POST EMPLOYMENT

Atty. Nelson T. Bandoles, LPT

Employer-employee relationship

Tests to determine relationship:

1. Four-fold test
a) Selection and engagement of employee;
b) Payment of wages or salaries;
c) Exercise of the power of dismissal; or
d) Exercise of the power to control the employee's
conduct (Philippine Global Communications, Inc. vs. De
Vera, GR No.157214, June 7, 2005)
 The fourth factor or the so-called “control test” or
“Means-and-Method Control Test” is the controlling test. It
addresses the issue of whether the employer controls or
has reserved the right to control the employee not only as to
the result of the work to be done but also as to the means
and methods by which the same is to be accomplished
(Gallego vs. Bayer Philippines, Inc., GR No. 179807, July
31, 2009). Stated otherwise, an ER-EE relationship exists
where the person for whom the services are performed
reserved the right to control not only the end or result to be
achieved but also the means and methods to be used in
reaching such end (Aurora Land Projects Corporation vs.
NLRC, GR No. 114733, Jan. 2, 1997)
2. 2-Tierred Test. While the control test may be the most
important index to determine the existence of ER-EE
relationship, however, in certain cases, the control test is
not sufficient to give a complete picture of the relationship
between the parties, owing to the complexity of such a
relationship where several positions have been held by the
worker.
Francisco doctrine (Francisco vs. NLRC,GR No.
170087, Aug. 31, 2006)
• involves the inquiry to the following:
a) The putative ER's power to control the EE with respect
to the means and methods by which the work is to be
accomplished (control test); and
b) The underlying economic realities of the activity or the
relationship (economic reality test).
• The broader economic reality test calls for the nature of the
relationship based on the circumstances of the whole economic
activity. Under this test, the proper standard of economic
dependence is whether the worker is dependent on the alleged
employer for his continued employment in that line of business.
• The two-tierred test provides a framework of analysis which would
take into consideration the totality of the circumstances
sorrounding the true nature of the relationship between the
parties. This is especially appropriate in a case where there is no
written agreement or terms of reference to base the relationship
on and there exists a complexity in the relationship based on the
various positions and responsibilities given to the worker over the
period of the latter's employment.
Some principles on ER-EE relationship
• There is no uniform test prescribed by law or
jurisprudence to determine the existence of ER-EE
relationship.
• The existence of the ER-EE relationship is essential in
that it comprises as the jurisdictional basis for recovery
under the law. Only cases arising from said relationship
are cognizable by the labor courts.
• The relationship of ER and EE is contractual in nature. It
may be an oral or written contract. A written contract is not
necessary for the creation and validity of the relationship.
Some principles on ER-EE Relationship
• Stipulation in a contract is not controlling in determining
the existence of the relationship. The employment status
of a person is defined and presribed by law and not by
what the parties say it should be.
• The mode of paying the salary or compensation of a
worker does not preclude existence of ER-EE
relationship. Thus, payment by commission or on a piece-
rate basis or on a “no work no pay” basis does not affect
the existence of employment relationships.
• Retainer fee arrangement does not give rise to
employment relationship.
Previous Bar Question
• Inggu, an electronics technician, worked within the premises of Pit Stop,
an auto accessory shop. He filed a Complaint for illegal dismissal,
overtime pay and other benefits against Pit Stop. Pit Stop refused to pay
his claims on the ground that lnggu was not its employee but was an
independent contractor . . It was common practice for shops like Pit Stop
to collect the service fees from customers and pay the same to the
independent contractors at the end of each week. The auto shop
explained that lnggu was like a partner who worked within its premises,
using parts provided by the shop, but otherwise lnggu was free to render
service in the other auto shops. On the other hand, lnggu insisted that he
still was entitled to the benefits because he was loyal to Pit Stop, it being
a fact that he did not perform work for anyone else. Is lnggu correct?
Explain briefly. (5%) [2012 BEQ]
Previous Bar Question
• Does the performance by a contractual employee,
supplied by a legitimate contractor, of activities directly
related to the main business of the principal make him a
regular employee of the principal? Explain. (5%) [2012
BEQ]
Previous Bar Question

Don Luis, a widower, lived alone in a house with a large

garden. One day, he noticed that the plants in his garden
needed trimming. He remembered that Lando, a 17-year
old out-of-school youth, had contacted him in church the
other day looking for work. He contacted Lando who
immediately attended to Don Luis’s garden a nd finished the
job in three days. (4%)
(A) Is there an employer-employee relationship between
Don Luis and Lando? [2014 BEQ]
Previous Bar Question
Ador is a student working on his master's degree in horticulture.
To make ends meet, he takes on jobs to come up with flower
arrangements for friends. His neighbor, Nico, is about to get
married to Lucia and needs a floral arranger. Ador offers his
services and Nico agrees. They shake hands on it, agreeing
that Nico will pay Ador P20,000.00 for his services but that Ador
will take care of everything. As Ador sets about to decorate the
venue, Nico changes all of Ador's plans and ends up designing
the arrangements himself with Ador simply executing Nico's
instructions.
(a) Is there an employer-employee relationship between Nico
and Ador? (4%)
Previous Bar Question
Star Crafts is a lantern maker based in Pampanga. It supplies Christmas
lanterns to stores in Luzon, Metro Manila, and parts of Visayas, with the
months of August to November being the busiest months. Its factory
employs a workforce of 2,000 workers who make different lanterns daily for
the whole year. Because of increased demand, Star Crafts entered into a
contractual arrangement with People Plus, a service contractor, to supply the
former with I 00 workers for only 4 months, August to November, at a rate
different from what they pay their regular employees. The contract with
People Plus stipulates that all equipment and raw materials will be supplied
by Star Crafts with the express condition that the workers cannot take any of
the designs home and must complete their tasks within the premises of Star
Crafts.
Is there an employer-employee relationship between Star Crafts and the 100
workers from People Plus? Explain. (4%) [2015 BEQ]
Previous Bar Question
Gregorio was hired as an insurance underwriter by the Guaranteed Insurance
Corporation (Guaranteed). He does not receive any salary but solely relies on
commissions earned for every insurance policy approved by the company. He
hires and pays his own secretary but is provided free office space in the office
of the company. He is, however, required to meet a monthly quota of twenty
(20) insurance policies, otherwise, he may be terminated. He was made to
agree to a Code of Conduct for underwriters and is supervised by a Unit
Manager.
[a] Is Gregorio an employee of Guaranteed? Explain. (2.5%)
[b] Suppose Gregorio is appointed as Unit Manager and assigned to supervise
several underwriters. He holds office in the company premises, receives an
overriding commission on the commissions of his underwriters, as well as a
monthly allowance from the company, and is supervised by a branch manager.
He is governed by the Code of Conduct for Unit Managers. Is he an employee
of Guaranteed? Explain. (2.5%) [2016 BEQ]
Previous Bar Question
Matibay Shoe and Repair Store, as added service to its customers,
devoted a portion of its store to a shoe shine stand. The shoe shine
boys were tested for their skill before being allowed to work and
given ID cards. They were told to be present from the opening of the
store up to closing time and were· required to follow the company
rules on cleanliness and decorum. They bought their own shoe
shine boxes, polish, and rags. The boys were paid by their
customers for their services but the payment is coursed through the
store's cashier, who pays them before closing time. They were not
supervised in their work by any managerial employee of the store
but for a valid complaint by a customer or for violation of any
company rule, they can be refused admission to the store. Were the
boys employees of the store? Explain. (5%)[2016 BEQ]
Previous Bar Question
Empire Brands (Empire) contracted the services of Style Corporation (Style) for the marketing and
promotion of its clothing line. Under the contract, Style provided Empire with Trade Merchandising
Representatives (TMRs) whose services began on September 15, 2004 and ended on June 6, 2007, when
Empire terminated the promotions contract with Style.
Empire then entered into an agreement for manpower supply with Wave Human Resources (Wave). Wave
owns its condo office, owns equipment for the use by the TMRs, and has assets amounting to
Pl,000,000.00. Wave provided the supervisors who supervised the TMRs, who, in tum, received orders
from the Marketing Director of Empire. In their agreement, the parties stipulated that Wave shall be liable
for the wages and salaries of its employees or workers, including benefits, and protection due them, as
well as remittance to the proper government entities of all withholding taxes, Social Security Service, and
Philhealth premiums, in accordance with relevant laws.
As the TMRs wanted to continue working at Empire, they submitted job applications as TMRs with Wave.
Consequently, Wave hired them for a term of five (5) months, or from June 7, 2007 to November 6, 2007,
specifically to promote Empire's products.
When the TMRs' 5-month contracts with Wave were about to expire, they sought renewal thereof, but were
refused. Their contracts with Wave were no longer renewed as Empire hired another agency. This
prompted them to file complaints for illegal dismissal, regularization, non-payment of service incentive
leave and 13th month pay against Empire and Wave.
[a] Are the TMRs employees of Empire? (2.5%)
[b] Were the TMRs illegally dismissed by Wave? (2.5%)
Previous Bar Question

What are the accepted tests to determine the existence of

an employer-employee relationship? (5%)[2017 BEQ]

Applying the tests to determine the existence of an

employer-employee relationship, is a jeepney driver
operating under the boundary system an employee of his
jeepney operator or a mere lessee of the jeepney? Explain
your answer. (3%) [2017 BEQ]
Previous Bar Question
A, B, and C were hired as resident-doctors by MM Medical Center, Inc. In the
course of their engagement, A, B, and C maintained specific work schedules as
determined by the Medical Director. The hospital also monitored their work through
supervisors who gave them specific instructions on how they should perform their
respective tasks, including diagnosis, treatment, and management of their patients.
One day A, B, and C approached the Medical Director and inquired about the non-
payment of their employment benefits. In response, the Medical Director told them that
they are not entitled to any because they are mere "independent contractors" as
expressly stipulated in the contracts which they admittedly signed. As such, no
employer-employee relationship exists between them and the hospital.
(a) What is the control test in determining the existence of an employer-employee?
(2%)
(b) Is the Medical Director’s reliance on the contracts signed by A, B, and C to
refute the existence of an employer-employee relationship correct? If not, are A, B, and
C employees of MM Medical Center, Inc.? explain. (3%) [2019 BEQ A.3]
LEGITIMATE CONTRACTING vs. LABOR-ONLY
CONTRACTING

Legal Basis: Article 106-109, LC

Department Order No. 174, Series of 2017
Legitimate subcontracting as distinguished from labor-only
contracting
CONTRACTING OR SUBCONTRACTING refers to an
arrangement whereby a principal agrees to farm out to a
contractor the performance or completion of a specific job
or work within a definite or predetermined period,
regardless of whether such job or work is to be performed
or completed within or outside the premises of the principal.
CONTRACTOR refers to any person or entity engaged in a
legitimate contracting or subcontracting arrangement
providing services for a specific job or undertaking farmed
out by principal under a Service Agreement.
Trilateral relationship

1. The principal which refers to any natural or juridical entity,

whether an employer or not, who puts out or farms out a job
or work to a contractor;
2. The contractor; and
3. The contractor's employee which refers to the employee
of the contractor hired to perform or complete a job or work
farmed out by the principal pursuant to a Service
Agreement with the latter.
To emphasize,
• In legitimate contracting arrangement, there exists an ER-
EE relationship only between the contractor and its EEs it
supplies to the principal.
• Lest it be forgotten, there is one instance where, by
operation of law, the principal is treated as an indirect ER
in case the contractor fails to pay the wages of its EEs
supplied to the principal, but only to the extent of the work
performed under the contract, in the same manner and
extent that he is liable to EEs directly employed by him.
• Moreover, it must be pointed out that in some specific
instances, where the principal is held solidarily liable with
the contractor, the former again by operation of law, is
treated as the direct ER of the latter's EEs supplied to the
former, such as, inter alia, when there is labor-only
contracting or when the contractor functions as an in-
house agency or when certain illicit forms of employment
are committed.
Elements:
• The contractor is engaged in a distinct and independent business
and undertakes to perform the job or work on its own
responsibility, according to its own manner and method;
• The contractor has substantial capital to carry out the job farmed
out by the principal on his account, manner and method,
investment in the form of tools, equipment, machinery and
supervision;
• In performing the work farmed out, the contractor is free from the
control and/or direction of the principal in all matters connected
with the performance of thr work except as to the result thereto;
and
• The Service Agreement ensures compliance with all the rights and
benefits for all the EEs of the contractor under labor laws.
Tests to determine existence of legitimate job
contracting arrangement
1. Right of control test. It basically addresses the issue of
whether the contractor's manner and method of performing
the contracted job, work or service are completely free from
the control and direction of the principal except as to the
results thereof. If the issue is answered in the affirmative,
then this requisite of legitimate contracting arrangement is
fully satisfied.
2. Substantial Capital or Investment Test. This seeks to address
the issue of whether the contractor has substantial capital or
investment in the form of tools, equipmen, machineries, work
premises, and other materials which are necessary in the conduct
of its business. If the answer is in the affirmative, then this
requisite of legitimate contracting arrangement is fully complied
with.
D.O. No. 174, Series of 2017 has fixed the amount of
substantial capital, to wit:
1) In the case of corporations, partnerships, or cooperatives -
paid up capital stocks/shares of at least 5M pesos; or
2) In the case of single proprietorship - a net worth of at least
5M pesos.
• Substantial capital alone, without investment in tools,
equipment premises or machineries, well constitutes one
incontrovertible proof that a contractor is not engaged in
labor-only contracting arrangement. In fact, once a
contractor has duly proved that it has substantial
capitalization, it need not prove that it has investment in
tools, equipment, premises or machineries.
LABOR-ONLY CONTRACTING ARRANGEMENT
• refers to an arrangement where the contractor merely
recruits, supplies, or places workers to perform a job or
work for a principal, and the elements thereof, are
present.
Other illicit forms of employment
• Cabo refers to a person or group of persons or to a labor
group which supplies workers under the guise of a labor
organization, cooperative or any entity, supplies workers
to an ER, with or without any monetary or other
consideration, whether in the capacity of an agent of the
ER or as an ostensible independent contractor
• In-house Agency refers to a contractor which is owned,
managed, or controlled, directly or indirectly, by the
principal or one where the principal owns/represents any
share of stock, and which operates mainly for the
principal.
• In-house Cooperative refers to a cooperative which is
managed or controlled directly or indirectly by the
principal or one where the principal or any of its officers
owns/represents any equity or interest, and which
operates solely or mainly for the principal.
Effects of labor-only contracting and engaging in
other illicit forms of employment
1. The labor-only contractor will be treated as the agent or
intermediary of the principal. Since the act of an agent is the act of
the principal, representations made by the labor-only contractor to
the EEs will bind the principal.
2. The principal will become the direct employer as if it directly
employed the workers supplied by the labor-only contractor to
undertake the job or service.
3. The principal and the labor-only contractor will be solidarily
treated as the ER.
4. The EEs supplied by the labor-only contractor will become the
regular EEs of the principal subject to classifications of EEs under
Article 295, LC.
Previous Bar Question
• Distinguish Labor-Only contracting and Job-Only contracting.
(5%) [2012 BEQ]
• XYZ Manpower Services (XYZ) was sued by its employees
together with its client, ABC Polyester Manufacturing
Company (ABC). ABC is one of the many clients of XYZ.
During the proceedings before the Labor Arbiter, XYZ was
able to prove that it had substantial capital of Three Million
Pesos. The Labor Arbiter ruled in favor of the employees
because it deemed XYZ as a labor only contractor. XYZ was
not able to prove that it had invested in tools, equipment, etc.
Is the Labor Arbiter's ruling valid? Explain. (5%)
Previous Bar Question
Our Lady of Peace Catholic School Teachers and Employees Labor
Union (OLPCS-TELU) is a legitimate labor organization composed
of vice principals, department heads, coordinators, teachers, and
non-teaching personnel of Our Lady of Peace Catholic School
(OLPCS).
OLPCS-TELU subsequently filed a petition for certification election
among the teaching and non-teaching personnel of OLPCS before
the Bureau of Labor Relations (BLR) of the Department of Labor
and Employment (DOLE). The Med-Arbiter subsequently granted
the petition and ordered the conduct of a joint certification election
for the teaching and non-teaching personnel of OLPCS.
May OLPCS-TELU be considered a legitimate labor organization?
(5%) [2014 BEQ]
Previous Bar Question
Dr. Crisostomo entered into a retainer agreement with AB Hotel and
Resort whereby he would provide medical services to the guests and
employees of AB Hoteland Resort, which, in turn, would provide the clinic
premises and medical supplies. He received a monthly retainer fee of
₱60,000.00, plus a 70% share in the service charges from AB Hotel and
Resort's guests availing themselves of the clinic's services. The clinic
employed nurses and allied staff, whose salaries, SSS contributions and
other benefits he undertook to pay. AB Hotel and Resort issued directives
giving instructions to him on the replenishment of emergency kits and
forbidding the clinic staff from receiving cash payments from the guests.
In time, the nurses and the clinic staff claimed entitlement to rights as
regular employees of AB Hoteland Resort, but the latter refused on the
ground that Dr. Crisostomo, who was their employer, was an independent
contractor. Rule, with reasons. (4%) [2017 BEQ]
Previous Bar Question

The labor sector has been loudly agitating for the end of
labor-only contracting, as distinguished from job
contracting. Explain these two kinds of labor contracting,
and give the effect of a finding that one is a labor-only
contractor. Explain your answers. (4%) [2017 BEQ]
Previous Bar Question
W Gas Corp. is engaged in the manufacture and distribution to the general public of
various petroleum products. On January 1, 2010, W Gas Corp. entered into a Service
Agreement with Q Manpower Co., whereby the latter undertook to provide utility
workers for the maintenance of the former’s manufacturing plant. Although the workers
were hired by q Manpower Co., they used the equipment owed by W gas Corp. in
performing their tasks, and were likewise subject to constant checking based on W gas
Corp.’s procedures.
On February 1, 2010, Mr. R, one of the utility workers, was dismissed from employment
in line with the termination of the Service Agreement between W Gas Corp. and Q
Manpower Co. Thus, Mr. R filed a complaint for illegal dismissal against W Gas Corp.,
claiming that Q Manpower Co. is only a labor-only contractor. In the course of the
proceedings, W Gas Corp. presented no evidence to prove Q manpower Co.’s
capitalization.
(a) Is Q Manpower Co. a labor-only contractor? Explain. (2.5%)
(b)Will Mr. R’s complaint for illegal dismissal against W Gas Corp. prosper? Explain.
(2.5%)
Kinds of employment
1. Regular Employment (Article 295 [280], LC)
Regular employees are those who have been engaged to
perform activities which are usually necessary or desirable
in the usual business or trade of the ER.
2. Project employees are those who has been fixed for a
specific project or undertaking, the completion or
termination of which has been determined at the time of the
engagement of the EE;
3. Seasonal employees are those who work or perform
services which are seasonal in nature, and the employment
is for the duration of the season.
4. Casual employees are those who are not regular, project,
or seasonal employees.
5. Probationary employee refers to those whose
employment shall not exceed six months from the date the
employee started working.
6. Fixed-term employee refers to those whose duration of
employment agreed upon by the parties may be any day
certain, which is understood to be that which must
necessarily come although it may not be known.
Previous Bar Question

Marciano was hired as Chief Engineer on board the vessel

MN Australia. His contract of employment was for nine
months. After nine months, he was re-hired. He was hired a
third time after another nine months. He now claims
entitlement to the benefits of a regular employee based on
his having performed tasks usually necessary and desirable
to the employer's business for a continuous period of more
than one year. Is Marciano's claim tenable? Explain your
answer. (3%) [2017 BEQ]
Previous Bar Question
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%) [2018 BEQ]
Previous Bar Question
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:
a) 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;
b) the Contractor shall employ the necessary personnel like helpers, salesmen, and drivers who
are determined by the Contractor to be efficiently trained;
c) the Client may request replacement of the Contractor's personnel if quality of the desired
result is not achieved;
d) the Contractor's personnel will comply with the Client's policies, rules, and regulations; and
e) 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%) [2018 BEQ]
Some principles of casual employment
• Casual EE becomes regular after one (1) year of service
by operation of law.
• No regular appointment papers necessary for a casual EE
to become regular.
• The one year period should be reckoned from the hiring
date.
Some principles of probationary employment
• A probationary period cannot be stipulated within the fixed
period of employment.
• It cannot be stipulated that after hurdling probationary
period, the EE does not become regular but merely a
project EE.
• The probationary period may be extended but only when
the EE agrees to such extension.
• Employment is deemed regular if the employment
contract has no stipulation on probationary period.
• Agabon doctrine applies if dismissal of probationary
employee for a just cause is without due process. Thus,
the termination is considered legal but the EE will be
awarded an indemnity in the form of nominal damages of
P30,000.00.
• Jaka doctrine applies if dismissal of probationary
employee for an authorized cause is without due process.
The amount of indemnity is higher: P50,000.00.
Probationary employment of private school teachers
• For private school teachers, the probationary period of not
more than three consecutive years was governed by the
1970 Manual of Regulations for Private Schools, adopted
by the then-Department of Education, Culture and Sports
(DECS) pursuant to the provisions of Act 2076, as
amended by Act 3075 and Commonwealth Act 180.
Previous Bar Question
Amaya was employed as a staff nurse by St. Francis Hospital (SFH) on July 8, 2014 on
a probationary status for six (6) months. Her probationary contract required, among
others, strict compliance with SFH's Code of Discipline.
On October 16, 2014, Dr. Ligaya, filed a Complaint with the SFH Board of Trustees
against Amaya for uttering slanderous remarks against the former. Attached to the
complaint was a letter of Minda, mother of a patient, who confirmed the following
remarks against Dr. Ligaya:
"Bakit si Dr. Ligaya pa ang napili mong 'pedia' eh ang tandatanda na n'un? E
makakalimutin na yun xx x Alam mo ba, kahit wala namang diperensya yung baby,
ipinapa-iso/ate nya?"
The SFH President asks you, being the hospital's counsel, which of these two (2)
options is the legal and proper way of terminating Amaya: a) terminate her for a just
cause under Article 288 of the Labor Code (Termination by Employer); or b) terminate
her for violating her probationary contract. Explain. (5%) [2016 BEQ]
Litmus test of project employment
• Whether or not the project EEs were assigned to carry out
a specific project or undertaking, the duration and scope
of which were specified at the time the EEs were engaged
for that project. A true project EE should be assigned to a
project which begins and ends at determined or
determinable times and be informed thereof at the time of
hiring.
Previous Bar Question
Mario Brothers, plumbing works contractor, entered into an agreement with Axis
Business Corporation (Axis) for the plumbing works of its building under construction.
Mario Brothers engaged the services of Tristan, Arthur, and Jojo as plumber, pipe fitter,
and threader, respectively. These workers have worked for Mario Brothers in numerous
construction projects in the past but because of their long relationship, they were never
asked to sign contracts for each project. No reports to government agencies were
made regarding their work in the company.
During the implementation of the works contract, Axis suffered financial difficulties and
was not able to pay Mario Brothers its past billings. As a result, the three (3) employees
were not paid their salaries for two (2) months and their 13th month pay. Because Axis
cannot pay, Mario Brothers cancelled the contract and laid off Tristan, Arthur, and Jojo.
The 3 employees sued Mario Brothers and Axis for illegal dismissal, unpaid wages,
and benefits.
[a] Mario Brothers claims the 3 workers are project employees. It explains that the
agreement is, if the works contract is cancelled due to the fault of the client, the period
of employment is automatically terminated. Is the contractor correct? Explain. (2.5%)
[2016 BEQ]
Requisites for validity of fixed-term EE
• The fixed period of employment was knowingly and
voluntarily agreed upon by the parties, without any force,
duress, or improper pressure being brought to bear upon
the EE and absent any other circumstances vitiating his
consent; or
• It satisfactorily appears that the ER and EE dealt with
each other on more or less equal terms with no moral
dominance whatever being exercised by the former on
the latter.
Some principles on fixed-term employment
• EE is deemed regular if the contract failed to state the
specific fixed period of employment;
• Charges for misconduct or other wrongful acts or
omissions are relevant only in termination prior to
expiration of the term. They are not relevant if termination
is due to expiration of fixed period.
• EEs allowed to work beyond fixed term are regular EEs.
• Rendering work beyond one (1) year would result to
regular employment.
• 555 Doctrine - The scheme of the ER in hiring workers on
a uniformly fixed 5-month basis and replacing them upon
the expiration of their contracts with other workers with
the same employment status circumvents their right to
security of tenure.
• Employment on a “day-to-day basis for a temporary
period” will result to regular employment as it is a contract
which has the purpose of circumventing the EE's security
of tenure.
• Employment on “as the need arises” basis may ripen into
regular employment.
• Employment on a “por viaje” (per trip) basis may ripen
into regular employment by reason of their continuous
hiring and performance of tasks necessary and desirable
in the usual trade and business of the ER.
• Termination prior to lapse of fixed-term contract should be
for a just or authorized cause.
• Liability for illegal dismissal of fixed-term EE is only for
salary for the unexpired portion of the fixed-term contract.
Fixed-term employment of OFWs
• OFWs can never acquire regular employment because they
can only be engaged on a fixed-term basis.
• OFWs do not become regular EE by reason of nature of work.
• Probationary employment of OFWs is a misnomer.
• Series of rehiring og OFWs cannot ripen into regular
employment.
• Hiring of seafarer for overseas employment but assigning him
to local vessel does not affect his status as OFW.
• Seafarer hired for overseas employment but later assigned to
domestic operations after the expiration of his overseas
contract ceases to be an OFW.
Previous Bar Question
Lucy was one of approximately 500 call center agents at
Hambergis, Inc. She was hired as a contractual employee four
years ago. Her contracts would be for a duration of five (5)
months at a time, usually after a onemonth interval. Her re-
hiring was contingent on her performance for the immediately
preceding contract. Six (6) months after the expiration of her
last contract, Lucy went to Hambergis personnel department to
inquire why she was not yet being recalled to work. She was
told that her performance during her last contract was "below
average." Lucy seeks your legal advice about her chances of
getting her job back. What will your advice be? (4%) [2014
BEQ]
Previous Bar Question

Don Don is hired as a contractual employee of CALLHELP,

a call center. His contract is expressly for a term of 4
months. Don Don is hired for 3 straight contracts of 4
months each but at 2-week intervals between contracts.
After the third contract ended, Don Don is told that he will
no longer be given another contract because of "poor
performance." Don Don files a suit for "regularization" and
for illegal dismissal, claiming that he is a regular employee
of CALLHELP and that he was dismissed without cause.
You are the Labor Arbiter. How would you decide the case?
(4%) [2015 BEQ]
Previous Bar Question
Ms. A is a volleyball coach with five (5) years of experience in her field. Before the start of
the volleyball season of 2015, she was hired for the sole purpose of overseeing the training
and coaching of the University’s volleyball team. During her hiring, the Vice-President for
Sports expressed to Ms. A the University’s expectation that she would bring the University
a championship at the end of the year.
In her first volleyball season, the University placed ninth (9th) out of 10 participating teams.
Soon after the end of the season, the Vice-president for Sports informed Ms. A that she
was a mere probationary employee and hence, she need not come back for the next
season because of the poor performance of the team.
In any case, the Vice-President for Sports claimed that Ms. A was a fixed-term employee
whose contract had ended at the close of the year.
(a) Is Ms. A a probationary, fixed-term, or regular employee? Explain your reasons as to
why she is or she is not such kind of an employee for each of the types of employment
given, (5%)
(b) Assuming that Ms. A was dismissed by the University for serious misconduct but was
never given a notice to explain, what is the consequence of a procedurally infirm dismissal
from service under our labor law and jurisprudence? Explain. (2%) [2019 BEQ)
Floating status
• While an EE like a security guard is placed on a “floating
status”, he is not entitled to any salary, financial benefit or
financial assistance provided by law during the 6-month
period thereof.
• As a general rule, floating status beyond six (6) months
amounts to illegal dismissal. This is so because “floating
status” is not equivalent to dismissal so long as such
status does not continue beyond a reasonable time which
means six (6)months. After 6 months, the EE should be
recalled for work, or for a new assignment; otherwise, he
is deemed terminated.
• The security guard who refused to be re-assigned may be dismissed
for insubordination.
• Multiple “floating status” amount to constructive dismissal.
• Floating status is different from preventive suspension. In the case
of floating status, the EE is out of work because his ER has no
available work or job to assign him to. He is thus left with no choice
but to wai for at least six (6) months before he could claim having
been constructively dismissed, should his ER fail to assign him to
any work or job within said period. In the case of preventive
suspension, the EE is out of work because he has committed a
wrongful act and his continued presence in the company premises
poses a serious and imminent threat to the life or property of the ER
or his co-workers. Without this kind of threat, preventive suspension
is not proper. Further, the period of preventive suspension under the
said provisions of the Implementing Rules should not exceed thirty
D.O. No. 215 Series of 2020.
This issuance amends Section 12, Rule 1, Book VI of the Rules
Implementing the Labor Code of the Philippines.
SECTION 12. Suspension of relationship. – The employer-employee
relationship shall be deemed suspended in case of suspension of
operation of the business or undertaking of the employer for a
period not exceeding six (6) months, unless the suspension is for
the purpose of defeating the rights of the employees under the
Code, and in case of mandatory fulfillment by the employee of a
military or civic duty. The payment of wages of the employee as well
as the grant of other benefits and privileges while he is on
suspended employment or on a military or civic duty shall be subject
to existing laws and decrees and to the applicable individual or
collective bargaining agreement and voluntary employer practice or
policy.
• In case of declaration of war, pandemic and similar national emergencies, the
employer and the employees, through the union, if any, or with the assistance
of the Department of Labor and Employment, shall meet in good faith for the
purpose of extending the suspension of employment for a period not
exceeding six (6) months: Provided, that the employer shall report to the
Department of Labor and Employment, through the Regional Offices, the
extension of suspension of employment ten (10) days prior to the effectivity
thereof subject to inspection; Provided, however, that the employees shall not
lose employment if they find alternative employment during the extended
suspension of employment except in cases of written, unequivocal and
voluntary resignation; Provided further, that should retrenchment be
necessary before or after the expiration of the extension of suspension of
employment, the affected employee shall be entitled to separation pay as
prescribed by the Labor Code, company policies or collective bargaining
agreement, whichever is higher; Provided, finally, that the retrenched
employees shall have priority in the re-hiring if they indicate their desire to
resume their work not later than one (1) month from the resumption of
operations.
• This notwithstanding, by mutual agreement of the
employer and the employees, through the union, if any, or
with the assistance of the Department of Labor and
Employment, employees may be recalled to work or
retrenched subject to the requirement of notice and
separation pay, anytime before the expiration of the
extension of suspension of employment.
• The extension of suspension of employment shall not
affect the right of the employees to separation pay. The
first six (6) months of suspension of employment shall be
included in the computation of the employees’ separation
pay.
Termination by ER
• Substantive due process
1. Just cause; or
2. Authorized causes; and
• Procedural due process
1. statutory due process; and
2. contractual due process.
Just cause vs. Authorized Causes
• A dismissal based on just cause means that the employee
has committed a wrongful act or omission; while a
dismissal based on authorized cause means that there
exists a ground which the law itself allows or authorizes to
be invoked to justify the termination of an EE even if he
has not committed any wrongful act or omission, such as
installation of labor-saving devices, redundancy,
retrenchment, closure or cessation of business operations
or disease.
Just causes
Article 297 [282]. Termination by employer. An employer may
terminate an employment for any of the following just causes:
(a) Serious misconduct or willful disobedience by the employee
of the lawful orders of his employer or representative in connection
with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in
him by his employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against
the person of his employer or any immediate member of his family
or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
Article 279(a) [264(a)] - (Prohibited Activities) which provides for the termination of the
following:
(a) Union officers who knowingly participate in an illegal strike and therefore
deemed to have lost their employment status.
(b) Any EE, union officer or ordinary member who knowingly participates in the
commission of illegal acts during a strike (irrespective of whether the strike is legal or
illegal), is also deemed to have los his employment status.
Article 278(g) [263(g)] - (National Interest Cases) where strikers who violate orders,
prohibitions and/or injunctions as are issued by the DOLE Secretary or the NLRC, may
be imposed immediate disciplinary action, including dismissal or loss of employment
status.
Article 259(e) [248(e)]- (Union Security Clause) where violation of the union security
agreement in the CBA may result in termination of employment. Under this clause, the
bargaining union can demand from the ER the dismissal of an EE who commits a
breach of union security arrangement, such as failure to join the union or to maintain
his membership in good standing therein. The same union can also demand the
dismissal of a member who commits an act of disloyalty against it, such as when the
member organizes a rival union.
Just causes under prevailing jurisprudence
• violation of company rules and regulations or code of conduct or code of
discipline (Sampaguita Auto Transport Corp. vs. NLRC, GR No. 197384, Jan.
20, 2013)
• theft of property owned by a co-employee as distinguished from company-
owned property, which is considered serious misconduct (John Hancok Life
Insurance Corp. vs. Davis, GR No. 169549, Sept. 3, 2008);
• incompetence, inefficiency or ineptitude (Reyes-Rayel vs. Philippine Luen Thai
Holdings Corp., GR No. 174893, July 11, 2012);
• failure to attain work quota (Aliling vs. Feliciano, GR No. 185829, April 25, 2012);
• failure to comply with weight standards of EE (Yrasuegui vs, PALm GR No.
168081, Oct. 17, 2008);
• attitude problem (Reyes-Rayel vs. Philippine Luen Thai Holdings Corp., GR No.
174893, July 11, 2012).
Previous Bar Question

What are the grounds for validly terminating the services of

an employee based on a just cause? (5%)
Serious misconduct

Requisites:
1. It must be serious;
2. It must relate to the performance of EE's duties;
3. It must show that he has become unfit to continue
working for the ER; and
4. It must have been performed with wrongful intent.
Previous Bar Question

Dion is an Accounting Supervisor in a trading company. He

has rendered exemplary service to the company for 20
years. His co-employee and kumpadre, Mac, called him
over the phone and requested him to punch his (Mac's)
daily time card as he (Mac) was caught in a monstrous
traffic jam. Dion acceded to Mac's request but was later
caught by the Personnel Manager while punching. Mac's
time card. The company terminated the employment of Dion
on the ground of misconduct. Is the dismissal valid and
just? Explain. (5%) [ 2016 BEQ]
Insubordination of willful disobedience of lawful
orders
Requisites:
1. EE's assailed conduct must have been willful or
intentional, the willingness being characterized by a
wrongful or perverse attitude; and
2. The order violated must be based on a reasonable and
lawful company rule, regulation or policy and made known
to the EE and must pertain to the duties for which he has
been engaged to discharge.
Gross and habitual neglict of duties

Requisites:
1) There must be negligence which is gross and/or
habitual in character; and
2) It must be work-related as would make him unfit to
work for his ER.
Abadonment of work

Requisites:
1) The EE must have failed to report for work or must
have been absent without valid or justifiable reason; and
2) There must have been a clear intention on the part of
the EE to sever the ER-EE relationship manifested by some
overt act.
Fraud

Requisites:
1) The EE has committed fraud, an intentional deception
and used dishonest methods for personal gain or to
damage the ER; and
2) The fraud is work-related and rendered him unfit to
work for his ER.
Willful breach of trust and confidence

Requisites:
1) The EE holds a position of trust and confidence;
2) There exists an act justifying the loss of trust and
confidence, which means that the act that betrays the ER's
trust must be real, i.e., founded on clearly established facts.
3) The EE's breach of the trust must be willful, i.e., it was
done intentionally, knowingly and purposely, without
justifiable excuse; and
4) The act must be in relation to his work which would
render him unfit to perform it.
Position of trust and confidence

A position of trust and confidence is one where a person is

entrusted with confidence on delicate matters, such sa the
custody, handling, or care and protection of the ER's
money, assets or property.
Classes of positions of trust
• MANAGERIAL EE- those who, by the nature of their
positions are entrusted with confidential and delicate
matters and from whom greater fidelity to duty is
correspondingly expected. Their primary duty consists if
the management of the establishment in which they are
employed or of a department or a subdivision thereof and
to other officers or members of the managerial staff.
• SUPERVISORY EE - who in the interest of the ER, effectively
recommend such managerial actions the exercise of which is
not merely routinary or clerical in nature but requires the use
of independent judgment.
• FIDUCIARY RANK-AND-FILE EE - such as cashiers,
auditors, property custodians, or those who, in the normal and
routine exercise of their functions, regularly handle significant
amounts of the ER's money or property. These EEs, though
rank-and-file, are routinely charged with the custody,
handling, or care and protection of the ER's money or
property, or entrusted with confidence on delicate matters,
and are thus classified as occupying positions of trust and
confidence.
Commission of crime or offense

Requisites:
1) A crime or offense was committed by the EE;
2) It was committed against any of the following persons:
a) his ER;
b) any immediate member of his ER's family; ot
c) his ER's duly authorized representative.
Previous Bar Question

Rico has a temper and, in his work as Division Manager of

Matatag Insurance, frequently loses his temper with his
staff. One day, he physically assaults his staff member by
slapping him. The staff member sues him for physical
injuries. Matatag Insurance decides to terminate Rico, after
notice and hearing, on the ground of loss of trust and
confidence. Rico claims that he is entitled to the
presumption of innocence because he has not yet been
convicted. Comment on Matatag's action in relation to
Rico's argument. (4%) [2015 BEQ]
Other analogous causes
• violation of company rules and regulations or code of conduct or code of
discipline (Sampaguita Auto Transport Corp. vs. NLRC, GR No. 197384,
Jan. 20, 2013)
• theft of property owned by a co-employee as distinguished from company-
owned property, which is considered serious misconduct (John Hancok
Life Insurance Corp. vs. Davis, GR No. 169549, Sept. 3, 2008);
• incompetence, inefficiency or ineptitude (Reyes-Rayel vs. Philippine Luen
Thai Holdings Corp., GR No. 174893, July 11, 2012);
• failure to attain work quota (Aliling vs. Feliciano, GR No. 185829, April 25,
2012);
• failure to comply with weight standards of EE (Yrasuegui vs, PALm GR
No. 168081, Oct. 17, 2008);
• attitude problem (Reyes-Rayel vs. Philippine Luen Thai Holdings Corp.,
GR No. 174893, July 11, 2012).
Previous Bar Question
Flight attendant A, five feet and six inches tall, weighing 170
pounds ended up weighing 220 pounds in two years.
Pursuant to the long standing Cabin and Crew
Administration Manual of the employer airline that set a
147-pound limit for A’s height, management sent A a notice
to “shape up or ship out” within 60 days. At the end of the
60-day period, A reduced her weight to 205 pounds. The
company finally served her a Notice of Administration
Charge for violation of company standards on weight
requirements. Should A be dismissed? Explain. (3%) [2010
BEQ)
AUTHORIZED CAUSES

Business-related causes (Article 298 [283]):

• Installation of labor-saving device;
• redundancy;
• retrenchment;
• closure or cessation of business operations not due to
serious business losses or financial reverses
• closure or cessation of business operations due to
serious business losses or financial reverses
Health-related causes (Article 299[284])
Commonality of requisites:
• Good faith in effecting the termination;
• Termination is a matter of last resort;
• Two separate written notices are served on both the affected
EE and DOLE at least 1 month prior to the intended date of
termination;
• Fare and reasonable criteria
• Separation pay
1) if based on (a) installation of labor-saving device or (b)
redundancy: 1 month pay or at least 1 month pay for every year
of service, whichever is higher, a fraction of at least six (6) months
shall be considered as one whole year.
2. If based on (a) retrenchment, or (b) closure not due to
serious business losses or financial reverses: 1 month pay
or at least 1/2 month pay for every year of service,
whichever is higher, a fraction of at least six (6) months
shall be considered as one whole year.
3. If closure is due to serious business losses or financial
reverses: no separation pay
4. In case CBA or company policy provides for a higher
separation pay, the same must be followed instead of the
one provided in Article 298[283].
Disease substantive requisites:
• An EE has been found to be suffering from any disease;
• His continued employment is prohibited by law; or
prejudicial to his health as well as to the health of his co-
EEs; and
• A competent public health authority issues a medical
certificate that the disease is of such nature or at such
stage that it cannot be cured within a period of six (6)
months even with proper medical treatment.
Procedural requisites:
• Deoferio vs. Intel Technology Philippines, Inc., GR No.
202996, June 18, 2014 pronounced the rule that due
process in termination due to disease is similar to due
process for just cause termination.
• Fuji Television Network Inc., vs. Espiritu, GR Nos.
204944-45, Dec. 3, 2014 has further expounded on the
due process requirement in termination due to disease,
this time, by categorically specifying the right of the ailing
EE to present countervailing evidence in the form of
medical certificates to prove that his dismissal due to
disease is not proper and therefore illegal.
Standard situations in termination cases
• LEGAL if done with both substantive and procedural due
process;
• ILLEGAL if done without substantive due process
although procedural due process was observed;
• ILLEGAL if it was done without both substantive and
procedural due process;
• LEGAL if done with substantive due process but without
procedural due process
Doctrines
• Wenphil Rule or Belated Due Process Rule - Where the
ER had a valid reason to dismiss an EE but did not follow
due process requirement, the dismissal may be upheld
but the ER will be penalized to pay an indemnity to the
EE.
• Serrano doctrine: Ineffectual dismissal rule - The violation
by the ER of the notice requirement in termination for just
or authorized cause was not a denial of due process that
will nullify the termination. However, the dismissal is
declared ineffectual and the ER must pay full backwages
from the time of termination until it is judicially declared
• Agabon doctrine - Where the dismissal is for a just cause,
the lact of statutory due process should not nullify the
dismissal, or render it illegal or ineffectual. However, the
ER should indemnify the EE for the violation of his right to
statutory due process. Such indemnity or sanction,
however, must be stiffer than that imposed in Whenphil.
Consequently, the sanction imposed upon the ER in form
of nominal damages in the higher amount of P30,000.00.
• Abbott Laboratories doctrine: Contractual due process
rule - In a situation where there is an existing company
policy enunciating the procedural due process that must
be observed in termination of employment, compliance
alone with the statutory due process would not suffice.
Additionally, there must be compliance too with the
company-prescribed due process or the so-called
contractual due process. Otherwise, the same
consequence as in Agabon will ensue, that is, the
termination shall be considered legal and valid but for lack
of contractual due process, the ER will be penalized with
the payment of indemnity in the form of nominal damages
in the same amount of P30,000.00 as awarded in Agabon.
Previous Bar Question
ABC Tomato Corporation, owned and managed by three (3)
elderly brothers and two (2) sisters, has been in business for 40
years. Due to serious business losses and financial reverses during
the last five (5) years, they decided to close the business.
• As counsel for the corporation, what steps will you take prior to its
closure? (3%)
• Are the employees entitled to separation pay? (2%)
• If the reason for the closure is due to old age of the brothers and
sisters:
• Is the closure allowed by law? (2%)
• Are the employees entitled to separation benefits? (3%) [2012
BEQ]
Previous Bar Question
Jose and Erica, former sweethearts, both worked as sales representatives
for Magna, a multinational firm engaged in the manufacture and sale of
pharmaceutical products. Although the couple had already broken off their
relationship, Jose continued to have special feelings for Erica.
One afternoon, Jose chanced upon Erica riding in the car of Paolo, a co-
employee and Erica's ardent suitor; the two were on their way back to the office
from a sales call on Silver Drug, a major drug retailer. In a fit of extreme
jealousy, Jose rammed Paolo's car, causing severe injuries to Paolo and Erica.
Jose's flare up also caused heavy damage to the two company-owned cars
they were driving.
(A) As lawyer for Magna, advise the company on whether just and valid grounds
exist to dismiss Jose. (4%)
(B) Assuming this time that Magna dismissed Jose from employment for cause
and you are the lawyer of Jose, how would you argue the position that Jose's
dismissal was illegal? (4%) [2013 BEQ]
Previous Bar Question
Luisa Court is a popular chain of motels. It employs over 30
chambermaids who, among others, help clean and maintain the rooms.
These chambermaids are part of the union rank-and-file employees
which has an existing collective bargaining agreement (CBA) with the
company. While the CBA was in force, Luisa Court decided to abolish the
position of chambermaids and outsource the cleaning of the rooms to
Malinis Janitorial Services, a bona fide independent contractor which has
invested in substantial equipment and sufficient manpower. The
chambermaids filed a case of illegal dismissal against Luisa Court. In
response, the company argued that the decision to outsource resulted
from the new management’s directive to streamline operations and save
on costs. If you were the Labor Arbiter assigned to the case, how would
you decide? (4%) [2014 BEQ]
Previous Bar Question
Luisa was hired as a secretary by the Asian Development Bank
(ADB) in Manila. Luisa’s first boss was a Japanese national
whom she got along with. But after two years, the latter was
replaced by an arrogant Indian national who did not believe her
work output was in accordance with international standards.
One day, Luisa submitted a draft report filled with typographical
errors to her boss. The latter scolded her, but Luisa verbally
fought back. The Indian boss decided to terminate her services
right then and there. Luisa filed a case for illegal dismissal with
the Labor Arbiter claiming arbitrariness and denial of due
process. If you were the Labor Arbiter, how would you decide
the case? (4%)
Previous Bar Question

Lanz was a strict and unpopular Vice-President for Sales of

Lobinsons Land. One day, Lanz shouted invectives against
Lee, a poor performing sales associate, calling him, among
others, a "brown monkey." Hurt, Lee decided to file a
criminal complaint for grave defamation against Lanz. The
prosecutor found probable cause and filed an information in
court. Lobinsons decided to terminate Lanz for committing a
potential crime and other illegal acts prejudicial to business.
Can Lanz be legally terminated by the company on these
grounds? (4%) [2014 BEQ]
Previous Bar Question

Hagibis Motors Corporation (Hagibis) has 500 regular

employees in its car assembly plant. Due to the Asian
financial crisis, Hagibis experienced very low car sales
resulting to huge financial losses. It implemented several
cost-cutting measures such as cost reduction on use of
office supplies, employment hiring freeze, prohibition on
representation and travel expenses, separation of casuals
and reduced work week. As counsel of Hagibis, what are
the measures the company . should undertake to implement
a valid retrenchment? Explain. (5%)[ 2016 BEQ]
Previous Bar Question
Pedro, a bus driver of Biyahe sa Langit Transport, was involved in a
collision with a car, damaging the bus. The manager accused him of
being responsible for the damage and was told to submit his written
explanation within 48 hours. Pedro submitted his explanation within
the period. The day.after, Pedro received a notice of termination
stating that he is dismissed for reckless driving resulting to damage
to company property, effective immediately. Pedro asks you, as his
counsel, if the company complied with the procedural due process
with respect to dismissal of employees.
[a] Explain the twin notice and hearing rule. (2.5%)
[b] Did the Biyahe sa Langit Transport comply with the prior
procedural requirements for dismissal? (2.5%) [2016 BEQ]
Previous Bar Question
Zienna Corporation (Zienna) informed the Department of Labor and Employment Regional
Director of the end of its operations. To carry out the cessation, Zienna sent a Letter
Request for Intervention to the NLRC for permission and guidance in effecting payment of
separation benefits for its fifty (50) terminated employees.
Each of the terminated employees executed a Quitclaim and Release before Labor Arbiter
Nocomora, to whom the case was assigned. After the erstwhile employees received their
separation pay, the Labor Arbiter declared the labor dispute dismissed with prejudice on the
ground of settlement. Thereafter, Zienna sold all of its assets to Zandra Company (Zandra),
which in tum hired its own employees.
Nelle, one of the fifty (50) terminated employees, filed a case for illegal dismissal against
Zienna. She argued that Zienna did not cease from operating since the corporation subsists
as Zandra. Nelle pointed out that aside from the two companies having essentially the
same equipment, the managers and owners of Zandra and Zienna are likewise one and the
same.
For its part, Zienna countered that Nelle is barred from filing a complaint for illegal
dismissal against the corporation in view of her prior acceptance of separation pay.
Is Nelle correct in claiming that she was illegally dismissed? (5%) [2016 BEQ]
Previous Bar Question

Due to business recession, Ballistic Company retrenched a

part of its workforce. Opposing the retrenchment, some of the
affected employees staged a strike. Eventually, the
retrenchment was found to be justified, and the strike was
declared illegal; hence, the leaders of the strike, including the
retrenched employees, were declared to have lost their
employment status.
Are the striking retrenched employees still entitled to separation
pay under Sec. 298 (283) of the Labor Code despite the
illegality of their strike? Explain your answer. (2%) [2017 BEQ]
Previous Bar Question
Nicodemus was employed as a computer programmer by Network Corporation, a
telecommunications firm. He has been coming to work in shorts 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 1st 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.
(a) Were there valid legal grounds to dismiss Nicodemus from his employment?
(2.5%) [2018 BEQ]
Previous Bar Question
• Give the procedure to be observed for validly terminating
the services of an employee based on a just cause? (4%)
[2017 BEQ]

• Define, explain or distinguish the following terms:

(a) Just and authorized causes (2%)
(b) Seasonal and project employees (2%) [2019 BEQ
A.1]
Previous Bar Question
Because of dwindling sales and the consequent limitation of productions, rumors
were rife that XYZ, Inc. would reduce its employee force. The next day, the
employees of XYZ, Inc. received a notice that the company will have a winding
down period of 10 days, after which there will be a six (6)-month suspension of
operations to allow the company to address its precarious financial position.
On the fourth (4th) month of suspension of its operations XYZ, Inc. posted
announcement that it will resume its operations in 60 days but at the same time
announced that instead of closing down due to financial losses, it will retrench 50%
of the work force.
(a) Is the announcement that there would be retrenchment affecting 50% of the
work force sufficient compliance with the legal requirements for retrenchment?
Explain. (2.5%)
(b) Assuming that XYZ, Inc., instead of retrenchment, extended the suspension of
its operations from six (6) months to eight (8) months, would the same be legally
permissible? If not, what are the consequences? (2.5%)
Preventive suspension
• According to Supreme court: Gatbonton vs. NLRC (G.R. No.
146779, January 23, 2006)
• “Preventive suspension is a disciplinary measure for the
protection of the company’s property pending investigation of any
alleged malfeasance or misfeasance committed by the employee.
The employer may place the worker concerned under preventive
suspension if his continued employment poses a serious and
imminent threat to the life or property of the employer or of his co-
workers. However, when it is determined that there is no sufficient
basis to justify an employee’s preventive suspension, the latter is
entitled to the payment of salaries during the time of preventive
suspension.”
• “Section 8. Preventive suspension. The employer may place the worker
concerned under preventive suspension only if his continued
employment poses a serious and imminent threat to the life or property
of the employer or of his co-workers” (Rule XXIII, Book V).
• This kind of suspension shall last longer than 30 days (In JRS
Business Corp. v. NLRC, et. al., 246 SCRA 445 [1995], the Supreme
Court penalized the employer to pay indemnity in the amount of P1,000
when it violated the maximum 30-day preventive suspension.) The
employer shall thereafter, reinstate the worker in his former or in a
substantially equivalent position (actual reinstatement) or the employer
may extend the period of suspension provided that during the period of
extension, he pays the wages and other benefits due to the worker
(payroll reinstatement). In such case, the worker shall not be bound to
reimburse the amount paid to him during the extension if the employer
decided, after completion of the hearing, to dismiss the worker.
Previous Bar Question
Karina Santos is a famous news anchor appearing nightly in the
country's most watched newscast. She is surprised, after one
newscast, to receive a notice of hearing before the station's Vice-
President for Human Resources and calls the VP immediately to ask
what was wrong. Karina is told over the phone that one of her crew
filed a complaint against her for verbal abuse and that management
is duty-bound to investigate and give her a chance to air her side.
Karina objects and denies that she had ever verbally assaulted her
crew. The VP then informed her that pending the investigation she
will be placed on a 30-day preventive suspension without pay and
that she will not be allowed to appear in the newscast during this
time.
Is the preventive suspension of Karina valid? Discuss the reasons
for your answer. (4%)
Reliefs from Illegal Dismissal (Article 294 [279])
• Reinstatement without loss of seniority rights and other
privileges;
• Full backwages, inclusive of allowances; and
• Other benefits or their monetary equivalent.
Termination by EE

1. Voluntary resignation
Resignation is defined as a voluntary act of an EE who
finds himself in a situation where he believes that personal
reasons cannot be sacrificed in favor of the exigency of the
service so much so that he has no other choice but to
dissociate himself from his employment.
Concurrence of two things:
1. intent to relinquish; and
2. Overt act of relinquishment.
Requisites
• Submission of a written resignation letter;
• Service of notice to ER at least one month in advance;
and
• Written acceptance by ER of his resignation (based on
jurisprudence).
Separation pay in lieu of reinstatement
• Doctrine of strained relations - where the continued
relationship between the ER and EE is no longer viable
due to the strained relations and antagonism between
them.
Previous Bar Question

Despite a reinstatement order, an employer may choose not

to reinstate an employee if: (1%)
(A) there is a strained employer-employee relationship
(B) the position of the employee no longer exists
(C) the employer’s business has been closed
(D) the employee does not wish to be reinstated. [2014
BEQ]
Previous Bar Question
After due proceedings, the Labor Arbiter (LA) declared Mr. K to have been
illegally dismissed by his former employer, AB, Inc. As a consequence, the LA
directed ABC, Inc. to pay Mr. K separation pay in lieu of reinstatement as well
as his full backwages.
While ABC, Inc. accepted the finding of illegal dismissal, it nevertheless filed a
motion for reconsideration, claiming that the LA erred in awarding both
separation pay and full backwages, and instead, should have ordered Mr. K’s
reinstatement to his former position without loss of seniority rights and other
privileges, but without payment of backwages. In this regard, ABC, Inc. pointed
out that the LA’s ruling did not contain any finding of strained relations or that
reinstatement was no longer feasible. In any case, it appears that no evidence
was presented on this score.
(a) Is ABC, Inc.’s contention to delete the separation pay, and instead, order
reinstatement without backwages correct? Explain. (3%) [2019 BEQ]
Money claims arising from ER-EE Relationship
• Bases:
1. Labor Code;
2. Other special laws;
3. Jurisprudence;
4. Employment contracts;
5. Voluntary employer policy or practice; or
6. CBA
Burden of proof in monetary claims
• As a general rule, a party who alleges payment as a defense has
the burden of proving it. Well-settled is the rule that once the EE
has set out with particularity in his complaint, position paper,
affidavits, and other documents the labor standards benefits he is
entitled to (such as his entitlement to unpaid overtime pay,
premium pay for holiday and rest day and service incentive leave
pay) and which he alleged that the ER failed to pay, it becomes
the ER's burden to prove that it has paid these money claims.
More succinctly, the burden rests on the ER to prove payment,
rather than oh the EE's to prove non-payment.
• The burden of proof, however, may shift to the EE if the ER
denies the monetary claim.
Involuntary resignation (with just cause)
• Article 300(b) [285(b):
(b) An employee may put an end to the relationship without serving
any notice on the employer for any of the following just causes:
(1) Serious insult by the employer or his representative on the honor
and person of the employee;
(2) Inhuman and unbearable treatment accorded the employee by
the employer or his representative;
(3) Commission of a crime or offense by the employer or his
representative against the person of the employee or any of the
immediate members of his family; and
(4) Other causes analogous to any of the foregoing.
Constructive dismissal
• There is constructive dismissal when any or all of the
following three (3) circumstances exist:
(1) When continued employment is rendered impossible,
unreasonable or unlikely;
(2) When there is a demotion in rank and/or in a
diminution in pay; or
(3) When a clear discrimination, insensibility or disdain by
an ER becomes unbearable to the EE that it could foreclose
any choice by him except to forego his continued
employment.
Previous Bar Question

An accidental fire gutted the JKL factory in Caloocan. JKL

decided to suspend operations and requested its
employees to stop reporting for work. After six (6) months,
JKL resumed operations but hired a new set of employees.
The old set of employees filed a case for illegal dismissal. If
you were the Labor Arbiter, how would you decide the
case? (4%) [2014 BEQ]
Previous Bar Question
Jim is the holder of a certificate of public convenience for a jeepney. He entered into a contract
of lease with Nick, whereby they agreed that the lease period is for one (1) year unless sooner
terminated by Jim for any of the causes laid down in the contract. The rental is thirty thousand
pesos (P30,000.00) monthly. All the expenses for the repair of the jeepney, together with
expenses for diesel, oil and service, shall be for the account of Nick. Nick is required to make a
deposit of three (3) months to answer for the restoration of the vehicle to its good operating
condition when the contract ends. It is stipulated that Nick is not an employee of Jim and he
holds the latter free and harmless from all suits or claims which may arise from the
implementation of the contract. Nick has the right to use the jeepney at any hour of the day
provided it is operated on the approved line of operation.
After five (5) months of the lease and payment of the rentals, Nick became delinquent in the
payment of the rentals for two (2) months. Jim, as authorized by the contract, sent a letter of
demand rescinding the contract and asked for the arrearages. Nick responded by filing a
complaint with the NLRC for illegal dismissal, claiming that the contract is illegal and he was just
forced by Jim to sign it so he can drive. He claims he is really a driver of Jim on a boundary
system and the reason he was removed is because he failed to pay the complete daily
boundary , of one thousand (P1,000.00) for 2 months due to the increase in the number of
tricycles.
[b] Assuming that Nick is an employee of Jim, was Nick validly dismissed? [2016 BEQ]
Previous Bar Question
Ms. T was caught in the act of stealing the company property of her employer.
When Ms. T admitted to the commission of the said act to her manager, the
latter advised her to just tender her resignation; otherwise, she would face an
investigation which would likely lead to the termination of her employment and
the filing of criminal charges in court.
Acting on her manager’s advice, Ms. T submitted a letter of resignation. Later
on, Ms. T filed a case for constructive dismissal against her employer. While
Ms. T conceded that her manager spoke to her in a calm and unforceful
manner, she claimed that her resignation was not completely voluntary because
she was told that should she not resign, she could be terminated from work for
just cause and worse criminal charges could be file against her.
(a) What is the difference between resignation and constructive dismissal? (2%)
(b) Will Ms. T’s claim for constructive dismissal prosper? Explain. (3%) [2019
BEQ]
Retirement
• EEs eligible for retirement:
1. All EEs in the private sector, regardless of their
positions, designations, or status and irrespective of the
method by which their wages are paid.
2. Part-time EEs;
3. EEs of service and other job contractors;
4. Domestic workers/kasambahays or persons in the
personal service of another;
5. Undergrond mine workers; and
6. EEs of GOCCs without original charter.
Excluded
• EEs of national government and its political subdivisions
including GOCCs with original charter.
• EEs of retail, service or agricultural establishments
regularly employing not more than 10 EEs
Retirement Age
• Article 302 [287]
1. Optional retirement upon reaching the age of sixty (60) years;
2. Compulsory retirement upon reaching the age of sixty-five
years.
• Under retirement plan
Article 302 [287] of the LC come into play only in the
absence of retirement plan or agreement setting forth other
forms of optional or compulsory retirement schemes.
Years of service
• Five (5) years is the minimum years of service that must
be rendered by the EE before he can avail of the
retirement benefits upon reaching optional or compulsory
retirement age under Article 302[287]. But this period
holds true only in the absence of a retirement plan or
agreement providing for retirement benefits of EEs in the
establishment. Hence, the ER and the EE are free to
stipulate a different period in the retirement plan,
employment contracts or CBA.
Amount of retirement pay
• In the absence of a retirement plan or agreement
providing for retirement benefits of EEs in the
establishment, an EE, upon reaching the optional or
compulsory retirement age specified in Article 302[287],
shall be entitled to retirement pay equivalent to at least
1/2 month salary for every year of service, a fraction of at
least six months being considered as one whole year.
One-half month salary include:
• 15 days' salary based on latest salary rate;
• cash equivalent of 5 days of service incentive leave;
• 1/12th of the 13th month pay; and
• all other benefits that ER and EE may agree upon that
should be included in the computation.
- Means 22.5 days (Capitol Wireless, Inc. vs. Confesor, GR
No. 117174, Nov. 13, 1996)
Note:
• Retirement benefits under the LC, retirement policy, or
plan of the ER or under a CBA are separate and distinct
from the SSS retirement pay.
• The coverage of the Pag-ibig Fund may be treated as a
substitute retirement benefit for the EE within the purview
of the LC.
• GSIS retirement benefits apply to government EEs only.
Retirement of underground mine workers:
• RA No. 8558
• Optional - fifty (50) years of age;
• Compulsory - sixty (60) years of age.
• 1/2 month salary as enunciated in the LC
Previous Bar Question
Dennis was a taxi driver who was being paid on the "boundary"
system basis. He worked tirelessly for Cabrera Transport Inc. for
fourteen (14) years until he was eligible for retirement. He was
entitled to retirement benefits. During the entire duration of his
service, Dennis was not given his 13th month pay or his service
incentive leave pay.
(b) Since he was not given his 13th month pay and service
incentive leave pay, should Dennis be paid upon retirement, in
addition to the salary equivalent to fifteen (15) days for every year
of service, the additional 2.5 days representing one-twelfth (1/12)
of the 13th month pay as well as the five (5) days representing
the service incentive leave for a total of 22.5 days? Explain. (5%)
Previous Bar Question
After thirty (30) years of service, Beta Company compulsorily retired Albert at age 65
pursuant to the company's Retirement Plan. Albert was duly paid his full retirement
benefits of one (1) month pay for every year of service under the Plan. Thereafter, out
of compassion, the company allowed Albert to continue working and paid him his old
monthly salary rate, but without the allowances that he used to enjoy.
After five (5) years under this arrangement, the company finally severed all
employment relations with Albert; he was declared fully retired in a fitting ceremony but
the company did not give him any further retirement benefits. Albert thought this
treatment unfair as he had rendered full service at his usual hours in the past five (5)
years. Thus, he filed a complaint for the allowances that were not paid to him, and for
retirement benefits for his additional five (5) working years, based either on the
company's Retirement Plan or the Retirement Pay Law, whichever is applicable.
(A) After Albert's retirement at age 65, should he be considered a regular employee
entitled to all his previous salaries and benefits when the company allowed him to
continue working? (4%)
(B) Is he entitled to additional retirement benefits for the additional service he rendered
after age 65? (4%)
Previous Bar Question
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%)
(b) If he is entitled to retirement benefits, how should retirement pay be computed in
the absence of any contract between him and Norte University providing for such
benefits? (2.5%)