Father Saturnino Urios UniversityCollege of Law

Legal Ethics Manual (Module E, Scenarios 1 and 2)

Final Exam for

Problem Areas in Legal Ethics (Law 312)

Submitted by:

Aiko Eleni N. Paler

Submitted to:

Atty. Josefe Sorrera-Ty

PALE Professor

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ANALYSIS AND DISCUSSION FOR SCENARIO 1, MODULE E

Grievance procedure and arbitration may definitely be utilized with regard the “equal work, unequal pay” practiced by IS Cebu.

The primacy of grievance procedure and voluntary arbitration is mandated by the

Philippine Constitution itself and entrenched in the Labor Code as a matter of basic

industrial relations policy. Sec. 3, Article XIII of the Constitution provides that the State

shall promote the principle of shared responsibility between workers and employers and

the preferential use of voluntary modes in settling disputes, including conciliation,

and shall enforce their mutual compliance therewith to foster industrial peace.

Furthermore, Art 211 of the Labor Code, as amended by RA 6715 provides,

among others:

(a) “…It is the policy of the State…to promote and emphasize the primacy

of free collective bargaining and negotiations, including voluntary arbitration,

mediation and conciliation, as modes of settling labor or industrial disputes.”

(b) “To provide an adequate administrative machinery for the expeditious

settlement of labor or industrial disputes.”

. These legal mandates, in turn, are formalized recognition of the ultimate precept

that the best persons to resolve a labor dispute are the party disputant themselves. In

the absence of an agreement or other voluntary arrangement providing for a more

expeditious manner of collective bargaining, it shall be the duty of employer and the

representatives of the employees to bargain collectively. Under the law, this means the

performance of a mutual obligation to meet and convene promptly and expeditiously in

good faith for the purpose of negotiating an agreement with respect to wages, hours of

work and all other terms and conditions of employment.

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It is clear from these legal provisions that voluntary arbitration and other modes

of dispute resolution are to be exhausted before resorting to judicial machinery. In the

case of International School Alliance of Educators v. Quisumbing, G.R. No. 128845

(June 1, 2000), foreign-hired teachers were given higher pay than the locally hired

teachers, it was held that there exists a blatant display of discrimination. Equal pay for

equal work is a principal long honored in this jurisdiction, as it rests on fundamental

norms of justice.

Hence, disputes regarding employment conditions, such as presented in the

scenario can be subject to grievance procedure. Where the grievance remains

unresolved, either party, may serve notice upon the other of its decision to submit the

issue to voluntary arbitration. Article 262 (now 274) of the Labor Code provides that

upon agreement of the parties, the voluntary arbitrator can hear and decide all other

labor disputes.

In labor-management relations voluntary arbitration is a master procedure. Any

and all kinds of labor disputes may be submitted to, settled, or resolved through

voluntary arbitration, if the parties so desire. As a master procedure, it takes

precedence over other dispute settlement devices.

Victor, the lawyer-boyfriend may not act as conciliator, mediator and negotiator.

Rule 15.03 of the Code of Professional Responsibility prohibits lawyers from

representing conflicting interests. The law provides thus:

Rule 15.03. - A lawyer shall not represent conflicting interests

except by written consent of all concerned given after a full disclosure of

the facts.

There exists a conflict of interest considering that Victor is a Senior Associate of

XYZ Law Firm, and that the same law firm is the retained counsel of IS Manila. It is of

no moment that IS Cebu has consulted exclusively with Partner D of XYZ the law firm.

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It is explicit that a lawyer is prohibited from representing new clients whose

interests oppose those of a former client in any manner, whether or not they are parties

in the same action or on totally unrelated cases. The prohibition is founded on the

principles of public policy and good taste. It behooves lawyers not only to keep inviolate

the client's confidence, but also to avoid the appearance of treachery and double-

dealing for only then can litigants be encouraged to entrust their secrets to their lawyers,

which is of paramount importance in the administration of justice

There is conflict of interest when a lawyer represents inconsistent interests of two

or more opposing parties. The test is whether or not in behalf of one client, it is the

lawyers duty to fight for an issue or claim, but it is his duty to oppose it for the other

client. In brief, if he argues for one client, this argument will be opposed by him when he

argues for the other client. This rule covers not only cases in which confidential

communications have been confided, but also those in which no confidence has been

bestowed or will be used. Also, there is conflict of interests if the acceptance of the new

retainer will require the attorney to perform an act which will injuriously affect his first

client in any matter in which he represents him and also whether he will be called upon

in his new relation to use against his first client any knowledge acquired through their

connection. Another test of the inconsistency of interests is whether the acceptance of a

new relation will prevent an attorney from the full discharge of his duty of undivided

fidelity and loyalty to his client or invite suspicion of unfaithfulness or double dealing in

the performance thereof ( Hornilla v. Atty. Salunat 453 Phil. 108, 2003)

Rule 15.04, Canon 15 of the Code of Professional Responsibility provides that a

lawyer may, with written consent of all concerned, act as mediator, conciliator or

arbitrator in settling disputes. Consent in writing is required to prevent future controversy

on the authority of the lawyer to act as mediator, conciliator or arbitrator. However, the

lawyer who acts as such, cannot represent any of the parties to it. (Report of IBP

Committee, p. 82)

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Hence, even with a written consent from all parties concerned, Victor, still cannot

act a mediator, conciliator or arbitrator. The idea of him not representing any of the

parties, is far-fetched considering that he maintains a romantic relationship with Jaclyn.

As to the validity of the intended dismissal of Jaclyn’s, I would submit that the same would be unwarranted and illegal.

Encouraging those locally-hired teachers of IS Cebu to raise questions against

the policy of the school does not amount to misconduct which could warrant her

dismissal, especially that the act of IS Cebu constitutes discrimination against the

locally-hired teachers. Neither does the same act constitute as a just nor authorized

cause for termination contemplated under Articles 296-298 of the Labor Code.

Misconduct is improper or wrong conduct. It is the transgression of some

established and definite rule of action, a forbidden act, a dereliction of duty, willful in

character, and implies wrongful intent and not mere error in judgment. Such

misconduct, however serious, must nevertheless be in connection with the employee’s

work to constitute just cause for his separation. Thus, for misconduct or improper

behavior to be a just cause for dismissal, (a) it must be serious; (b) it must relate to the

performance of the employees duties; and (c) it must show that the employee has

become unfit to continue working for the employer. The misconduct to be serious within

the meaning of the act must be of such a grave and aggravated character and not

merely trivial or unimportant. (Nissan Motors Phils. v. Angelo, G.R. No. 164181, 14

September 2011.)

No less than the Constitution recognizes and guarantees the labor’s right to

security of tenure. The guarantee of security of tenure under the Constitution means that

an employee cannot be dismissed from the service for causes other than those provided

by law and only after due process is accorded the employee. (De Guzman vs. Comelec,

G.R. No. 129118, July 19, 2000.)

Under the Labor Code of the Philippines, as amended, specifically, Article 279 of

the said Code, the security of tenure has been construed to mean as that “the employer

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shall not terminate the services of an employee except for a just cause or when

authorized” by the Code.

In a host of cases, the Court has upheld the employee’s right to security of tenure

in the face of oppressive management behavior and management prerogative. It is a

right which may not be denied on mere speculation of any unclear basis.

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ANALYSIS AND DISCUSSION FOR SCENARIO 2, Module E

Encouragement of compromise agreements as a mode of settlement of labor disputes.

Lawyers should not be instigators of controversies but a mediator for concord

and conciliator for compromise. Canon 1 rule 1.014 a lawyer shall encourage his clients to avoid, end or settle a controversy if it will admit of a fair settlement.

The nature of a compromise agreement is such that a party must give up some

of the rights that he has, in consideration of the same act on the part of the other side.

(Jesalva, et al vs Bautista, et al)

In the case of Flores vs. Chua, 306 SCRA 465, the Court had he occasion to

state that a compromise is as often the better part of justice as prudence is part of valor

and a lawyer who encourages compromise is no less the client’s champion in

settlement out of court than he is the client’s champion in the battle in court. Whenever

the controversy will admit of fair judgment, the client should be advised to avoid or to

end the litigation. This will save the client from additional expenses and help prevent the

clogging of docket.

It is the lawyer’s duty to see to it that justice be accorded to all without

discrimination. Legal aid is not a matter of charity. It is a means for the correction of

social imbalance that may and often do lead to injustice.

Requirements for validity of compromise agreements

Compromise agreements involving labor standards cases must be reduced to

writing and signed in the presence of the Regional Director or his duly authorized

representative (Atilano v. De la Cruz)

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Furthermore, Article 1878 of the New Civil Code provides that a Special Power of

Authority is required before an agent can be authorized to enter into a compromise. It

reads:

Art. 1878. Special powers of attorney are necessary in the following

cases:

xxx xxx xxx

(3) To compromise, to submit questions to arbitration, to renounce the

right to appeal from a judgment, to waive objections to the venue of an

action or to abandon a prescription already acquired.

The authority of attorneys to bind their clients is governed by Sec. 7, Rule III of

the New Rules of Procedure of the National Labor Relations Commission, which

provides:

Sec. 7. Authority to Bind Party. - Attorneys and other representatives of

parties shall have authority to bind their clients in all matters of procedure; but

they cannot, without a special power of attorney or express consent, enter into a

compromise agreement with the opposing party in full or partial discharge of a

client's claim.

A fundamental policy of Philippine labor laws is to allow the parties to find solutions to their own disputes. The Constitution, commands the State to promote the preferential use of voluntary modes in settling disputes since the maintenance of industrial peace is a joint responsibility of workers and employers.

Article 248 (a) of the Labor Code considers it an unfair labor practice when an

employer interferes, restrains or coerces employees in the exercise of their right to self-

organization or the right to form an association. In order to show that the employer

committed unfair labor practice under the Labor Code, substantial evidence is required

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to support the claim. Substantial evidence has been defined as such relevant evidence

as a reasonable mind might accept as adequate to support a conclusion.

Art. 246 of the Labor Code provides that, “It shall be unlawful for any person

to restrain, coerce, discriminate against or unduly interfere with employees and workers

in their exercise of the right to self-organization. Such right shall include the right to

form, join, or assist labor organizations for the purpose of collective bargaining through

representatives of their own choosing and to engage in lawful concerted activities for

the same purpose for their mutual aid and protection, subject to the provisions of Article

264 of this Code.” (As amended by Batas Pambansa Bilang 70, May 1, 1980)

Unfair labor practices violate the constitutional right of workers and employees to

self-organization, are inimical to the legitimate interests of both labor and management,

including their right to bargain collectively and otherwise deal with each other in an

atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the

promotion of healthy and stable labor-management relations.

Consequently, unfair labor practices are not only violations of the civil rights of

both labor and management but are also criminal offenses against the State which shall

be subject to prosecution and punishment as herein provided. (Art 247, Labor Code)

The Court has always respected a company's exercise of its prerogative to

devise means to improve its operations. Thus, it has been held that management is free

to regulate, according to its own discretion and judgment, all aspects of employment,

including hiring, work assignments, supervision and transfer of employees, working

methods, time, place and manner of work.

This is so because the law on unfair labor practices is not intended to deprive

employers of their fundamental right to prescribe and enforce such rules as they

honestly believe to be necessary to the proper, productive and profitable operation of

their business. (Philcom Employees Union vs Philippine Global Communications and

Philcom Corporation)

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It should be noted in this connection that Section 3 of our Industrial Peace Act

was taken from Section 7 of the Wagner Act. This Wagner Act provision was amended

in 1947 by the Taft-Hartley Act, so that, as it now stands, Section 7 reads:

Employees shall have the right to self-organization, to form, join, or assist labor

organizations to bargain collectively through representatives of their own

choosing, and to engage in concerted activities for the purpose of collective

bargaining or other mutual aid or protection, and shall also have the right to

refrain from any or all of such activities except to the extent that such right may

be affected by an agreement requiring membership in a labor organization as a

condition of employment as authorized in section 8(a) (3)

The Constitutional mandate that the State shall "assure the rights of the workers

to self-organization, collective bargaining, security of tenure and just and humane

conditions of work," should be achieved under a system of law such as the

aforementioned provisions of the pertinent statutes. When an overzealous official by-

passes the law on the pretext of retaining a laudable objective, the intendment or

purpose of the law will lose its meaning as the law itself is disregarded. (Colgate

Palmolive Philippines, Inc. vs Hon. Blas F. Ople, Colgate Palmolive Sales Union)

In the case of Insular Life Assurance Co., Ltd. Employees Association – NATU v.

Insular Life Assurance Co. Ltd., the Court had occasion to lay down the test of whether

an employer has interfered with and coerced employees in the exercise of their right to

self-organization, that is, whether the employer has engaged in conduct which, it may

reasonably be said, tends to interfere with the free exercise of employees’ rights; and

that it is not necessary that there be direct evidence that any employee was in fact

intimidated or coerced by statements of threats of the employer if there is a reasonable

inference that anti-union conduct of the employer does have an adverse effect on self-

organization and collective bargaining.

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