a) 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 decision-making 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. II. a) What issues or disputes may be the subject of voluntary arbitration under the Labor Code? (4%) Voluntary arbitrators of voluntary arbitration panels have original and exclusive jurisdiction to hear and decide: (a) all unresolved grievances, including termination cases, arising from the interpretation or implementation of the CBA, and those arising from the interpretation or enforcement of company personnel policies submitted to the Grievance Machinery provided for the purpose in the CBA. All grievances unresolved within seven days from the date of its submission for resolution to the last step of the grievance machinery are automatically referred to voluntary arbitration; (b) violations of a CBA, except those which are gross in character, such violations are no longer treated as unfair labor practices, but are resolved as grievances under the CBA; (c) upon agreement of the parties, all other disputes including unfair labor practices and bargaining deadlocks. b) Can a dispute falling within the exclusive jurisdiction of the Labor Arbiter be submitted to voluntary arbitration? Why or why not? (3%)

Although Article 217 of the Labor Code speaks of exclusive and original jurisdiction of Labor Arbiters, the cases enumerated thereto may be submitted to voluntary arbitration by agreement by the parties under Article 262. This is because the law prefers voluntary to compulsory arbitration Labor Arbiters have original and exclusive jurisdiction over: 1. unfair labor practices; 2. termination disputes; 3. cases accompanied with a claim for reinstatement, and involving wages, rates of pay, hours of work, and other terms and conditions of employment; 4. claims for actual, moral, exemplary and other forms of damages arising from employer-employee relations: 5. cases arising from any violation of Article 264 of the Labor Code, including questions involving the legality of strikes and lockout; and 6. except claims of Employees Compensation, Social Security. Medicare and maternity benefits, all other claims arising from employer-employee relations including those persons in domestic or household service, Involving an amount exceeding five thousand pesos (P5,000 00) regardless of whether accompanied with a claim for reinstatement. Jurisdiction of the NLRC: 1. exclusive appellate jurisdiction over all cases decided by Labor Arbiter; 2. exclusive appellate jurisdiction over all cases decided by Regional Directors or hearing officers involving the recovery of wages and other monetary claims and benefits arising from employer-employee relations where the aggregate money claim of each employee or househelper does not exceed five thousand pesos (P5,000.00); 3. original Jurisdiction to act as a compulsory arbitration body over labor disputes certified to NLRC by the Secretary of Labor and Employment; and 4. power to issue a labor injunction. JUST CAUSE - May be defined as those lawful or valid grounds for termination of employment which arise from causes directly attributable to the fault or negligence of the erring employee. Just causes are usually serious or grave in nature and attended by willful or wrongful intent or they reflected adversely on the moral character of the employees. As opposed to authorized causes under Article 283 wherein the termination of employment is dictated by necessity of the business, the dismissal under just causes is imposed by the employer to the erring employee as a punishment for the latters acts or omission. Just Causes Under the Labor Code Just causes for termination under the Labor Code is found in Article 282 and enumerated here as follows: Serious misconduct. Serious misconduct is an improper conduct willful in character and of such grave nature that transgressed some established and definite rule of action in relation to the employees work. Willful disobedience to lawful orders. The employees are bound to follow reasonable and lawful orders of the employer which are in connection with their work. Failure to do so may be a ground for dismissal or other disciplinary action.

Gross and habitual neglect of duties. Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence, or the entire absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. Fraud or willful breach of trust. Fraud is any act, omission, or concealment which involves a breach of legal duty, trust, or confidence justly reposed and is injurious to another. Commission of a crime or offense. Commission of a crime or offense by the employee against his employer or any immediate member of his family or his duly authorized representative, is a just cause for termination of employment. Analogous causes. Other causes analogous to the above grounds may also be a just cause for termination of employment. Examples of Analogous Causes Abandonment. Abandonment of job is a form of neglect of duty. There is abandonment when the employee leave his job or position with a clear and deliberate intent to discontinue his employment without any intention of returning back. Gross inefficiency. Gross inefficiency is analogous to and closely related to gross neglect for both involve acts or omissions on the part of the employee resulting in damage to the employer or to his business. (See Lim vs. NLRC, G.R. No. 118434, July 26, 1996.) Disloyalty/conflict of interest. Disloyalty exists when one asserts an interest, or performs acts adverse to ones employer, such as secretly engaging in a business which renders him a competitor and rival of his employer. It constitutes a breach of an implied condition of the contract of employment. (See Elizalde International vs. Court of Appeals, G.R. No. L40553 February 26, 1981.) Dishonesty. Acts of dishonesty deemed to be patently inimical to the employer is analogous to breach of trust and is a valid cause for termination of employment. No Separation Pay An employee who is terminated from employment for a just cause is not entitled to payment of separation benefits. Section 7, Rule I, Book VI, of the Omnibus Rules Implementing the Labor Code provides: Sec. 7. Termination of employment by employer. The just causes for terminating the services of an employee shall be those provided in Article 282 of the Code. The separation from work of an employee for a just cause does not entitle him to the termination pay provided in Code, without prejudice, however, to whatever rights, benefits and privileges he may have under the applicable individual or collective bargaining agreement with the employer or voluntary employer policy or practice. AUTHORIZED CAUSES The two most commonly used grounds for termination of employee are the Authorized Causes under Article 283 and 284 of the Labor Code, and the Just Causes under Article 282. Below are the authorized causes for termination of employment. As maybe broadly defined, AUTHORIZED CAUSES for dismissal of employee refer to those lawful grounds for termination which in general do not arise from fault or negligence of the employee. Authorized causes are

distinguished from just causes under Article 282 in that the latter are always based on acts attributable to the employees own fault or negligence. Authorized causes The authorized causes for termination of employee are enumerated under Article 283 and 284 of the Labor Code, as follows: Installation of labor-saving devices. The installation of labor-saving devices contemplates the installation of machinery to effect economy and efficiency in the method of production[1]. Redundancy. Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. A position is redundant where it superfluous, and superfluity of a position or positions may be the outcome of a number of factors, such as over hiring of workers, decreased of volume business, or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise[2]. Retrenchment to prevent losses. Retrenchment is an economic ground to reduce the number of employees. Retrenchment is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an employer because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business[3]. It is sometimes also referred to as downsizing. It is aimed at saving a financially ailing business establishment from eventually collapsing. Closure or cessation of operation. The closure of a business establishment is a ground for the termination of the services of an employee unless the closing is for the purpose of circumventing pertinent provisions of the Labor Code. Disease. An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as the health of his co-employees. It should be noted though that the above enumeration is not an exhaustive list of authorized causes of termination of employment. Valid application of union security clause, relocation of business, among others, may also considered authorized causes of termination. c) Can a dispute falling within the jurisdiction of a voluntary arbitrator be submitted to compulsory arbitration? Why or why not? (3%) 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%) IV. Super Comfort Hotel employed a regular pool of extra waiters who are called or asked to report for duty when the Hotels volume of business is beyond the capacity of the regularly employed waiters to undertake. Pedro has been an extra waiter for more than 10 years. He is also called upon to work on weekends, on holidays and when there are big affairs at the hotel. What is Pedros status as an employee under the Labor Code? Why? Explain your answer fully. (6%) V. The Pizza Corporation (PizCorp) and Ready Supply Cooperative (RSC) entered into a service agreement wherein RSC, in consideration of service fees to be paid by PizCorp, will exclusively supply PizCorp with a group of RSC motorcyle-owning cooperative members who will henceforth perform PizCorps pizza delivery service. RSC assumes under the agreement full obligation for the payment of the salaries and other statutory monetary benefits of its members deployed to PizCorp. The parties also stipulated that there shall be no employer-employee relationship between PizCorp and the RSC members. However, if PizCorp is materially prejudiced by any act of the delivery crew that violates PizCorps directives and orders, PizCorp can directly impose disciplinary actions on, including the power to dismiss, the erring RSC member/s. a) Is the contractual stipulation that there is no employer-employee relationship binding on labor officials? Why? Explain fully. (3%) b) Based on the test/s for employer-employee relationship, determine the issue of who is the employer of the RSC members. (4%) c) Assume that RSC has a paid-up capitalization of P1,000,000.00. Is RSC engaged in labor only contracting, permissible job contracting or simply, recruitment? (3%) 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, they held 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%) VII.

Tito Pacencioso is an employee of a foundry shop in Malabon, Metro Manila. He is barely able to make ends meet with his salary of P4,000.00 a month. One day, he asked his employer to stop deducting from his salary his SSS monthly contribution, reasoning out that he is waiving his social security coverage.

If you were Titos employer, would you grant his request? Why? (6%) VIII. Carol de la Cruz is the secretary of the proprietor of an auto dealership in Quezon City. She resides in Caloocan City. Her office hours start at 8:00 a.m. and end at 5:00 p.m. On July 30, 2008, at 7 a.m. while waiting for public transport at Rizal Avenue Extension as has been her routine, she was sideswiped by a speeding taxicab resulting in her death. The father of Carol filed a claim for employees compensation with the Social Security System. Will the claim prosper? Why? (6%) IX.

Assume that in Problem 5, Mario, an RSC member disgusted with the non-payment of his night shift differential and overtime pay, filed a complaint with the DOLE Regional Office against RSC and PizCorp. After inspection, it was found that indeed Mario was not getting his correct differential and overtime pay and that he was not declared an SSS member (so that no premiums for SSS membership were ever remitted). On this basis, the Regional Director issued a compliance order holding PizCorp and RSC solidarily liable for the payment of the correct differential and overtime pay and ordering PizCorp to report Mario for membership with SSS and remit the overdue SSS premiums.

Who has the obligation to report the RSC members for membership with the SSS, with the concommitant obligation to remit SSS premiums? Why? (6%) 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 Labor 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%) XI. Complainants had worked five (5) years as waitresses in a cocktail lounge owned by the respondent. They did not receive any salary directly from the respondent but shared in all service charges collected for food and drinks to the extend of 75%. With respondents pripor permission, they could sit with and entertain guests inside the establishment and approrpiate for themselves the tips given by guests. After five (5) years, the complainants individual shares in the collected service charges dipped to below minimum wage level asa consequence of the lounges marked business decline. Thereupon, complainants asked respondent to increase their share in the collected service charges to 85%, or the minimum wage level, whichever is higher.

Respondent terminated the services of the complainants who countered by filing a consolidated complaint for unlawful dismissal, with prayer for 85% of the collected services or the minimum wage for the appropriate periods, whichever is higher. Decide. (6%) Here are the Basic Benefits for Employees covered by the Philippine Labor Code: Social Security Systems (SSS) Contributions Republic Act No. 8282, otherwise known as the Social Security Act of 1997, refers to the social security system in the Philippines that is initiated, developed and promoted by its Government. The social security system is aimed at providing protection for the SSS member against socially recognized hazard conditions, such as sickness, disability, maternity, old age and death, or other such contingencies not stated but resulted in loss of income or results to a financial burden.

The employee and his/her employer(s) are to contribute for the social security benefits of the said employee in accordance to a given schedule by the Philippine Social Security System. Monthly employee contribution depends on the employee's actual monthly salary. (See: Circular No. 33-P)

Contribution to National Health Insurance Program (NHIP) The employee and his/her employer(s) are to contribute for the medical insurance of the said employee in accordance to the Republic Act 7835 on Medicare Program which is administered by the Philippine Health Insurance Corporation (Philhealth). Monthly employee contribution depends on the employee's actual monthly salary. The contribution schedule is provided by Philhealth. (See: Philhealth Premium Contribution Schedule)

Contribution to Home Development and Mutual Fund (HDMF) The employer(s) is required to contribute per month not less than P100.00 to the employee's Home Development and Mutual Fund. In accordance to the periodic remittance schedule provided by HDMF, the employer(s) will remit this contribution, in addition to that of the employee's, which is to be deducted from his/her payroll.

The 13th Month Pay As mandated by the Presidential Decree No. 851, the employee shall receive a bonus salary equivalent to one (1) month, regardless of the nature of his/her employment, not later than December 24 of every year.

Service Incentive Leave

Book III, Chapter III of the Labor Code of the Philippines covers the employee's benefit for Service Incentive Leaves. According to Article 95, an employee who has rendered at least one year of service is entitled to a yearly five days service incentive leave with pay. (See: Article 95, Conditions of Employment)

Meal and Rest Periods Under Article 83, the employee is provided a one-hour employee benefit for regular meals, when working on an eight (8 hour) stretch. Employees are also provided adequate rest periods in the morning and afternoon which shall be counted as hours worked. (See: Article 83, Conditions of Employment). All these provisions apply in addition to every new employee benefits furnished that are in excess of what is stipulated by the Philippine Labor Code. Other regular Philippine employees benefits furnished by the employer(s) but are outside of the mandated employee benefit includes, but not limited to: Housing and housing plans Expense Account Company sponsored vehicle Paid Holiday and Vacation Educational assistance or plans to the employee and/or his direct dependents.