assist
the employee with his needs and to enjoy the remaining years, without worrying
about his finances. A retirement pay may also be considered as a reward for the
loyal services to the employer, after reaching certain period of time.
Further, a retirement plan, where not mandated by law but a voluntary act on the
part of the employer, may be granted provided that the employee has conformed
to such. The Supreme Court has ruled that the silence of employees constitutes
conformity.
In this case, the non-contributory retirement plan is a voluntary act of the employer
which the employee conformed to through his silence. The plan provides for
guaranteed benefits to employees with at least 30 years of service or who reached
55 years old, whichever came first. The plan also provides that a written application
is no longer required for eligible employees.
Denver is eligible to receive the retirement benefits under the plan because he has
rendered 30 years of service to X Co. If not because of his death caused by Omicron,
he would have availed the retirement plan. Hence, the retirement benefits should
be paid to Denver’s widow.
c) No, the widow can no longer claim death benefits after 3 years following her
husband’s death.
Under the Employees Compensation Law, the claim for compensation must be
within 1 year from notice to the employer.
Denver’s widow should have filed a claim for death benefits within one year from
the notice to the employer. The claim for death benefits is not in dispute. Only
money claims arising from employer-employee relationship can be filed within 3
years from the time the cause of action accrues. Hence, Denver’s widow can no
longer claim death benefits from the Employees Compensation Commission
because prescription has already set in.
a) Yes, the Labor Arbiter (LA) has jurisdiction over the complaint for illegal dismissal.
The Supreme Court has ruled in several cases that generally, complaints for illegal dismissal are
within the original and exclusive jurisdiction of the Labor Arbiter. In order for the LA to take
cognizance of the case, the existence of an employer-employee relationship, as a pre-condition,
must be established. Otherwise, the case shall be endorsed to the DOLE Regional Director.
In this case, Jess filed a complaint for illegal dismissal and included the allegations of the non-
payment of 13th month pay, service incentive leave, holiday pay and overtime pay. While the
company raised the defense of lack of employer-employee relationship, it is yet to be
determined by the introduction of evidence. Thus, the LA can take cognizance of the complaint
for illegal dismissal filed by Jess as such case is generally under the original and exclusive
jurisdiction of the LA.
b) The issues to be resolved in the case at bar are:
1. Whether or not the Labor Arbiter has jurisdiction over a complaint for illegal
dismissal.
2. Whether or not an employer-employee relationship exist between Jess and the
Company.
c) Resolution per Issue:
1. The Labor Arbiter has jurisdiction over a complaint for illegal dismissal.
The Supreme Court has ruled in several cases that generally, complaints for illegal
dismissal are within the original and exclusive jurisdiction of the Labor Arbiter. In
order for the LA to take cognizance of the case, the existence of an employer-
employee relationship, as a pre-condition, must be established. In this case, the
complaint filed by Jess is one for illegal dismissal. If after the determination of the
existence of an employer-employee relationship as a pre-condition, then the LA can
take cognizance of the case because the case for illegal dismissal is generally, one
falling under the original and exclusive jurisdiction of the LA.
2. There is employer-employee relationship between Jess and the company.

It is well-settled that the employer-employee relationship exists when the four fold
test has been met: 1. Selection and recruitment of employees, 2. Payment of
compensation, 3. Power of Dismissal and 4. Power of control. There is also two-
tiered test to be established taking into consideration the totality of the
circumstances, i.e. the putative control of the employer with respect to means and
methods by which the work is to be accomplished and the underlying economic
realities of the activity and relationship. A private contract cannot override what the
laws and settled jurisprudence has established. Therefore, applying the four-fold test
and the two-tiered test, there exists an employer-employee relationship with Jess as
the employee and the company as the employer.

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a) The Principle of Participation is a constitutional right guaranteed under Article XIII of the

1987 Constitution. It pertains to the co-participation and co-determination by and

A retirement plan is an agreement whereby the employee agrees to terminate his

b) The issues to be resolved in the case at bar are:

c) Resolution per Issue:

2. There is employer-employee relationship between Jess and the company.

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