2016 (Labor Law) Bar Exam Questions: Question 15

[Answer/discuss the question below, or see 2016 bar exam Labor Law Instructions; 2016 Labor Law Questions: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 1416, 17, 18, 19, and 20; See also 2016 Bar Exam: Information, Discussions, Tips, Questions and Results]


Jim is the holder of a certificate of public convenience for a jeepney. He entered into a contract of lease with Nick, whereby they agreed that the lease period is for one (1) year unless sooner terminated by Jim for any of the causes laid down in the contract. The rental is thirty thousand pesos (P30,000.00) monthly. All the expenses for the repair ofthe jeepney, together with expenses for diesel, oil and service, shall be for the account of Nick. Nick is required to make a deposit of three (3) months to answer for the restoration of the vehicle to its good operating condition when the contract ends. It is stipulated that Nick is not an employee of Jim and he holds the latter free and harmless from all suits or claims which may arise from the implementation of the contract. Nick has the right to use the jeepney at any hour of the day provided it is operated on the approved line o f operation.

After five (5) months of the lease and payment of the rentals, Nick became delinquent in the payment ofthe rentals for two (2) months. Jim, as authorized by the contract, sent a letter of demand rescinding the contract and asked for the arrearages. Nick responded by filing a complaint with the NLRC for illegal dismissal, claiming that the contract is illegal and he was just forced by Jim to sign it so he can drive. He claims he is really a driver of Jim on a boundary system and the reason he was removed is because he failed to pay the complete daily boundary of one thousand (P1,000.00) for 2 months due to the increase in the number of tricycles.

[a] Jim files a motion to dismiss the NLRC case on the ground that the regular court has jurisdiction since the agreement is a lease contract. Rule on the motion and explain. (2.5%)

[b] Assuming that Nick is an employee of Jim, was Nick validly dismissed?

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