FINAL EXAM - ANSWERS

BC

I.

Krys is a daily-paid factory worker who is required to render eight (8) hours of work per
day. Two (2) days ago, he rendered only seven hours of work as he arrived late in the morning.
Yesterday, Krys worked for nine hours as he was required to assist in the processing of perishable
goods. His supervisor, Rudy, told Krys that he would not get any overtime pay as his work for nine
hours yesterday was meant to offset the one-hour shortfall in his work the day before.

A. Does Rudy’s comment have the effect as that of their employer? Explain briefly.
B. Suppose that Krys’ employment contract bears the provision on offsetting, is Rudy
correct? Explain briefly.
C. May Rudy compel or force Krys to assist in the processing of perishable goods? Explain
briefly.

ANSWER:
A
No, Rudy’s comment does not have the effect as that of their employer.

Labor Code provides that Supervisory employees are those who, in the interest of the employer,
effectively recommend such managerial actions if the exercise of such authority is not merely routinary or
clerical in nature but requires the use of independent judgment. Supervisory employees’ decision are
subject of review by managerial employees.

Here, Rudy’s position is merely to supervise rank-and-file employee such as Krys. Thus. Does not have
the effect as that of their employer.

B
No, Rudy is not correct even if the provision of offsetting is included in the contract.

Labor code provides that an overtime pay cannot be offset to undertime pay. No contract shall be valid if
it is against the provision of the Labor code or any law.

Thus, Krys is still entitled to Overtime pay even if it is included in their contract the provision of
offsetting as that provision in the contract is against the law.

C
Yes, Rudy can compel Krys to assist in the processing of perishable goods.

Labor code provides, generally, the employer cannot force the employee to make overtime work, however
if the matter are perishable goods, the employer may force the employee to work overtime to assist the
processing of perishable goods.

Here, since the matter is of perishable goods, Rudy may compel Krys to work overtime in assisting the
processing of perishable goods.

II.

Kotse Corp. operates a mobile phone application “Kotse PH” that allows users to book
private cars on demand to their destination, and matches them with nearby available “driver-
partners.” The destination is only made known to the driver-partners when the users have boarded
the vehicle. Kotse Corp. has an accreditation process for its driver-partners who are required to
submit bio-data, professional driver’s license, and negative drug test result, as well as pass an exam
on road safety. After accreditation, the driver-partners are free to choose their own work hours but
Kotse Corp. requires them to complete at least a total 40 hours per week or else the driver’s share
in the fare will be reduced. The fare is determined by the application software depending on
distance, time, and the demand for rides. The fare is paid by the user or passenger through the

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application and Kotse Corp. remits the driver’s share of 75% of the fare every two weeks. Kotse
Corp. keeps 25% as its commission. The driver-partners are evaluated by the users or passengers
through a five-star rating system. Driver-partners who consistently have an average rating of two
stars or below may be removed from Kotse Corp.’s roster of driver-partners. The driver-partners
use their own vehicles, pay for fuel, and secure their own vehicle insurance.

A. Is Kotse Corp. the employer of its “driver-partners”? Explain briefly.

B. Is a written employment contract necessary in determining whether employer-employee
relationship exists between Kotse Corp. and its “driver-partners”? Explain briefly.
C. Are the “driver-partners” entitled to 13th month pay? Explain briefly.

ANSWER:
A
Yes, Kotse Corp. is the employer of its “driver-partners”.

Labor Code provides that there is the rule of four-fold test if there exist the selection of the employee and
engagement of the employee; the payment of wages; the power of dismissal; and the control over the
person of the employee.

Here, Kotse Corp. is the one providing for the qualifications of the employees. They have the discretion
to dismiss the said employee if the employee do have the consistent average rating of 2-star, they have
control and they give wages to the drivers. Thus, there is exist an employer- employee relationship.

B
No, a written contract is not a basis or the one that determines if there exist an employer-employee
relationship.

Labor Code provides that applying the four-fold test, the control, power of dismissal, selection of
employees at the employer’s discretion and the giving of wages exist, then there exist an employer-
employee relationship even without an employment contract.

C
No, the “drivers-partners” are not entitled to 13th month pay.

Under the law, Employers of those who are paid on purely commission, boundary, or task basis, and those
who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the
performance thereof.

Here, the “driver-partner” is paid on purely commission based. Thus, is not entitled to 13 th month pay.

III.

D, one of the sales representatives of OP, Inc., was receiving a basic pay of ₱50,000.00 a
month, plus a 1% overriding commission on his actual sales transactions. In addition, beginning
three (3) months ago, or in August 2019, D was able to receive a monthly gas and transportation
allowance of ₱5,000.00 despite the lack of any company policy therefor.

In November 2019, D approached his manager and asked for his gas and transportation
allowance for the month. The manager declined his request, saying that the company had decided
to discontinue the aforementioned allowance considering the increased costs of its overhead
expenses. In response, D argued that OP, Inc.’s removal of the gas and transportation allowance
amounted to a violation of the rule on non-diminution of benefits.

A. Cite two (2) distinctions between supplements and facilities.

B. Is the gas and transportation allowance deductible from the earnings of D? Explain
briefly.

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 C. Does OP, Inc.’s removal of the gas and transportation allowance constitute diminution
of benefits? Explain briefly.

ANSWER:
A
Facilities are articles or services customarily given for the benefit of the employee and are voluntarily
accepted by him. It forms part of the wages and is deductible from the wages provided for the benefit of
the workers and his family. While supplements are extra remuneration or benefits independent of wages
and is not deductible on wages and is granted for the convenience of the employer.

B
No, the gas and transportation allowance are not deductible.

Labor code provides that supplements are extra remuneration or benefits independent of wages and is not
deductible on wages and is granted for the convenience of the employer.

Here, the gas and transportation allowance, being a supplement, is not deductible from the wages of the
employee.

C
No, OP, Inc’s removal of the gas and transportation allowance does not constitute diminution of benefits.

Labor Code provides that The Principle of Non-Diminution of Benefits strictly pertains to pre-
promulgation benefits and not to post-promulgation benefits such as subject allowance. Benefits being
given to employees cannot be taken back or reduced unilaterally by the employer because the benefit has
become part of the employment contract, whether written or unwritten.

Here, what was remove is gas and transportation allowance which has not yet ripened to a demandable
right since its enjoyment was for a few months only and the company did not intend to grant it
permanently. Hence, it does not constitute diminution of benefits.

IV.

Discuss and differentiate between the procedural requirements in termination of

employment for (i) just and (ii) authorized causes. Explain briefly. (20 points)

ANSWER:
i) Labor Code provides that termination for a Just Cause requires service of two notices on the
employee sought to be dismissed. The first shall apprise him of the ground on which his
intended dismissal is to be effected. The second shall notify him of his employer’s final
decision to dismiss him. It must be complied that the employee must be given ample
opportunity to come to the defense of his livelihood.
ii) Labor Code provides that termination for an Authorized Cause requires notice to DOLE-RD
and employee 30 days before the intended dismissal.

V.

Trixie is a scientist/researcher in the academe, specializing in vaccine research, particularly

messenger ribonucleic acid (mRNA) technology. At the start of the pandemic in 2020, Trixie was
hired by AZ Corp. to help formulate and produce a vaccine against COVID-19. The employment
contract provides: “You shall not work for whatsoever capacity, either as an employee, agent, or
consultant with any person, anywhere in the Philippines, whose business is in direct and indirect
competition with the company during the period of this contract, and for a period of ten (10) years
from date of resignation or separation from the company. Violation of this stipulation shall make
you liable for liquidated damages in the amount of Php 5,000,000.00.” Trixie was able to
successfully produce the vaccine and for which AZ Corp. paid her Php 50,000,000.00. Thereafter,
Trixie resigned from AZ Corp. and returned to her work in the academe. AZ Corp. filed a
complaint for damages in the amount of Php 5,000,000.00 against Trixie for violation of the above
stipulation in her contract.

If you were the judge, rule on the validity of the stipulation. Explain briefly. (20 points)

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ANSWER:
The stipulation in Trixie’s contract with AZ Corp is not valid.

Under jurisprudence, a non-involvement clause is not necessarily void for being in restraint of trade as
long as there are reasonable limitations as to time, trade, and place. Also, the Civil Code provides that
parties to a contract may establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided they are not contrary to law, morals, good customs, public order, or public policy.
However, it is void when while the stipulation was indeed limited as to time and space, it was not limited
as to trade. Such prohibition, in effect, forces an employee to leave the Philippines to work should his
employer refuse to give a written permission.

Here, the non-involvement clause is void for being contrary to public policy as the same is unreasonably
excessive as to its restrictions. 10 years is unreasonable as it has the effect of depriving Trixie of
livelihood for too long a time as to drive her to penury and it requires Trixie to get out of the Philippines
to be able to get gainfully employed. Thus, it makes it unreasonable. Hence, the stipulation is void.

VI.

As Human Resources Manager of a five-star hotel, you were told in confidence by several
fearful employees in the housekeeping department that Joy, the head of housekeeping, was a harsh
disciplinarian who would pinch the ears of her staff or rap their heads to drill instructions on the
proper way to clean and tidy up the hotel rooms. One day, the assistant housekeeper urgently called
you to the supply room of the hotel, where you found housekeeping staff Erika and Patricia
slumped on the floor with bloody faces. The assistant housekeeper reported that she saw Joy beat
up Erika and Patricia with a mop for allegedly stealing complimentary toiletries for guests. Erika
and Patricia were hospitalized for a couple of days due to the injuries they sustained. (20 points)

A. Can Joy be placed on preventive suspension pending administrative investigation? If so,

for what maximum period? Explain briefly.

B. If Joy is placed on preventive suspension, is she entitled to receive her wages and other
benefits during the period? Explain briefly.

ANSWER:
A
Yes, Joy can be placed on preventive suspension pending administrative investigation. It shall not exceed
60 days.

Under the law, preventive suspension is a measure of precaution so that the official or employee charged
may be removed from the scene of his alleged misfeasance, malfeasance or non-feasance while the same
is being investigated to prevent destruction of evidence that may be used against the employee provided
the suspension shall not exceed 60 days.

Here, Joy is accused of having malfeasance in connection of her work. Thus, a preventive suspension is
allowed.

B
No, Joy is not entitled to receive her salary under preventive suspension.

Labor Code provides that the provision “no-work, no-pay” means that if the employee is did not work, he
is not entitled with any pay. The period of suspension is not compensable during the period the employee
is under preventive suspension. However, if the preventive suspension is extended beyond 60 days, the
employee is now entitled to compensation.

VII.

Sonic Build Corp. employed Leo and Dan in its cement factory and assigned them the tasks
of, among others, directing and supervising rank-and-file employees. Leo and Dan are required to
ensure that such employees obey company rules and regulations, and recommend to the company’s

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Human Resources Department any required disciplinary action against erring employees. There is
only one union representing rank-and-file employees. May Leo and Dan join the union? Explain
briefly. (20 points)

ANSWER:
No, Leo and Dan may not join the union but may join, assist or form separate organizations of their own.

Labor Code provides that managerial employees are not eligible to join, assist or form any labor
organization. Supervisory employees shall not be eligible for membership in the collective bargaining
unit of the rank-and-file employees but may also join, assist or form separate collective bargaining units
or legitimate labor organizations of their own.

Here, Leo and Dan are task to ensure that such employees obey company’s rules and regulations. The job
description of the concerned employees indisputably show that they are supervisory employees since they
do not lay down company policies. Hence, Leo and Dan may not join the union but may join, assist or
form separate organizations of their own.

X.

Cristina, a new-hire of Sterling Corporation (Sterling), was made to join Sterling

Corporation Employees Union (SCEU) in compliance with the union shop provision in the
collective bargaining agreement (CBA) between SCEU and Sterling. At the request of SCEU,
Sterling started deducting union dues from Cristina’s salary and remitting the same to SCEU
pursuant to the CBA provisions. Cristina protested, claiming that she has not authorized the
deduction in writing. Is Cristina’s claim valid? Explain briefly. (20 points)

ANSWER:
No, the claim of Christina is not valid.

The Labor Code provides that regarding check-off system, when included in the CBA, no special
assessment or other extra ordinary fees may be levied upon the members of a labor organization unless
authorized by a written resolution of a majority of all the members at a general membership meeting duly
called for the purpose. Also, individual written authorization duly signed by the employee is only needed
when the subject of the checked off are special assessments, attorney’s fees, negotiation fees or any other
extraordinary fees.

Here, what is deducted is union dues from Christina’s salary. It is not any other fees. Only written
resolution of a majority of all the members at a general membership meeting is needed. Also, Labor law
did not prohibit the union dues to be deducted from employee’s salary especially when it is recognized by
the employer under a valid union shop provision. Thus, the claim of Christina is not valid.

HINDI KO IKUKUMPARA ANG SARILI KO SA IBA,

DAHIL TULAD NG LIBRO MAY SARILI AKONG PAHINA.