LABOR RELATIONS –Final Exams

Atty. Peter Joey B. Usita

A. X Co is a firm with 800 employees. It published telephone directories and is chiefly dependent on the
marketing and sale of advertising space. It pays 10M in income tax alone to the Phil government. While
a labor dispute between the management and the exclusive bargaining agent of the company were
undergoing conciliation process, top officers of the union were dismissed. Wary that a strike might be
staged by the union, the SOLE immediately assumed jurisdiction over the dispute. (2013, 2015, 2016
Finals)
a. Is the action of the SOLE justified and legal? State your reasons (5 pts)

 The SOLE is granted under LC 263(g) , the extraordinary police power of assuming
jurisdiction over a labor dispute which, in his opinion, will cause a strike or lockout in an
industry indispensable to the national interest, or so called “national interest” cases.
Alternatively, he may certify the labor dispute to the NLRC for compulsory arbitration.
(Chan notes)

 YES. A labor dispute may be assumed by the Secretary or certified to the NLRC even before
the actual staging of strike since the law does not require the existence of a strike but only of
a labor dispute involving national interest. What constitutes “indispensable industry” is
based upon the discretion of the Secretary of Labor. However, the President of the
Philippines may not be precluded from determining industries which in his opinion are
indispensable to national interest.

b. Assuming it is justified and legal, what, if any, are the effects of the SOLE’s assumption of
jurisdiction over the dispute? (5 pts)

 Note: LC 263 (g) also provides that even if the case has already been assumed by the SOLE
or certified to the NLRC for compulsory arbitration, or during the pendency therewith, the
parties thereto may still withdraw the case from the SOLE or NLRC and submit
it to a voluntary arbitration

 Automatically enjoins the intended or impending strike as specified in the

assumption or certification order;
 If one has already taken place at the time of assumption or certification, all
striking employees shall within 24 hours return to work from receipt of an
assumption or certification order; and
 The employer shall immediately resume operation and re-admit all workers
under the same terms and conditions prevailing before the strike.

c. How do we determine whether a strike is legal or not? (5pts)

Procedural but mandatory requisites. In accordance with Article 263 and

pertinent prevailing jurisprudence, a strike, in order to be valid and legal, must conform
to the following procedural requisites:

1st - It must be based on a valid and factual ground;

2nd - A notice of strike must be filed with the NCMB-DOLE;
3rd - A notice must be served to the NCMB-DOLE at least twenty-four (24) hours prior to
the taking of the strike vote by secret balloting, informing said office of the decision
to conduct a strike vote, and the date, place, and time thereof;
4th - A strike vote must be taken where a majority of the members of the union obtained
by secret ballot in a meeting called for the purpose, must approve it;
5th - A strike vote report should be submitted to the NCMB-DOLE at least seven (7) days
before the intended date of the strike;
6th - Except in cases of union-busting, the cooling-off period of 15 days, in case of unfair
labor practices of the employer, or 30 days, in case of collective bargaining
deadlock, should be fully observed; and

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Atty. Peter Joey B. Usita

7th - The 7-day waiting period/strike ban reckoned after the submission of the strike
vote report to the NCMB-DOLE should also be fully observed in all cases.
All the foregoing requisites, although procedural in nature, are mandatory
and failure of the union to comply with any of them would render the strike
illegal.

B. As a result of a bargaining deadlock between Y Company and Y Employees’ Union, 85 employees

belonging to the union staged a strike. During the strike, 15 of the strikers padlocked the main gate of
the company which prevented the ingress and egress of company personnel. However, the company
remained steadfast and refused to give in to the union’s demands. Eventually, the strikers relented and
informed the company of their intention to return to work. (2013, 2016 Finals)

a. Can Y Company refuse to admit ALL the strikers? (5 pts)

a. Reinstatement, when proper. Reinstatement (without backwages) of ordinary rank-

and-file union members who did not participate in the commission of illegal
acts during the conduct of the illegal strike may be ordered.

b. No reinstatement for strikers who committed illegal acts. The strikers who
committed illegal acts during and in the course of a strike may be terminated. They
are not entitled to be reinstated. Additionally, they may be held criminally liable therefor

NO. The company may only refuse to admit the 15 strikers who padlocked the main gate
of the company which prevented the ingress and egress of company personnel as this
constitute a prohibited act under the law. These 15 striking employees who knowingly
participated in the commission of illegal act during a strike may be declared to have been
lost his employment.

b. If due to the prolonged strike, Y Company hired replacements, can it refuse to admit the
replaced strikers? (5 pts)

An employee who participates in a lawful strike is not deemed to have abandoned
his employment but is merely exercising his right to self-organization
precisely to protect his rights as an employee and/or to obtain better working
conditions. Such participation should not constitute sufficient ground for the
termination of his employment even if a replacement has already been hired by
the employer during such lawful strike.

NO. During the strike, the employer-employee relationship is not terminated but merely
suspended as the work stoppage is not permanent but only temporary. The employer,
therefore, is under obligation to reinstate striking employees upon termination of the
strike provided that the participation of the employee in the strike did not constitute
grounds for termination for his employment.

C. Z Union is a LLO in Z Corp. Desirous of becoming an exclusive bargaining agent, Z Union wrote a letter
to Z Corp demanding that it be recognized as such. (2013, 2016 Finals)

a. If you were the President of Z Corp, would you accede to the demand of Z Union? (4pts)

 NO. D.O. No. 40-I-15 has already repealed and replaced the rules on voluntary recognition
in D.O. No. 40-03 with rules on request for sole and exclusive bargaining agent (SEBA).
Hence, as the president of Z Corporation, I can no longer voluntarily recognize Z Union as
the exclusive bargaining representative (EBR). Z Union should ask for SEBA certification
from DOLE to be recognized as the EBR of the employees in the appropriate bargaining unit.

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Atty. Peter Joey B. Usita

b. Assuming you accede, will such recognition of Z Union as EBA possibly give rise to a complaint
for ULP? Why or why not? (3 pts)

YES. If there is already an exclusive bargaining representative chosen through a certification

election, the employer will commit ULP if he voluntarily recognizes Z Union and chooses to bargain
with him rather than with the EBR.

c. Assuming you do NOT accede, what, if any, is your proper course of action? Why and where
would you file it? (3 pts)

D. B was employed as a route salesman by respondent C Company. His duties, which were spelled out in
the Company Handbook, included selling softdrink products either on cash or credit basis; receiving
payments for past due or current accounts; issuing sales invoices and receiving empty bottles and cases
of softdrinks. Upon verification and audit of the accounts handled by B, the District Sales Supervisor of
C Company discovered transactions in violation of the Company Handbook. (2015, 2016 Finals)

a. Considering that B is not a managerial employee, may he be dismissed from employment based
on loss of trust and confidence? (5pts)

REQUISITES. For the doctrine of loss of trust and confidence to apply, the following
requisites must be satisfied:

1. The employee holds a position of trust and confidence;

2. There exists an act justifying the loss of trust and confidence,128 which means
that the act that betrays the employer‟ s trust must be real, i.e. , founded on
clearly established facts;129

3. The employee‟ s breach of the trust must be willful, i.e. , it was done
intentionally, knowingly and purposely, without justifiable excuse;130 and

4. The act must be in relation to his work which would render him unfit to perform
it.

Rules on termination of managerial and supervisory employees

different from those applicable to rank-and-file employees. As a general rule,
the doctrine of “trust and confidence” is restricted to managerial employees. This means
that the rules on termination of employment applicable to managerial or fiduciary
employees are different from those involving ordinary employees not holding positions
of trust and confidence. In the latter case, mere accusations by the employer will not be
sufficient. Thus, with respect to rank-and-file personnel, loss of trust and confidence
as a ground for valid dismissal requires proof of involvement in the alleged events in
question and that mere uncorroborated assertions and accusations by the employer will
not be sufficient. But as regards a managerial employee, the mere existence of a basis for
believing that he has breached the trust of his employer would suffice for his dismissal

Two (2) classes of positions of trust. The first class consists of managerial
employees or those who, by the nature of their position, are entrusted with confidential
and delicate matters and from whom greater fidelity to duty is correspondingly
expected. They refer to those vested with the powers or prerogatives to lay down and
execute management policies and/or to hire, transfer suspend, lay-off, recall, discharge,
assign or discipline employees or to effectively recommend such managerial actions.
Their primary duty consists of the management of the establishment in which they are
employed or of a department or a subdivision thereof. The second class includes
“cashiers, auditors, property custodians, or those who, in the normal and routine

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Atty. Peter Joey B. Usita

exercise of their functions, regularly handle significant amounts of [the employer‟ s]

money or property.” They are fiduciary rank-and-file employees who, though rank-
and-file, are routinely charged with the custody, handling or care and protection of the
employer's money or property, or entrusted with confidence on delicate matters, and
are thus classified as occupying positions of trust and confidence.

b. Before B’s dismissal may be validly implemented, discuss the statutory obligations of C
Company towards B. (5pts)

According to the Agabon Doctrine, the law imposes upon the employer the obligation to observe
the procedural requirements of termination otherwise known as “statutory due process”. It protects
employees from being unjustly terminated without just cause after notice and hearing because the
Bill of Rights is not meant to be invoked against acts of private individuals like employers. The
procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus
Rules Implementing the Labor Code:

Standards of due process: requirements of notice. – In all cases of termination of employment, the
following standards of due process shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 of the Code:

(a) A written notice served on the employee specifying the ground or grounds for termination, and
giving to said employee reasonable opportunity within which to explain his side;

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if
the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut
the evidence presented against him; and

(c) A written notice of termination served on the employee indicating that upon due consideration
of all the circumstances, grounds have been established to justify his termination.

In case of termination, the foregoing notices shall be served on the employee's last known address.

c. Assuming that there is indeed a just cause to terminate the services of B, may he nevertheless be
awarded separation pay? Explain. (3pts)

Award of separation pay in lieu of reinstatement is not proper if there is no finding of

illegality of dismissal. This is so because the principal remedy of reinstatement may
only be granted in case the dismissal is illegal.

d. Assuming that B’s dismissal is held to be illegal, may his prayer for “reinstatement to his former
position without loss of seniority rights” be denied? (2pts)

This phrase denotes that benefits due to a dismissed including seniority rights and other
privileges will not be affected by his absence due to suspension of
employment brought about by the unlawful dismissal. Although there was in
fact absence of employment, the law mandates continuity of employment for purposes of
enjoyment of such benefits.

E. DEF Union was voluntarily recognized as the exclusive bargaining agent by GHI Corp, an unorganized
establishment. Thereafter, a CBA was executed and registered. (2015, 2016 Finals)

a. Before the expiration of the freedom period, may DEF Union again request GHI Corp for
voluntary recognition? (5pts)

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Atty. Peter Joey B. Usita

No, because D.O. No. 40-1-15 has already been repealed and replaced the rules on voluntary
recognition in D.O. 40-03 with rules on Request for Sole and Exclusive Bargaining Agent
Certification.

b. Assuming GHI Corp agrees to the request, will such voluntary recognition give rise to a
complaint for ULP? Why or why not? (5pts)

No, because DEF is the current exclusive bargaining representative. The employer only commits
ULP when he recognizes a union and initiates collective bargaining with it even though an
exclusive bargaining representative has already been chosen through certification election.

c. Enumerate 5 salient features of RA 9481 which strengthen the worker’s right to self-
organization. (5pts)

A. Employer as Bystander. - In all cases, whether the petition for certification election is
filed by an employer or a legitimate labor organization, the employer shall not be considered a
party thereto with a concomitant right to oppose a petition for certification election. The
employer's participation in such proceedings shall be limited to: (1) being notified or informed
of petitions of such nature; and (2) submitting the list of employees during the pre-election
conference should the Med-Arbiter act favorably on the petition.

B. Voluntary Cancellation of Registration. - The registration of a legitimate labor

organization may be cancelled by the organization itself. Provided, That at least two-thirds of its
general membership votes, in a meeting duly called for that purpose to dissolve the
organization: Provided, further, That an application to cancel registration is thereafter
submitted by the board of the organization, attested to by the president thereof."

C. Chartering and Creation of a Local Chapter. - A duly registered federation or national

union may directly create a local chapter by issuing a charter certificate indicating the
establishment of the local chapter. The chapter shall acquire legal personality only for purposes
of filing a petition for certification election from the date it was issued a charter certificate.

D. Effect of Inclusion as Members of Employees Outside the Bargaining Unit. - The

inclusion as union members of employees outside the bargaining unit shall not be a ground for
the cancellation of the registration of the union. Said employees are automatically deemed
removed from the list of membership of said union."

E. Reportorial Requirements. Failure to comply with the requirements shall not be a

ground for cancellation of union registration but shall subject the erring officers or members to
suspension, expulsion from membership, or any appropriate penalty."

F. The results of the certification election in a collective bargaining unit of 1,000 employees are as follows:
(2015, 2016 Finals)

 Union 1 260 votes

 Union 2 250 votes
 Union 3 100 votes
 No Union 200 votes

a. Considering that there are no invalid votes cast, may Union 1 be declared as the winner?
Explain. (5pts)

Number of votes required to be certified as the collective bargaining agent. To be

certified as the sole and exclusive bargaining agent, the union should obtain
a majority of the valid votes cast.

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Atty. Peter Joey B. Usita

Following the rule enunciated in Article 256, in order to have a valid certification
election, majority of the 100 employees or at least 51 employees should cast their votes.
In order to win the election, a contending union should be able to garner the majority of
the valid votes cast. So, if only 51 employees cast their votes, the majority thereof or at
least 26 employees should vote for the winning union. This illustration is necessary to
dispel the notion that in a bargaining unit composed of 100 employees, at least 51
employees should vote for the winning union. As clearly shown in this illustration, a
vote of 26 would suffice in order to be certified as the sole and exclusive bargaining
agent.

No. For there to be a valid certification election, two majorities must be complied with:

1. Majority of bargaining unit must have voted; and

2. The winning union must have garnered majority of the valid votes cast.

Majority of the valid votes cast in the case at bar is 406. Union 1 only got 260 votes.
Having failed to comply with the second requirement, union 1 may not be declared as the
winner.

b. Is run-off election proper? Explain (5pts)

 YES. A “run-off election” refers to an election between the labor unions receiving the two
(2) highest number of votes in a certification election or consent election with three (3) or
more choices, where such a certification election or consent election results in none of the
three (3) or more choices receiving the majority of the valid votes cast, provided that the
total number of votes for all contending unions is at least fifty percent (50%) of the number
of votes cast.

 YES. The contending unions obtained 610 votes which exceeds one-half of the
votes cast. The run-off will be between unions 1 and 2 because they received the
two highest number of votes.

Run-off election is proper if the 5 concurrent conditions exists, namely:

1. A valid election took place because majority of the CBU members voted.
2. The election presented at least three choices.
3. Not one of the unions obtained the majority of the valid votes.
4. The total number of votes for all the unions is at least 50% of the votes cast.
5. There is no unresolved challenges of voter or election protest.

All these conditions are present in the case at bar.

G. A group of employees in NOPQ Factory belonging to a religious sect, in conformity with the teachings
and dictates of their religion, refused to join the labor union of the factory. The labor union was able to
negotiate a substantial wage increase in its CBA with the management. A provision therein stated that
the wage increase would be paid to the members of the union only in view of the “closed shop” union
security clause in the new agreement. The members of the sect protested and demanded that the wage
increase be extended to them. The officers of the union countered by demanding their dismissal from
the company pursuant to the closed-shop provision in the just-concluded CBA. (2015, 2016 Finals)

a. Is the CBA provision valid? (5pts)

Respondent union in Philippine Diamond Hotel and Resort, Inc. [Manila Diamond
Hotel] v. Manila Diamond Hotel Employees Union, insists that it could validly bargain
in behalf of “its members” only. The Supreme Court, however, ruled that the same

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Atty. Peter Joey B. Usita

would only “fragment the employees” of petitioner. What respondent union will be
achieving is to divide the employees, more particularly, the rank-and-file employees of
petitioner hotel. The other workers who are not members are at a serious
disadvantage, because if the same shall be allowed, employees who are non- union
members will be economically impaired and will not be able to negotiate their terms and
conditions of work, thus defeating the very essence and reason of collective bargaining
which is an effective safeguard against the evil schemes of employers in terms and
conditions of work. Petitioner‟ s refusal to bargain then with respondent cannot be
considered an unfair labor practice to justify the staging of the strike.
YES. In a closed-shop agreement, only member of the union can be hired by the
company and they must remain as union members to retain employment in the
company. In view of the close-shop agreement, the provision on wage increase was not
discriminatory as it was intended to cover all the employees of the NOPQ Factory.

b. Should the company comply with the union’s demand of terminating the services of the
members of the religious sect? (5pts)
 NO. Although close-shop agreement is valid, employees belonging to any religious sect
which prohibit affiliation of their members with any labor organization are not covered
by such agreement. The free exercise of religious belief is superior to contract rights.

True or False. Explain your answer briefly (3 pts each)

1. Deeds of release, waivers and quitclaims are ALWAYS valid and binding. (2013, 2014)

 The requisites of a valid quitclaim are:

1. A fixed amount a full and final compromise settlement

2. The benefits of the employees if possible with the corresponding amounts, which the
employees are giving up in consideration of the fixed compromise amount

3. A statement that the employer has clearly explained to the employees in English, Filipino or
in the dialect known to the employees and the by signing the waiver or quitclaim, they are
forfeiting or relinquishing their right to receive the benefits which are due them under the
law, and

4. A statement that the employees signed and executed the document voluntarily, and had fully
understood the contents of the document and that their consent was freely given without any
threat, violence, intimidation or undue influence exerted on their person.

 FALSE. The requisites for a valid quitclaim are: 1) the employees executes the deed of quitclaims
voluntarily; 2) that there was no fraud or deceit on the part of any of the parties; 3) that the
consideration for the quitclaim is credible and reasonable; and 4) that the contract is not contrary to
law, public order, public policy, morals or good customs or prejudicial to a third person with a right
recognized by law. If the deed of release, waivers and quitclaims did not comply with the requisites,
it is not valid.

2. When there is a bargaining deadlock, a notice of strike may be filed by any LLO in the employer’s
business. (2013, 2014, 2015)

 FALSE. In case of a bargaining deadlock, only a certified or duly recognized bargaining

representative may file a notice of strike.

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Atty. Peter Joey B. Usita

3. The substitutionary doctrine prohibits a new CBA from repudiating an existing CBA. (2013, 2014)

 TRUE. The existing CBA (in full force and effect) must be honored by the new exclusive
bargaining representative because of the policy of the stability in labor relations between an
employer and the workers.

 TRUE. The employees cannot revoke the validly constituted collective bargaining contract with
their employer by the mere expedient of changing their bargaining agent. The new agent must
respect the contract. The new agent may, however, bargain for the shortening of said expiration
date.

4. When the employer or his representative hurls serious insult to the honor or person of the employee,
the law says that the employee may leave work at any time and file for constructive dismissal. (2013,
2016)

 TRUE. Constructive dismissal contemplates any of the following situations:

1) An involuntary resignation resorted to when continued employment is rendered

impossible, unreasonable or unlikely;
2) A demotion in rank and/or a diminution in pay; or
3) A clear discrimination, insensibility or disdain by an employer which becomes
unbearable to the employee that it could foreclose any choice by him except to forego his
continued employment.

 INVOLUNTARY RESIGNATION. The termination initiated by the employee based on the

just causes described and enumerated in LC 285 is in the nature of involuntary resignation.
“Thus, an employee may put an end to the employment relationship without need of 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; …” Thus, unlike
resignation without just cause under the same Article 285 where the law requires
prior written notice, the employee may terminate his employment without
serving any notice to the employer if such is occasioned by any of the just causes
mentioned above.

5. The voluntary arbitrator’s jurisdiction is limited to interpretation and implementation of CBAs and
company personnel policies. (2013,2014, 2015, LabRev2016)

 FALSE. Although the Art. 224 of the Labor Code speaks of exclusive and original jurisdiction of
the labor arbiter, the cases enumerated therein may still be submitted to a voluntary arbitrator
by agreement of the parties. In fact, the law prefers voluntary over compulsory arbitration.

6. If the is a “no strike, no lockout clause” in a CBA, no strike can be validly declared and staged during the
effectivity of the CBA. (2013,2015)

 FALSE. A strike based based on ULP is valid. A “No Strike, No Lockout” clause in the
CBA is an expression of the firm commitment of the parties thereto that, on the part of the
union, it will not mount a strike during the effectivity of the CBA, and on the part of the
employer, that it will not stage a lockout during the lifetime thereof. It has heretofore been held
that a “No Strike, No Lockout” provision in the CBA is a valid stipulation although the clause
may be invoked by an employer only when the strike is economic in nature or one
which is conducted to force wage or other concessions from the employer that are
not mandated to be granted by the law itself. It does not bar strikes grounded on unfair
labor practices.

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Atty. Peter Joey B. Usita

7. The SOLE may, based in his sound discretion, certify to the NLRC for compulsory arbitration. (2013,
2014, LabRev2016)

 TRUE. When there exists a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the Secretary of Labor may certify the dispute to
the NLRC. This power of certification is in the nature of police power measure.

8. Collective bargaining deadlock is one of the grounds for valid strike. There is a bargaining deadlock
when, despite negotiating in good faith, the parties do not agree regarding a specific issue or subject
matter. (2013, 2016)

 TRUE. The law recognizes only two (2) grounds in support of a valid strike:
1. Collective bargaining deadlock (Economic Strike); and/or
2. Unfair labor practice (Political Strike).
A strike not based on any of these two grounds is illegal

 “Collective bargaining deadlock” refers to a situation where there is a failure in the collective
bargaining negotiations between the collective bargaining agent and the employer resulting in
an impasse or stalemate. Despite their efforts at bargaining in good faith, the parties have failed
to resolve the issues and it appears that there are no other definite options or plans in sight to
break it. Simply stated, there is a deadlock when there is a complete blocking or
stoppage in the negotiation resulting from the action of equal and opposing
forces.

9. A runaway shop is an act constituting ULP. (2013, 2014, LabRev2016)

 FALSE. A runaway shop is not automatically ULP. If it is motivated by anti-union

animus, it is ULP. A “runaway shop” is a form of discriminatory act of the employer.
Technically, it is defined as an industrial plant moved by its owners from one location to
another to escape union labor regulations or state laws. The term is also used to describe a plant
moved to a new location in order to discriminate against employees at the old plant because of
their union activities.A “runaway shop”in this sense is a relocation motivated by anti-union
animus rather than for legitimate business reasons.

 TRUE. Runaway shop is an ULP practice of management which usually takes place by effecting
the transfer of ownership, the plant itself, or its equipment, or by temporarily closing its
business purposely to bust the union or to evade the payment of legitimate obligations.

10. The employer must observe both substantive and procedural due process when dismissing an employee
based on a just cause. If procedural due process is not observed, the dismissal will be regarded as an
abuse of employer’s discretion which renders the dismissal ineffectual. (2013, 2014, 2016)

 Dismissal of employees requires the observance of the two-fold due process requisites,
namely:
1. Substantive aspect which means that the dismissal must be for any of the (1) just
causes provided under Article 282 of the Labor Code or the company rules and regulations
promulgated by the employer; or (2) authorized causes under Articles 283 and 284 thereof;
and

2. Procedural aspect which means that the employee must be accorded due process, the
elements of which are notice and the opportunity to be heard and to defend himself.

 FALSE. When dismissal is for a just cause but due process is not observed, the dismissal should
be upheld. However, the employer is liable for indemnity in the form of nominal damages for
non-compliance with the procedural requirements of due process.

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11. In the absence of a retirement plan or agreement providing for retirement benefits of the employees in
the establishment, a retiring employee is entitled to retirement pay equivalent to 15days of his salary for
every year of service. (2015, 2016)

 Under RA 7641, a retiree is entitled to a retirement pay equivalent to at least ½ month salary for
every one year of service, a fraction of at least 6 months being considered as one whole year.

 FALSE. Art 302 par. 3 of the Labor Code provides, “In the absence of retirement plan or
agreement providing for retirement benefits of employees in the establishment, an employee
upon reaching the age of 60 years or more, but not beyond 65 years which is hereby declared the
compulsory retirement age, who has served at least 5 years in the said establishment, may retire
and shall be entitled to retirement pay equivalent to at least ½ month salary for every year of
service, a fraction of at last 6 months being considered as one whole year.”

12. An employee who has repeatedly incurred two absences monthly for the past 12 months may be
dismissed from employment. (2015, 2016)

 FALSE. In order to constitute a just cause for the employee’s dismissal, the neglect of duties
must not only be habitual but also gross. Gross neglect means an absence of that diligence than
an ordinary prudent man would use in his own affairs. While the employee’s absences may be
habitual, it is not gross.

13. An exclusive bargaining representative always enjoys the majority support of the CBU members.
(LabRev2016)

 Under Article 255 of the Labor Code, it is clear that only the labor organization duly
recognized or selected by the majority of the employees in an appropriate collective
bargaining unit is the exclusive representative of all the employees in such unit for purposes of
collective bargaining.

14. In the absence of a certified exclusive bargaining representative, the employer cannot be legally
compelled to bargain collectively with its employees. (LabRev2016)

15. Interference with the employees’ exercise of their right to self-organization is an ULP. (LabRev2016)

 TRUE. The act complained of as ULP must have a proximate and causal connection with the
exercise of the right to self-organization. Sans this connection, the unfair acts do not fall within
the technical signification of the term “unfair labor practice”.

16. The legality of a strike is not substantially affected by the conversion of a “Notice of Strike” to a “Notice
of Preventive Mediation” by the NCMB. (LabRev2016)

17. The employer is always required to inform the probationary employee of the nature of his employment
(LabRev2015)

 Employment is deemed regular if the employment contract has no stipulation on probationary

period.
 Employee is deemed regular absent any contract to prove probationary employment.
 Repetitive rehiring of a probationary employee means he has become a regular employee.

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18. Probationary employment should not exceed 6months otherwise, the probationary employee
automatically becomes a regular employee. (LabRev2015)

 As a general rule, it should not exceed six (6) months from the date the employee started
working. One becomes a regular employee upon completion of his six-month period of
probation.

 EXCEPTIONS. The 6-month period provided in Article 281 admits of certain exceptions such
as:

1. When the employer and the employee agree on a shorter or longer period;
2. When the nature of work to be performed by the employee requires a longer period;
3. When a longer period is required and established by company policy.
If not one of the exceptional circumstances above is proven, the employee whose employment
exceeds six (6) months is undoubtedly a regular employee.

19. An employee may be both a regular and a project employee at the same time. (LabRev2015)

 FALSE. Failure to present contract of project employment means that employees are regular.
Regular employment is inconsistent with project employment. In other words, a regular
employee cannot be at the same time a project employee

20. Abandonment of work/employment is not a valid defense if the the employee immediately files a
complaint for illegal dismissal. (LabRev2015)

 Immediate filing of a complaint for illegal dismissal praying for reinstatement negates
abandonment.

21. Payment of separation pay is always required when an employee is dismissed due to an authorized
clause. (LabRev2015)

 TRUE. Separation pay is an employer’s statutory obligation in cases of legal termination due to
authorized causes.

22. The “twin-notice rule” must always be observed prior to the dismissal of an employee. (LabRev2015)

 In just cause termination, the twin-notice requirement applies.

23. Separation pay not be awarded if an employee is dismissed based on a just cause (LabRev2015)

 TRUE. The law does not provide for the employer’s obligation to award separation pay in case
of dismissal due to just cause/

24. In all cases, the compulsory retirement age of employees is 65 y/o. (LabRev2015)

 FALSE. The retirement age is primarily determined by the existing retirement plan or
agreement providing for retirement benefits. Absent this agreement, the retirement is fixed by
law.

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LABOR RELATIONS –Final Exams

Atty. Peter Joey B. Usita

Assume that you are now a full-fledged lawyer. Your first would-be clients come to your office
and consult you on the following legal matters. Discuss briefly and completely what you would
tell them (5pts each) (2013, 2014, LabRev2016)

1. How a LLO becomes an exclusive bargaining agent.

 A legitimate labor organization may become an exclusive bargaining agent either by certification
election, request for sole and exclusive bargaining agent (SEBA) certification, and consent
election.

2. How to legally and validly retrench employees

 For a valid retrenchment, the following requisites must be complied with:

(a) the retrenchment is necessary to prevent losses and such losses are proven;
(b) written notice to the employees and to the DOLE at least one month prior to the
intended date of retrenchment; and
(c) payment of separation pay equivalent to one-month pay or at least onehalf month pay
for every year of service, whichever is higher.

 Jurisprudential standards for the losses which may justify retrenchment are:
1) The losses expected should be substantial and not merely de minimis in extent. If the
loss purportedly sought to be forestalled by retrenchment is clearly shown to be
insubstantial and inconsequential in character, the bonafide nature of the retrenchment
would appear to be seriously in question.
2) The substantial loss apprehended must be reasonably imminent, as such imminence can
be perceived objectively and in good faith by the employer; x x x
3) be reasonably necessary and likely to effectively prevent the expected losses; x x x
4) , x x x. alleged losses if already realized, and the expected imminent losses sought to be
forestalled, must be proved by sufficient and convincing evidence. The reason for
requiring this quantum of proof is readily apparent: any less exacting standard of proof
would render too easy the abuse of this ground for termination of services of employees.
(Manatad v. Philippine Telegraph and Telephone Corp., G.R. No. 172363, March 7,
2008).
 An employer may retrench employees by serving a written notice on the workers and the
appropriate Regional Office of DOLE at least 30 days before the effectivity of the termination,
specifying the ground or grounds for termination.
A separation pay equivalent to 1 month pay or at least ½ month pay for every year of service,
whichever is higher, must also be given to the employee.

3. The kinds of separation pay based on law and jurisprudence

 Separation pay is viewed in four ways or contexts: (???)

1. As the employer’s statutory obligation in cases of legal termination due to

authorized causes
2. As financial assistance, act of social justice
3. In lieu of reinstatement in illegal dismissal cases
4. Employment benefit granted in a CBA or company policy

4. When does a CBA take effect?

 It depends.
If the CBA is the first in the bargaining unit, it takes effect on the day agreed upon by the parties.

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LABOR RELATIONS –Final Exams

Atty. Peter Joey B. Usita

If the CBA is a renegotiated CBA and renegotiation was finished and new CBA is concluded 6
months from the date of the old one, the new CBA is subject to automatic retroaction to the day
immediately following such date of expiry.
On the other hand, if the CBA was completed beyond 6 months, the new CBA will retroact
according to the agreement of the parties.

5. The original and exclusive jurisdiction of the Labor Arbiters

 1. Under Article 217 of the Labor Code:

(a) Unfair labor practice cases;
(b) Termination disputes;
(c) If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
(d) Claims for actual, moral, exemplary and other forms of damages arising from
employer- employee relations;
(e) Cases arising from any violation of Article 279 [264] of the Labor Code, as amended,
including questions involving the legality of strikes and lockouts;
(f) Except claims for employees compensation, social security, Philhealth (Medicare) and
maternity benefits, all other claims arising from employer-employee relations, including
those of persons in domestic or household service, involving an amount exceeding Five
Thousand Pesos (P5,000.00) , whether or not accompanied with a claim for
reinstatement.
 2. Under Article 124 of the Labor Code, as amended by R.A. No. 6727: Disputes involving legislated
wage increases and wage distortion in unorganized establishments not voluntarily settled by the
parties pursuant to R.A. No. 6727.

 3. Under Article 128(b) of the Labor Code, as amended by R.A. No. 7730: Contested cases under the
exception clause in Article 128(b) of the Labor Code.

 4. Under Article 227 of the Labor Code: Enforcement of compromise agreements when there is
non-compliance by any of the parties thereto, pursuant to Article 227 of the Labor Code.

 5. Under Article 262-A of the Labor Code: Issuance of writ of execution to enforce decisions of
Voluntary Arbitrators or panel of Voluntary Arbitrators, in case of their absence or incapacity, for
any reason.

 6. Under Section 10 of R.A. No. 8042, as amended by R.A. No. 10022: Money claims arising out of
employer-employee relationship or by virtue of any law or contract, involving Filipino workers for
overseas deployment, including claims death and disability benefits and for actual, moral,
exemplary and other forms of damages as provided by R.A. No. 8042, as amended.

 7. Other cases as may be provided by law. All the foregoing shall be discussed hereunder seriatim.

 Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations;
 Unfair labor cases;
 If accompanied with a claim for reinstatement, those that workers file involving wages, rates of pay,
hours of work and other terms and conditions of employment;
 Wage distortion disputes in unorganized establishments not voluntarily settled by the parties;
 Monetary claims of overseas contract workers arising from employer-employee relations;
 Cases arising from any violation of Art. 278 including questions involving the legality of strikes and
lockouts;
 Except claims for employment compensation, social security, philhealth, and maternity benefits, all
other claims arising from employer-employee relations, including those of persons in domestic or

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LABOR RELATIONS –Final Exams

Atty. Peter Joey B. Usita

household service, involving an amount exceeding P5,000 regardless of whether accompanied with
a claim for reinstatement;
 Termination disputes;
 Cases under the visitorial and enforcement powers of the DOLE Secretary;
 Enforcement of compromise agreements when there is non-compliance by any of the parties
 Other cases as may be provided by law.

Define/explain briefly and accurately the following: (3pts each) (2013, 2014)

1. Labor dispute

 Includes any controversy or matter concerning the terms and conditions of employment or the
association or representation of persons in negotiating, fixing, maintaining, changing or
arranging the terms and conditions of employment, regardless of whether the disputants stand
in the proximate relation of employer and employee.

2. Duty to bargain collectively

 The duty to bargain collectively means the performance of a mutual obligation to meet and
convene promptly and expeditiously, in good faith for the purpose of negotiating an agreement
with respect to wages, hours of work and all other terms and conditions of employment
including proposals for suggesting any grievances or questions arising under such agreement
and executing a contract incorporating such agreements if requested by either party but such
duty does not compel any party to agree to a proposal or to make any concession.
 When there is a collective bargaining agreement, the duty bargain collectively shall also mean
that neither party shall terminate nor modify such agreement during its lifetime.

3. Economic strike

 One staged by workers to force wage or other economic concessions from the employer which he
is not required by law to grant.

4. Constructive dismissal

 Constructive dismissal is an involuntary resignation resulting in cessation of work resorted to

when continued employment becomes impossible, unreasonable or unlikely; when there is a
demotion in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain
by an employer becomes unbearable to an employee.

5. Globe doctrine

 In defining the appropriate bargaining unit for purposes of collective bargaining, the
determining factor is the express will or the desire of the employees themselves.

6. Run-off election

 Refers to an election between the labor unions receiving the 2 highest number of votes in a
certification election or consent election with 3 or more choices, where such a certification
election or consent election results in none of the3 or more choices receiving the majority of the
valid votes cast, provided that the total number of votes for all contending unions is at least 50%
of the number of votes cast.

Enumerate the following: (LabRev2015)

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LABOR RELATIONS –Final Exams

Atty. Peter Joey B. Usita

1. The authorized causes for dismissal of employees (5pts)

 Under the Labor Code, authorized causes are classified into two (2) classes, namely:

(1) Business-related causes. - Referring to the grounds specifically mentioned in Article 283,
to wit:
a. Installation of labor-saving device;
b. Redundancy;
c. Retrenchment;
d. Closure or cessation of business operations NOT due to serious business losses or
financial reverses; and
e. Closure or cessation of business operations due to serious business losses and financial
reverses.
(2) Health-related causes. - Referring to disease covered by Article 284 of the Labor Code.

2. 5 instances when separation pay in lieu of reinstatement may be awarded (5pts)

 It is now well-settled that separation pay in lieu of reinstatement should be awarded in the
following situations:

(1) Where the continued relationship between the employer and the employee is no longer viable
due to the strained relations and antagonism between them (Doctrine of Strained Relations)

(2) When reinstatement proves impossible, impracticable, not feasible or unwarranted for varied
reasons and thus hardly in the best interest of the parties

(3) Where the employee decides not to be reinstated as when he does not pray for
reinstatement in his complaint or position paper but asked for separation pay instead.

(4) When reinstatement is rendered moot and academic due to supervening events, such as: (a)
Death of the illegally dismissed employee. (b) Declaration of insolvency of the employer by the
court. (c) Fire which gutted the employer‟ s establishment and resulted in its total destruction. (d)
In case the establishment where the employee is to be reinstated has closed or ceased operations.

(5) To prevent further delay in the execution of the decision to the prejudice of private respondent.

(6) Other circumstances59 such as (a) when reinstatement is inimical to the employer‟ s
interest;60 (b) reinstatement does not serve the best interests of the parties involved;61 (c) the
employer is prejudiced by the workers‟ continued employment;62 or (d) that it will not serve any
prudent purpose as when supervening facts transpired which made execution unjust or
inequitable.

3. The jurisdictional preconditions for collective bargaining (5pts)

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LABOR RELATIONS –Final Exams

Atty. Peter Joey B. Usita

Distinguish (do not define) between: (4pts each)

1. Contract Bar Rule and Deadlock Bar Rule (2015)

 Under the contract bar rule, a petition for certification election may not be entertained when a
bargaining deadlock to which an incumbent or certified bargaining agent is a party has been
submitted to conciliation or arbitration or has become the subject of a valid notice of strike or
lockout.
 Under this rule, a petition for certification election may not be filed when a CBA between the
employer and a duly recognized or certified bargaining agent has been registered with the
Bureau of Labor Relations (BLR) in accordance with the Labor Code. Where the CBA is duly
registered, a petition for certification election may be filed only within the 60-day freedom
period prior to its expiry. The purpose of this rule is to ensure stability in the relationship of the
workers and the employer by preventing frequent modifications of any CBA earlier entered into
by them in good faith and for the stipulated original period.

2. Just Cause and Authorized Cause for dismissal of employees (2015, LabRev2016)

 A dismissal based on a just cause means that the employee has committed a wrongful act or
omission; while a dismissal based on an authorized cause means that there exists a ground
which the law itself allows or authorizes to be invoked to justify the termination of an employee
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.

3. Surface Bargaining and Blue Sky Bargaining (2015)

 Surface bargaining is going through the motions of negotiating without any legal intent to reach
an agreement while blue-sky bargaining means exaggerated or unreasonable proposals. the
former may be only be committed by the employer, while the latter may only be committed by
the bargaining union.

4. Regular and Casual employment (2015)

 Regular employees referring to those who have been “engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer”
 Casual employees are those that the work or job for which he was hired is merely incidental to
the principal business of the employer and such work or job is for a definite period made known
to the employee at the time of engagement

5. Actual and Constructive dismissal (2015)

 Actual dismissal is the termination of employment by the employer
 While there is constructive dismissal when a reasonable person in the employee’s position
would have felt compelled to give up his position under the circumstances. It is an act
amounting to dismissal but made to appear as if it were not. In fact, the employee who is
constructively dismissed may be allowed to keep on coming to work.

6. Compulsory Arbitration and Voluntary Arbitration (LabRev2016)

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