1. Kotse Corp.

operates a mobile phone application “Kotse PH” that allows users to book private cars on
demand to their destination, and matches them with nearby available “driver-partners.” The destination
is only made known to the driver-partners when the users have boarded the vehicle. Kotse Corp. has an
accreditation process for its driver-partners who are required to submit bio-data, professional driver’s
license, and negative drug test result, as well as pass an exam on road safety. After accreditation, the
driver-partners are free to choose their own work hours but Kotse Corp. requires them to complete at
least a total 40 hours per week or else the driver’s share in the fare will be reduced. The fare is
determined by the application software depending on distance, time, and the demand for rides. The fare
is paid by the user or passenger through the application and Kotse Corp. remits the driver’s share of 75%
of the fare every two weeks. Kotse Corp. keeps 25% as its commission. The driver-partners are
evaluated by the users or passengers through a five-star rating system. Driver-partners who consistently
have an average rating of two stars or below may be removed from Kotse Corp.’s roster of driver-
partners. The driver-partners use their own vehicles, pay for fuel, and secure their own vehicle
insurance.

Is there an employer-employee relationship between Kotse Corp. and its driver-partners? Explain
briefly. (5 points)

Answer:

Yes, there is an employer-employee relationship between Kotse Corp and its driver-partners.

Well settled is the rule that in order to establish employer-employee relationship, the four-
fold test should be satisfied, to wit:

a. the power of hiring or selection of employees;

b. payment of wages;

c. the power to terminate; and

d. the power to control the means employed and its result.

In this case, the Kotse Corp. is the one who selects the driver-partners through the submission
of required documents and the accreditation process. The Kotse Corp. is also the one who pays the
wages of the said driver-partners through a commission. Furthermore, it has the power to terminate
the said driver-partners in case it fails to satisfy its clients. And finally, it has the power to control on
the means, by giving the destination of every trip and the required hours of work in which to be
complied with by the drivers.

Hence, the four-fold test is established, therefore there is an employer-employee relationship

between Kotse Corp. and its drivers.

2. [This item has two questions.] Krys is a daily-paid factory worker who is required to render eight hours
of work per day. Two days ago, he rendered only seven hours of work as he arrived late in the morning.
Yesterday, Krys worked for nine hours as he was required to assist in the processing of perishable goods.
His supervisor, Rudy, told Krys that he would not get any overtime pay as his work for nine hours
yesterday was meant to offset the one-hour shortfall in his work the day before.

a. Is Rudy correct? Explain briefly.

Answer:

No, Rudy is not correct.

Basic is the rule under Labor laws that overtime cannot offset an under time as the wage rate
thereof is different. Thus, the 1-hour undertime of Krys cannot be offset by her overtime the next
working day. Hence, Rudy is not correct.

b. Assuming Krys is entitled to overtime pay, how much will he get as overtime pay if his daily wage is
Php 640.00? Explain briefly.

Answer:

Under the labor law, overtime pay is 30% of the daily wage of an employee. Thus, if Krys’ daily
wage is Php 640.00, she will receive an additional 30% which is Php 192.00.

(5 points)

3. Cristina, a new-hire of Sterling Corporation (Sterling), was made to join Sterling Corporation
Employees Union (SCEU) in compliance with the union shop provision in the collective bargaining
agreement (CBA) between SCEU and Sterling. At the request of SCEU, Sterling started deducting union
dues from Cristina’s salary and remitting the same to SCEU pursuant to the CBA provisions. Cristina
protested, claiming that she has not authorized the deduction in writing.

Is Cristina’s claim valid? Explain briefly. (5 points)

Answer:

No, Cristina’s claim is not valid.

As a general rule under the law, it is prohibited to impose any deduction on the employees’
salaries without its written consent. However, as an exception, union membership fee is an
authorized deduction provided under the law as the consent to deduct the fees thereto is implied
upon joining a union.

Here, upon hiring of Cristina, she is required to join Sterling by virtue of its union shop
provision. Thus, she is required to pay the membership fees thereof.

4. Due to Bitoy’s repeated unwanted sexual advances towards his co-worker Diego, Diego went to the
Personnel Manager to report Bitoy’s behavior. The Personnel Manager started a disciplinary action case
against Bitoy. In his written explanation, Bitoy denied the allegation of sexual advances. He also pointed
out that sexual harassment only pertains to a superior-subordinate relationship, where the perpetrator
is the superior and the victim is the subordinate. Since Diego is not his subordinate, as they are co-
workers with the same rank, Bitoy cannot be subject to disciplinary action.
Is Bitoy’s contention correct? Explain briefly. (5 points)

Answer:

Bitoy’s contention is incorrect.

The Labor Code provides that a sexual harassment case is applicable not only to superior-
subordinate relationships but also between co-workers. Any type of sexual advances in the workplace
can be considered as sexual harassment. Here, Bitoy’s repeated sexual advances toward Diego is
tantamount to sexual abuse.

Therefore, Bitoy’s contention is incorrect.

5. Marino, a seafarer, was engaged as an oiler on board Searena Corporation’s oil tanker vessel. After
ten consecutive contracts, with each contract having a duration of eight months and the last one ending
in December 2021, Marino decided it was time to enjoy his hard-earned money, and disembarked from
the vessel upon the expiration of his employment contract. In April 2022, he felt excruciating pain in his
groin. He went to a doctor and was diagnosed with acute hernia. The doctor also determined that the
hernia was caused by repeated heavy lifting because of his work as an oiler.

As a result, Marino filed a case against Searena Corporation before the Labor Arbiter, claiming total and
permanent disability under the POEA Standard Employment Contract.

Searena Corporation raised in its position paper that Marino is barred from filing the case as he did not
raise any complaints during the term of his employment, and within three days from his arrival in the
country after his last employment.

If you were the Labor Arbiter, rule on Searena Corporation’s defense. Explain briefly. (5 points)

Answer:

The defense of Searena Corporation is misplaced.

The Labor Code provides that it is not necessary that the illness subject of the claim for total
and permanent disability to arise during the term of the employment contract, the employee only
needs to establish that such illness was contracted or aggravated during his employment.
Furthermore, he is also not required to raise a complain about such illness during the mandatory
check-up with the company designated physician three days upon arrival as the determination of such
illness is the responsibility of the said physician.

As such, the findings of the Doctor that Marino has an acute hernia which was due to
repeated heavy lifting because of his previous work as an oiler is sufficient to bind Searena
Corporation for the payment of permanent and total disability under POEA-Standard Employment
Contract.

6. Sonic Build Corp. employed Leo and Dan in its cement factory and assigned them the tasks of, among
others, directing and supervising rank-and-file employees. Leo and Dan are required to ensure that such
employees obey company rules and regulations, and recommend to the company’s Human Resources
Department any required disciplinary action against erring employees. There is only one union
representing rank-and-file employees.
May Leo and Dan join the union? Explain briefly. (5 points)

Answer:

No, Leo and Dan cannot join of the union of the rank-in-file employees because their job is
managerial and supervisory nature as they are tasked to direct and supervise the rank-and-file
employees and to ensure that the latter obey the company rules and regulations.

It is established under the Labor law that managerial and supervisory employees is not
allowed to join in the union of rank-and-file employees as there should be a demarcation of the
relationship between rank-and-file and managerial employees.

In view thereof, Leo and Dan cannot join the union representing the rank-and-file employees.

7. Two legitimate labor organizations (Union Jack and Union Jill) are competing to become the first sole
and exclusive bargaining agent (SEBA) in Maharlika Company. The unions agree to a consent election
without involving the Bureau of Labor Relations (BLR). Union Jack garners an overwhelming majority of
the valid votes cast during the consent election. Negotiation for a collective bargaining agreement (CBA)
commences, and while this is ongoing, a third union, Union Jumble, files with the BLR a petition for
certification election seeking certification as the SEBA in Maharlika Company. Union Jack opposes the
petition, arguing that no petition for certification election can be filed within one year from the consent
election, and during the CBA negotiation.

Is Union Jack correct? Explain briefly. (5 points)

Answer:

The contention of Union Jack is bereft of merit.

Under the Labor Code, a consent election conducted without the consent of the Bureau of
Labor Relations does not bind other unions. In this case, failure to involve and notify the BLR in the
consent election does not bind the Union Jumble.

Hence, the contention of Union Jack is unmeritorious.

8. Julian was hired by Index Agency, a licensed manpower and recruitment corporation, which had a
Service Agreement with Kainan Resto, a fast food restaurant, for the provision of ancillary and support
services. Index Agency assigned Julian to work at Kainan Resto as a cashier and counter clerk, whose
duties involved taking customer orders, receiving payments, preparing food orders, and serving food to
customers.

Julian was accused of short-changing a customer during one transaction. He was immediately dismissed
from service by the manager of Kainan Resto. Julian filed a complaint for illegal dismissal against Index
Agency and Kainan Resto. In its defense, Kainan Resto argued that Julian was not its employee but that
of Index Agency, given that Index Agency is a licensed manpower and recruitment corporation.

Is Kainan Resto correct? Explain briefly. (5 points)

Answer:
 Kainan Resto’s contention is incorrect.

Under the Labor Code, the principal and the recruitment agency is jointly and severally liable
for any action arising out of employer-employee relationship.

Here, Index Agency, is the recruitment agency who engaged the services of Julian and
assigned the latter to Kainan Resto, the principal. In a complaint for illegal dismissal, it is necessary to
implead both the principal and the recruitment agency. Hence, the contention of Kainan Resto is
incorrect.

9. Sigaw Corp., a media entity, produces television shows. To streamline its processes, it created a
database of camera crew and sound engineers whom it usually engages for its television shows. Sigaw
Corp. pays them only “talent fees” each time they are engaged for a show. After several years of this set-
up, the camera crew and sound engineers filed a complaint for regularization against Sigaw Corp. before
the Labor Arbiter. On the other hand, Sigaw Corp., claims that they are not regular employees but
independent contractors or talents because they are engaged and paid for their specific technical skills.”

Rule on the complaint. Explain briefly. (5 points)

Answer:

The complaint filed by the camera crew and sound engineers is impressed with merit.

Settled is the rule that an employee who rendered service which is necessary and desirable in
the trade or business of the employer is considered as a regular employee. Furthermore, an employee
who has rendered at least 1 year of service either broken or continuous is also considered as a regular
employee.

In this case, it is apparent that the services of the camera crew and sound engineers in the
business of Sigaw Corp., a media entity, is necessary and desirable. Moreover, said camera crew and
engineers were also rehired for several years of service until this complaint.

In view the foregoing, it is sufficiently established that the requirement mentioned above is
complied with. Hence, the complaint for regularization is impressed with merit.

10. [This item has two questions.] As Human Resources Manager of a five-star hotel, you were told in
confidence by several fearful employees in the housekeeping department that Joy, the head of
housekeeping, was a harsh disciplinarian who would pinch the ears of her staff or rap their heads to drill
instructions on the proper way to clean and tidy up the hotel rooms. One day, the assistant housekeeper
urgently called you to the supply room of the hotel, where you found housekeeping staff Erika and
Patricia slumped on the floor with bloody faces. The assistant housekeeper reported that she saw Joy
beat up Erika and Patricia with a mop for allegedly stealing complimentary toiletries for guests. Erika and
Patricia were hospitalized for a couple of days due to the injuries they sustained.

a. Can Joy be placed on preventive suspension pending administrative investigation? If so, for what
maximum period? Explain briefly.

Answer:

Yes, Joy can be placed on a preventive suspension.

 The law provides that, pending an administrative investigation, an employee/respondent may
be placed on a preventive suspension for a period not exceeding three (3) months in order to prevent
the respondent in influencing the investigators especially if such respondent is holding a high position
in a company.

b. If Joy is placed on preventive suspension, is she entitled to receive her wages and other benefits
during the period? Explain briefly.

Answer:

Yes, if after the investigation, she is found to be innocent. However, if the findings is in the
contrary, she is not entitled to claim her wages for the duration of the suspension as her dismissal will
retroact to the date of the suspension and thus the wage for the said period is deemed forfeited.