Father Saturnino Urios UniversityCollege of Law

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

In Partial Fulfilment of the Requirements for

Problem Areas in Legal Ethics (Law 312)

Submitted by:

Jose Nikko M. Mencidor

Submitted to:

Atty. Josefe Sorrera-Ty

PALE Professor

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ANSWERS TO SCENARIO 1, Module E

1. WHETHER VICTOR CAN CONTINUE TO ADVISE JACLYN CONCERNING THE EQUAL WORK

BUT UNEQUAL PAY PRACTICES OF IS CEBU, OR EVEN TO REPRESENT HER AS A

PERSONAL CLIENT IN THE THREATENED DISCIPLINARY ACTION AGAINST HER BY IS

CEBU, WHICH IS A RETAINER CLIENT OF THE XYZ LAW FIRM.

Atty. Victor should discontinue giving advises to Jaclyn since it would necessarily

amount to a conflict of interest between him as a Senior associate for the firm in which

he works for that is being retained by the school in which Jaclyn works for as a teacher

to which she is made subject for disciplinary action.

The rule on conflict of interest is based on the fiduciary obligation in a lawyer-

client relationship. Lawyers must treat all information received from their clients with

utmost confidentiality in order to encourage clients to fully inform their counsels of the

facts of their case. 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 lawyer’s 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. (A.C. No. 10583, February 18, 2015)

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A lawyer may not, without being guilty of professional misconduct, act as counsel

for a person whose interest conflicts with that of his present or former client. The test is

whether, on behalf of one client, it is the lawyer's duty to contest for that which his duty

to another client requires him to oppose or when the possibility of such situation will

develop. The 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. In addition, the rule holds even if the inconsistency is remote or merely probable

or the lawyer has acted in good faith and with no intention to represent conflicting

interests. (Nombrado v. Hernandez)

The rule concerning conflict of interest prohibits a lawyer from representing a

client if that representation will be directly adverse to any of his present or former

clients. In the same way, a lawyer may only be allowed to represent a client involving

the same or a substantially related matter that is materially adverse to the former client

only if the former client consents to it after consultation. The rule is grounded in the

fiduciary obligation of loyalty. In the course of a lawyer-client relationship, the lawyer

learns all the facts connected with the client's case, including the weak and strong

points of the case. The nature of that relationship is, therefore, one of trust and

confidence of the highest degree. (Perez vs De la Torre)

The termination of attorney-client relation provides no justification for a lawyer to

represent an interest adverse to or in conflict with that of the former client. The client's

confidence once reposed should not be divested by mere expiration of professional

employment. Even after the severance of the relation, a lawyer should not do anything

which will injuriously affect his former client in any matter in which he previously

represented him nor should he disclose or use any of the client's confidences acquired

in the previous relation. (Natam vs Capule)

In relation to this, Canon 17 of the Code of Professional Responsibility provides

that a lawyer owes fidelity to the cause of his client and shall be mindful of the trust and

confidence reposed on him. His highest and most unquestioned duty is to protect the

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client at all hazards and costs even to himself. The protection given to the client is

perpetual and does not cease with the termination of the litigation, nor is it affected by

the party's ceasing to employ the attorney and retaining another, or by any other change

of relation between them. It even survives the death of the client. (Heirs of Lydio "Jerry"

Falame vs Atty. Edgar J. Baguio)

2. WHETHER OR NOT JACLYN COULD BE SUBJECTED TO DISCIPLINARY ACTION FOR HER CONDUCT THAT IN THE JUDGMENT OF THE SCHOOL MANAGEMENT ADVERSELY AFFECTED IN THE MANAGEMENT-EMPLOYEE RELATIONSHIP IN THE SCHOOL.

Jaclyn’s action in encouraging those locally-hired teachers of IS Cebu to raise

questions against the policy of the school would amount to misconduct which could

warrant her dismissal.

Security of tenure means the employee’s right not to be dismissed from work

except for a valid, legal reason and through proper procedure.

Except as limited by special laws, an employer is free to regulate, according to

his own discretion and judgment, all aspects of employment, including hiring, work

assignments, working methods, time, place and manner of work, tools to be

used, processes to be followed, supervision of workers, working regulations, transfer of

employees, work supervision, lay-off of workers and the discipline, dismissal and recall

of work. (NLU vs. Insular La Yebana Co)

So long as a company's management prerogatives are exercised in good faith for

the advancement of the employer's interest and not for the purpose of defeating or

circumventing the rights of the employees under special laws or under valid

agreements, the Supreme Court will uphold them. (San Miguel Brewery Sales vs Ople)

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The employer’s obligation to give his workers just compensation and treatment

carries with it the corollary right to expect from the workers adequate work, diligence,

and good conduct.

The employer has a prerogative to instill discipline in his employees and to

impose reasonable penalties, including dismissal, on erring employees pursuant to

company rules and regulations.

A company has the right to dismiss its erring employees if only as a measure of

self-protection against acts inimical to its interest. (Filipro, Inc vs NLRC)

Concededly, the employer’s right to freely select or discharge his employees is

subject to regulation by the State basically in the exercise of its paramount police

power. But the employer cannot be legally compelled to continue with the employment

of a person who admittedly was guilty of misfeasance towards his employer and whose

continuance in the service of the latter is patently inimical to his interest. The law in

protecting the rights of the labourer authorizes neither oppression nor self-destruction of

the employer. (Ibid)

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

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

character, and implies wrongful intent and not mere error in judgement. The misconduct

to be serious must be of such grave and aggravated character and not merely trivial or

unimportant. Such misconduct, however serious, must, nevertheless be in connection

with the employee’s work to constitute just cause for his separation.

The employer may dismiss an employee if the former has reasonable grounds to

believe, or to entertain the moral conviction, that the latter is responsible for the

misconduct and the nature of his participation therein renders him absolutely unworthy

of the trust and confidence demanded by his position. (Ibid)

However, for disciplinary action or dismissal to be warranted, proper process should be observed.

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While it is true that the decision to dismiss or lay off an employee is

management's prerogative, it must be made without abuse of discretion, for what is at

stake is not only the employee's position but also his means of livelihood. Therefore, he

should be protected against any arbitrary deprivation of his job.  At any rate, where a

penalty less punitive would suffice, whatever missteps may be committed by labor ought

not to be visited with a consequence so severe. It is not only because of the law's

concern for the workingmen. There is, in addition, his family to consider. Unemployment

brings about hardships and sorrows on those dependent on the wage-earner. The

misery and pain attendant to the loss of jobs then could be avoided if there be

acceptance of the view that under all circumstances of a case the workers should not be

deprived of their means of livelihood. 

Disciplinary action against an erring employee is a management prerogative

which, generally, is not subject to judicial interference. However, this policy can be

justified only if the disciplinary action is dictated by legitimate business reasons and is

not oppressive. (Jimmy Areno, JR vs SKYCABLE PCC-BAGUIO)

3. WHETHER OR NOT CBA OR GRIEVANCE MACHINERY CAN BE AVAILED OF BY THE

EMPLOYEES.

Every Collective Bargaining Agreement (CBA) shall provide a grievance machinery

to which all disputes arising from its implementation or interpretation will be subjected to

compulsory negotiations. This essential feature of a CBA provides the parties with a

simple, inexpensive and expedient system of finding reasonable and acceptable

solutions to disputes and helps in the attainment of a sound and stable industrial peace.

It is settled that "when parties have validly agreed on a procedure for resolving

grievances and to submit a dispute to voluntary arbitration then that procedure should

be strictly observed." Moreover, it has been held time and again that "before a party is

allowed to seek the intervention of the court, it is a precondition that he should have

availed of all the means of administrative processes afforded him. Hence, if a remedy 6

within the administrative machinery can still be resorted to by giving the administrative

officer concerned every opportunity to decide on a matter that comes within his

jurisdiction, then such remedy should be exhausted first before the court’s judicial power

can be sought. 

In this case, a grievance procedure culled from the CBA should be followed in

order to resolve the conflict between the employer and employee subject to disciplinary

action. The Labor Code provides that, “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.”

Professor Fernandez quotes Bernstein :

“It is of vital importance that the interrelationship of the two procedures-grievance

and arbitration-be borne in mind by those who study and practice arbitration. A grievance

procedure in which few disputes are settled inevitably overloads arbitral machinery.

Arbitration procedures and awards that undermine the grievance machinery by

permitting serious disregard of its prescribed procedures can invite more arbitration and

fewer settlements by negotiation. Or arbitration that encourages overemphasis on

technical procedural requirements will thwart settlement on the merits so that pressure

builds for resort to self-help. Obviously the balance to be struck requires judgment, pre-

eminently on the part of the representatives of unions and management, who have initial

and primary responsibility. How they discharge their functions may be affected by what

arbitrators do. Arbitration is a powerful tool that can, on occasion, send reverberations

through the larger organism, the grievance procedure and shop office relations”.

The choice of an arbitrator must take into account the following general

considerations: 1) field of choice, or the problem of availability of desired persons; 2)

legal qualification; 3) legal disqualification; and 4) criteria and attributes of a suitable

arbitrator.

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Every arbitrator must possess certain attributes that make him acceptable to the

parties interested in naming him as arbitrator: 1) he must be without prejudice or bias, 2)

he must be intelligent, 3) he must be capable of exercising sound judgment, 4) he must

be immune to pressures from parties to the dispute and from others, 5) he must be

experienced in the field of labor relations.

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ANSWERS TO SCENARIO 2, Module E

Honesty must always still be the lawyer’s best virtue. Lawyers must deal with

their clients, brother lawyers, courts of justice and the public with honesty. Honesty is an

essential for every lawyer to retain his standing as a member of the bar. Lawyers must

always conduct themselves in their professional and non-professional life with good

moral character and without deception. Lawyers should not be instigators of

controversies but a mediator for concord and conciliator for compromise. Canon 1, Rule 1.014 provides that, “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)

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. (Pajares vs Abad Santos)

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.

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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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.

1. WHETHER OR NOT THE LEGALITY OF IS MANILA’S INDEPENDENT UNION CAN BE ASSAILED ON THE BASIS OF THE PROVISION OF TITLE IV, CHAPTER I WHICH TENDS TO FAVOR THE FORMATION OF INDUSTRY WIDE FEDERATIONS WITH APPARENT OBJECTIVE OF STRENGTHENING LABOR UNIONISM IN THE COUNTRY.

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.

With the changes under RA 9481, the 20% registration requirement applies only

to an independent union. This makes a local chapter registerable even if its initial

membership is less than 20% of the bargaining unit. Hence, a company can be quickly

unionized by a very small number of employees.

False statements made by union officers before and during a certification election

-- that the union is independent and not affiliated with a national federation -- are

material facts likely to influence the election results. This principle finds application in

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the present case in which the majority of the employees clearly wanted an independent

union to represent them. Thus, after the members learned of the misrepresentation, and

after a majority of them disaffiliated themselves from the union and formed another one,

a new certification election should be held to enable them to express their true will.

(DHL Philippines Corporation United Rank and File Association-Federation of Free

Workers vs Buklod ng Manggagawa ng DHL Philippines Corporation)

2. WHETHER OR NOT I.S. MANILA CAN SUBTLY AND DISCREETLY ENCOURAGE ITS

MEMBERS TO MAINTAIN THEIR INDEPENDENCE AND PERMANENTLY REJECT

AFFILIATION WITH ACT WITHOUT COMMITTING UNFAIR LABOR PRACTICE.

The bargaining agent must be truly representative of the employees.

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

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

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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)

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 12

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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