2007 Bar exam LABOR IV. (5 POINTS) 4. Explain: a) The Globe Doctrine. b) The Community of Interest Rule. IX.

. (5 POINTS) Discuss the legal requirements of a valid strike. XV. (5 POINTS) Some officers and rank-and-file members of the union staged an illegal strike. Their employer wants all the strikers dismissed. As the lawyer, what will you advise the employer? Discuss fully. 2008 Labor Bar exam Explain the automatic renewal clause of collective bargaining agreements. (3%) [An automatic renewal clause, sometimes referred to as an "evergreen clause" purports to continue the terms of the contract or agreement indefinitely until the parties renegotiate and ratify a successor agreement. An automatic renewal clause is a cost item and it therefore does not bind the parties unless it has been ratified by the body. In the absence of a binding automatic renewal clause, a CBA ends on its termination date. Once a CBA expires, while the parties continue to negotiate for a successor agreement, their obligations to one another are governed by the doctrine of maintaining the status quo. The principle of maintaining the status quo demands that all terms and conditions of employment remain the same during collective bargaining after a CBA has expired. This does not mean that the expired CBA continues in effect; rather, it means that the conditions under which the workers worked endure throughout the collective bargaining process. ] b) Explain the extent of workers right to participate in policy and decision-making process as provided under Article XIII, Section 3 of the Philippine Constitution. Does it include membership in the Board of Directors of a corporation. (3%) [The workers have the right to participate in policy and decisionmaking process on matters affecting their rights and benefits. This participation can be through collective bargaining, grievance machineries, voluntary modes of settling disputes, and conciliation proceedings mediated by government. This right does not automatically include the right to membership in the Board of Directors of a corporation, insofar as Sec. 23 of the Corporation Code requires the directors to be owners of at least one share of stock in a stock corporation, and must be subsisting members in a non-stock corporation. Cessation as stockholders or member, respectively, automatically disqualifies them as directors. Moreover, a majority of them must be Philippine residents.] III. Savoy Department Store (SDS) adopted a policy of hiring salesladies on five-month cycles. At the end of a salesladys five-month term, another person is hired as replacement. Salesladies attend to store customers, wear SDS uniforms, report at specified hours, and are subject to SDS workplace rules and regulations. Those who refuse the 5-month employment contract are not hired. The day after the expiration of her 5-month engagement, Lina wore her SDS white and blue uniform and reported for work but was denied entry into the store premises. Agitated, she went on a hunger strike and stationed herself in front of one of the gates of SDS. Soon thereafter, other employees whose 5-month term had also elapsed, joined Linas hunger strike. a) Lina and 20 other salesladies filed a complaint for illegal dismissal, contending that they are SDS regular employees as they performed activities usually necessary or desirable in the usual business or trade of SDS and thus, their constitutional

right to security of tenure was violated when they were dismissed without valid, just or authorized cause. SDS, in defense, argued that Lina, et al. agreed prior to engagement to a fixed period of employment and thus waived their right to a full-term tenure. Decide the dispute. (4%) b) The owner of the SDS considered the hunger strike staged by Lina, et al., an eyesore and disruptive of SDS business. He wrote the Secretary of Labor a letter asking him to assume jurisdiction over the dispute and enjoin the hunger strike. What answer will you give if you were the Secretary of Labor? (3%) c) Assume that no fixed-term worker complained, yet in a routine inspection of a labor inspector of the Regional Office of the DOLE found the 5-month term policy of SDS violative of the Labor Codes security of tenure provisions and recommended to the Regional Director the issuance of a compliance order. The Regional Director adopted the recommendation and issued a compliance order. Is the compliance order valid? Explain your answer. (3%) SUGGESTED ANSWER a) I will decide in favor of Lina, et.al.. The contention of a fixedperiod employment by SDS cannot be sustained. For a fixed period employment to be valid, it must be: - entered into by the parties voluntarily & knowingly; - when entered into, parties should have been in a more or less of equal footing/terms, absent duress, force, intimidation or fraud; & - should be entered into by the parties without intention to circumvent the law. The SC, in a number of cases, have consistently, ruled that Art 280, LC does not prohibit fixed-period employment, however if such agreement is in fact devised and used to circumvent the law, as when the circumstances show that it is apparent that such terms of the contract/agreement are imposed to preclude the acquisition of tenurial security by the employee, they should be struck down or disregarded as contrary to law, public policy & moral. Moreover, in the case at bar, Lina, et.al. were hired to perform activities that are necessary & desirable in the usual business/trade of the employer under a contract of a purportedly fixedperiod employment nature. However, such contract/agreement pales under the light of the same Art 280, LC, which states that: notwithstanding the agreement of the parties, workers performing activities that are necessary and desirable to the business/trade of the employer. Wherefore, under the premises, the contract entered into by the parties should be declared void ab initio being contrary to law, public policy, & moral. SDS should be held liable and accountable to Lina, et.al., who in return are entitled to the benefits & protection provided for by the law. b) As the SOLE, I will not grant the letter asking for my assumption of jurisdiction over the dispute. The dispute does not include the issues pertaining to industries indispensable to national interest to warrant an injunction from the office of the SOLE; moreover, the issues & disputes does not fall within the jurisdiction of the SOLE, but squarely falls within the ambit of the power of the LA. c) No, the compliance order is not valid. Although under Art 274, LC, the SOLE may delegate its visitorial power upon the RD, such delegation does not include the power to issue a compliance order. Therefore, absent such delegated power, the compliance order is not valid for having been issued without authority. VI. On the day that the union could validly declare a strike, the Secretary of Labor issued an order assuming jurisdiction over the dispute and enjoining the strike, or if one has commenced, ordering the striking workers to immediately return to work. The return-to-work order required the employees to return to work within twenty-four hours and was served at 8 a.m. of the day the strike was to start. The order at the same time directed the Company to accept all employees under the same terms and conditions of employment prior to the work stoppage. The Union members did not return to work on the day the Secretarys

ssumption order was served, nor on the next day; instead, theyheld a continuing protest rally against the companys alleged unfair labor practices rally against the companys alleged unfair labor practices. Because of the accompanying picket, some of the employees who wanted to return to work failed to do so. On the 3rd day, the workers reported for work, claiming that they do so in compliance with the Secretarys return-to-work order that binds them as well as the Company. The Company, however, refused to admit them back since they have violated the Secretarys return-to-work order and are now considered to have lost their employment status. The Union officers and members filed a complaint for illegal dismissal arguing that that there was no strike but a protest rally which is a valid exercise of the workers constitutional right to peaceable assembly and freedom of expression. Hence, there was no basis for the termination of their employment. You are the Labor Arbiter to whom the case was raffled. Decide, ruling on the following issues: a) Was there a strike? (4%) b) Were the employees simply exercising their constitutional right to petition for redress of their grievances? (3%) c) What are the consequences, if any, of the acts of the employees? (3%) SUGGESTED ANSWER: VI.a Yes, the refusal of the worker to return to work and their holding of continuing protest rally despite the order issued by the Secretary of Labor is in itself constitute a strike. Strike can be done in different modes; by reporting to work and not actually rendering work, by not reporting to work and conducting a protest rally or a mere act which would tend to sabotage the operation of the company. In this case, the manifest intent of staging strike is clearly shown by conducting protest rally accompanied by formation of picket line that prevents other workers who wanted to return to work. VI.b No, these constitutional rights do not mean to compliment the workers right against their employer. Employer and employee relation is governed by a distinct law on which procedures of settling disputes are clearly established. The workers right to peaceable assembly, freedom of expression and right to petition for redress of their grievances are not primarily framed to subvert any abuse, the employer may commit against its employees. The Constitution conferred these rights to all citizens for the purpose of neutralizing the acts of the different branches of the government responsible in running the affairs of the State. The workers cannot simply feign by their acquiescence making these rights as an excuse to justify their non compliance of the order of the Secretary of Labor. VI.c The consequence would warrant termination of their services. Once the Secretary of Labor assumes jurisdiction of the dispute, non compliance of his order constitute an undue disregard of his authority which the law provides a stiffer sanction. X. Pepe Santos was an international flight steward of FlySafe Airlines. Under FSAs Cabin Crew Administration Manual, Santos must maintain, given his height, a weight of 150 to 170 pounds. After 5 years as a flight steward, Santos began struggling with his weight; he weighed 200 lbs. , 30 pounds over the prescribed maximum weight. The Airline gave him a one-year period to attain the prescribed weight, and enrolled him ins everal weight reduction programs. He consitently failed to meet his target. He was given a 6-month grace period, after which he still failed to meet the weight limit. FSC thus sent him a Notice of Administrative Charge for violation of company standards on weight requirements. He stated in his answer that, for medical reasons, he cannot have a rapid weight loss. A clarificatory

hearing was held where Santos fully explained his predicament. The explanation did not satisfy FSA and so it decided to terminate Santos service for violation of company standards. Santos filed a complaint for illegal dismissal, arguing that the comapanys weight requirement policy is unreasonable and that his case is not a disciplinary but a medical issue (as one get older, the natural tendency is to grow heavier). FSA defended its policy as a valid exercise of management prerogative and from the point of view of passenger safety and extraordinary diligence required by law of common carriers; it also posited that Santos failure to achieve his ideal weight constituted gross and habitual neglect of duty, as well as willful disobedience to lawful employer orders. The Labot Arbiter found the dismissal illegal for there was neither gross and habitual neglect of duty nor willful disobedience. Is the Labor Arbiter correct? Why or why not? Explain fully. (6%) SUGGESTED ANSWER: No, while it is true that the law should at all cost protect the security of tenure of the employees, this does not mean to deprive employer of its right to exercise management prerogative for the purpose of upholding the interest of business, especially if its operation requires the maintenance of public safety. Santos has not been deprived of due process; he was given one-year-period to meet the standard of the company. Upon his failure, he was given again another period of six months. A notice was served to him and through a hearing duly accorded; he was given a chance to explain his side. After observing the procedural due process, only then the company finally decided to terminate his services. The failure therefore of Santos to meet companys standard despite due notice obviously amount to gross and habitual neglect of duty. His total disregard of companys policy on the belief that it is unreasonable constitute willful disobedience on his part by ignoring the facts that his company is a common carrier, thus, by a man of common understanding, he should have understand that his company can validly enforce such policy. The finding of Labor Arbiter therefore in this case is not correct. **A very recent case crop up (based on an article in Inquirer only this week) with almost the same facts, that involving a certain Armando Yrasuegui, a flight steward of PAL.In said case, The Supreme Court has upheld the right of Philippine Airlines to dismiss an overweight flight attendant on the basis ofbona fide occupational qualification defense and flight safety. The LA is NOT correct. Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin unless the employer can show that sex, religion, or national origin is an actual qualification for performing the job. The qualification is called a bona fide occupational qualification (BFOQ). In Duncan Association of Detailman-PTGWTO v. Glaxo Wellcome Philippines, Inc., the Court did not hesitate to pass upon the validity of a company policy which prohibits its employees from marrying employees of a rival company. It was held that the company policy is reasonable considering that its purpose is the protection of the interests of the company against possible competitor infiltration on its trade secrets and procedures. A reading of the weight standards of PAL would lead to no other conclusion than that they constitute a continuing qualification of an employee in order to keep the job. Tersely put, an employee may be dismissed the moment he is unable to comply with his ideal weight as prescribed by the weight standards. The dismissal of the employee would thus fall under Article 282(e) of the Labor Code. In fine, the Supreme Court hold that the obesity of petitioner, when placed in the context of his work as flight attendant, becomes an analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As the CA correctly puts it, "[v]oluntariness basically means that the just cause is solely attributable to the employee without any external force influencing or controlling his actions. This element runs through all just causes under Article 282, whether they be in the nature of a wrongful action or omission. Gross and habitual neglect, a recognized just cause, is considered voluntary

although it lacks the element of intent found in Article 282(a), (c), and (d)." (Yrasuegi vs. PAL, G.R. No. 168081 | October 17, 2008) XIII. The rank-and-file union staged a strike in the company premises which caused the disruption of business operations. The supervisors union of the same company filed a money claim for unpaid salaries for the duration of the strike, arguing that the supervisors failure to report for work was not attributable to them. The company contended that it was equally faultless, for the strike was not the direct consequence of any lockout or unfair labor practice. May the company be held liable for the salaries of the supervisors? Decide. (6%) SUGGESTED ANSWER: No, although the principle of a fair wages for a fair hours work may have been applied only to rank-and-file employees, there can be no strict prohibition why this principle cannot be applied in a case of supervisor employees on the premise alone that these employees may have been paid by the company on a monthly or semimonthly basis. Justice and equity dictate that person committed no fault must not be made by law, to suffer from burden on which he has no complete control. To rule otherwise would invite a situation wherein one person will be made to suffer from fault on which he himself has not created. The labor code is always construed in favor of labor, but this does not mean to disregard the interest of the employer to the extent of setting at naught the rule of equity governing the relations between the two contending parties. While it is true that failure to report is not attributable to the said supervisors, it is however equally true that the disruption is not due to the fault of the company. To require payment of salary of supervisor employees who do not render any work or service would in effect imposing such burden or obligation which the company does not derive any benefit. XIV. Puwersa, a labor federation, after having won in a certification election held in the company premises, sent a letter to respondent company reminding it of its obligation to recognize the local union the federation represents and enter into a CBA with the local union. Respondent company replied that though it is willing, the rank-and-file employees had already lost interest in joining the local union as they had dissolved it. Puwersa argued that since it won in a certification election, it can validly perform its function as a bargaining agent and represent the rank-and-file employees despite the unions dissolution. Is the argument of Puwersa tenable? Decide with reasons. (6%) SUGGESTED ANSWER:

Management filed an action to declare the strike illegal, contending that: [a] The union did not observe the cooling-off period mandated by the Labor Code; (2%) and [b] The union went on strike without complying with the strikevote requirement under the Labor Code. (2%) Rule on the foregoing contentions with reasons. [c] The Labor Arbiter found management guilty of unfair labor practice for the unlawful dismissal of Johnny. The decision became final. Thereafter, the NMMR filed a criminal case against the Manager of Manila Restaurant. Would the Labor Arbiters finding be sufficient to secure the Managers conviction? Why or why not? (2%) IX [a] What is wage distortion? Can a labor union invoke wage distortion as a valid ground to go on strike? Explain. (2%) [b] What procedural remedies are open to workers who seek correction of wage distortion? (2%) SUGGESTED ANSWER: a.) "Wage distortion" is 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. Under Republic Act No. 6727 otherwise known as the Wage Rationalization Act, a strike is illegal if based on alleged salary distortion. The legislative intent that solution to the problem of wage distortions shall be sought by voluntary negotiation or arbitration, and not by strikes, lockouts or other concerted activities of the employees or management, is made clear in the rules implementing Republic Act No. 6727 issued by the Secretary of Labor and Employment pursuant to the authority granted by Section 13 of the said law. b.) Under Article 124 of the LC, any dispute arising from wage distortion shall be resolved thru the grievance procedure under the CBA and if it remains unresolved, thru voluntary arbitration. Unless otherwise agreed by the parties in writing, such dispute shall be decided by voluntary arbitrators within 10 calendar days from the time said dispute was referred to voluntary arbitration. In cases, where there are no CBA or organized labor unions, the employers and workers shall endeavor to correct such distortions. Any dispute arising therefrom shall be settled thru NCMB and, if it remains unresolved after 10 calendar days of conciliation, it shall be referred to the appropriate branch of NLRC. XV Among the 400 regular rank-and-file workers of MNO Company, a certification election was ordered conducted by the MedArbiter of the Region. The contending parties obtained the following votes: 1. Union A 70 2. Union B 71 3. Union C 42 4. Union D 33 5. No union 180 6. Spoiled votes 4 There were no objections or challenges raised by any party on the results of the election. [a] Can Union B be certified as the sole and exclusive collective bargaining agent among the rank-and-file workers of MNO Company considering that it garnered the highest number of votes among the contending unions? Why or why not? (3%)

No, because Pwersa is a mere agent of an agent (local union). The local union is the agent of the principal (employees). Thus, without a principal, an agent has no authority to act, with more reason as to an agent of an agent. Yes, the argument of "Puwersa" is tenable. A labor federation can take the place of a local union in negotiations with Management at the enterprise level for so long as the employees give their consent
2009 Bar exam VII Johnny is the duly elected President and principal union organizer of the Nagkakaisang Manggagawa ng Manila Restaurant (NMMR), a legitimate labor organization. He was unceremoniously dismissed by management for spending virtually 95% of his working hours in union activities. On the same day Johnny received the notice of termination, the labor union went on strike.

[b] May the management or lawyer of MNO Company legally ask for the absolute termination of the certification election proceedings because 180 of the workers a clear plurality of the voters have chosen not to be represented by any union? Reasons. (3%) [c] If you were the duly designated election officer in this case, what would you do to effectively achieve the purpose of certification election proceedings? Discuss. (3%) SUGGESTED ANSWER: a) No, Union B cannot be certified as the sole and exclusive collective bargaining agent among the rank-and-file workers of MNO Company. ART. 256 of the labor code as amended, states that The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit. In the case at bar, although Union B garnered the highest number of votes among the contending unions, it did not received the majority of the valid votes casted in the election. Hence, Union B failing to receive the majority votes of the valid votes casted failed to qualify to be certified as the sole and exclusive bargaining agent of the employees, as mandated in the above mentioned provision of law. b) No, the management or lawyer of MNO Company cannot legally ask for the absolute termination of the certification election proceedings. While it is true that 180 of the workers a clear plurality of the voters have chosen not to be represented by any union, the remaining votes casted in favor of the contending union in sum have clearly shown that the majority of the employees wanted to be represented by a union. Hence, to terminate the proceedings would clearly disenfranchise the employees by denying them their choice to be represented by a union. c) As the duly designated election officer in this case, I would conduct a run-off election. Under Art 256, labor code as amended, it is stated that : When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast, a run-off election shall be conducted between the labor unions receiving the two highest number of votes: Provided, that the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast. A run-off election is in order when these requisites concur: - there was a valid election; - that said election provides for 3 or more choices; - that none among the choices received a majority of the valid votes casted; and - that the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes casted. The facts of the case show that all the requisites are present- hence, a run-off election is in order. Therefore, as the officer-in-charge, I would call for the run-off election in consonance with Art 256, LC as amended. XVI The Company and Triple-X Union, the certified bargaining agent of rank-and-file employees, entered into a Collective Bargaining Agreement (CBA) effective for the period January 1, 2002 to December 31, 2007. For the 4th and 5th years of the CBA, the significant improvements in wages and other benefits obtained by the Union were: 1) Salary increases of P1,000 and P1,200 monthly, effective January 1, 2006 and January 1, 2007, respectively; 2) Vacation Leave and Sick Leave were adjusted from 12 days to 15 days annually for each employee;

3) Medical subsidy of P3,000 per year for the purchase of medicines and hospitalization assistance of P10,000 per year for actual hospital confinement; 4) Rice Subsidy of P600 per month, provided the employee has worked for at least 20 days within the particular month; and 5) Birthday Leave with Pay and Birthday Gift of P1,500. As early as October 2007, the Company and the Union started negotiations to renew the CBA. Despite mutual good faith and earnest efforts, they could not agree. However, no union filed a petition for certification election during the freedom period. On March 30, 2008, no CBA had been concluded. Management learned that the Union would declare a bargaining deadlock on the next scheduled bargaining meeting. As expected, on April 3, 2008, the Union declared a deadlock. In the afternoon of the same day, management issued a formal announcement in writing, posted on the bulletin board, that due to the CBA expiration on December 31, 2007, all fringe benefits contained therein are considered withdrawn and can no longer be implemented, effective immediately. SUGGESTED ANSWERS [a] When was the freedom period referred to in the foregoing narration of facts? Explain. (2%) -November 2007 or 60 days prior to the expiry date of the CBA, which is December 31, 2007. [b] After April 3, 2008, will a petition for certification election filed by another legitimate labor union representing the rank-and-file employees legally prosper? Reasons. (3%) -No, it will not prosper as it is filed outside the freedom period. Moreover, there is pending bargaining dead lock, thus, it is barred under the dead lock bar rule. [c] Is managements withdrawal of the fringe benefits valid? Reasons. (2%) -No, Under the Hold-over principle, the CBA still exist until one has been entered into. Thus, the benefits under the said CBA continues until a new CBA is created. [d] If you were the lawyer for the union, what legal recourse or action would you advise? Reasons. (3%) - As a lawyer, I would advised the union to hold a strike and then seek for an improved offer balloting. XVIII [b] Explain the impact of the union security clause to the employees right to security of tenure. (2%) SUGGESTED ANSWERS the Union Security Clause in a way provides or fortifies the employees' right to Security of Tenure since automatic membership in a union would afford him protection against any employer harassment/ intimidations and threats