2013 (Labor Law) Bar Exam Questions: Multiple Choice Question 17

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XVII. Constant Builders, an independent contractor, was charged with illegal dismissal and non-payment of wages and benefits of ten dismissed employees. The complainants impleaded as co-respondent Able Company, Constant Builder’s principal in the construction of Able’s office building. The complaint demanded that Constant and Able be held solidarily liable for the payment of their backwages, separation pay, and all their unpaid wages and benefits.

If the Labor Arbiter rules in favor of the complainants, choose the statement that best describes the extent of liabilities of Constant and Able. (1%)

(A) Constant and ABle should beĀ  held solidarily liable for the unpaid wages and benefits, as well as backwages and separation pay, based on Article 109 of the Labor Code which provides that “every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code.”

(B) Constant and Able should be held solidarily liable for the unpaid wages and benefits, and should order Constant, as the worker’s direct employer, to be solely liable for the backwages and separation pay.

(C) Constant and Able should be held solidarily liable for the unpaid wages and benefits and the backwages since these pertain to labor standards benefits for which the employer and contractor are liable under the law, while Constant alone — as the actual employer — should be ordered to pay the separation pay.

(D) Constant and Able should be held solidarily liable for the unpaid wages and benefits, and Constant should be held liable for their backwages and separation pay unless Able is shown to have participated with malice or bad faith in the workers’ dismissal, in which case both should be held solidarily liable.

(E) The above statements are all inaccurate.

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