Labor Law and Social Legislation

Bar Examination Question and Answer

Submitted by:

Rafael Lorenzo Conejos

Oilie Haulo

John Albert Laylo

Martin Angelo Millete

Rene Pilapil Jr.

BLOCK 1 – GROUP 8
 Labor Law and Social Legislation Bar Examination Question and Answer

Question 7

Alexander, a security guard of Jaguar Security Agency (JSA), could not be given any assignment because
no client would accept him. He had a face only a mother could love. After six (6) months of being on
"floating" status, Alexander sued JSA for constructive dismissal. The Labor Arbiter upheld Alexander’s
claim of constructive dismissal and ordered JSA to immediately reinstate Alexander. JSA appealed the
decision to the NLRC. Alexander sought immediate enforcement of the reinstatement order while the
appeal was pending.

JSA hires you as lawyer, and seeks your advice on the following:

[a] Because JSA has no client who would accept Alexander, can it still be compelled to reinstate him
pending appeal even if it has posted an appeal bond?

Yes. JSA can be compelled to reinstate Alexander, pending appeal of the decision of the Labor Arbiter to
the NLRC, even if JSA has posted a bond.

Article 223 of the Labor Code, as amended by Republic Act No. 6715 states that “in any event, the decision
of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is
concerned shall be immediately executory even pending appeal and the posting of a bond. The employee
shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal
or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by
the employer shall not stay the execution for reinstatement provided herein.”

Clearly, the law speaks for the reinstatement of the employee.

[b] Can the order of reinstatement be immediately enforced in the absence of a motion for the issuance of a
writ of execution?

Yes, the order of reinstatement can immediately be enforced in the absence of a motion for the issuance of
a writ of execution. The law in fact says that once a reinstatement order is made, it MUST be enforced right
away.

As stated in Article 223, Par 3 of the Labor Code: "In any event, the decision of the labor arbiter reinstating
a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal."

Also as enunciated in Pioneer Texturizing Corp vs. NLRC (G.R. No. 118651, October 16, 1997), it was
indicated that the legislative content is quite obvious, i.e., to make an award of reinstatement immediately
enforceable, even pending appeal. To require the application for and issuance of a writ of execution as
prerequisites for the execution of a reinstatement award would certainly betray and run counter to the very
object and intent of Article 223, i. e., the immediate execution of a reinstatement order. The reason is
simple. An application for a writ of execution and its issuance could be delayed for numerous reasons. A

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mere continuance or postponement of a scheduled hearing, for instance, or an inaction on the part of the
Labor Arbiter or the NLRC could easily delay the issuance of the writ thereby setting at naught the strict
mandate and noble purpose envisioned by Article 223.

[c] If the order of reinstatement is being enforced, what should JSA do in order to prevent reinstatement?

There is nothing the employer can do to prevent reinstatement. It may however opt for reinstatement of the
employee in the payroll of the company without requiring him to report back to his work.

RA 6715, amending paragraph 3 of Article 223 of the Labor Code provides that:

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as
the reinstatement aspect is concerned, shall immediately be executory, even pending appeal . The
employee shall either be admitted back to work under the same terms and conditions prevailing prior to his
dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a
bond by the employer shall not stay the execution for reinstatement provided herein (Emphasis supplied)

Jurisprudence provided in Zamboanga City Water District vs. Buat (G.R. No. 104389 May 27, 1994), under
the said provision of law, the decision of the Labor Arbiter reinstating a dismissed or separated employee
insofar as the reinstatement aspect is concerned, shall be immediately executory, even pending appeal.
The employer shall reinstate the employee concerned either by: (a) actually admitting him back to work
under the same terms and conditions prevailing prior to his dismissal or separation; or (b) at the option of
the employer, merely reinstating him in the payroll. Immediate reinstatement is mandated and is not stayed
by the fact that the employer has appealed, or has posted a cash or surety bond pending appeal.

Question 8

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Richie, a driver-mechanic, was recruited by Supreme Recruiters (SR) and its principal, Mideast
Recruitment Agency (MRA), to work in Qatar for a period of two (2) years. However, soon after the contract
was approved by POEA, MRA advised SR to forego Richie’s deployment because it had already hired
another Filipino driver-mechanic, who had just completed his contract in Qatar. Aggrieved, Richie filed with
the NLRC a complaint against SR and MRA for damages corresponding to his two years’ salary under the
POEA-approved contract.

SR and MRA traversed Richie’s complaint, raising the following arguments: Rule on the validity of the
foregoing arguments with reasons.

[a] The Labor Arbiter has no jurisdiction over the case;

The Labor Arbiter has jurisdiction over the case. As promulgated in Republic Act No. 8042, Section 7 and
further amended by Republic Act 10022, Section 10 reads that:

"SEC. 10. Money Claims. - Notwithstanding any provision of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and
decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an
employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damage. Consistent with this
mandate, the NLRC shall endeavor to update and keep abreast with the developments in the global
services industry.

Therefore, it is clear in the provision that the Labor Arbiter has the original and exclusive jurisdiction for
claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment. In this case, the 2 years of Salary claimed by Richie is in relation to his
overseas deployment to Qatar which was eventually cancelled. Also, the claim of the salaries is within the
ambit of the said code as a form of an actual claim of damage.

[b] Because Richie was not able to leave for Qatar, no employer-employee relationship was established
between them;

Using the test of the existence of employer-employee relationship, it is established that there is such
relationship.

To determine whether there exists an employer-employee relationship, the four-way test should be applied,
namely: (1) selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employee's conduct—the last being the most important element.

Supreme Recruiters (SR) and its principal, Mideast Recruitment Agency (MRA) has selected Ritchie for
driver and on the course of engaging his service. He will be paid of wages and definitely they have the
power of dismissal. Definitely, SR and MRA have the power to control Ritchie because anytime they can
withhold the deployment of Ritchie like what happened in this case. The mere fact that the deployment of
Ritchie be in the hands of the agencies is already an indication of control over Ritchie.

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[c] Even assuming that they are liable, their liability would, at most, be equivalent to Richie’s salary for only
six (6) months, not two years.

The issue on SR and MRA’s liability over Richie’s situation may be decided on two conflicting contentions,
both of which rely on Sec. 10(5) of RA 8042, as amended by Sec. 7 of RA 10022.

Richie may be entitled to an equivalent of his salary for two years

The first contention entitles Richie to the equivalent of his full salary for two years, deeming untenable SR
and MRA’s position that they are only liable to pay Richie the equivalent of his salary for, at most, six
months. This contention is supported by the Supreme Court’s decision in Serrano vs. Gallant Maritime
Services (G.R. No. 167614, March 24, 2009), in which they held that a clause on Sec. 10(5), RA 8042,
which reads: “three months of every year of the unexpired term”, is unconstitutional. The Supreme Court
based its decision on the ground that the said clause contains a suspect classification singling out a class
of OFWs by imposing upon them a “peculiar disadvantage”. The said clause treats illegally-dismissed
OFWs with an unexpired portion of one year or more in their employment differently from those who are
not, by imposing upon them the disadvantage of a three-month cap on their claims. There is no
specification in RA 8042 that the same applies to OFWs who are not dismissed illegally. Applying it to the
instant case, Richie may be therefore entitled to an equivalent of his full salary for two years, because SR
and MRA’s argument that they are only liable for a six-month equivalent of his salary is void and
unconstitutional, similar to that of the voided three-month cap clause under Sec. 10(5), RA 8042.

It must be noted that the Serrano doctrine was decided shortly before RA 10022, which amended RA 8042,
came into effect.

Richie may not be entitled to an equivalent of his salary for two years

A closer look at Sec. 7 of RA 10022, which amended Sec. 10 of RA 8042, would reveal that the subject
clause in Serrano is still retained in toto. It could be that the Legislature may not have taken cognizance of
the Serrano doctrine; hence the subject clause is still in effect until the present, unless jurisprudence would
further emphasize on Serrano by declaring the portion of Sec. 7 containing the subject clause
unconstitutional.

Resolution

Taking into context the hierarchy of laws, with statutes being above jurisprudence or case law, it would then
be safe to conclude that at this point, Sec. 7 of RA 10022 is the one applicable to the present case, and not
Serrano. In effect, Richie is therefore entitled only to an equivalent of, at most, six months worth of his
salary as contended by SR and MRA.

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