PART I

A.1.

Define, explain or distinguish the following terms:

(a) Just and authorized causes (2%)

A dismissal for just cause implies that the employee concerned

has committed, or is guilty of, some violation against the
employer, i.e. the employee has committed some serious
misconduct, is guilty of some fraud against the employer, or, he
has neglected his duties. Thus, it can be said that the employee
himself initiated the dismissal process.

On another breath, a dismissal for an authorized cause does not

necessarily imply delinquency or culpability on the part of the
employee. Instead, the dismissal process is initiated by the
employer’s exercise of his management prerogative, i.e. when the
employer opts to install labor saving devices, when he decides to
cease business operations or when, as in this case, he undertakes
to implement a retrenchment program.

Accordingly, it is wise to hold that: (1) if the dismissal is based on

a just cause but the employer failed to comply with the notice
requirement, the sanction to be imposed upon him should be
tempered because the dismissal process was, in effect, initiated
by an act imputable to the employee; and (2) if the dismissal is
based on an authorized cause but the employer failed to comply
with the notice requirement, the sanction should be stiffer
because the dismissal process was initiated by the employer’s
exercise of his management prerogative.

(b) Seasonal and project employees (2%)

Seasonal employment involves work or service that is seasonal in

nature or lasting for the duration of the season. While, a project
employment contemplates on arrangement whereby “the
employment has been fixed for a specific project or undertaking
whose completion or termination has been determined at the
time of the engagement of the employee”.

As with seasonal employment, to exclude the asserted “seasonal”

employee from those classified as regular employees, the
employer must show that: (1) the employee must be performing
work or services that are seasonal in nature; and (2) he had been
employed for the duration of the season. In project employment,
two requirements need to be satisfied to remove the engagement
from the presumption of regularity of employment, namely: (1)
designation of a specific project or undertaking for which the
employee is hired; and (2) clear determination of the completion
or termination of the project at the time of the employee’s
engagement.
(c) Strikes and lockouts (2%)

“Strike” means any temporary stoppage of work by the concerted

action of employees as a result of an industrial or labor dispute,
while “Lockout” means any temporary refusal of an employer to
furnish work as a result of an industrial or labor dispute.

(d) Bona fide occupational qualifications (2%)

Bona fide occupational qualifications (BFOQ) are employment

qualifications that employers are allowed to consider while
making decisions about hiring and retention of employees. The
qualification should relate to an essential job duty and is
considered necessary for operation of the particular business.

This test was discussed by the High Court in Star Paper

Corporation v. Simbol, G.R. No. 164774, April 12, 2006, as follows:
We note that since the finding of a bona fide occupational
qualification justifies an employer’s no-spouse rule, the exception
is interpreted strictly and narrowly by these state courts. There
must be a compelling business necessity for which no alternative
exists other than the discriminatory practice. To justify a bona fide
occupational qualification, the employer must prove two factors:
(1) that the employment qualification is reasonably related to the
essential operation of the job involved; and, (2) that there is a
factual basis for believing that all or substantially all persons
meeting the qualification would be unable to properly perform the
duties of the job.

(e) Grievance machinery (2%)

Grievance machinery is a machinery for the adjustment and

resolution of grievances arising from the interpretation or
implementation of their Collective Bargaining Agreement and
those arising from the interpretation or enforcement of company
personnel policies. (Article 273 [260], Labor Code)

A.2.

X is a member of the Social Security System (SSS). In 2015, he

died without any spouse or children. Prior to the semester of his
death, X had paid 36 monthly contributions. His mother, M, who
had previously been receiving regular support from X, filed a
claim for the latter’s death benefits.

(a) Is M entitled to claim death benefits from the SSS? Explain.

(2.5%)

Yes, M is entitled to claim the death benefits. According to Section

8 (k) of the SSS Law (RA 8282) in the absence of the dependent
spouse and children, the dependent parents shall be the
secondary beneficiaries of the member. In this case X died
without any spouse or children, his mother M can therefore claim
the death benefits.

(b) Assuming that X got married to his girlfriend a few days before
his death, is M entitled to claim death benefits from the SSS?
Explain. (2.5%)

No, M is not entitled to claim death benefits of X. According to

Section 8 (k) of the SSS Law (RA 8282) one of the primary
beneficiaries is the dependent spouse, while dependent parents
are only secondary beneficiaries of the member. M is only entitled
in the absence of primary beneficiaries such as the dependent
spouse and children. On the assumption that X got married to his
girlfriend a few days before his death, M is not entitled to claim
her son’s death benefits from the SSS.

A.3.

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 relationship? (2%)

In Royale Homes Marketing Corporation v. Alcantara, G. R. No.

195190, July 28, 2014, it was held: Among the four, the most
determinative factor in ascertaining the existence of employer-
employee relationship is the "right of control test". "It is deemed
to be such an important factor that the other requisites may even
be disregarded." (Sandigan Savings and Loan Bank, Inc. v.
National Labor Relations Commission, 324 Phil. 348, 358 [1996])
This holds true where the issues to be resolved is whether a
person who performs work for another is the latter’s employee or
is an independent contractor, (Cosmopolitan Funeral Homes, Inc.
v. Maalat, G.R. No. 86693, July 2, 1990, 187 SCRA 108, 112) as in
this case. For where the person for whom the services are
performed reserves the right to control not only the end to be
achieved, but also the means by which such end is reached,
employer-employee relationship is deemed to exist.
(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%)

No, Medical Director’s reliance on the contracts is not correct. In

Calamba Medical Center, Inc. v. NLRC, G.R. No. 176484,
November 25, 2008, applying the “control test”, the Supreme
Court ruled that an employment relationship exists between a
physician and a hospital if the hospital controls both the means
and the details of the process by which the physician is to
accomplish his task. (Nogales v. Capitol Medical Center, G.R. No.
142625, December 19, 2006, 511 SCRA 204, 221 citing Diggs v.
Novant Health, Inc., 628 S.E.2d 851 [2006]).

In this case, the element of control is very clear in the given facts.
This is because the resident-doctors in the course of their
engagement maintained specific work schedules as determined
by the Medical Director and 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.

A.4.

Mrs. B, the personal cook in the household of X, filed a monetary

claim against her employer, X, for denying her service incentive
leave pay. X argued that Mrs. B did not avail of any service
incentive leave at the end of her one (1) year of service and
hence, not entitled to the said monetary claim.

(a) Is the contention of X tenable? Explain. (2.5%)

Yes, X’s contention is tenable. While under Kasambahay Law (RA

10361) A domestic worker who has rendered at least one (1) year
of service shall be entitled to an annual service incentive leave of
five (5) days with pay any unused portion of said annual leave
shall not be cumulative or carried over to the succeeding years.
Unused leaves shall not be convertible to cash. (Section 29,
Article IV, Republic Act No. 10361)

(b) Assuming that Mrs. B is instead a clerk in X’s company with at

least 30 regular employees, will her monetary claim prosper?
Explain. (2.5%)

Yes, Mrs. B monetary claim will prosper. The Rules to Implement

the Labor Code is very clear that the service incentive leave shall
be commutable to its money equivalent if not used or exhausted
at the end of the year. This is the distinction with respect to the
service incentive leave of a domestic worker under RA 10361.

A.5.

Ms. F, a sales assistant, is one of the eight (8) workers regularly

employed by ABC Convenience Store. She was required to report
on December 25 and 30. Should ABC Convenience Store pay her
holiday pay? Explain. (2.5%)

ABC Convenience Store is excluded from paying F her holiday pay.

Under the Rules to Implement the Labor Code the retail and
service establishments regularly employing less than ten (10)
workers is excluded from the coverage of holidays with pay.
(Section 1, Rule IV, Book III, Rules to Implement the Labor Code)

A.6.

D, one of the sales representatives of OP, Inc., was receiving a

basic pay of P50, 000.00 a month, plus a 1% overriding
commission on his actual sales transactions. In addition,
beginning three (3) months ago, or in August 2019, D was able to
receive a monthly gas and transportation allowance of P5, 000.00
despite the lack of any company policy therefor.

In November 2019, D approached his manager and asked for his

gas and transportation allowance for the month. The manager
declined his request, saying that the company had decided to
discontinue the aforementioned allowance considering the
increased costs of its overhead expenses. In response, D argued
that OP, Inc.’s removal of the gas and transportation allowance
amounted to a violation of the rule on non-diminution of benefits.
Is the argument of D tenable? Explain. (2.5%)

The argument of D is not tenable. The case of Wesleyan

University-Philippines v. Wesleyan University-Philippines Faculty
and Staff Association, G.R. No. 181806, March 12, 2014, laid down
the rule as to when to apply the Non-Diminution Rule. This rule,
however, applies only if the benefit is based on an express policy,
a written contract, or has ripened into a practice. (Central
Azucarera De Tarlac v. Central Azucarera De Tarlac Labor Union-
NLU, G.R. No. 188949, July 26, 2010, 625 SCRA 622, 630-631)
While in as held in Vergara, Jr. v. Coca-Cola Bottlers Philippines,
Inc., G.R. No. 176985, April 1, 2013, “To be considered as a
regular company practice, the employee must prove by
substantial evidence that the giving of the benefit is done over a
long period of time, and that it has been made consistently and
deliberately.”

In the given facts, it was clearly stated the absence of company

policy. Moreover, the grant of the subject gas and transportation
is not a regular company practice in the absence of substantial
evidence that the giving of the subject benefit is done over a long
period of time, and that it has been made consistently and
deliberately.
Applying the above decision, the discontinuance is not a violation
of non-diminution rule.

A.7.

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 owned 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%)

Q Manpower Co. is a labor-only contractor. In Valencia v.

Classique Vinyl products Corporation, G. R. No. 206390, January
30, 2017, it was ruled that generally, the presumption is that the
contractor is a labor-only contractor unless such contractor
overcomes the burden of proving that it has the substantial
capital, investment, tools and the like. W Gas Corp. and Q
Manpower Co. failed to overcome this presumption.

(b) Will Mr. R’s complaint for illegal dismissal against W Gas Corp.
prosper? Explain. (2.5%)

Yes, Mr. R’s complaint for illegal dismissal against W Gas Corp. will
prosper. In this case, since the arrangement between W Gas Corp.
and Q Manpower Co. is labor-only contracting due to their failure
to overcome the presumption the latter shall be considered
merely as an agent of the former who shall be responsible to the
workers in the same manner and extent as if the latter were
directly employed by him. The liability of W Gas Corp. for illegal
dismissal is based on Article 109 of the Labor Code which say that
every employer shall be held responsible with his contractor or
subcontractor for any violation of any provision of this Code.

A.8.

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 filed
against her.

(a) What is the difference between resignation and constructive

dismissal? (2%)

In Doble, Jr. v. ABB, Inc. G.R. No. 215627, June 5, 2017 it was
ruled: The concepts of constructive dismissal and resignation are
discussed in Gan v. Galderma Philippines, Inc.,701 Phil. 612
(2013) thus:

To begin with, constructive dismissal is defined as quitting or

cessation of work because continued employment is rendered
impossible, unreasonable or unlikely; when there is a demotion in
rank or a diminution of pay and other benefits. It exists if an act of
clear discrimination, insensibility, or disdain by an employer
becomes so unbearable on the part of the employee that it could
foreclose any choice by him except to forego his continued
employment. There is involuntary resignation due to the harsh,
hostile, and unfavorable conditions set by the employer. The test
of constructive dismissal is whether a reasonable person in the
employee’s position would have felt compelled to give up his
employment/position under the circumstances.

On the other hand, “resignation is the voluntary act of an

employee who is in a situation where one believes that personal
reasons cannot be sacrificed in favor of the exigency of the
service, and one has no other choice but to dissociate oneself
from employment. It is a formal pronouncement or relinquishment
of an office, with the intention of relinquishing the office
accompanied by the act of relinquishment. As the intent to
relinquish must concur with the overt act of relinquishment, the
acts of the employee before and after the alleged resignation
must be considered in determining whether he or she, in fact,
intended to sever his or her employment.”

(b)Will Ms. T’s claim for constructive dismissal prosper? Explain.

Ms. T’s claim for constructive dismissal will not prosper. It is

settled that there is nothing reprehensible or illegal when the
employer grants the employee a chance to resign and save face
rather than smear the latter's employment record, as in this case.

The facts belie Ms. T’s argument that her employer constructively
dismissed her. These circumstances show that she was given the
option to voluntarily resign from the company instead of dealing
with an investigation which might result in her dismissal. Verily,
the manager’s decision to give Ms. T a graceful exit rather than to
file an action for redress is perfectly within the discretion of the
former; as it is not uncommon that an employee is permitted to
resign to avoid the humiliation and embarrassment of being
terminated for just cause after the exposure of her malfeasance.

In sum, the company did not constructively dismiss Ms. T; but

rather, the latter voluntarily resigned from her job in order to
avoid a full-blown administrative trial regarding her misdeeds
which could potentially result in her termination for just cause.
While it may be said that she did not tender her resignation
wholeheartedly, circumstances of her own making did not give
her any other option but to voluntarily do so.

The foregoing is based on the ponencia of Justice Perlas Bernabe

in Central Azucarera de Bais, Inc. v. Siason, G.R. No. 215555, July
29, 2015.

A.9.
After due proceedings, the Labor Arbiter (LA) declared Mr. K to
have been illegally dismissed by his former employer, ABC, 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%)

Yes, ABC Inc.’s contention is correct. It is a established doctrinal

rule that even in cases of illegal dismissal, the doctrine of strained
relations is not applied indiscriminately as to bar reinstatement,
especially when the employee has not indicated an aversion to
returning to work (Coca-Cola Bottlers Phils., Inc. v. Daniel, G.R. No.
156893, June 21, 2005) or does not occupy a position of trust and
confidence in (Globe-Mackay Cable and Radio Corporation v.
NLRC, G.R. No. 82511, 3 March 1992, 206 SCRA 701, 712) or has
no say in the operation of the employer’s business (Abalos v.
Philex Mining Corporation, G.R. No. 140374, November 27, 2002).
Although litigation may also engender a certain degree of
hostility, it has likewise been ruled that the understandable strain
in the parties’ relations would not necessarily rule out
reinstatement which would, otherwise, become the rule rather
than the exception in illegal dismissal cases (Procter and Gamble
Philippines v. Bondesto, G.R. No. 139847, March 5, 2004.

(b)Assuming that on appeal, the National Labor Relations

Commission (NLRC) upholds the decision of the LA, where, how,
and within what time frame should ABC, Inc. assail the NLRC
ruling? (2%)

The decision of the NLRC can be assailed to the Court of Appeals

by petition for certiorari under Rule 65 of the Rules of Court and
within sixty (60) days from receipt of the resolution denying the
motion for reconsideration.

A.10.

For purposes of prescription, within what periods from the time

the cause of action accrued should the following cases be filed:

(a) Money claims arising from employer-employee relations (1%)

All money claims and benefits arising from employer relations

shall be filed within three (3) years from the time the cause of
action accrued; otherwise, they shall be forever barred. (Section
1, Rule II, Book VII, Rules to Implement the Labor Code, Article
306. [291], Labor Code)

(b) Illegal dismissal (1%)

Teekay Shipping Philippines, Inc. v. Concha, G.R. No. 185463,

February 22, 2012 ruled: In Callanta v. Carnation Philippines, Inc.,
229 Phil. 279, 288 (1986), this Court ruled that actions based on
injury to rights prescribe in four (4) years under Article 1146 of
the Civil Code rather than three (3) years as provided for the
Labor Code. An action for damages involving a plaintiff separated
from his employment for alleged unjustifiable causes is one for
injury to the rights of the plaintiff, and must be brought within
four (4) years. (Valencia v. Cebu Portland Cement, et al., 106
Phils. 732, 735 [1959])

(c) Unfair labor practice (1%)

All unfair labor practice arising from Book V shall be filed with the
appropriate agency within one (1) year from accrual of such unfair
labor practice; otherwise, they shall be forever barred. (Article
305 [290], Labor Code)

(d) Offenses under the Labor Code (1%)

Offenses penalized under this Code and the rules and regulations
issued pursuant thereto shall prescribe in three (3) years. (Article
305 [290], Labor Code)

(e) Illegal recruitment (1%)

For illegal recruitment under RA 8042, Migrant Workers and

Overseas Filipinos Act of 1995, the prescription for (simple) illegal
recruitment is five (5) years. (Section 12 of RA 8042, Migrant
Workers and Overseas Filipinos Act of 1995) And in case it
involves economic sabotage the prescription is twenty (20) years.
(Section 12 of RA 8042, Migrant Workers and Overseas Filipinos
Act of 1995) while illegal recruitment under, considered offenses
penalized under this Code and the rules and regulations issued
pursuant thereto shall prescribe in three (3) years. (Article 305
[290], Labor Code)

PART II

B.11.

Briefly discuss the powers and responsibilities of the following in

the scheme of the Labor Code:

(a) Secretary of Labor (2%)

The following are the Secretary of Labor’s powers and

responsibilities of the following in the scheme of the Labor Code:
1) Article 35: Concurrent jurisdiction to suspend
and/cancellation of license or authority to recruit;
2) Article 36: Regulatory power to restrict and regulate the
recruitment and placement activities of all agencies;
3) Article 37: Visitorial power to inspect the premises, books of
accounts and records of any person or entity under the tile of
recruitment and placement, to require the submission of reports
and act on violation of the title on recruitment and placement;
4) Article 66: Appeal of the decision of the authorized agency of
DOLE for violation of apprenticeship agreement;
5) Article 128: Visitorial and enforcement power;
6) Article 23 1: Contempt powers;
7) Article 278 (g): Assumption of jurisdiction over disputes
involving industries indispensable to national interest;
8) Article 289: Visitorial power;
9) Article 292 (b): Power to suspend the effects of termination.

(b) Bureau of Labor Relations (2%)

The Bureau of Labor Relations and the Labor Relations Divisions in

the regional offices of the Department of Labor, shall have original
and exclusive authority to act, at their own initiative or upon
request of either or both parties, on:
a) All inter-union and intra-union conflicts; and
b) All disputes, grievances or problems arising from or affecting
labor-management relations in all workplaces, whether
agricultural or non-agricultural. (Article 232 [226], Labor Code)

The jurisdiction of the Bureau of Labor Relations, in so far as

inter/intra union and registration related cases, are as follows:
1) Inter/intra union disputes included under Section 1 (A), Rule
XI, Book V, Rules to Implement the Labor Code — Complaints or
petitions involving federations, national or industry unions, trade
union centers and their chartered locals, affiliates or members
organizations shall be filed either with the Regional Office or the
Bureau. The complaint or petition shall be heard and resolved by
the Bureau (Fourth paragraph, Section 4, Rule XI, Book V, Rules to
Implement the Labor Code);
2) Disputes over conduct of election of officers — In the case of
federations, national or industry unions, trade union centers, the
petition shall be filed with the Bureau or the Regional Office but
shall be heard by the Bureau (Second paragraph, Section 2, Rule
XII, Book V, Rules to Implement the Labor Code);
3) Visitorial power under Article 289 of the Labor Code — A
request for examination of books of accounts of federations or
national and trade union centers pursuant to Article 289 [274]
shall be filed with the Bureau. Such request or complaint, in the
absence of allegations pertaining to a violation of Article 250
[241] shall not be treated as an intra-union dispute and the
appointment of an Audit Examination by the Regional or Bureau
Director shall not be appealable (Second paragraph, Section 3,
Rule XIII, Book V, Rules to Implement the Labor Code);
4) Registration of labor organizations:
a) Application for registration — Applications for registration of
federations, national unions or workers’ association operating in
more than one region shall be filed with the Bureau of the
Regional Offices, but shall be processed by the Bureau in
accordance with Sections 2-B and 2-D of this Rule (Second
paragraph, Section 1, Rule III, Book V, Rules to Implement the
Labor Code);
b) Notice of Merger/Consolidation of Labor Organizations —
Notice of merger or consolidation of federations or national unions
shall be filed with and recorded by the Bureau (Second sentence,
Section 8, Rule III, Book V, Rules to Implement the Labor Code);
c) Action on application either by approving or denying it
(Sections 4 and 5, Rule IV, Rules to Implement the Labor Code);
d) Cancellation of Registration - Complaints or petitions
involving federations, national or industry unions, trade union
centers and their chartered locals, affiliates or member
organizations shall be filed either with the Regional Office or the
Bureau. The complaint or petition shall be heard and resolved by
the Bureau (Fourth paragraph, Section 4, Rule XI, Book V, Rules to
Implement the Labor Code). In case of federations, national or
industry unions and trade union centers, the Bureau Director may
cancel the registration upon the filing of a petition for cancellation
or application for voluntary dissolution in the Bureau of Labor
Relations. (Third paragraph, Section 1, Rule XIV, Book V, Rules to
Implement the Labor Code).
5) Registration/deregistration of CBA:
a) Registration of CBA for Multi-employer — Multi-employer
collective bargaining agreement shall be filed with the Bureau
(Second paragraph, Section 1, Rule XVII, Book V, Rules to
Implement the Labor Code);
b) Action on application either by approving or denying it
(Sections 4 and 5, Rule XVII, Book V, Rules to Implement the
Labor Code);
c) Deregistration of CBA for multi-employer under Section 4,
Rule XI, Book V, Rules to Implement the Labor Code where the
complaints or petitions involving federations, national or industry
unions, trade union centers and their chartered locals, affiliates or
member organizations shall be filed either with the Regional
Office or the Bureau. The complaint or petition shall be heard and
resolved by the Bureau.

(c) Voluntary Arbitrators (2%)

The voluntary arbitrator or panel of voluntary arbitrators shall

have exclusive and original jurisdiction to hear and decide all
unresolved grievances arising from:
1) The implementation or interpretation of the collective
bargaining agreements; (Article 274 [261], Labor Code, Section 4,
Rule XIX, Book V, Rules to Implement the Labor Code)
2) The interpretation or enforcement of company personnel
policies which remain unresolved after exhaustion of the
grievance procedure; (Article 274 [261], Labor Code, Section 4,
Rule XIX, Book V, Rules to Implement the Labor Code)
3) Wage distortion issues arising from the application of any
wage orders in organized establishments; (par. 4, Article 124,
Labor Code, Section 4, Rule XIX, Book V, Rules to Implement the
Labor Code)
4) The interpretation and implementation of the productivity
incentive programs under RA 6971.
5) Upon agreement of the parties, shall also hear and decide all
other labor disputes including unfair labor practices and
bargaining deadlocks. (Article 275, [262], Labor Code, Section 4,
Rule XIX, Book V, Rules to Implement the Labor Code)
6) Violations of a Collective Bargaining Agreement, except those
which are gross in character, shall no longer be treated as unfair
labor practice and shall be resolved as grievances under the
Collective Bargaining Agreement; (Article 274, [261], Labor Code)

B.12.

Due to serious business reverses, ABC Co. decided to terminate

the services of several officers receiving “fat” compensation
packages. One of these officers was Mr. X, its Vice-President for
External Affairs and a member of the Board of Directors.
Aggrieved, Mr. X filed a complaint for illegal dismissal before the
National Labor Relations Commission (NLRC) — Regional
Arbitration Branch.

ABC Co. moved for the dismissal of the case on the ground of lack
of jurisdiction, asserting that since Mr. X occupied the position of
Vice-President for External Affairs which is listed in the by-laws of
the corporation, the case should have been filed before the
Regional Trial Court.

The Labor Arbiter (LA) denied ABC Co.’s motion and proceeded to
rule that Mr. X was illegally dismissed. Hence, he was reinstated in
ABC Co.’s payroll pending its appeal to the NLRC.

(a) Did the LA err in denying ABC Co.’s motion to dismiss on the
ground of lack of jurisdiction? Explain. (2.5%)

The LA erred in denying ABC Co.’s motion to dismiss.

By established ruling in Marc II Marketing Inc. v. Joson, G.R. No.

171993, December 12, 2011 citing Easycall Communications
Phils., Inc. v. King, the Supreme Court ruled that in the context of
Presidential Decree No. 902-A, corporate officers are those
officers of a corporation who are given that character either by
the Corporation Code or by the corporations by-laws. Section 25
of the Corporation Code specifically enumerated who are these
corporate officers, to wit: (1) president; (2) secretary; (3)
treasurer; and (4) such other officers as may be provided for in
the by-laws. (Easycall Communications Phils., Inc. v. King, supra at
302)
The facts is clear, as alleged in the motion to dismiss, that Mr. X’s
position as Vice-President for External Affairs was listed in the by-
laws of the corporation. Therefore, Mr. X is not a mere employee
or subordinate. His termination is an intra-corporate controversy
and not a termination dispute under the Labor Code.

(b)Assuming that jurisdiction is not at issue and that the NLRC

reverses the LA’s ruling of illegal dismissal with finality, may ABC
Co. claim reimbursement for the amounts it paid to Mr. X during
the time that he was on payroll reinstatement pending appeal?
Explain. (2.5%)

ABC Co. cannot claim reimbursement for the amounts it paid to

Mr. X during the latter’s payroll reinstatement pending appeal.

The reimbursement referred in the problem refers to the refund

doctrine enunciated in Genuino v. National Labor Relations
Commission, G.R. Nos. 142732-33 & 142753-54, December 4,
2007 which provides that if the decision of the labor arbiter is
later reversed on appeal upon the finding that the ground for
dismissal is valid, then the employer has the right to require the
dismissed employee on payroll reinstatement to refund the
salaries s/he received while the case was pending appeal, or it
can be deducted from the accrued benefits that the dismissed
employee was entitled to receive from his/her employer under
existing laws, collective bargaining agreement provisions, and
company practices. However, this doctrine was already modified
in Garcia v. Philippine Airlines, Inc., G.R. No. 164856, January 20,
2009, 576 SCRA 479, where it was ruled that the social justice
principles of labor law outweigh or render inapplicable the civil
law doctrine of unjust enrichment.

Applying the above ruling, ABC Co. cannot claim reimbursement

of the wages paid during Mr. X’S payroll reinstatement.

B.13.
Mr. A signed a one (1)-year contract with XYZ Recruitment Co. for
deployment as welding supervisor for DEF, Inc. located in Dubai.
The employment contract, which the Philippine Overseas
Employment Administration (POEA) approved, stipulated a salary
of US$600.00 a month.

Mr. A had only been in his job in Dubai for six (6) when DEF, Inc.
announced that it was suffering from severe financial losses and
thus intended to retrench some of its workers, among them Mr. A.
DEF, Inc. hinted, however, that employees who would accept a
lower salary could be retained.

Together with some other Filipino workers, Mr. A agreed to a

reduced salary of US$400.00 a month and thus, continued with
his employment.

(a) Was the reduction of Mr. A’s salary valid? Explain. (2.5%)

The reduction of A’s salary is not valid. This is a clear violation of

Section 6(h) which prohibits the substitution or alteration to the
prejudice of the worker, employment contracts approved and
verified by the Department of Labor and Employment from the
time of actual signing thereof by the parties up to and including
the period of the expiration of the same without the approval of
the Department of Labor and Employment;

The fact that the salary of Mr. A was reduced from US$600.00 a
month to US$400.00 a month without the approval of the
Department of Labor and Employment is a substitution or
alteration of the one (1)-year contract with XYZ Recruitment Co.
for deployment as welding supervisor for DEF, Inc. located in
Dubai.

(b) Assuming that the reduction was invalid, may Mr. A hold XYZ
Recruitment Co, liable for underpayment of wages? Explain.
(2.5%)
Yes, Mr. A hold XYZ Recruitment Co, liable for underpayment of
wages on the basis of its solidary liability under the Migrant
Worker’s overseas Filipino Act of 1995. Section 10 of Republic Act
No. 8042 as amended is clear that the liability of the
principal/employer and the recruitment/placement agency for any
and all money shall be joint and several. This provision shall be
incorporated in the contract for overseas employment and shall
be a condition precedent for its approval. In fact such liabilities
shall continue during the entire period or duration of the
employment contract and shall not be affected by any
substitution, amendment or modification made locally or in a
foreign country of the said contract.

XYZ Recruitment Co is therefore liable for underpayment of

wages.

B.14.

Upon review of the wage rate and structure pertaining to its

regular rank and file employees, K Corporation found it necessary
to increase its hiring rates for belonging to the different job
classification levels to make their salary rates more competitive in
the labor market.

After the implementation of the new hiring salary, Union X, the

exclusive bargaining agent of the rank and file employees,
demanded a similar salary adjustment for the old employees. It
argued that the increase in hiring rates resulted in wage distortion
since it erased the wage gap between the new and old
employees. In other words, new employees would enjoy almost
the same salary rates as K Corporation’s old employees.

(a) What is wage distortion? (2%)

A wage distortion shall mean a situation where an increase in

prescribed wage rates results in the elimination or severe
contraction of intentional quantitative differences in wage or
salary rates between and among employee groups in an
establishment as to effectively obliterate the distinctions
embodied in such wage structure based on skills, length of
service, or other logical bases of differentiation. (seventh
paragraph, Article 124, as amended by Republic Act No. 6727,
June 9, 1989) Otherwise stated, wage distortion means the
disappearance or virtual disappearance of pay differentials
between lower and higher positions in an enterprise because of
compliance with a wage order. (P.I. Manufacturing, Incorporated
vs. P.I. Manufacturing Supervisors and Foremen Association, G.R.
No. 167217, February 4, 2008)

(b) Did a wage distortion arise under the circumstances which

legally obligated K Corporation to rectify the wages of its old
employees? Explain. (3%)

No, there was no wage distortion.

The provisions of the Labor Code (see Article 124 par. 4) is clear
that distortions of the wage structure within an establishment is a
result of the application of any prescribed wage increase by virtue
of a law or wage order issued by any Regional Board. It was
likewise ruled in Associated Labor Unions-TUCP v. National Labor
Relations Commission G.R. No. 109328, August 16, 1994, it was
ruled that in case of salary adjustments in terms of restructuring
of benefits and allowances by employer or increase pursuant to
CBA there is no wage distortion. Thus in Cardona v. NLRC, G.R. No.
89007, March 11, 1991, 195 SCRA 92, 97, it was held that there
was no wage distortion where the employer made salary
adjustments in terms of restructuring of benefits and allowances
and there was an increase pursuant to the CBA.

In the given facts, it is clear that the distortion was a result of K

Corporation’s increasing its hiring rates of those belonging to the
different job classification levels to make their salary rates more
competitive in the labor market. Thus, wage distortion did not
arise under the circumstances.

B.15.
On December 1, 2018, GHI Co., an organized establishment, and
Union J, the exclusive bargaining agent therein, executed a five
(5)-year collective bargaining agreement (CBA) which, after
ratification, was registered with the Bureau of Labor Relations.

(a)When can the union ask, at the earliest, for the renegotiation of
all the terms of the CBA, except its representation aspect?
Explain. (2.5%)

The period to renegotiate “all other provisions” of the Collective

Bargaining Agreement under the Labor Code provides that all
other provisions of the Collective Bargaining Agreement shall be
renegotiated not later than three (3) years after its execution.
(Article 265 [253-A], Labor Code, as amended by Section 21,
Republic Act No. 6715, March 21, 1989)

The union can therefore ask, at the earliest, for the renegotiation
of all the terms of the CBA between GHI Co. and Union J, not alter
than three (3) years after its execution on December 1, 2018 or
on December 1, 2021.

(b)When is the earliest time that another union can file for a
petition for certification election? Explain. (2.5%)

Under Article 268 of the Labor Code, a petition for certification

election can be filed within the sixty (60)-day period before the
expiration of the collective bargaining agreement.

Thus, the earliest time that another union can file for a petition for
certification election is within the sixty (60)-day period before the
expiration of the five (5) year period of the collective bargaining
agreement between GHI Co., an organized establishment, and
Union J.

B.16.
W Ship Management, Inc. hired Seafarer G as bosun in its vessel
under the terms of the 2010 Philippine Overseas Employment
Administration - Standard Employment Contract (POEA-SEC).

On his sixth (6th) month on board, Seafarer G fell ill while

working. In particular, he complained of stomach pain, general
weakness, and fresh blood in his stool. When his illness persisted,
he was medically repatriated on January 15, 201 8. On the same
day, Seafarer G submitted himself to a post-employment medical
examination, wherein he was referred for further treatment. As of
September 30, 2018, Seafarer G has yet to be issued any fit-to-
work certification by the company- designated physician, much
less a final and definitive assessment of his actual condition.
Since Seafarer G still felt unwell, he sought an opinion from a
doctor of his choice who later issued an independent assessment
stating that he was totally and permanently disabled due to his
illness sustained during work.
Seafarer G then proceeded to file a claim for total and permanent
disability compensation. The company asserts that the claim
should be dismissed due to prematurity since Seafarer G failed to
first settle the matter through the third-doctor conflict resolution
procedure as provided under the 2010 POEA-SEC.

(a) What is the third-doctor conflict resolution procedure under

the 2010 POEA-SEC? Explain. (2%)

The Supreme Court laid down the procedure for the the third-
doctor conflict resolution procedure under the 2010 POEA-SEC in
Daraug v. KGJS Fleet Management Manila, G.R. No. 211211,
January 14, 2015 citingVergara v. Hammonia Maritime Services,
Inc.31 (Vergara), it was stated that the Department of Labor and
Employment (DOLE), through the POEA, has simplified the
determination of liability for work-related death, illness or injury in
the case of Filipino seamen working on foreign oceangoing
vessels. Every seaman and the vessel owner (directly or
represented by a local manning agency) are required to execute
the POEA Standard Employment Contract (POEA-SEC) as a
condition sine qua non prior to the deployment of the seaman for
overseas work. The POEA-SEC is supplemented by the Collective
Bargaining Agreement (CBA) between the owner of the vessel and
the covered seaman. In this case, the parties entered in to a
contract of employment in accordance with the POEA-SEC and
they agreed to be bound by the CBA.

Thus, in resolving petitioner’s claim for disability compensation,

the Court will be guided by the procedures laid down in the POEA-
SEC and in the CBA. On this point, Section 20(B)(3) of the POEA-
SEC provides:

Upon sign-off from the vessel for medical treatment, the seafarer
is entitled to sickness allowance equivalent to his basic wage until
he is declared fit to work or the degree of permanent disability
has been assessed by the company-designated physician but in
no case shall this period exceed one hundred twenty (120) days.

For this purpose, the seafarer shall submit himself to a post-

employment medical examination by a company-designated
physician within three working days upon his return except when
he is physically incapacitated to so, in which case, a written
notice to the agency within the same period is deemed a
compliance. Failure of the seafarer to comply with the mandatory
reporting requirement shall result in his forfeiture of the right to
claim the above benefits.

If a doctor appointed by the seafarer disagrees with the

assessment, a third doctor may be agreed jointly between the
Employer and the seafarer. The third doctor’s decision shall be
final and binding on both parties.

(b) Will Seafarer G’s claim for total and permanent disability
benefits prosper despite his failure to first settle the matter
through the third-doctor conflict resolution procedure? Explain.
(3%)

No, Seafarer G’s claim for total and permanent disability benefits
will not prosper because of his failure to first settle the matter
through the third-doctor conflict resolution procedure.
In Philippine Hammonia Ship Agency, Inc. v. Dumadag, G.R. No.
194362, June 26, 2013, 700 SCRA 53 (Dumagdag), it was ruled by
the Supreme Court that the seafarer’s non-compliance with the
mandated procedure under the POEA-SEC militates against his
claims. In Dumagdag, the High Court explained:

The POEA-SEC and the CBA govern the employment relationship

between Dumadag and the petitioners.

The two instruments are the law between them. They are bound
by their terms and conditions, particularly in relation to this case,
the mechanism prescribed to determine liability for a disability
benefits claim.

In Magsaysay Maritime Corp. v. Velasquez, the Court said: “The

POEA Contract, of which the parties are both signatories, is the
law between them and as such, its provisions bind both of them.”

Dumadag, however, pursued his claim without observing the laid-

out procedure. He consulted physicians of his choice regarding his
disability after Dr. Dacanay, the company-designated physician,
issued his fit-to-work certification for him. There is nothing
inherently wrong with the consultations as the POEA-SEC and the
CBA allow him to seek a second opinion. The problem only arose
when he pre-empted the mandated procedure by filing a
complaint for permanent disability compensation on the strength
of his chosen physicians’ opinions, without referring the
conflicting opinions to a third doctor for final determination.

On the basis of the above-doctrinal rule, Seafarer G’s claim for

total and permanent disability benefits will not prosper.

(c) Assuming that Seafarer G failed to submit himself to a post-

employment medical examination within three (3) working days
from his return, what is the consequence thereof to his disability
claim? Explain. (2%)

Seafarer G’S failure to submit himself to a post-employment

medical examination within three (3) working days from his return
shall result in his forfeiture of the right to claim his disability
compensation. This was ruled upon by the Supreme Court in
Daraug v. KGJS Fleet Management Manila, G.R. No. 211211,
January 14, 2015 citing Vergara v. Hammonia Maritime Services,
Inc. (Vergara), that failure of the seafarer to comply with the
mandatory reporting requirement shall result in his forfeiture of
the right to claim the disability compensation.

B.17.

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%)

Ms. A is not a probationary, fixed-term, or regular employee. This

is because her engagement cannot be characterized as either a
probationary, fixed-term, or regular employee as defined by law
or jurisprudence.

There is probationary employment where the employee upon his

engagement is made to undergo a trial period during which the
employer determines his fitness to qualify for regular employment
based on reasonable standards made known to him at the time of
engagement. (Robinsons Galleria/Robinsons Supermarket
Corporation and/or Jess Manuel v. Ranchez, G.R. No. 177937,
January 19, 2011, 640 SCRA 142, citing Omnibus Rules
Implementing the Labor Code, Book VI, Rule I, Sec. 6 [d])

Regular employees are further classified into: (1) regular

employees by nature of work; and (2) regular employees by years
of service. (E. Ganzon, Inc. vs. National Labor Relations
Commission, G.R. No. 123769, 22 December 1999, 321 SCRA 434,
440) The former refers to those employees who perform a
particular activity which is necessary or desirable in the usual
business or trade of the employer, regardless of their length of
service; while the latter refers to those employees who have been
performing the job, regardless of the nature thereof, for at least a
year. (Pangilinan vs. General Milling Corporation, G.R. No. 149329,
12 July 2004)

In E. Ganzon, Inc. (EGI) v. Ando, Jr., G.R. No. 214183, February 20,
2017, the fixed-term employment was explained as follows: The
duration of a fixed-term 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 when.” The
decisive determinant in fixed-term employment is not the activity
that the employee is called upon to perform but the day certain
agreed upon by the parties for the commencement and
termination of the employment relationship. (GMA Network, Inc. v.
Pabriga, et al., supra note 24, at 177-178.

Ms. A is a casual employee.

Casual employment, the third kind of employment arrangement,

refers to any other employment arrangement that does not fall
under any of the first two categories, i.e., regular or
project/seasonal. (Universal Robina Sugar Milling Corporation v.
Acibo, G.R. No. 186439, January 15, 2014)

(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%)

In Agabon v. NLRC, G.R. No. 158693, November 17, 2004, the

Supreme Court ruled that where the dismissal is for a just cause,
as in the instant case, the lack of statutory due process should
not nullify the dismissal, or render it illegal, or ineffectual.
However, the employer should indemnify the employee for the
violation of his statutory rights. The Supreme Court imposed the
nominal damages in the amount of P30, 000.00 considering the
prevailing circumstances in the said case.
Clearly, the procedural infirmity will not render defective Ms. A’s
dismissal. The dismissal based on just cause is valid while the
employer is liable for nominal damages.

B.18.

When resolving a case of unfair labor practice (ULP) filed by a

union, what should be the critical point of analysis to determine if
an act constitutes ULP? (2.5%)

While an act or decision of an employer may be unfair, certainly

not every unfair act or decision constitutes unfair labor practice
(ULP) as defined and enumerated under Art. 248 of the Labor
Code. (Great Pacific Life Employees Union v. Great Pacific Life
Assurance Corporation, G.R. No. 126717, February 11, 1999) In
Baptista v. Villanueva, G.R. No. 194709, July 31, 2013 it was ruled:
In essence, ULP relates to the commission of acts that transgress
the workers’ right to organize. As specified in Articles 248 and 249
of the Labor Code, the prohibited acts must necessarily relate to
the workers’ right to self-organization and to the observance of a
CBA. (Tunay na Pagkakaisa ng Manggagawa sa Asia Brewery v.
Asia Brewery, Inc., G.R. No. 162025, August 3, 2010, 626 SCRA
376, 388) Absent the said vital elements, the acts complained,
although seemingly unjust, would not constitute ULP. (General
Santos Coca-Cola Plant Free Workers Union-Tupas v. Coca-Cola
Bottlers Phils., Inc. (General Santos City), G.R. No. 178647,
February 13, 2009, 579 SCRA 414, 419, citing Philcom Employees
Union v. Philippine Global Communication, 527 Phil. 540, 557; 495
SCRA 214, 229 [2006])

B.19.

Because of dwindling sales and the consequent limitation of

production, 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 (4) month of suspension of its operations, XYZ, Inc.
posted an 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%)

The posting of the announcement that there would be

retrenchment affecting 50% of the work force is not sufficient
compliance with the legal requirements for retrenchment.

In explaining that the posting of written notice of closure on the

bulletin board did not meet the requirement, Supreme Court in
Galaxie Steel Workers Union (GSWU-NAFLU-KMU) v. NLRC, G.R.
No. 165757, October 17, 2006 said:

Finally, with regard to the notice requirement, the Labor Arbiter

found, and it was upheld by the NLRC and the Court of Appeals,
that the written notice of closure or cessation of Galaxies business
operations was posted on the company bulletin board one month
prior to its effectivity. The mere posting on the company bulletin
board does not, however, meet the requirement under Article 283
of serving a written notice on the workers. The purpose of the
written notice is to inform the employees of the specific date of
termination or closure of business operations, and must be served
upon them at least one month before the date of effectivity to
give them sufficient time to make the necessary arrangements.
(DAP Corporation v. Court of Appeals, G.R. No. 165811, December
14, 2005, 477 SCRA 792) In order to meet the foregoing purpose,
service of the written notice must be made individually upon each
and every employee of the company.

The posting of the announcement is not in compliance with the

provision of the Labor Code on serving notice to the employee to
be retrenched.

(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%)

The extended suspension of its operations from six (6) months to

eight (8) months is not permissible.

The Supreme Court agreed with the contention of the petitioners

in Nasipit Lumber Company v. National Organization of
Workingmen (NOWM), G.R. No. 146225, November 25, 2004 that
under Article 286 of the Labor Code, an employer may bona fide
suspend the operation of its business for a period of not
exceeding six (6) months. In such a case, there is no termination
of the employment of the employees, but only a temporary
displacement. When the suspension of the business operations
exceeds six (6) months, then the employment of the employees
would be deemed terminated. On the other hand, if the operation
of the business is resumed within six (6) months from the bona
fide suspension thereof, it shall be the duty of the employer to
reinstate his employees to their former positions without loss of
seniority rights, if the latter would indicate their desire to resume
work within one (1) month from such resumption of operations,
conformably to Article 286 of the Labor Code xxx.

Thus, with the extension the employees were deemed terminated.

The employer is therefore liable for illegal dismissal and as a
consequence the dismissed employees are entitled to the reliefs
of backwages and reinstatement.

B.20.

Discuss the differences between compulsory and

voluntary/optional retirement as well as the minimum benefits
provided under the Labor Code for retiring employees of private
establishments. (2.5%)

The differences between compulsory and voluntary/optional

retirement as well as the minimum benefits provided under the
Labor Code are as follows:

For compulsory retirement — Where there is no such plan or

agreement referred to in the immediately preceding sub-section,
an employee shall be retired upon reaching the age of sixty (65)
five years old. (Rule II, Section 4, sub-section 4.2, Rules
Implementing the Retirement Law, April 1, 1993)

For underground mineworkers — An underground mining

employee upon reaching the age of fifty (50) years or more, but
not beyond sixty (60) years which is hereby declared the
compulsory retirement age for underground mine workers, who
has served at least five (5) years as underground mine worker,
may retire and shall be entitled to all the retirement benefits
provided for in this Article. (5th paragraph, Article 302 [287],
Labor Code)

For optional retirement – In the absence of a retirement plan or

other applicable agreement providing for retirement benefits of
employees in an establishment, an employee may retire upon
reaching the age of sixty (60) years or more if he has served for
at least five (5) years in said establishment. (Rule II, Section 4,
sub-section 4.1, Rules Implementing the Retirement Law, April 1,
1993)

As to minimum benefits, in the absence of an applicable

agreement or retirement plan, an employee who retires pursuant
to the Act shall be entitled to retirement pay equivalent to at least
one-half (½) month salary for every year of service, a fraction of
at least six (6) months being considered as one whole year. (Rule
II, Section 5, sub-section 5.1, Rules Implementing the Retirement
Law, April 1, 1993)