Compendium Labor PDF

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COMPILATION OF SUPREME COURT DECISIONS

(MARCH 2014-MARCH 2015)
LABOR LAW AND the entire duration of his contract, bears a

great degree of emotional strain while
SOCIAL LEGISLATION making an effort to perform his work well.
The strain is even greater in the case of a
• G.R. No. 193047. March 3, 2014 Fil-Pride seaman who is constantly subjected to the
Shipping Company, Inc., et al. Vs. Edgar perils of the sea while at work abroad and
A. Balasta away from his family.”
• Compensability •
• Regarding the issue of compensability, it
has been the Court’s consistent ruling that Assessment by company-designated
in disability compensation, “it is not the physician
injury which is compensated, but rather it
is the incapacity to work resulting in the • The company-designated physician must
impairment of one’s earning capacity.” arrive at a definite assessment of the
Moreover, “the list of illnesses/diseases in seafarer's fitness to work or permanent
Section 32-A does not preclude other disability within the period of 120 or 240
illnesses/diseases not so listed from being days pursuant to Article 192 (c)(l) ofthe
compensable. The POEA-SEC cannot be Labor Code and Rule X, Section 2 ofthe
presumed to contain all the possible Amended Rules on Employees
injuries that render a seafarer unfit for Compensation (AREC). Ifhe fails to do so
further sea duties.” and the seafarer's medical condition
• Just the same, in several cases, remains unresolved, the latter shall be
cardiovascular disease, coronary artery deemed totally and permanently disabled.
disease, as well as other heart ailments On the other hand, an employee's
were held to be compensable. Likewise, disability becomes permanent and total
petitioners failed to refute respondent’s even before the lapse ofthe statutory 240-
allegations in his Position Paper that in the day treatment period, when it becomes
performance of his duties as Able evident that the employee's disability
Seaman, he inhaled, was exposed to, and continues and he is unable to engage in
came into direct contact with various gainful employment during such period
injurious and harmful chemicals, dust, because, for instance, he underwent
fumes/ emissions, and other irritant surgery and it evidently appears that he
agents; that he performed strenuous could not recover therefrom within the
tasks such as lifting, pulling, pushing statutory period.
and/or moving equipment and materials
on board the ship; that he was constantly Respondent was repatriated on September 18,
exposed to varying temperatures of 2005. He was further examined by the company-
extreme hot and cold as the ship crossed designated physician Dr. Cruz on September 21,
ocean boundaries; that he was exposed as 23 and 30, 2005; October 6, 2005; February 2,
well to harsh weather conditions; that in 13 and 17, 2006; March 6 and 20, 2006; and on
most instances, he was required to April 19, 2006. And beginning from the February
perform overtime work; and that the work 2, 2006 medical report, respondent was
of an Able Seaman is both physically and diagnosed by Dr. Cruz with severe 3-vessel
mentally stressful. It does not require coronary artery disease, and was scheduled for
much imagination to realize or conclude coronary artery bypass surgery on February 24,
that these tasks could very well cause the 2006. After surgery, respondent continued his
illness that respondent, then already 47 treatment with Dr. Cruz, who on the other hand
years old, suffered from six months into continued to diagnose respondent with severe
his employment contract with petitioners. coronary artery disease even on respondent’s last
• Notably, it is “a matter of judicial notice consultation on April 19, 2006.
that an overseas worker, having to ward
off homesickness by reason of being
Concededly, the period September 18, 2005 to
physically separated from his family for
Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 11
Ateneo de Davao University
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April 19, 2006 is less than the statutory 240-day of the instant petition concerns the
– or 8-month – period. Nonetheless, it is timely posting of the appeal
impossible to expect that by May 19, 2006, or on bond. The pertinent rule on the
the last day of the statutory 240-day period, matter is Article 223 of the Labor
respondent would be declared fit to work when Code, as amended, which sets
just recently – or on February 24, 2006 – he forth the rules on appeal from the
underwent coronary artery bypass graft surgery; Labor Arbiter’s monetary award
by then, respondent would not have sufficiently
recovered. In other words, it became evident as These statutory and regulatory provisions
early as April 19, 2006 that respondent was explicitly provide that an appeal from the
permanently and totally disabled, unfit to return Labor Arbiter to the NLRC must be
to work as seafarer and earn therefrom, given his perfected within ten calendar days
delicate post-operative condition; a definitive from receipt of such decisions,
assessment by Dr. Cruz before May 19, 2006 was awards or orders of the Labor Arbiter.
unnecessary. Respondent would to all intents and In a judgment involving a monetary
purposes still be unfit for sea- duty. Even then, award, the appeal shall be perfected only
with Dr. Cruz’s failure to issue a definite upon; (1) proof of payment of the
assessment of respondent’s condition on May 19, required appeal fee; (2) posting of a
2006, or the last day of the statutory 240-day cash or surety bond issued by a
period, respondent was thus deemed totally and reputable bonding company; and (3)
permanently disabled pursuant to Article 192 filing of a memorandum of appeal.
(c)(1) of the Labor Code and Rule X, Section 2 of
the AREC. No appeal was perfected by the petitioners
within the 10-day period under Article 223
Premature labor complaint of the Labor Code.
Neither may it be argued by the petitioners that The petitioners received the 7 August
respondent’s filing of the labor complaint on 2003 Decision of the Labor Arbiter on 15
February 10, 2006 should affect the outcome of September 2003, hence, they had until 25
the case. It is difficult to blame respondent for September 2003 to perfect their appeal. A
deciding to sue, considering that he has been perusal of the records reveals an apparent
diagnosed by no less than three separate contrariety on the date of the posting of
physicians – Drs. Dizon, Vicaldo, and Cruz – with the appeal bond, a material fact decisive
severe three-vessel coronary artery disease of the instant controversy. While the First
which required bypass procedure. Respondent Certification indicated that no appeal bond
may have been acting under a sense of extreme has been posted as of 2 October 2003, the
urgency given the life-threatening nature of his Second Certification and the Transmittal
illness. The filing of the labor complaint may have Letter stated that a surety bond was
been designed to pressure petitioners into taking posted on 24 September 2003.
action to address his condition, or to recover
expenses should he decide to proceed with the The conclusion that the First Certification
bypass procedure on his own. Either way, the necessarily leads to is the lateness of the
Court cannot subscribe to the view that there was perfection of the appeal to the NLRC.
a premature resort to litigation since respondent Ostensibly, the Second Certification puts
was still undergoing treatment for his illness and the appeal within the required perfection
the company-designated physician has not period of ten days from receipt of the
completed treatment and made a definite decision of the Labor Arbiter. However,
assessment of his condition. the fact behind what seems to be is that
• G.R. No. 188828. March 5, 2014   Co Say both certifications state, directly by the
Products Phils., et al. Vs. Benjamin first while distortedly by the second, that
Baltasar, et al. the appeal by petitioners to the NLRC was
• The crucial issue in the resolution perfected beyond the provided period. In

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a seeming attempt to avoid the direct fact cannot furthermore be considered as the
of untimeliness in the First Certificate, the posting of the other seven required
Second Certificate mentions two dates, documents.
one which is within the 10-day period and
the other, the late date of 28 October Without a straight statement, the Second
2003 which is even beyond the 2 October Certification seems to consider posting as
2003 issuance of the First Certificate. The mailing such that the date 24 September
first date, 24 September 2003 was 2003 should be the reckoning date that
depicted in the Second Certificate as the determines timeliness and not the date 28
date of posting while the date 28 October October 2003 which was the date of
2003 was described as the date of receipt receipt of the surety bond. Even such
by the DOLE-RAB. Apart from saying that insinuation, strained and all, is
the appeal bond was timely “posted” on unacceptable considering the absence of
24 September 2003, the Second proof of mailing, it being the fact that
Certification would also justify why on the there was no mention at all in any of the
date of the First Certification, 2 October pleadings below that the surety bond was
2003, there was yet no posted appeal mailed.
bond on record, the reason, although
unstated being that the “posted” bond was The Court of Appeals therefore, correctly
“received” only on 28 October 2003. ruled that petitioners failed to perfect their
appeal on time. In holding so, the
The Second Certificate is not a document appellate court only applied the appeal
of timeliness of petitioners’ appeal bond. bond requirement as already well
It is even confirmatory of the fact of explained in our previous pronouncements
tardiness that the First Certification stated that there is legislative and administrative
doubtlessly. The NLRC gravely abused its intent to strictly apply the appeal bond
discretion when it considered as correct requirement, and the Court should give
the statement in the Second Certificate utmost regard to this intention. The clear
that “x x x respondent in re: RAB-V Case intent of both statutory and procedural
No. 10-004860-02 x x x posted Surety law is to require the employer to post a
Bond x x x dated on September 24, cash or surety bond securing the full
2003.” amount of the monetary award within the
ten 10-day reglementary period. Rules on
That the posting of the surety bond perfection of an appeal, particularly in
requires as necessary addition the seven labor cases, must be strictly construed
enumerated documents is underscored by because to extend the period of the
the provision that the appellant shall appeal is to delay the case, a
furnish the appellee with a certified true circumstance which would give the
copy of the said surety bond with all the employer a chance to wear out the efforts
above-mentioned supporting documents. and meager resources of the worker to
The appellee shall verify the regularity and the point that the latter is constrained to
genuineness thereof and immediately give up for less than what is due him. This
report any irregularity to the Commission. is to assure the workers that if they finally
prevail in the case the monetary award
The rule gives the appellee the authority will be given to them both upon dismissal
and opportunity, even the duty, to verify of the employer’s appeal. It is further
the regularity and genuineness not only of meant to discourage employers from using
the surety bond but also of the seven the appeal to delay or evade payment of
attachments. To reiterate, even if the their obligations to the employees. The
issuance of the surety bond on 24 appeal bond requirement precisely aims to
September 2003 is considered as the prevent empty or inconsequential victories
posting of the bond, the certification secured by laborers in consonance with
the protection of labor clause ensconced
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and zealously guarded by our employment contract. Section 32(A) of

Constitution. the 2000 POEA Amended Standard Terms
and Condition further provides that for an
It is entrenched in our jurisprudence that occupational disease and the resulting
perfection of an appeal in a manner and disability to be compensable, the following
within the period prescribed by law is not need to be satisfied: (1) the seafarer's
only mandatory but jurisdictional, and work must involve the risks described; (2)
failure to perfect an appeal has the the disease was contracted as a result of
effect of making judgment final and the seafarer's exposure to the described
executory. While dismissal of an appeal risks; (3) the disease was contracted
on technical grounds is frowned upon, within a period of exposure and under
Article 223 of the Labor Code which such other factors necessary to contract
prescribes the appeal bond requirement, it; and (4) there was no notorious
however, is a rule of jurisdiction and not negligence on the part of the seafarer.
of procedure.
Suarez had been diagnosed to suffer from
All considered then, the finding of the posterior subscapsular cataract on his
Labor Arbiter holding the petitioners liable right eye and pseudophakia, and posterior
for illegal dismissal is binding on them. capsule opacification on his left eye. For
Not having been timely appealed, this these to be regarded as occupational
issue is already beyond our jurisdiction to diseases, Suarez had to prove that the
resolve, and the finding of the Labor risk of contracting the disease was
Arbiter can no longer be disturbed without increased by the conditions under which
violating the fundamental principle that he worked. The evidence must be real and
final judgment is immutable and substantial, and not merely apparent. It
unalterable and may no longer be must constitute a reasonable basis for
modified in any respect, even if the arriving at a conclusion that the conditions
modification is meant to correct erroneous of his employment caused the disease or
conclusion of fact and law. that such conditions aggravated the risk of
• G.R. No. 199344. March 5, 2014 Vetyard contracting the illness.
Terminals & Shipping Services, Inc./Miguel
S. Perez, Seafix, Inc. Vs. Bernardino D. Here, Suarez did not present substantial
Suarez proof that his eye ailment was work-
• The sole issue in this case is related. Other than his bare claim that
whether or not the CA erred in paint droppings accidentally splashed on
failing to hold that the NLRC an eye causing blurred vision, he adduced
gravely abused its discretion when no note or recording of the supposed
it found that Suarez’s eye accident. Nor did he present any record of
ailment is compensable. some medical check-up, consultation, or
treatment that he had undergone.
The contractual liability of an employer to Besides, while paint droppings can cause
pay disability benefits to a seafarer who eye irritation, such fact alone does not
suffers illness or injury during the term of ipso facto establish compensable
his contract is governed by Section disability. Awards of compensation cannot
20(B)(6) of the Philippine Overseas rest on speculations or presumptions;
Employment Administration-Standard Suarez must prove that the paint
Employment Contract (POEA-SEC). droppings caused his blindness.
Based on the above, an injury or illness is The Court is inclined to accept the findings
compensable when, first, it is work-related of Dr. Caparas, the company-designated
and, second, the injury or illness existed physician, that it was cataract extraction,
during the term of the seafarer’s not paint droppings that caused Suarez’s

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ailment. The definitions of the imputed any other contract, it has the force
medical conditions plainly do not indicate of law between the parties and,
work-relatedness. thus, should be complied with in
good faith. Unilateral changes or
Besides, even if the Court were to assume suspensions in the implementation
that Suarez’s eye ailment was work- ofthe provisions ofthe CBA,
related, he still cannot claim disability therefore, cannot be allowed
benefits since he concealed his true without the consent o f both
medical condition. The records show that parties.
when Suarez underwent pre-employment
medical examination (PEME), he The Non-Diminution Rule found in Article
represented that he was merely wearing 100 of the Labor Code explicitly prohibits
corrective lens. He concealed the fact that employers from eliminating or reducing
he had a cataract operation in 2005. He the benefits received by their employees.
told the truth only when he was being This rule, however, applies only if the
examined at the Medical City on May 18, benefit is based on an express policy, a
2007. This willful concealment of a vital written contract, or has ripened into a
information in his PEME disqualifies him practice. o be considered a practice, it
from claiming disability benefits pursuant must be consistently and deliberately
to Section 20(E) of the POEA-SEC which made by the employer over a long period
provides that “a seafarer who knowingly of time.
conceals and does not disclose past
medical condition, disability and history in An exception to the rule is when “the
the pre-employment medical examination practice is due to error in the construction
constitutes fraudulent misrepresentation or application of a doubtful or difficult
and shall disqualify him from any question of law.” The error, however,
compensation and benefits.” must be corrected immediately after its
discovery; otherwise, the rule on Non-
The CA has no basis in holding that Diminution of Benefits would still apply.
Suarez's PEME is sufficiently exhaustive as
to excuse his non-disclosure of a previous The practice of giving two retirement
cataract operation. The fact that he was benefits to petitioner’s employees is
physically and psychologically ascertained supported by substantial evidence.
to be fit for sea duties does not rule out
misrepresentation. A PEME is generally In this case, respondent was able to
not exploratory in nature, nor is it a totally present substantial evidence in the form
in-depth and thorough examination of an of affidavits to support its claim that there
applicant's medical condition. It does not are two retirement plans. Based on the
reveal the real state of health of an affidavits, petitioner has been giving two
applicant. Since it is not exploratory, its retirement benefits as early as 1997.
failure to reveal or uncover Suarez's eye Petitioner, on the other hand, failed to
disability cannot shield him from the present any evidence to refute the
consequences of his willful concealment. veracity of these affidavits. Petitioner’s
• G.R. No. 181806. March 12, 2014 Wesleyan contention that these affidavits are self-
University-Philippines Vs. Wesleyan serving holds no water. The retired
University-Philippines Faculty and Staff employees of petitioner have nothing to
Association lose or gain in this case as they have
• A Collective Bargaining Agreement already received their retirement benefits.
(CBA) is a contract entered into by Thus, they have no reason to perjure
an employer and a legitimate labor themselves. Obviously, the only reason
organization concerning the terms they executed those affidavits is to bring
and conditions of employment. Like out the truth. As we see it then, their

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affidavits, corroborated by the affidavits of Rules.

incumbent employees, are more than
sufficient to show that the granting of two Ordinarily, the infirmity in Llamas’ appeal
retirement benefits to retiring employees would have been fatal and would have
had already ripened into a consistent and justified an end to the case. A careful
deliberate practice. consideration of the circumstances of the
• G.R. No. 190724. March 12, 2014 Diamond case, however, convinces us that the
Taxi and/or Bryan Ong Vs. Felipe Llamas, NLRC should, indeed, have given due
Jr. course to Llamas’ appeal despite the initial
• The NLRC committed grave absence of the required certificate. We
abuse of discretion in note that in his motion for reconsideration
dismissing Llamas’ appeal on of the NLRC’s May 30, 2006 resolution,
mere technicality Llamas attached the required certificate of
non-forum shopping.
Article 223 (now Article 229) of the Labor
Code states that decisions (or awards or Moreover, Llamas adequately explained, in
orders) of the LA shall become final and his motion for reconsideration, the
executory unless appealed to the NLRC inadvertence and presented a clear
within ten (10) calendar days from receipt justifiable ground to warrant the
of the decision. Consistent with Article relaxation of the rules. To recall, Llamas
223, Section 1, Rule VI of the 2005 NLRC was able to file his position paper, through
Rules also provides for a ten (10)-day his new counsel, only on December 20,
period for appealing the LA’s decision. 2005. He hired the new counsel on
Under Section 4(a), Rule VI of the 2005 December 19, 2005 after several
NLRC Rules, the appeal shall be in the repeated, albeit failed, pleas to his former
form of a verified memorandum of appeal counsel to submit, on or before October
and accompanied by proof of payment of 25, 2005 per the LA’s order, the required
the appeal fee, posting of cash or surety position paper. On November 29, 2005,
bond (when necessary), certificate of however, the LA rendered a decision that
non-forum shopping, and proof of Llamas and his new counsel learned and
service upon the other parties. Failure of received a copy of only on January 5,
the appealing party to comply with any or 2006. Evidently, the LA’s findings and
all of these requisites within the conclusions were premised solely on the
reglementary period will render the LA’s petitioners’ pleadings and evidence. And,
decision final and executory. while not the fault of the LA, Llamas,
nevertheless, did not have a meaningful
Indisputably, Llamas did not file a opportunity to present his case, refute the
memorandum of appeal from the LA’s contents and allegations in the petitioners’
decision. Instead, he filed, within the ten position paper and submit controverting
(10)-day appeal period, a motion for evidence.
reconsideration. Under Section 15, Rule V
of the 2005 NLRC Rules, motions for Faced with these circumstances, i.e.,
reconsideration from the LA’s decision are Llamas’ subsequent compliance with the
not allowed; they may, however, be certification-against-forum-shopping
treated as an appeal provided they comply requirement; the utter negligence and
with the requirements for perfecting an inattention of Llamas’ former counsel to
appeal. The NLRC dismissed Llamas’ his pleas and cause, and his vigilance in
motion for reconsideration treated as an immediately securing the services of a
appeal for failure to attach the required new counsel; Llamas’ filing of his position
certificate of non-forum shopping per paper before he learned and received a
Section 4(a), Rule VI of the 2005 NLRC copy of the LA’s decision; the absence of a
meaningful opportunity for Llamas to

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present his case before the LA; and the establish his case’s merits.
clear merits of his case (that our
subsequent discussion will show), the Llamas did not abandon his work; he
NLRC should have relaxed the application was constructively dismissed
of procedural rules in the broader
interests of substantial justice. Indeed, “abandonment is the deliberate and
while the requirement as to the certificate unjustified refusal of an employee to
of non-forum shopping is mandatory, this resume his employment. It is a form of
requirement should not, however, be neglect of duty that constitutes just cause
interpreted too literally and thus defeat for the employer to dismiss the employee.
the objective of preventing the
undesirable practice of forum- shopping.
To constitute abandonment of work, two
elements must concur: “(1)
Under Article 221 (now Article 227) of the
Labor Code, “the Commission and its
x x x the employee must have failed to
members and the Labor Arbiters shall use
report for work or must have been absent
every and all reasonable means to
without valid or justifiable reason; and (2)
ascertain the facts in each case speedily
x x x there must have been a clear
and objectively and without regard to
intention [on the part of the employee] to
technicalities of law or procedure, all in
sever the employer- employee relationship
the interest of due process.”
manifested by some overt act. The
employee’s absence must be accompanied
Then, too, we should remember that “the by overt acts that unerringly point to the
dismissal of an employee’s appeal on employee’s clear intention to sever the
purely technical ground is inconsistent employment relationship.
with the constitutional mandate on
protection to labor.” Under the
And, to successfully invoke abandonment,
Constitution
whether as a ground for dismissing an
employee or as a defense, the employer
and the Labor Code, the State is bound to bears the burden of proving the
protect labor and assure the rights of employee’s unjustified refusal to resume
workers to security of tenure – tenurial his employment. Mere absence of the
security being a preferred constitutional employee is not enough.
right that, under these fundamental
guidelines, technical infirmities in labor
Guided by these parameters, we agree
pleadings cannot defeat.
that the petitioners unerringly failed to
prove the alleged abandonment. They did
In this case, Llamas’ action against the not present proof of some overt act of
petitioners concerned his job, his security Llamas that clearly and unequivocally
of tenure. This is a property right of which shows his intention to abandon his job.
he could not and should not be deprived We note that, aside from their bare
of without due process. But, more allegation, the only evidence that the
importantly, it is a right that assumes a petitioners submitted to prove
preferred position in our legal hierarchy. abandonment were the photocopy of their
attendance logbook and the July 15, 2005
Under these considerations, we agree that memorandum that they served on Llamas
the NLRC committed grave abuse of regarding the July 13, 2005 incident.
discretion when, in dismissing Llamas’ These pieces of evidence, even when
appeal, it allowed purely technical considered collectively, indeed failed to
infirmities to defeat Llamas’ tenurial prove the clear and unequivocal intention,
security without full opportunity to on Llamas’ part, that the law requires to
deem as abandonment Llamas’ absence

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from work. Quite the contrary, the employment is rendered impossible,

petitioners’ July 15, 2005 memorandum,
in fact, supports, if not strengthens, unreasonable or unlikely. Constructive
Llamas' version of the events that led to dismissal is a dismissal in disguise or
his filing of the complaint, i.e., that as a
result of the July 13, 2005 incident, the an act amounting to dismissal but made to
petitioners refused to give him the key to appear as if it were not. In
his assigned taxi cab unless he would sign
the resignation letter.
constructive dismissal cases, the employer
is, concededly, charged with the
Moreover, and as the CA pointed out,
Llamas lost no time in filing the
burden of proving that its conduct and
action were for valid and legitimate
illegal dismissal case against them. To grounds. The petitioners' persistent
recall, he filed the complaint on July refusal to give Llamas the key to his
assigned taxi cab, on the condition that he
18, 2005 or only two days from the third should first sign the resignation letter,
time he was refused access to his rendered, without doubt, his continued
employment impossible, unreasonable and
assigned taxi cab on July 16, 2005. unlikely; it, thus, constituted constructive
Clearly, Llamas could not be deemed to dismissal.
• G.R. No. 186621. March 12, 2014   South
have abandoned his work for, as we have East International Rattan, Inc. and/or
previously held, the immediate Estanislao Agbay Vs. Jesus Coming
• Resolution of the first issue is
filing by the employee of an illegal paramount in view of petitioners’
dismissal complaint is proof enough of denial of the existence of
employer-employee relationship.
his intention to return to work and
negates the employer's charge of To ascertain the existence of an employer-
employee relationship jurisprudence has
abandonment. invariably adhered to the four-fold test, to
wit: (1) the selection and engagement of
the employee; (2) the payment of wages;
To reiterate and emphasize, abandonment
(3) the power of dismissal; and (4) the
is a matter of
power to control the employee’s conduct,
or the so-called “control test.”
intention that cannot lightly be presumed
from certain equivocal acts of the
In Tan v. Lagrama, the Court held that the
employee.
fact that a worker was not reported as an
employee to the SSS is not conclusive
The CA, therefore, correctly regarded proof of the absence of employer-
Llamas as constructively employee relationship. Otherwise, an
employer would be rewarded for his
dismissed for the petitioners' failure to failure or even neglect to perform his
prove the alleged just cause - obligation.
abandonment - for his dismissal. Nor does the fact that respondent’s name
Constructive dismissal exists when there does not appear in the payrolls and pay
envelope records submitted by petitioners
is cessation of work because continued negate the existence of employer-
employee relationship. For a payroll to be
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utilized to disprove the employment of a supporting the claims of respondent.

person, it must contain a true and
complete list of the employee. In this In any controversy between a laborer and
case, the exhibits offered by petitioners his master, doubts reasonably arising
before the NLRC consisting of copies of from the evidence are resolved in favor of
payrolls and pay earnings records are only the laborer.
for the years 1999 and 2000; they do not
cover the entire 18-year period during As a regular employee, respondent enjoys
which respondent supposedly worked for the right to security of tenure under
SEIRI. Article 279 of the Labor Code and may
only be dismissed for a just or authorized
In their comment to the petition filed by cause, otherwise the dismissal becomes
respondent in the CA, petitioners illegal.
emphasized that in the certifications
issued by Mayol and Apondar, it was Respondent, whose employment was
shown that respondent was employed and terminated without valid cause by
working for them in those years he petitioners, is entitled to reinstatement
claimed to be working for SEIRI. However, without loss of seniority rights and other
a reading of the certification by Mayol privileges and to his full back wages,
would show that while the latter claims to inclusive o f allowances and other benefits
have respondent under his employ in or their monetary equivalent, computed
1997, 1998 and 1999, respondent’s from the time his compensation was
services were not regular and that he withheld from him up to the time of his
works only if he wants to. Apondar’s actual reinstatement. Where
certification likewise stated that reinstatement is no longer viable as an
respondent worked for him since 1999 option, back wages shall be computed
through his brother Vicente as “sideline” from the time of the illegal termination up
but only after regular working hours and to the finality of the decision. Separation
“off and on” basis. Even assuming the pay equivalent to one month salary for
truth of the foregoing statements, these every year of service should likewise be
do not foreclose respondent’s regular or awarded as an alternative in case
full-time employment with SEIRI. In reinstatement is not possible.
effect, petitioners suggest that respondent • G.R. No. 191455. March 12, 2014  
was employed by SEIRI’s suppliers, Mayol
Dreamland Hotel Resort and Westley J.
and Apondar but no competent proof was
Prentice Vs. Stephen B. Johnson
presented as to the latter’s status as
• At its inception, the Court takes
independent contractors.
note of the Resolutions dated
December 14, 2009 and February
Petitioners’ admission that the five affiants 11, 2010 of the CA dismissing the
were their former employees is binding Petition for Certiorari due to the
upon them. While they claim that following infirmities:
respondent was the employee of their • 1. The affiant has no proof of
suppliers Mayol and Apondar, they did not authority to file the petition in
submit proof that the latter were indeed behalf of petitioner Dreamland.
independent contractors; clearly,
petitioners failed to discharge their burden
2. The petition has no appended affidavit
of proving their own affirmative allegation.
of service to show proof of service of filing
There is thus no showing that the five
as required by Sec. 13 of the 1997 Rules
former employees of SEIRI were
of Civil Procedure.
motivated by malice, bad faith or any ill-
motive in executing their affidavit
“While it is desirable that the Rules of
Court be faithfully observed, courts should

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not be so strict about procedural lapses presenting such documents, the

that do not really impair the proper petitioners would want to impress upon
administration of justice. If the rules are the Court that their act of accommodating
intended to ensure the proper and orderly Johnson was merely due to his being a
conduct of litigation, it is because of the fellow Australian national.
higher objective they seek which are the
attainment of justice and the protection of As it could not be determined with
substantive rights of the parties. Thus, the absolute certainty whether or not Johnson
relaxation of procedural rules, or saving a rendered the services he mentioned
particular case from the operation of during the material time, doubt must be
technicalities when substantial justice construed in his favor for the reason that
requires it, as in the instant case, should “the consistent rule is that if doubt exists
no longer be subject to cavil.” between the evidence presented by the
employer and that by the employee, the
Brushing aside technicalities, in the scales of justice must be tilted in favor of
utmost interest of substantial justice and the latter.”
taking into consideration the varying and
conflicting factual deliberations by the LA What is clear upon the records is that
and the NLRC, the Court shall now delve Johnson had already taken his place in the
into the merits of the case. hotel since July 2007.
The petitioners contend that the For the petitioners’ failure to disprove that
employment of Johnson as operations Johnson started working on August 1,
manager commenced only on October 8, 2007, as stated on the employment
2007 and not on August 1, 2007. contract, payment of his salaries on said
However, the employment contract date, even prior to the opening of the
categorically stated that the “term of hotel is warranted.
employment shall commence on [August
1, 2007].” Furthermore, the factual Another argument posited by the
allegations of Johnson that he actually petitioners is that the employment
worked from August 1, 2007 were neither contract executed by the parties is
sufficiently rebutted nor denied by the inefficacious because the employment
petitioners. contract is subject to the presentation of
Johnson of his Alien Employment Permit
Notably, it was only in their Motion for (AEP) and Tax Identification Number
Reconsideration of the NLRC decision (TIN).
where the petitioners belatedly disagreed
that Johnson performed the Again, this statement is wanting of merit.
abovementioned tasks and argued that
had Johnson done the tasks he
Johnson has adduced proof that as a
enumerated, those were tasks foreign and
permanent resident, he is exempted from
alien to his position as operations
the requirement of securing an AEP as
manager and [were done] without their
expressed under Department Order No.
knowledge and consent. Nevertheless,
75-06, Series of 2006 of the Department
Prentice did not deny that he ordered
of Labor and Employment (DOLE),
Johnson to speak with potential guests of
the hotel. In fact, the petitioners admitted
and submitted documents which showed Furthermore, Johnson submitted a
that Johnson has already taken his Certification from DOLE Regional Office
residence in the hotel as early as July III, stating that he is exempted from
2007—a part of Johnson’s remuneration securing an AEP as a holder of Permanent
as the hotel operations manager. In Resident Visa. Consequently, the condition
imposed upon Johnson’s employment, if
11
there is any, is in truth without effect to to the strained relations between the
its validity. parties, separation pay is to be awarded
to Johnson in lieu of his reinstatement.
Anent the requirement of securing a TIN • G.R. No. 171482. March 12, 2014 Ashmor
to make the contract of employment M. Tesoro, Pedro Ang and Gregorio Sharp
efficacious, records show that Johnson Vs. Metro Manila Retreaders, Inc.
secured his TIN only on December 2007 (BANDAG) and/or Northern Luzon
after his resignation as operations Retreaders, Inc (BANDAG) and/or Power
manager. Nevertheless, this does not Tire and Rubber Corp. (BANDAG)
negate the fact that the contract of Dissenting Opinion J. Leonen  
employment had already become effective • This case concerns the effect on
even prior to such date. the status of employment of
employees who entered into a
In addition to the foregoing, there is no Service Franchise Agreement with
stipulation in the employment contract their employer.
itself that the same shall only be effective
upon the submission of AEP and TIN. The Franchising is a business method of
petitioners did not present any proof to expansion that allows an individual or
support this agreement prior to the group of individuals to market a product
execution of the employment contract. or a service and to use of the patent,
trademark, trade name and the systems
As regards the NLRC findings that Johnson prescribed by the owner. In this case,
was constructively dismissed and did not Bandag’s SFAs created on their faces an
abandon his work, the Court is in arrangement that gave petitioners the
consonance with this conclusion with the privilege to operate and maintain Bandag
following basis: branches in the way of franchises,
providing tire repair and retreading
Even the most reasonable employee would services, with petitioners earning profits
consider quitting his job after working for based on the performance of their
three months and receiving only an branches.
insignificant fraction of his salaries. There
was, therefore, not an abandonment of The question is: did petitioners remain to
employment nor a resignation in the real be Bandag’s employees after they began
sense, but a constructive dismissal, which operating those branches? The tests for
is defined as an involuntary resignation determining employer- employee
resorted to when continued employment is relationship are: (a) the selection and
rendered impossible, unreasonable or engagement of the employee; (b) the
unlikely x x x. payment of wages; (c) the power of
dismissal; and (d) the employer’s power
The petitioners aver that considering that to control the employee with respect to
Johnson tendered his resignation and the means and methods by which the
abandoned his work, it is his burden to work is to be accomplished. The last is
prove that his resignation was not called the “control test,” the most
voluntary on his part. It is impossible, important element.
unreasonable or unlikely that any
employee, such as Johnson would When petitioners agreed to operate
continue working for an employer who Bandag’s franchise branches in different
does not pay him his salaries. parts of the country, they knew that this
substantially changed their former
Since Johnson was constructively relationships. They were to cease working
dismissed, he was illegally dismissed. In as Bandag’s salesmen, the positions they
the present case, the NLRC found that due occupied before they ventured into

12
running separate Bandag branches. They franchisors may impose guidelines that
were to cease receiving salaries or somehow restrict the petitioners’ conduct
commissions. Their incomes were to which do not necessarily indicate
depend on the profits they made. Yet, “control.” The important factor to consider
petitioners did not then complain of is still the element of control over how the
constructive dismissal. They took their work itself is done, not just its end result.
chances, ran their branches, Gregorio
Sharp in La Union for several months and Petitioners cannot use the revolving funds
Ashmor Tesoro in Baguio and Pedro Ang in feature of the SFAs as evidence of their
Pangasinan for over a year. Clearly, their employer-employee relationship with
belated claim of constructive dismissal is Bandag. These funds do not represent
quite hollow. wages. They are more in the nature of
capital advances for operations that
It is pointed out that Bandag continued, Bandag conceptualized to attract
like an employer, to exercise control over prospective franchisees. Petitioners’
petitioners’ work. It points out that incomes depended on the profits they
Bandag: (a) retained the right to adjust make, controlled by their individual
the price rates of products and services; abilities to increase sales and reduce
(b) imposed minimum processed tire operating costs.
requirement (MPR); (c) reviewed and • G.R. No. 150326. March 12, 2014   The
regulated credit applications; and (d) National Wages and Productivity
retained the power to suspend petitioners’ Commission (NWPC), et al. Vs. The
services for failure to meet service Alliance of Progessive Labor (APL), et al.
standards. • This case concerns the authority of
the National Wages and
But uniformity in prices, quality of Productivity Commission (NWPC)
services, and good business practices are and the Regional Tripartite Wages
the essence of all franchises. A franchisee and Productivity Board (RTWPB)
will damage the franchisor’s business if he created under Republic Act No.
sells at different prices, renders different 6727 otherwise known as the Wage
or inferior services, or engages in bad Rationalization Act, to issue wage
business practices. These business orders, and to receive, process and
constraints are needed to maintain act on applications for exemption
collective responsibility for faultless and from the prescribed wage rates
reliable service to the same class of •
customers for the same prices.
Restated, the issues are: (a) whether or
This is not the “control” contemplated in not the RTWPB-NCR had the authority to
employer-employee relationships. Control provide additional exemptions from the
in such relationships addresses the details minimum wage adjustments embodied in
of day to day work like assigning the Wage Order No. NCR-07; and (b) whether
particular task that has to be done, or not Wage Order No. NCR-07 complied
monitoring the way tasks are done and with the requirements set by NWPC
their results, and determining the time Guidelines No. 01, Series of 1996.
during which the employee must report
for work or accomplish his assigned task. Under the guidelines, the RTWPBs could
issue exemptions from the application of
Franchising involves the use of an the wage orders as long as the
established business expertise, trademark, exemptions complied with the rules of the
knowledge, and training. As such, the NWPC. In its rules, the NWPC enumerated
franchisee is required to follow a certain four exemptible establishments, but the
established system. Accordingly, the list was not exclusive. The RTWPBs had

13
the authority to include in the wage orders sectors and establishments enumerated in
establishments that belonged to, or to Section 2(A) and Section 9(2) based on
exclude from the four enumerated the public hearings and consultations,
exemptible categories. If the exempted meetings, social-economic data and
category was one of the listed ones, the informations gathered prior to the
RTWPB issuing the wage order must see issuance of Wage Order No. NCR-07. The
to it that the requisites stated in Section 3 very fact that the validity of the assailed
and Section 4 of the NWPC Guidelines No. sections of Wage Order No. NCR-07 had
01, Series of 1996 were complied with been already passed upon and upheld by
before granting fully or partially the the NWPC meant that the NWPC had
application of an establishment seeking to already given the wage order its
avail of the exemption, necessary legal imprimatur. Accordingly,
the requisite approval or review was
On the other hand, if the exemption was complied with.
outside of the four exemptible categories,
like here, the exemptible category should In creating the RTWPBs, Congress
be: (1) in accord with the rationale for intended to rationalize wages, firstly, by
exemption; (2) reviewed/approved by the establishing full time boards to police
NWPC; and (3) upon review, the RTWPB wages round-the-clock, and secondly, by
issuing the wage order must submit a giving the boards enough powers to
strong and justifiable reason or reasons achieve this objective. In Employers
for the inclusion of such category. It is the Confederation o f the Phils. v. National
compliance with the second requisite that Wages and Productivity Commission, this
is at issue here. Court all too clearly pronounced that
Congress meant the RTWPBs to be
The CA reversed the decisions of the creative in resolving the annual question
NWPC dated February 28, 2000 and July of wages without Labor and Management
17, 2000 mainly on the ground that Wage knocking on the doors of Congress at
Order No. NCR-07, specifically its Section every turn. The RTWPBs are the thinking
2(A) and Section 9(2), had not been group of men and women guided by
reviewed or approved by the NWPC. statutory standards and bound by the
However, the NWPC stated that it had rules and guidelines prescribed by the
reviewed and approved the challenged NWPC. In the nature of their functions,
sections when it upheld the validity of the RTWPBs investigate and study all the
Wage Order No. NCR-07 in its decisions of pertinent facts to ascertain the conditions
February 28, 2000 and July 17, 2000. in their respective regions. Hence,
We rule in favor of petitioners. they are logically vested with the

competence to determine the applicable
The wage orders issued by the RTWPBs minimum wages to be imposed as well as
could be reviewed by the NWPC motu the industries and sectors to exempt from
proprio or upon appeal. Any party the coverage of their wage orders.
aggrieved by the wage order issued by the
RTWPBs could appeal. Here, APL and Lastly, Wage Order No. NCR-07 is
TNMR appealed on October 26, 1999, presumed to be regularly issued in the
submitting to the NWPC precisely the absence of any strong showing of grave
issue of the validity of the Section 2(A) abuse of discretion on the part of RTWPB-
and Section 9(2) of Wage Order No. NCR- NCR. The presumption of validity is made
07. The NWPC, in arriving at its decision, stronger by the fact that its validity was
weighed the arguments of the parties and upheld by the NWPC upon review.
ruled that the RTWPB-NCR had substantial • G.R. No. 177493. March 19, 2014   Eric
and justifiable reasons in exempting the Godfrey Stanley Livesey Vs. Binswanger

14
Philippines, Inc. and Keith Elliot convenience, is an entity shielded by a

• The NLRC committed no grave protective mantle and imbued by law with
abuse of discretion in reversing LA a character alien to the persons
Laderas’ ruling as there is comprising it. Nonetheless, the shield is
substantial evidence in the records not at all times impenetrable and cannot
that Livesey was prevented from be extended to a point beyond its reason
fully receiving his monetary and policy. Circumstances might deny a
entitlements under the compromise claim for corporate personality, under the
agreement between him and CBB, “doctrine of piercing the veil of
with Elliot signing for CBB as its corporate fiction.”
President and CEO. Substantial
evidence is more than a scintilla; it Piercing the veil of corporate fiction is an
means such relevant evidence as a equitable doctrine developed to address
reasonable mind might accept as situations where the separate corporate
adequate to support a conclusion. personality of a corporation is abused or
used for wrongful purposes. Under the
Shortly after Elliot forged the compromise doctrine, the corporate existence may be
agreement with Livesey, CBB ceased disregarded where the entity is formed or
operations, a corporate event that was not used for non-legitimate purposes, such as
disputed by the respondents. Then to evade a just and due obligation, or to
Binswanger suddenly appeared. It was justify a wrong, to shield or perpetrate
established almost simultaneously with fraud or to carry out similar or inequitable
CBB’s closure, with no less than Elliot as considerations, other unjustifiable aims or
its President and CEO. Through the intentions, in which case, the fiction will
confluence of events surrounding CBB’s be disregarded and the individuals
closure and Binswanger’s sudden composing it and the two corporations will
emergence, a reasonable mind would be treated as identical.
arrive at the conclusion that Binswanger is
CBB’s alter ego or that CBB and In the present case, we see an
Binswanger are one and the same indubitable link between CBB’s
corporation. There are also indications of closure and Binswanger’s
badges of fraud in Binswanger’s incorporation. CBB ceased to exist
incorporation. It was a business strategy only in name; it re-emerged in the
to evade CBB’s financial liabilities, person of Binswanger for an urgent
including its outstanding obligation to purpose — to avoid payment by CBB
Livesey. of the last two installments of its
monetary obligation to Livesey, as
The respondents impugned the probative well as its other financial liabilities.
value of Livesey’s documentary evidence Freed of CBB’s liabilities, especially
and insist that the NLRC erred in applying that owing to Livesey, Binswanger
the doctrine of piercing the veil of can continue, as it did continue, CBB’s
corporate fiction in the case to avoid real estate brokerage business.
liability. They consider the NLRC
conclusions as mere assumptions. Livesey’s evidence, whose existence the
respondents never denied, converged to
We disagree. show this continuity of business
operations from CBB to Binswanger. It
It has long been settled that the law vests was not just coincidence that Binswanger
a corporation with a personality distinct is engaged in the same line of business
and separate from its stockholders or CBB embarked on: (1) it even holds office
members. In the same vein, a in the very same building and on the very
corporation, by legal fiction and same floor where CBB once stood; (2)

15
CBB’s key officers, Elliot, no less, and Guzman, CBB's former Associate Director,
Catral moved over to Binswanger, informed him that at one time Elliot told
performing the tasks they were doing at her of CBB's plan to close the corporation
CBB; (3) notwithstanding CBB’s closure, and organize another for the purpose of
Binswanger’s Web Editor (Young), in an e- evading CBB's liabilities to Livesey and its
mail correspondence, supplied the other financial liabilities. This wrongful
information that Binswanger is “now intent we cannot and must not condone,
known” as either CBB (Chesterton for it will give a premium to an iniquitous
Blumenauer Binswanger or as Chesterton business strategy where a corporation is
Petty, Ltd., in the Philippines; (4) the use formed or used for a non-legitimate
of Binswanger of CBB’s paraphernalia purpose, such as to evade a just and due
(receiving stamp) in connection with a obligation. We, therefore, find Elliot as
labor case where Binswanger was liable as Binswanger for CBB's unfulfilled
summoned by the authorities, although obligation to Livesey.
Elliot claimed that he bought the item with • G.R. No. 193628. March 19, 2014 Splash
his own money; and (5) Binswanger’s Philippines, Inc., et al. Vs. Ronulfo G.
takeover of CBB’s project with the PNB. Ruizo
• A. The 120-day rule
While the ostensible reason for • As in many other maritime
Binswanger’s establishment is to continue compensation cases which reached
CBB’s business operations in the the Court, the CA’s award of
Philippines, which by itself is not illegal, permanent total disability benefits
the close proximity between CBB’s to Ruizo is anchored on the 120-
disestablishment and Binswanger’s coming day rule often invoked through the
into existence points to an unstated but Court’s pronouncement in Crystal
urgent consideration which, as we earlier Shipping. The CA declared: “The
noted, was to evade CBB’s unfulfilled true test of whether
financial obligation to Livesey under the respondent suffered from a
compromise agreement. permanent disability is whether
there is evidence that he was
With CBB’s closure, Livesey asked why unable to perform his
people would buy into a corporation and customary work as chief cook
simply close it down immediately for more than 120 days.”
thereafter? The answer — to pave the way
for CBB’s reappearance as Binswanger. Under the above Court pronouncement, it
Elliot’s “guiding hand,” as Livesey puts it, is clear that the degree of a seafarer’s
is very much evident in CBB’s demise and disability cannot be determined on the
Binswanger’s creation. Elliot knew that basis solely of the 120-day rule or in total
CBB had not fully complied with its disregard of the seafarer’s employment
financial obligation under the compromise contract (executed in accordance with the
agreement. He made sure that it would POEA-SEC), the parties’ CBA if there is
not be fulfilled when he allowed CBB's one, and Philippine law and rules in case
closure, despite the condition in the of any unresolved dispute, claim or
agreement that "unless and until the grievance arising out of or in connection
Compromise Amount has been fully with the POEA-SEC, as the Court
settled and paid by the Company in favor explained in Vergara. Thus, in every
of Mr. Livesey, the Company shall not x x maritime disability compensation
x suspend, discontinue, or cease its entire claim, it is important to bear in mind
or a substantial portion of its operations. that under Section 20(B)3 of the
POEA-SEC, in the event a seafarer
What happened to CBB, we believe, suffers a work-related injury or
supports Livesey's assertion that De illness, the employer is liable only for
the resulting disability that has been
16
assessed or evaluated by the laid down in the POEA-SEC and/or

company-designated physician. If a their CBA, if one exists. Thus, the CA
doctor appointed by the seafarer ruled outside of legal contemplation
disagrees with the assessment, a and thus committed grave abuse of
third doctor may be agreed jointly discretion.
between the employer and the
seafarer whose decision shall be final Significantly, Ruizo himself recognized the
and binding on both parties. Further, relevance of the POEA- SEC in his case
the parties’ supposed CBA (the when he acknowledged that under the
complete copy belatedly submitted by contract, “a medically repatriated seafarer
Ruizo to the CA ) contains an almost is subject for examination and treatment
identical provision (as the POEA-SEC) by the company designated physician for
in its Article 20.1.4.2. a period not exceeding 120 days. After
which the company designated physician
Relatedly, there is one other POEA-SEC will make [an] assessment whether the
provision that is often overlooked or seafarer had already become fit for work
ignored, but which should be given due or not.” Ruizo, however, was not
consideration in the determination of the medically repatriated; he went home for
seafarer’s disability compensation, and a finished contract. In any event, as we
this is found in Section 20(B)6 which said in Vergara: “a temporary total
states: disability only becomes permanent
when so declared by the company
6. In case of permanent total or physician within the periods he is
partial disability of the seafarer allowed to do so, or upon the
caused by either injury or illness[,] expiration of the maximum 240-day
the seafarer shall be compensated in medical treatment period without a
accordance with the schedule of declaration of either fitness to work
benefits arising from an illness or or the existence of a permanent
disease shall be governed by the rates disability.”
and the rules of compensation
applicable at the time the illness or Although the 240-day maximum
disease was contracted. treatment period under the rules had
already expired, counted from his
In light of the above-cited provisions of repatriation on December 21, 2005, it can
the POEA-SEC which is the law be said that Ruizo and the petitioners
between the parties, we cannot find a agreed to have the treatment period
basis for the award of permanent total extended as it was obvious that he still
disability benefits to Ruizo, except the needed treatment. In fact, he agreed,
much belabored 120-day rule. The rule, as after some trepidation, to be subjected to
earlier emphasized, had already been an ultrasound procedure (ESWL) in the
modified pursuant to the Court’s effort of the petitioners to improve his
pronouncement in Vergara. It cannot condition; he was expected to return after
simply “be xxx applied as a general rule February 5, 2007 to Dr. Cruz for a repeat
for all cases and in all contexts.” ESWL, but he failed to do so. Clearly,
under the circumstances, the 120-day rule
In short, it cannot be used as a cure- had lost its relevance.
all formula for all maritime
compensation cases. Its application B. Compliance with the POEA-SEC
must depend on the circumstances of
the case, including especially As earlier emphasized, under the POEA-
compliance with the parties’ SEC, the employer is liable for a seafarer’s
contractual duties and obligations as disability, resulting from a work-connected

17
injury or illness, only after the degree of company was compelled to shut down its
disability has been established by the operations due to serious business
company- designated physician and, if reverses during the period material to the
the seafarer consulted with a case. It also appears that the petitioners
physician of his choice whose initially intended the shutdown to be
assessment disagrees with that of the temporary as it expected to resume
company- designated physician, the operations before the expiration of six
disagreement must be referred to a months or on April 22, 2004,
third doctor for a final assessment.
As we earlier stated, the petitioners
In the present dispute, no showing exists undertook a temporary shutdown. In fact,
that the relevant POEA-SEC provisions had the company notified the DOLE of the
been observed or complied with. While shutdown and filed an Establishment
Ruizo reported to Dr. Cruz upon his Termination Report containing the names
repatriation for examination and of the affected employees. The petitioners
treatment, he cut short his sessions with expected the company to recover before
the doctor and missed an important the end of the six-month shutdown period,
medical procedure (ESWL) which could but unfortunately, no recovery took place.
have improved his health condition and Thus, the shutdown became permanent.
his capability to work. Ruizo’s explanation According to the petitioners, they gave the
that he did not return for further ESWL company’s employees their separation
because Dr. Cruz told him that he would pay.
already be forwarding his assessment to
the petitioners is belied by the doctor’s We disagree with the company’s position
report to the agency dated March 19, that it resorted to a retrenchment under
2007, stating that he did not return for Article 283 of the Labor Code; it was a
further ESWL. The reason for Ruizo’s temporary shutdown under Article 286
failure to return and continue his where the employees are considered on
treatment with Dr. Cruz was, as the LA floating status or whose employment is
aptly saw it, his awareness of the temporarily suspended.
possibility that he could be declared fit to
work after treatment. Were the respondents illegally
dismissed and entitled to the CA
Thus, the facts of the case show that the award?
absence of a disability assessment by Dr.
Cruz was not of the doctor’s making, but 1. The illegal dismissal ruling
was due to Ruizo’s refusal to undergo
further treatment. In the absence of any
Under the circumstances, we cannot
disability assessment from Dr. Cruz,
say that the company’s employees
Ruizo’s claim for disability benefits must
were illegally dismissed; rather, they
fail for his obvious failure to comply with
lost their employment because the
the procedure under the POEA-SEC which
company ceased operations after
he was duty bound to follow
failing to recover from their financial
• G.R. No. 190053. March 24, 2014 Navotas
reverses. The CA itself recognized what
Shipyard Corporation and Jesus Villaflor happened to the company when it
Vs. Innocencio Montallana, et al. observed: “The temporary shutdown has
ISSUE: AWARD OF separation pay and ripened into a closure or cessation of
backwages notwithstanding the operations. In this situation[,] private
closure of the company’s business respondents are definitely entitled to the
operations. corresponding benefits of separation.”
It appears from the records that the In these lights, the CA was not only

18
incorrect from the point of law; it likewise (2) if the dismissal is based on an
disregarded, or at the very least, grossly authorized cause under Article 283 but the
misappreciated the evidence on record – employer failed to comply with the notice
that the petitioner was in distress and had requirement, the sanction should be stiffer
temporarily suspended its operations, because the dismissal process was
and duly reflected these circumstances to initiated by the employer’s exercise of his
the DOLE. management prerogative.” The Court
awarded P50,000.00 nominal damages in
2. The award of backwages/nominal Jaka.
damages
Further, in Industrial Timber Corp. v.
Since there was no illegal dismissal, Ababon, the Court emphasized that in the
the respondents are not entitled to determination of the amount of nominal
backwages. The term “backwages” damages, “several factors are taken into
presupposes illegal termination of account: (1) the authorized cause invoked
employment. It is restitution of earnings – whether it was a retrenchment or a
unduly withheld from the employee closure or cessation of operation of the
because of illegal termination. Hence, establishment due to serious business
where there is no illegal termination, there losses or financial reverses or otherwise;
is no basis for claim or award of (2) the number of employees to be
backwages. awarded; (3) the capacity of the
employers to satisfy the awards, taking
Pursuant to existing jurisprudence, if into account their prevailing financial
the dismissal is by virtue of a just or status as borne by the records; (4) the
authorized cause, but without due employer’s grant of other termination
process, the dismissed workers are benefits in favor of the employees; and
entitled to an indemnity in the form of (5) whether there was a bona fide attempt
nominal damages. to comply with the notice requirements as
opposed to giving no notice at all.” In this
cited case, the Court, in considering the
In the present case, the evidence on hand
circumstances obtaining in the case,
substantially shows that the company
deemed it wise and just to reduce the
closed down due to serious business
amount of nominal damages to be
reverses, an authorized cause for
awarded to each employee, to P10,000.00
termination of employment. The failure to
instead of P50,000.00 each.
notify the respondents in writing of the
closure of the company will not invalidate
the termination of their employment, but In the present case, there is no question
the company has to pay them nominal that the company failed to resume
damages for the violation of their right to operations anymore as it had been
procedural due process. saddled with serious financial obligations
due to unpaid debts for diesel fuel and ice
and other indebtedness, and because of
In Jaka Food Processing Corp. v. Pacot,
this it had to dispose of its fishing vessels.
the Court made a distinction between
The respondents themselves were aware
“just” and “authorized” cause in relation to
of the company’s heavy financial burden
the award of nominal damages. Thus, the
since Villaflor told them about it at the
Court said: “if the dismissal is based on a
meeting on October 20, 2003. Then there
just cause under Article 282 but the
was Villaflor’s undertaking to give them
employer failed to comply with the notice
separation pay of which he also told them.
requirement, the sanction to be imposed
Although the respondents were not
upon him should be tempered because the
individually served written notice of the
dismissal process was, in effect, initiated
termination of their employment, the
by an act imputable to the employee; and
company, nonetheless, filed an
19
Establishment Termination Report which rules are not necessarily fatal in

included the names of the respondents. labor cases; they can be liberally
The filing of the report indicates that the applied if – all things being equal –
company made the bona fide effort to any doubt or ambiguity would be
comply with the notice requirement under resolved in favor of labor.
the law and the rules. Given the
circumstances surrounding the The same reasoning applies to the failure
company’s closure and guided by the to attach a certificate of non- forum
ruling in Industrial Timber, we find it shopping. We can likewise relax our
reasonable to award the respondents treatment of the defect. Additionally,
P10,000.00 in nominal damages. while the 2005 NLRC Rules
specifically stated that a certificate of
3. The award of separation pay, non-forum shopping should be
service incentive leave pay and 13th attached, the 2011 NLRC Rules of
month pay Procedure no longer requires it.
Jurisprudence, too, is replete with
Under Article 283 of the Labor Code instances when the Court relaxed the
quoted earlier, the employer may rules involving the attachment of the
terminate the employment of any certificate of non-forum shopping.
employee due to, among other causes,
the closure or cessation of operations of We, however, do not agree with the
the establishment or undertaking. In such findings of the NLRC, as affirmed by
an eventuality, the employee may or may the CA, that Labrador was illegally
not be entitled to separation pay. On this dismissed.
point, Article 283 provides: in cases of
closures or cessation of operations of The failure to faithfully comply with the
establishment or undertaking not due company rules and regulations is
to serious business losses or financial considered to be a just cause in
reverses, the separation pay shall be terminating one’s employment, depending
equivalent to one (1) month pay or to on the nature, severity and circumstances
at least one-half (1/2) month pay for of non-compliance. “An employer ‘has the
every year of service, whichever is right to regulate, according to its
higher. A fraction of least six months discretion and best judgment, all aspects
shall be considered one (1) whole of employment, including work
year. assignment, working methods, processes
to be followed, working regulations,
Considering that the company’s transfer of employees, work supervision,
closure was due to serious financial lay-off of workers and the discipline,
reverses, it is not legally bound to dismissal and recall of workers.’”
give the separated employees
separation pay. Thus, it was within Sutherland’s
• G.R. No. 193107. March 24, 2014   prerogative to terminate Labrador’s
Sutherland Global Serives (Philippines), employment when he committed a serious
Inc. and Janette G. Lagazo Vs. Larry S. infraction and, despite a previous warning,
Labrador repeated it. To reiterate, he opened
• Sutherland insists that the failure another client account without the latter’s
to state the material dates is fatal consent, with far-reaching and costly
to effects on the company. For one, the
• Salvador’s appeal to the NLRC and repeated past infractions would have
to his present position in this case. resulted in negative feedbacks on
• We do not find Sutherland’s Sutherland’s performance and reputation.
argument meritorious as technical It would likewise entail additional

20
administrative expense since Sutherland dishonesty have been held to be sufficient

would have to address the complaints – grounds for dismissal as a measure of
an effort that would entail investigation self-protection on the part of the
costs and the return of the doubly- employer.
delivered merchandise. As a rule, “an G.R. No. 201663. March 31, 2014 Emmanuel
employer cannot be compelled to continue M. Olores Vs. Manila Doctors College and/or
with the employment of workers when Teresita O. Turla
continued employment will prove inimical Essentially, the issues are: (1) whether
to the employer's interests.” respondent’s appeal with the NLRC was perfected
despite its failure to post a bond;
To Sutherland’s credit, it duly complied
with the procedural requirement in At the outset, it must be emphasized that Article
dismissing an employee; it clearly 223 of the Labor Code states that an appeal by
observed both substantive and procedural the employer to the NLRC from a judgment of a
due process. Its action was based on a Labor Arbiter, which involves a monetary award,
just and authorized cause, and the may be perfected only upon the posting of a cash
dismissal was effected after due notice or surety bond issued by a reputable bonding
and hearing. company duly accredited by the NLRC, in an
amount equivalent to the monetary award in the
• G.R. No. 196142. March 26, 2014 Venus B. judgment appealed from.
Castillo, et al. Vs. Prudentiallife Plans, Inc.
et al. The posting of a bond is indispensable to the
• In a labor case, the written perfection of an appeal in cases involving
statements of co-employees monetary awards from the decisions of the Labor
admitting their Arbiter. The lawmakers clearly intended to make
• participation in a scheme to the bond a mandatory requisite for the perfection
defraud the employer are of an appeal by the employer as inferred from the
admissible in evidence. The provision that an appeal by the employer may be
• argument by an employee that the perfected “only upon the posting of a cash or
said statements constitute hearsay surety bond.” The word “only” makes it clear that
because the the posting of a cash or surety bond by the
• authors thereof were not presented employer is the essential and exclusive means by
for their cross-examination does which an employer’s appeal may be perfected.
not persuade, Moreover, the filing of the bond is not only
• because the rules of eviden~e are mandatory, but a jurisdictional requirement as
not strictly observed in proceedings well, that must be complied with in order to
before the confer jurisdiction upon the NLRC. Non-
• National Labor Relations compliance therewith renders the decision of the
Co)Illnission (NLRC), which are Labor Arbiter final and executory. This
summary in nature and requirement is intended to assure the workers
• decisions may be made on the that if they prevail in the case, they will receive
basis ofposition papers. the money judgment in their favor upon the
dismissal of the employer’s appeal. It is intended
For their dishonesty, the penalty of to discourage employers from using an appeal to
dismissal is justified pursuant to Section delay or evade their obligation to satisfy their
2.6 (i) of the Prudentialife Personnel employees’ just and lawful claims.
Manual which prescribes the penalty of
dismissal for acts of padding receipts for Here, it is undisputed that respondent’s appeal
reimbursement or liquidation of advances was not accompanied by any appeal bond despite
or expenses. Dishonesty is a serious the clear monetary obligation to pay petitioner
offense, and “no employer will take to its his separation pay in the amount of P100,000.00.
bosom a dishonest employee.” Acts of Since the posting of a bond for the perfection of

21
an appeal is both mandatory and jurisdictional, one of petitioner's clients. However,

the decision of the Labor Arbiter sought to be respondent points out that he was not
appealed before the NLRC had already become reinstated by petitioner Emeritus Security
final and executory. Therefore, the NLRC had no and Maintenance Systems, Inc. but was
authority to entertain the appeal, much less to employed by another company, Emme
reverse the decision of the Labor Arbiter. Security and Maintenance Systems, Inc.
• G.R. No. 204761. April 2, 2014   Emeritus (Emme). Thus, according to respondent,
Security and Maintenance Systems, Inc. he was not reinstated at all.
Vs. Janrie C. Dailig
Petitioner counters that Emeritus and
The issues are (1) whether respondent Emme are sister companies with the same
was illegally dismissed by respondent and Board of Directors and officers, arguing
(2) if he was, whether respondent is that Emeritus and Emme are in effect one
entitled to separation pay, instead of and the same corporation.
reinstatement.
Considering petitioner's undisputed claim
The Court agrees with the ruling of the that Emeritus and Emme are· one and the
Labor Arbiter, NLRC and Court of Appeals same, there is no basis in respondent's
that a floating status of a security guard, allegation that he was not reinstated to
such as respondent, for more than six his previous employment. Besides,
months constitutes constructive dismissal. respondent assails the corporate
personalities of Emeritus and Emme only
Petitioner admits relieving respondent in his Comment filed before this Court.
from his post as security guard on 10 Further, respondent did not appeal the
December 2005. There is also no dispute Labor Arbiter's reinstatement order.
that respondent remained on floating
status at the time he filed his complaint Contrary to the Court of Appeals' ruling,
for illegal dismissal on 16 June 2006. In there is nothing in the records showing
other words, respondent was on floating any strained relations between the parties
status from 10 December 2005 to 16 June to warrant the award of s~paration pay.
2006 or more than six months. There is neither allegation nor proof that
such animosity existed between petitioner
x x x the temporary inactivity or “floating and respondent. In fact, petitioner
status” of security guards should continue complied with the Labor Arbiter's
only for six months. Otherwise, the reinstatement order.
security agency concerned could be liable
for constructive dismissal. The failure of Considering that (1) petitioner reinstated
petitioner to give respondent a work respondent in compliance with the Labor
assignment beyond the reasonable six- Arbiter's decision, and (2) there is no
month period makes it liable for ground, particularly strained relations
constructive dismissal. between the parties, to justify the grant of
separation pay, the Court of Appeals erred
On whether respondent is entitled to in ordering the payment thereof, in lieu of
separation pay reinstatement.
• G.R. No. 201072. April 2, 2014   United
Article 279 of the Labor Code of the Philippine Lines, Inc. and Holland America
Philippines mandates the reinstatement of Line Vs. Generoso E. Sibug
an illegally dismissed employee, • Essentially, the issues for our
resolution are as follows: (1)
Respondent admits receiving a whether Sibug is entitled to
reinstatement notice from petitioner. permanent and total disability
Thereafter, respondent was assigned to benefits for his Volendam and

22
Ryndam injuries and (2) whether hence, justify an extension of

he is entitled to attorney’s fees. the period to 240 days;
2. (b) 240 days had lapsed
After our own review of the case, we find without any certification issued
the petition partly meritorious. We rule by the company-designated
that Sibug is not entitled to permanent physician;
and total disability benefit for his 3. (c) The company-designated
Volendam injury. But he is entitled to physician declared that he is fit for
permanent and total disability benefit for sea duty within the 120-day or
his Ryndam injury and to attorney’s fees. 240-day period, as the case may
be, but his physician of choice and
Sibug is not entitled to permanent and the doctor chosen under Section
total disability benefit for his Volendam 20-B(3) of the POEA-SEC are of a
injury since he became already fit to work contrary opinion;
again as a seaman. He even admitted in 4. (d) The company-designated
his position paper that he was declared fit physician acknowledged that he is
to work. He was also declared fit for sea partially permanently disabled but
service after his pre-employment medical other doctors who he consulted, on
examination when he sought his own and jointly with his
reemployment with petitioners. The employer, believed that his
medical certificate declaring Sibug fit for disability is not only permanent but
sea service even bears his signature. And total as well;
he was able to work again in the same 5. (e) The company-designated
capacity as waste handler in Ryndam. On physician recognized that he is
this point, the Labor Arbiter’s ruling is totally and permanently disabled
amply supported by substantial evidence. but there is a dispute on the
On the other hand, the CA erred in ruling disability grading;
that Sibug is entitled to permanent and 6. (f) Thecompany-
total disability benefit for the injury he designatedphysiciandeterminedthat
suffered at the Volendam. The facts hismedicalcondition is not
clearly show that he is not. compensable or work-related under
the POEA-SEC but his doctor- of-
choice and the third doctor
As regards his Ryndam injury, we agree
selected under Section 20-B(3) of
with the CA that Sibug is entitled to
the POEA-SEC found otherwise and
permanent and total disability benefit
declared him unfit to work;
amounting to US$60,000.
(g)The company-designated physician

In Millan v. Wallem Maritime Services,
declared him totally and permanently
Inc., we listed the following circumstances
disabled but the employer refuses to pay
when a seaman may be allowed to pursue
him the corresponding benefits; and
an action for permanent and total
disability benefits:
(h)The company-designated physician
declared him partially and permanently
1. (a) The company-designated
disabled within the 120-day or 240-day
physician failed to issue a
period but he remains incapacitated to
declaration as to his fitness to
perform his usual sea duties after the
engage in sea duty or disability
lapse of said periods.
even after the lapse of the 120-
day period and there is no
indication that further medical Paragraph (b) applies to Sibug’s case. The
treatment would address his company-designated doctor failed to issue
temporary total disability, a certification with a definite assessment

23
of the degree of Sibug’s disability for his was validly terminated by petitioner.
Ryndam injury within 240 days.
Our Ruling
In this case, Sibug was repatriated and
arrived in the country on January 15, The petition is partly meritorious.
2007 after his Ryndam injury. He had
surgery on his injured hand. On Issues on Appeal before the NLRC
September 7, 2007, the company-
designated doctor issued a medical report
Section 4(d), Rule VI of the 2005 Revised
that Sibug has a permanent but
Rules of Procedure of the NLRC, which
incomplete disability. But this medical
was in force at the time petitioner
report failed to state the degree of Sibug’s
appealed the Labor Arbiter’s decision,
disability. Only in an email dated
expressly provided that, on appeal, the
September 28, 2007, copy of which was
NLRC shall limit itself only to the specific
attached as Annex 3 of petitioners’
issues that were elevated for review, to
position paper, was Sibug’s disability from
wit:
his Ryndam injury classified as a grade 10
disability by the company-designated
doctor. By that time, however, the 240- Section 4. Requisites for perfection of
day extended period when the company- appeal. x x x. xxx x
designated doctor must give the definite
assessment of Sibug’s disability had (d) Subject to the provisions of Article 218
lapsed. From January 15, 2007 to of the Labor Code, once the appeal is
September 28, 2007 is 256 days. Hence, perfected in accordance with these Rules,
Sibug’s disability is already deemed the Commission shall limit itself to
permanent and total. reviewing and deciding only the specific
issues that were elevated on appeal.
In addition, we grant Sibug attorney’s fees
of US$6,000 since he was forced to We have clarified that the clear import of
litigate to protect his valid claim. Where the aforementioned procedural rule is that
an employee is forced to litigate and incur the NLRC shall, in cases of perfected
expenses to protect his right and interest, appeals, limit itself to reviewing those
he is entitled to an award of attorney’s issues which are raised on appeal. As a
fees equivalent to 10% of the award. consequence thereof, any other issues
• G.R. Nos. 196280 & 196286. April 2, 2014  which were not included in the appeal
Universidad De Sta. Isabel Vs. Marvin- shall become final and executory.
Julian L. Sambajon, Jr.
ISSUE: DISMISSAL without just or In reviewing the Labor Arbiter’s finding of
authorized cause at the time he had illegal dismissal, the NLRC concluded that
already acquired permanent or regular respondent had already attained regular
status since petitioner allowed him to status after the expiration of his first
continue teaching despite the expiration of appointment contract as probationary
the first contract of probationary employee. Such conclusion was but a
employment for the second semester of logical result of the NLRC’s own
SY 2002-2003. interpretation of the law. Since petitioner
elevated the questions of the validity of
In fine, petitioner asks this Court to rule respondent’s dismissal and the applicable
on the following issues: (1) whether the probationary period under the aforesaid
NLRC correctly resolved an issue not regulations, the NLRC did not gravely
raised in petitioner’s appeal abuse its discretion in fully resolving the
memorandum; and (2) whether said issues.
respondent’s probationary employment

24
Probationary Employment Period permanent.
A probationary employee is one who is on Since it was explicitly provided in the

trial by the employer during which the above contract that unless renewed in
employer determines whether or not said writing respondent’s appointment
employee is qualified for permanent automatically expires at the end of the
employment. A probationary appointment stipulated period of employment, the CA
is made to afford the employer an erred in concluding that simply because
opportunity to observe the fitness of a the word “probationary” no longer appears
probationary employee while at work, and below the designation (Full-Time Faculty
to ascertain whether he will become a Member), respondent had already become
proper and efficient employee. The word a permanent employee. Noteworthy is
probationary as used to describe the respondent’s admission of being still under
period of employment implies the purpose probationary period in his January 12,
of the term or period, but not its length. 2005 letter to Sr. Evidente reiterating his
demand for salary differential, which letter
It is well settled that the employer has the was sent almost one year after he signed
right or is at liberty to choose who will be the February 26, 2004 appointment
hired and who will be denied employment. contract,
In that sense, it is within the exercise of
the right to select his employees that the There can be no dispute that the period of
employer may set or fix a probationary probation may be reduced if the employer,
period within which the latter may test convinced of the fitness and efficiency of a
and observe the conduct of the former probationary employee, voluntarily
before hiring him permanently. The law, extends a permanent appointment even
however, regulates the exercise of this before the three-year period ends.
prerogative to fix the period of Conversely, if the purpose sought by the
probationary employment. While there is employer is neither attained nor attainable
no statutory cap on the minimum term of within the said period, the law does not
probation, the law sets a maximum “trial preclude the employer from terminating
period” during which the employer may the probationary employment on
test the fitness and efficiency of the justifiable ground; or, a shorter
employee. probationary period may be incorporated
in a collective bargaining agreement. But
The probationary employment of teachers absent any circumstances which
in private schools is not governed purely unmistakably show that an abbreviated
by the Labor Code. The Labor Code is probationary period has been agreed
supplemented with respect to the period upon, the three-year probationary term
of probation by special rules found in the governs.
Manual of Regulations for Private Schools.
Thus, it is the Manual of Regulations for As to the Certificate of Employment issued
Private Schools, and not the Labor Code, by Sr. Real on January 31, 2005, it simply
that determines whether or not a faculty stated that respondent “was a full time
member in an educational institution has faculty member in the Religious Education
attained regular or permanent status. Department of this same institution” and
that he holds the rank of Associate
Section 93 of the 1992 Manual of Professor. There was no description or
Regulations for Private Schools provides qualification of respondent’s employment
that full-time teachers who have as regular or permanent. Neither did the
satisfactorily completed their probationary similar Certification also issued by Sr. Real
period shall be considered regular or on March 18, 2005 prove respondent’s
status as a permanent faculty member of

25
petitioner. probation. Upon the expiration of his

contract of employment, being simply on
probation, he cannot automatically claim
security of tenure and compel the
It bears stressing that full-time teaching employer to renew his employment
primarily refers to the extent of services contract. It is when the yearly contract is
rendered by the teacher to the employer renewed for the third time that Section 93
school and not to the nature of his of the Manual becomes operative, and the
appointment. Its significance lies in the teacher then is entitled to regular or
rule that only full-time teaching personnel permanent employment status.
can acquire regular or permanent status.
As we made clear in the afore-cited case
In this case, petitioner applied the of Magis Young Achievers’ Learning
maximum three-year probationary period Center, the teacher remains under
– equivalent to six consecutive semesters probation for the entire duration of the
– provided in the Manual of Regulations. three-year period. Subsequently, in the
The circumstance that respondent’s case of Mercado v. AMA Computer
services were hired on semester basis did College-Parañaque City, Inc. the Court,
not negate the applicable probationary speaking through Justice Arturo D. Brion,
period, which is three school years or six recognized the right of respondent school
consecutive semesters. to determine for itself that it shall use
fixed-term employment contracts as its
medium for hiring its teachers.
In Magis Young Achievers’ Learning Center
Nevertheless, the Court held that the
the Court explained the three years
teachers’ probationary status should not
probationary period rule in this wise:
be disregarded simply because their
contracts were fixed-term.
The common practice is for the employer
and the teacher to enter into a contract,
Illegal Dismissal
effective for one school year. At the end of
the school year, the employer has the
option not to renew the contract, Notwithstanding the limited engagement
particularly considering the teacher’s of probationary employees, they are
performance. If the contract is not entitled to constitutional protection of
renewed, the employment relationship security of tenure during and before the
terminates. If the contract is renewed, end of the probationary period. The
usually for another school year, the services of an employee who has been
probationary employment continues. engaged on probationary basis may be
Again, at the end of that period, the terminated for any of the following: (a) a
parties may opt to renew or not to renew just or (b) an authorized cause; and (c)
the contract. If renewed, this second when he fails to qualify as a regular
renewal of the contract for another school employee in accordance with reasonable
year would then be the last year – since it standards prescribed by the employer.
would be the third school year – of
probationary employment. At the end of Thus, while no vested right to a
this third year, the employer may now permanent appointment had as yet
decide whether to extend a permanent accrued in favor of respondent since he
appointment to the employee, primarily had not completed the prerequisite three-
on the basis of the employee having met year period (six consecutive semesters)
the reasonable standards of competence necessary for the acquisition of permanent
and efficiency set by the employer. For status as required by the Manual of
the entire duration of this three-year Regulations for Private Schools -- which
period, the teacher remains under has the force of law -- he enjoys a limited

26
tenure. During the said probationary selection and engagement of the

period, he cannot be terminated except employee; (b) the payment of wages; (c)
for just or authorized causes, or if he fails the power of dismissal; and (d) the
to qualify in accordance with reasonable employer’s power to control the employee
standards prescribed by petitioner for the on the means and methods by which the
acquisition of permanent status of its work is accomplished. The last element,
teaching personnel. the so-called control test, is the most
important element.”
In a letter dated February 26, 2005,
petitioner terminated the services of There is no hard and fast rule designed to
respondent stating that his probationary establish the aforesaid elements. Any
employment as teacher will no longer be competent and relevant evidence to prove
renewed upon its expiry on March 31, the relationship may be admitted.
2005, respondent’s fifth semester of Identification cards, cash vouchers, social
teaching. No just or authorized cause was security registration, appointment letters
given by petitioner. Prior to this, or employment contracts, payrolls,
respondent had consistently achieved organization charts, and personnel lists,
above average rating based on evaluation serve as evidence of employee status.
by petitioner’s officials and students. He
had also been promoted to the rank of In this case, however, Francisco failed to
Associate Professor after finishing his present any proof substantial enough to
master’s degree course on his third establish his relationship with the
semester of teaching. Clearly, respondents. He failed to present
respondent’s termination after five documentary evidence like attendance
semesters of satisfactory service was logbook, payroll, SSS record or any
illegal. personnel file that could somehow depict
his status as an employee. Anent his claim
Respondent therefore is entitled to that he was not issued with employment
continue his three-year probationary records, he could have, at least, produced
period, such that from March 31, 2005, his social security records which state his
his probationary employment is deemed contributions, name and address of his
renewed for the following semester (1st employer, as his co-petitioner Tenazas
semester of SY 2005-2006). However, did. He could have also presented
given the discordant relations that had testimonial evidence showing the
arisen from the parties’ dispute, it can be respondents’ exercise of control over the
inferred with certainty that petitioner had means and methods by which he
opted not to retain respondent in its undertakes his work. This is imperative in
employ beyond the three-year period. light of the respondents’ denial of his
• G.R. No. 192998. April 2, 2014 Bernard A. employment and the claim of another taxi
Tenazas, Jaime M. Farncisco and Isidro G. operator, Emmanuel Villegas (Emmanuel),
Endraca Vs. R. Villegas Taxi Transport and that he was his employer. Specifically, in
Romualdo Villegas his Affidavit, Emmanuel alleged that
• Pivotal to the resolution of the Francisco was employed as a spare driver
instant case is the determination of in his taxi garage from January 2006 to
the existence of employer- December 2006, a fact that the latter
employee relationship and whether failed to deny or question in any of the
there was an illegal dismissal. pleadings attached to the records of this
case. The utter lack of evidence is fatal to
“[I]n determining the presence or absence Francisco’s case especially in cases like his
of an employer-employee relationship, the present predicament when the law has
Court has consistently looked for the been very lenient in not requiring any
following incidents, to wit: (a) the particular form of evidence or manner of
proving the presence of employer-
27
employee relationship. engender a certain degree of hostility, the

understandable strain in the parties’
Here, Francisco simply relied on his relation would not necessarily rule out
allegation that he was an employee of the reinstatement which would, otherwise,
company without any other evidence become the rule rather the exception in
supporting his claim. Unfortunately for illegal dismissal cases.
him, a mere allegation in the position
paper is not tantamount to evidence. Thus, it was a prudent call for the CA to
Bereft of any evidence, the CA correctly delete the award of separation pay and
ruled that Francisco could not be order for reinstatement instead, in
considered an employee of the accordance with the general rule stated in
respondents. Article 279 of the Labor Code.
• G.R. No. 189456. April 2, 2014 Chiang Kai
The CA’s order of reinstatement of Shek College and Carmelita Espino Vs.
Tenazas and Endraca, instead of the Rosalina M. Torres
payment of separation pay, is also well in • Resignation is the voluntary act of
accordance with prevailing jurisprudence. an employee who is in a situation
In Macasero v. Southern Industrial Gases where one believes that personal
Philippines, Clearly, it is only when reasons cannot be sacrificed for the
reinstatement is no longer feasible that favor of employment, and opts to
the payment of separation pay is ordered leave rather than stay employed. It
in lieu thereof. For instance, if is a formal pronouncement or
reinstatement would only exacerbate the relinquishment of an office, with
tension and strained relations between the the intention of relinquishing the
parties, or where the relationship between office accompanied by the act of
the employer and the employee has been relinquishment. As the intent to
unduly strained by reason of their relinquish must concur with the
irreconcilable differences, it would be overt act of relinquishment, the
more prudent to order payment of acts of the employee before and
separation pay instead of reinstatement. after the alleged resignation must
be considered in determining
This doctrine of strained relations, whether, he or she, in fact,
however, should not be used recklessly or intended to sever his or her
applied loosely nor be based on employment.
impression alone. “It bears to stress that
reinstatement is the rule and, for the Respondent had admitted to leaking a
exception of strained relations to apply, it copy of the HEKASI 5 special quiz. She
should be proved that it is likely that if reluctantly made the admission and
reinstated, an atmosphere of antipathy apologized to Mrs. Koo when the latter
and antagonism would be generated as to confronted her. She admitted during the
adversely affect the efficiency and 28 August 2002 hearing of executing two
productivity of the employee concerned.” (2) contradictory statements. On 30
August 2002, the Investigating Committee
A bare claim of strained relations by found respondent guilty of leaking a copy
reason of termination is insufficient to of the special quiz. Based on this
warrant the granting of separation pay. infraction alone, Chiang Kai Shek College
Likewise, the filing of the complaint by the would have been justified to validly
petitioners does not necessarily translate terminate respondent from service. As
to strained relations between the parties. Associate Justice Antonio T. Carpio
As a rule, no strained relations should emphasized, academic dishonesty is the
arise from a valid and legal act asserting worst offense a teacher can make because
one’s right. Although litigation may also teachers caught committing academic

28
dishonesty lose their credibility as except to forego his continued

educators and cease to be role models for employment.
their students. More so that under Chiang
Kai Shek College Faculty Manual, leaking There was here no discrimination
and selling of test questions is classified committed by petitioners. While
as a grave offense punishable by respondent did not tender her resignation
dismissal/termination. wholeheartedly, circumstances of her own
making did not give her any other option.
On 5 September 2002, respondent was With due process, she was found to have
verbally informed by Mrs. Caneda, Mrs. committed the grave offense of leaking
Carmelita Espino and Ms. Tibi that she test questions. Dismissal from
was being dismissed from service. Before employment was the justified equivalent
the Investigating Committee could penalty. Having realized that, she asked
formalize respondent’s dismissal, for, and was granted, not just a deferred
respondent handwrote a letter requesting imposition of, but also an acceptable cover
that the penalty be lowered from dismissal for the penalty.
to suspension in exchange for
respondent’s resignation at the end of the Respondent’s profession, the gravity of
school year. her infraction, and the fact that she waited
until the close of the school year to
We do not find anything irregular with challenge her impending resignation
respondent’s handwritten letter. The letter demonstrate that respondent had
came about because respondent was bargained for a graceful exit and is now
faced with an imminent dismissal and trying to renege on her obligation.
opted for an honorable severance from Associate Justice Antonio T. Carpio
employment. That respondent voluntarily accordingly noted that petitioners should
resigned is a logical conclusion. Justice not be punished for being compassionate
Arturo D. Brion correctly observed that and granting respondent's request for a
respondent’s infraction and the inevitable lower penalty. Put differently, respondent
and justifiable consequence of that should not be rewarded for reneging on
infraction, i.e., termination of her promise to resign at the end of the
employment, induced her to resign or school year. Otherwise, employers placed
promise to resign by the end of the school in similar situations would no longer
year. extend compassion to employees.
Compromise agreements, like that in the
Given the indications of voluntary instant case, which lean towards desired
resignation, we rule that there is no liberality that favor labor, would be
constructive dismissal in this case. There discouraged.
is constructive dismissal when there is • G.R. No. 195687. April 7, 2014 Land Bank
cessation of work, because continued of the Philippines Vs. David G. Naval, Jr.,
employment is rendered impossible, et al.
unreasonable or unlikely, as an offer • Despite the convoluted claims of
involving a demotion in rank or a the parties, the basic question
diminution in pay and other benefits. Aptly before us is whether or not
called a dismissal in disguise or an act respondents and intervenors are
amounting to dismissal but made to entitled to the COLA and the BEP
appear as if it were not, constructive on top of their basic salaries from
dismissal may, likewise, exist if an act of 1989 up to the present.
clear discrimination, insensibility, or
disdain by an employer becomes so The SSL Remained Valid Despite the
unbearable on the part of the employee Nullification of DBM-CCC No. 10
that it could foreclose any choice by him

29
To recall, respondents’ demand for the specified

payment of their COLA and BEP on top of
their basic salaries came after this Court’s herein as may be determined by
promulgation of De Jesus, which nullified the DBM.
DBM-CCC No. 10 for non-publication. It is
their position that by the nullification of Since the COLA and the BEP are among
DBM-CCC No. 10 which expressly named those expressly excluded by the SSL from
the COLA and BEP as integrated into the integration, they should be considered as
basic salary, LBP’s integration of the COLA deemed integrated in the standardized
and the BEP is likewise invalid. In other salaries of LBP employees under the
words, respondents equate the general rule of integration.
nullification of the implementing rules with
the nullification of the very law which
Under the doctrine of stare decisis et non
orders the integration of these allowances
quieta movere, a point of law already
into the basic salary. This Court had
established will be followed by the court in
already refuted the soundness of this
subsequent cases where the same legal
claim.
issue is raised. Thus, we can come to no
other conclusion than to deny the
The nullity of DBM-CCC No. 10, will payment of the COLA on top of the LBP
not affect the validity of R.A. No. employees’ basic salary from July 1, 1989
6758. It is a cardinal rule in statutory because (1) it has not been expressly
construction that statutory provisions excluded from the general rule on
control the rules and regulations which integration by the first sentence of Sec. 12
may be issued pursuant thereto. Such of the SSL and (2) as we have explained
rules and regulations must be consistent in Gutierrez, the COLA is not granted in
with and must not defeat the purpose of order to reimburse employees for the
the statute. The validity of R.A. No. expenses incurred in the performance of
6758 should not be made to depend their official duties.
on the validity of its implementing • G.R. No. 170007. April 7, 2014 Tabangao
rules.
Shell Refinery Employees Association Vs.
Pilipinas Shell Petroleum Corporation
From the foregoing provision, it is ISSUE: unfair labor practice through bad
immediately apparent that the SSL faith bargaining.
mandates the integration of all the nature of the duty to bargain, that is,
allowances except for the following: it does not compel any party to accept a
proposal or to make any concession. While
1. Representation and transportation the purpose of collective bargaining is the
allowances; reaching of an agreement between the
2. Clothing and laundry allowances; employer and the employee’s union
3. Subsistence allowance of marine resulting in a binding contract between
officers and crew on board the parties, the failure to reach an
agreement after negotiations continued
government vessels; for a reasonable period does not mean
lack of good faith. The laws invite and
4. Subsistence allowance of hospital contemplate a collective bargaining
personnel; contract but do not compel one. For after
5. Hazard pay; all, a CBA, like any contract is a product of
6. Allowances of foreign service mutual consent and not of compulsion. As
personnel stationed abroad; such, the duty to bargain does not include
7. And such other additional the obligation to reach an agreement.
compensation not otherwise

30
n this light, the corporation’s unswerving jurisdiction over the ‘CBA’ case when it
position on the matter of annual lump sum [was] not the subject matter of the notice
payment in lieu of wage increase did not, of strike” because the case was “all about
by itself, constitute bad faith even if such ‘ULP’ in the form of bad faith bargaining.”
position caused a stalemate in the For the union, the Secretary of Labor and
negotiations, as correctly ruled by the Employment should not have touched the
Secretary of Labor and Employment in the issue of the CBA as there was no CBA
decision dated June 8, 2005. deadlock at that time, and should have
limited the assumption of jurisdiction to
As there was no bad faith on the part of the charge of unfair labor practice for
the company in its bargaining with the bargaining in bad faith.
union, deadlock was possible and did
occur. The union’s reliance on item 8 of The union is wrong.
the ground rules governing the parties’
negotiations which required mutual As discussed above, there was already an
consent for a declaration of deadlock was actual existing deadlock between the
reduced to irrelevance by the actual facts. parties. What was lacking was the formal
Contra factum non valet argumentum. recognition of the existence of such a
There is no argument against facts. And deadlock because the union refused a
the fact is that the negotiations between declaration of deadlock. Thus, the union’s
the union and the company were stalled view that, at the time the Secretary of
by the opposing offers of yearly wage Labor and Employment exercised her
increase by the union, on the one hand, power of assumption of jurisdiction, the
and annual lump sum payment by the issue of deadlock was neither an incidental
company, on the other hand. Each party issue to the matter of unfair labor practice
found the other’s offer unacceptable and nor an existing issue is incorrect.
neither party was willing to yield. The
company suggested seeking the More importantly, however, the union’s
assistance of a third party to settle the mistaken theory that the deadlock issue
issue but the union preferred the remedy was neither incidental nor existing is
of filing a notice of strike. Each party was based on its premise that the case is all
adamant in its position. Thus, because of about the company’s alleged unfair labor
the unresolved issue on wage increase, practice of bargaining in bad faith, which
there was actually a complete stoppage of is the ground stated in its first Notice of
the ongoing negotiations between the Strike.
parties and the union filed a Notice of
Strike. A mutual declaration would neither
While the first Notice of Strike is indeed
add to nor subtract from the reality of the
significant in the determination of the
deadlock then existing between the
existing labor dispute between the parties,
parties. Thus, the absence of the parties’
it is not the sole criterion. The totality of
mutual declaration of deadlock does not
the company’s Petition for Assumption of
mean that there was no deadlock. At
Jurisdiction, including every allegation
most, it would have been simply a
therein, also guided the Secretary of
recognition of the prevailing status quo
Labor and Employment in the proper
between the parties.
determination of the labor dispute over
which he or she was being asked to
More importantly, the union only caused assume jurisdiction.
confusion in the proceedings before the
Secretary of Labor and Employment when
In this case, there was a dispute, an
it questioned the latter’s assumption of
unresolved issue on several matters,
jurisdiction over the labor dispute between
between the union and the company in
the union and the company on the ground
the course of the negotiations for a new
that the “Secretary erred in assuming
31
CBA. Among the unsettled issues was the As there is already an existing controversy
matter of compensation. on the matter of wage increase, the
Secretary of Labor and Employment need
Thus, the labor dispute between the union not wait for a deadlock in the negotiations
and the company concerned the to take cognizance of the matter. That is
unresolved matters between the parties in the significance of the power of the
relation to their negotiations for a new Secretary of Labor and Employment under
CBA. The power of the Secretary of Labor Article 263(g) of the Labor Code to
and Employment to assume jurisdiction assume jurisdiction over a labor dispute
over this dispute includes and extends to causing or likely to cause a strike or
all questions and controversies arising lockout in an industry indispensable to the
from the said dispute, such as, but not national interest.
limited to the union’s allegation of bad
faith bargaining. It also includes and Everything considered, therefore, the
extends to the various unresolved Secretary of Labor and Employment
provisions of the new CBA such as committed no abuse of discretion when
compensation, particularly the matter of she assumed
annual wage increase or yearly lump sum
payment in lieu of such wage increase, jurisdiction over the labor dispute ofthe
whether or not there was deadlock in the union and the company.
negotiations. Indeed, nowhere does the • G.R. No. 192582. April 7, 2014 Bluer Than
Order dated September 20, 2004 of the Blue Joint Ventures Company/ Mary Ann
Secretary of Labor and Employment Dela Vega Vs. Glyza Esteban
mention a CBA deadlock. What the union • "It is not the job title but the actual
viewed as constituting the inclusion of a work that the employee performs
CBA deadlock in the assumption of that determines whether he or she
jurisdiction was the inclusion of the occupies a position of trust and
economic issues, particularly the confidence." In this case, while
company’s stance of yearly lump sum respondent's position was
payment in lieu of annual wage increase, denominated as Sales Clerk, the
in the directive for the parties to submit nature of her work included
their respective position papers. inventory and cashiering, a
function that clearly falls within the
The union’s Motion for Reconsideration sphere ofrank-and-file positions
(With Urgent Prayer to Compel the imbued with trust and confidence.
Company to Justify Offer of Wage
[Increase] Moratorium) and Second Loss of trust and confidence is premised
Motion for Reconsideration questioning the on the fact that the employee concerned
Order dated September 20, 2004 of the holds a position of responsibility, trust and
Secretary of Labor and Employment confidence. The employee must be
actually confirm that the labor dispute invested with confidence on delicate
between the parties essentially and matters, such as the custody, handling,
necessarily includes the conflicting care and protection of the employer’s
positions of the union, which advocates property and funds. “[W]ith respect to
annual wage increase, and of the rank-and-file personnel, loss of trust and
company, which offers yearly lump sum confidence as ground for valid dismissal
payment in lieu of wage increase. In fact, requires proof of involvement in the
that is the reason behind the union’s alleged events in question, and that mere
prayer that the company be ordered to uncorroborated assertions and accusations
justify its offer of wage increase by the employer will not be sufficient.”
moratorium.
Esteban is, no doubt, a rank-and-file

32
employee. The question now is whether without justifiable excuse as distinguished

she occupies a position of trust and from an act done carelessly,
confidence. thoughtlessly, heedlessly or inadvertently.
The loss of trust and confidence must
Among the fiduciary rank-and-file spring from the voluntary or wilful act of
employees are cashiers, auditors, property the employee, or by reason of some
custodians, or those who, in the normal blameworthy act or omission on the part
exercise of their functions, regularly of the employee.
handle significant amounts of money
or property. These employees, though In this case, the Court finds that the acts
rank-and-file, are routinely charged with committed by Esteban do not amount to a
the care and custody of the employer’s wilful breach of trust. She admitted that
money or property, and are thus classified she accessed the POS system with the use
as occupying positions of trust and of the unauthorized “123456” password.
confidence. She did so, however, out of curiosity and
without any obvious intention of
In this case, Esteban was a sales clerk. defrauding the petitioner. As professed by
Her duties, however, were more than that Esteban, “she was acting in good faith in
of a sales clerk. Aside from attending to verifying what her co-staff told her about
customers and tending to the shop, the opening of the computer by the use of
Esteban also assumed cashiering duties. the “123456” password, x x x. She even
This, she does not deny; instead, she told her co-staff not to open again said
insists that the competency clause computer, and that was the first and last
provided that her tasks were that of a time she opened said computer.”
sales clerk and the cashiering function was Moreover, the petitioner even admitted
labelled “to follow.” A perusal of the that Esteban has her own password to the
competency clause, however, shows that POS system. If it was her intention to
it is merely an attestation on her part that manipulate the store’s inventory and
she is competent to “meet the basic funds, she could have done so long before
requirements needed for the position she had knowledge of the unauthorized
[she] is applying for x x x”. It does not password. But the facts on hand show that
define her actual duties. As consistently she did not. The petitioner also failed to
ruled by the Court, it is not the job title establish a substantial connection between
but the actual work that the employee Esteban’s use of the “123456” password
performs that determines whether he or and any loss suffered by the petitioner.
she occupies a position of trust and Indeed, it may be true that, as posited by
confidence. the petitioner, it is the fact that she used
the password that gives cause to the loss
Proceeding from the above conclusion, the of trust and confidence on Esteban.
pivotal question that must be answered is However, as ruled above, such breach
whether Esteban’s acts constitute just must have been done intentionally,
cause to terminate her employment. knowingly, and purposely, and without
any justifiable excuse, and not simply
something done carelessly, thoughtlessly,
Loss of trust and confidence to be a valid
heedlessly or inadvertently. To the Court’s
cause for dismissal must be work related
mind, Esteban’s lapse is, at best, a
such as would show the employee
careless act that does not merit the
concerned to be unfit to continue
imposition of the penalty of dismissal.
working for the employer and it must
be based on a wilful breach of trust
and founded on clearly established The Court is not saying that Esteban is
facts. Such breach is wilful if it is done innocent of any breach of company policy.
intentionally, knowingly, and purposely, That she relayed the password to another
employee is likewise demonstrative of her
33
mindless appreciation of her duties as a for the year 2005 to 2006. The petitioner
sales clerk in the petitioner’s employ. But justifies the deduction on the basis of
absent any showing that her acts were alleged trade practice and that it is
done with “moral perverseness” that allowed by the Labor Code.
would justify the claimed loss of trust and
confidence attendant to her job, the Court Article 113 of the Labor Code provides
must sustain the conclusion that Esteban that no employer, in his own behalf or in
was illegally dismissed. As stated by the behalf of any person, shall make any
CA, “[s]uspension would have sufficed as deduction from the wages of his
punishment, considering that the employees, except in cases where the
petitioner had already been with the employer is authorized by law or
company for more than 2 years, and the regulations issued by the Secretary of
petitioner apologized and readily admitted Labor and Employment, among others.
her mistake in her written explanation, The Omnibus Rules Implementing the
and considering that no clear and Labor Code, meanwhile, provides:
convincing evidence of loss or prejudice,
which was suffered by the [petitioner] SECTION 14. Deduction for loss or
from [Esteban’s] supposed infraction.” damage. – Where the employer is
engaged in a trade, occupation or
Preventive suspension during business where the practice of making
investigation deductions or requiring deposits is
recognized to answer for the
Preventive suspension is a measure reimbursement of loss or damage to tools,
allowed by law and afforded to the materials, or equipment supplied by the
employer if an employee’s continued employer to the employee, the employer
employment poses a serious and may make wage deductions or require the
imminent threat to the employer’s life or employees to make deposits from which
property or of his co-workers. It may be deductions shall be made, subject to the
legally imposed against an employee following conditions:
whose alleged violation is the subject of
an investigation. (a) That the employee concerned is clearly
shown to be responsible for the loss or
In this case, the petitioner was acting well damage;
within its rights when it imposed a 10-day
preventive suspension on Esteban. While (b) That the employee is given reasonable
it may be that the acts complained of opportunity to show cause why deduction
were committed by Esteban almost a year should not be made;
before the investigation was conducted,
still, it should be pointed out that Esteban (c) That the amount of such deduction is
was performing functions that involve fair and reasonable and shall not exceed
handling of the petitioner’s property and the actual loss or damage; and
funds, and the petitioner had every right
to protect its assets and operations
(d) That the deduction from the wages of
pending Esteban’s investigation.
the employee does not exceed 20 percent
of the employee’s wages in a week.
Sales negative variances as wage
deductions
In this case, the petitioner failed to
sufficiently establish that Esteban was
The petitioner deducted the amount of responsible for the negative variance it
P8,304.93 from Esteban’s last salary. had in its sales for the year 2005 to 2006
According to the petitioner, this and that Esteban was given the
represents the store’s negative variance opportunity to show cause the deduction
34
from her last salary should not be made. that disability should not be understood
The Court cannot accept the petitioner’s more on its medical significance but on
statement that it is the practice in the the loss of earning capacity. Permanent
retail industry to deduct variances from an total disability means disablement of an
employee’s salary, without more. employee to earn wages in the same kind
of work, or work of similar nature that he
In Niña Jewelry Manufacturing of Metal was trained for or accustomed to perform,
Arts, Inc. v. Montecillo, the Court ruled or any kind of work which a person of his
that: mentality and attainment could do.
Disability, therefore, is not synonymous
T]he petitioners should first establish that with “sickness” or “illness.” What is
the making of deductions from the salaries compensated is one’s incapacity to work
is authorized by law, or regulations issued resulting in the impairment of his earning
by the Secretary of Labor. Further, the capacity.
posting of cash bonds should be proven as
a recognized practice in the jewelry Moreover, the award for loss of earning
manufacturing business, or alternatively, lacks basis since the Philippine Overseas
the petitioners should seek for the Employment Agency (POEA) Standard
determination by the Secretary of Labor Contract of Employment (POEA SCE), the
through the issuance of appropriate rules governing law between the parties, does
and regulations that the policy the former not provide for such a grant. What Section
seeks to implement is necessary or 20, paragraph (G) of the POEA SCE
desirable in the conduct of business. The provides is that payment for injury,
petitioners failed in this respect. It bears illness, incapacity, disability, or death of
stressing that without proofs that the seafarer covers “all claims arising from
requiring deposits and effecting or in relation with or in the course of the
deductions are recognized practices, or seafarer’s employment, including but not
without securing the Secretary of Labor's limited to damages arising from the
determination of the necessity or contract, tort, fault or negligence under
desirability of the same, the imposition of the laws of the Philippines or any other
new policies relative to deductions and country.” The permanent disability
deposits can be made subject to abuse by compensation of US$60,000 clearly
the employers. This is not what the law amounts to reasonable compensation for
intends. the injuries and loss of earning capacity of
• G.R. No. 199022. April 7, 2014 Magsaysay the seafarer.
Maritime Corporation Vs. Oscar D. Chin, • G.R. No. 207983. April 7, 2014   Wenphil
Jr. Corporation Vs. Almer R. Abing and
• The key issue in this case is Anabelle M. Tuazon
whether or not the CA erred in • An order of reinstatement is
affirming the Labor Arbiter’s award immediately executory even
of loss of future earnings on top of pending appeal. The employer
his disability benefits as well as has the obligation to reinstate
awards of moral and exemplary and pay the wages of the
damages and attorney’s fees. dismissed employee during the
period of appeal until reversal
Definitely, the Labor Arbiter’s award of by the higher court.
loss of earning is unwarranted since Chin • Under Article 223 of the Labor
had already been given disability Code, “the decision of the Labor
compensation for loss of earning capacity. Arbiter reinstating a dismissed
An additional award for loss of earnings or separated employee, insofar
will result in double recovery. In a catena as the reinstatement aspect is
of cases, the Court has consistently ruled concerned, shall immediately
be executory, even pending
35
appeal. The employee shall either Thus, when the NLRC rendered its
be admitted back to work under decision on the appeal affirming the LA’s
the same terms and conditions finding that the respondents were illegally
prevailing prior to his dismissal or dismissed, but modifying the award of
separation, or at the option of the reinstatement to payment of separation
employer, merely reinstated in the pay, Wenphil stopped paying the
payroll. The posting of a bond by respondents’ wages.
the employer shall not stay the
execution for reinstatement.” The reinstatement salaries due to the
respondents were, by their nature,
Since the decision is immediately payment of unworked backwages. These
executory, it is the duty of the employer were salaries due to the respondents
to comply with the order of reinstatement, because they had been prevented from
which can be done either actually or working despite the LA and the NLRC
through payroll reinstatement. As findings that they had been illegally
provided under Article 223 of the Labor dismissed.
Code, this immediately executory nature
of an order of reinstatement is not We point out that reinstatement and
affected by the existence of an ongoing backwages are two separate reliefs
appeal. The employer has the duty to available to an illegally dismissed
reinstate the employee in the interim employee. The normal consequences of a
period until a reversal is decreed by a finding that an employee has been illegally
higher court or tribunal. dismissed are: first, that the employee
becomes entitled to reinstatement to his
In the case of payroll reinstatement, even former position without loss of seniority
if the employer’s appeal turns the tide in rights; and second, the payment of
its favor, the reinstated employee has no backwages covers the period running from
duty to return or reimburse the salary he his illegal dismissal up to his actual
received during the period that the lower reinstatement. These two reliefs are not
court or tribunal’s governing decision was inconsistent with one another and the
for the employee’s illegal dismissal. labor arbiter can award both
Otherwise, the situation would run counter simultaneously.
to the immediately executory nature of an
order of reinstatement. Moreover, the relief of separation pay
may be granted in lieu of
We see the situation discussed above to reinstatement but it cannot be a
be present in the case before us as substitute for the payment of
Wenphil observed the mandate of Article backwages. In instances where
223 to immediately comply with the order reinstatement is no longer feasible
of reinstatement by the LA. On October because of strained relations between the
29, 2001, while Wenphil’s appeal with the employee and the employer, separation
NLRC was pending, it entered into a pay should be granted. In effect, an
compromise agreement with the illegally dismissed employee should be
respondents. In this agreement, Wenphil entitled to either reinstatement – if viable,
committed to reinstate the respondents in or separation pay if reinstatement is no
its payroll. However, the commitment longer be viable, plus backwages in
came with a condition: Wenphil stipulated either instance.
that its obligation to pay the wages due to
the respondents would cease if the Apparently, when the NLRC changed the
decision of the LA would be “modified, LA’s decision (specifically, the order to
amended or reversed” by the NLRC. award separation pay in lieu of
reinstatement), Wenphil read this to mean

36
to be the “modification” envisioned in the customs and public policy.

compromise agreement, Wenphil likewise
effectively concluded that separation pay In the present case, the parties’
and backwages are the same or are compromise agreement simply provided
interchangeable reliefs. This conclusion that Wenphil’s obligation to pay the
can be deduced from Wenphil’s insistence respondents’ backwages shall end the
not to pay the respondent’s remaining moment the NLRC modifies, amends or
backwages under its erroneous reasoning reverses the illegal dismissal decision of
that this was the effect of the NLRC’s LA Bartolabac. On its face, there is
order to Wenphil to pay separation pay in nothing invalid with such stipulation.
lieu of reinstatement. Indeed, had the NLRC reversed the LA,
the obligation to pay backwages would
We emphasize that the basis for the have stopped. The NLRC, however, did not
payment of backwages is different from decree a reversal of the finding of illegal
that of the award of separation pay. dismissal. In fact, it affirmed the illegal
Separation pay is granted where dismissal conclusion, confining itself
reinstatement is no longer advisable merely to a modification of the
because of strained relations between the consequences of the illegal dismissal –
employee and the employer. Backwages from reinstatement to the payment of
represent compensation that should have separation pay.
been earned but were not collected
because of the unjust dismissal. The basis This “modification” of course we cannot
for computing separation pay is usually accept; the option under the legal policy is
the length of the employee’s past service, solely limited to a ruling that the
while that for backwages is the actual respondents had not been illegally
period when the employee was unlawfully dismissed. Otherwise, we would be
prevented from working. violating the Labor Code’s policy entitling
illegally dismissed employees to their right
Had Wenphil really wanted to put a stop to backwages even during the period of
to the running of the period for the appeal.
payment of the respondents’ backwages,
then it should have immediately complied This ruling embodies a principle and policy
with the NLRC’s order to award the of the law that cannot be watered down
employees their separation pay in lieu of by any lesser agreement except perhaps
reinstatement. This action would have when backwages are already earned
immediately severed the employer- entitlements that the employee chooses to
employee relationship. However, the surrender for a valuable consideration
records are bereft of any evidence that (and even then, the consideration must at
Wenphil actually paid the respondents’ least be equitable). This legal policy
separation pay. Thus, the employer- emphasizes, too, the rule that separation
employee relationship between Wenphil pay cannot be a substitute for backwages
and the respondents never ceased and the but only for reinstatement. The award of
employment status remained pending and separation pay is not inconsistent with the
uncertain until the CA actually rendered payment of backwages. Thus, until a
its decision that the respondents had not higher court’s or tribunal’s reversal of the
been illegally dismissed. In the context of finding that an employee
the parties’ agreement, it was only at this
point that the payment of backwages had been illegally dismissed, the employee
should have stopped. would be entitled to receive his
reinstatement salary or backwages during
A compromise agreement should not the period of appeal until such reversal.
be contrary to law, morals, good This is in line with the Labor Code’s policy

37
that an order of reinstatement, which can faith in abolishing the redundant position;
either be actual or through the payroll, is and (4) fair and reasonable criteria in
immediately executory and is not affected ascertaining what positions are to be
by the period of appeal.
• G.R. No. 191154. April 7, 2014   SPI declared redundant.
Technologies, Inc., et al. Vs. Victoria K.
Mapua Anent the first requirement which is
• he Court remains steadfast on its written notice served on both the
stand that the determination of the
• continuing necessity of a particular employee and the DOLE at least one
officer or position in a business month prior to the intended date of
• corporation is a management termination, SPI had discharged the
prerogative, and the courts will not burden of proving that it submitted a
interfere notice to the DOLE on March 21, 2007,
• unless arbitrary or malicious action stating therein that the effective date of
on the part of management is termination is on April 21, 2007. It is,
shown. however, quite peculiar that two kinds of
notices were served to Mapua. One
Indeed, an employer has no legal termination letter stated that its date of
obligation to keep more employees than effectivity is on the same day, March 21,
are necessary for the operation of its 2007. The other termination letter sent
business. we find our intrusion through mail to Mapua’s residence stated
indispensable, to look into matters which that the effective date of her termination
we would otherwise consider as an is on April 21, 2007.
exercise of management prerogative.
"Management prerogative" are not magic Moving on to the issue of the validity of
words uttered by an employer to bring redundancy program, SPI
him to a realm where our labor laws
cannot reach.
asserted that an employer has the
unbridled right to conduct its own
Mapua was dismissed from employment business in order to achieve the results it
supposedly due to redundancy. However, desires. In AMA Computer College, Inc. v.
she contended that her position as Garcia, et al., the Court held that the
Corporate Development Manager is not presentation of the new table of the
redundant. She cited that SPI was in fact organization and the certification of the
actively looking for her replacement after Human Resources Supervisor that the
she was terminated. Furthermore, SPI positions occupied by the retrenched
violated her right to procedural due employees are redundant are inadequate
process when her termination was made as evidence to support the college’s
effective on the same day she was notified redundancy program.
of it.
Furthermore, on the assumption that the
for a valid implementation of a functions of a Marketing Communications
redundancy program, the employer must Manager are different from that of a
comply with the following requisites: (1) Corporate Development Manager, it was
written notice served on both the not even discussed why Mapua was not
employee and the DOLE at least one considered for the position. While SPI had
month prior to the intended date of no legal duty to hire Mapua as a Marketing
termination; (2) payment of separation Communications Manager, it could have
pay equivalent to at least one month pay clarified why she is not qualified for that
or at least one month pay for every year position. In fact, Mapua brought up the
of service, whichever is higher; (3) good subject of transfer to Villanueva and Raina

38
several times prior to her termination but LA but with the regular courts, the remedy
to no avail. There was even no showing being civil in nature arising from a
that Mapua could not perform the duties contractual obligation, following this
of a Marketing Communications Manager. Court’s ruling in several cases.
Change in the job title is not synonymous The Court sustains the CA’s award of
to a change in the functions. A position moral and exemplary damages. Award of
cannot be abolished by a mere change of moral and exemplary damages for an
job title. In cases of redundancy, the illegally dismissed employee is proper
management should adduce evidence and where the employee had been harassed
prove that a position which was created in and arbitrarily terminated by the
place of a previous one should pertain to employer. Moral damages may be
functions which are dissimilar and awarded to compensate one for diverse
incongruous to the abolished office. injuries such as mental anguish,
besmirched reputation, wounded feelings,
On the issue of the solidary obligation of and social humiliation occasioned by the
the corporate officers impleaded vis-à-vis employer’s unreasonable dismissal of the
the corporation for Mapua’s illegal employee. The Court has consistently
dismissal, “[i]t is hornbook principle that accorded the working class a right to
personal liability of corporate directors, recover damages for unjust dismissals
trustees or officers attaches only when: tainted with bad faith; where the motive
(a) they assent to a patently unlawful act of the employer in dismissing the
of the corporation, or when they are guilty employee is far from noble. The award of
of bad faith or gross negligence in such damages is based not on the Labor
directing its affairs, or when there is a Code but on Article 220 of the Civil Code.
conflict of interest resulting in damages to • G.R. No. 195227. April 21, 2014 Froilan M.
the corporation, its stockholders or other Bergonio, Jr., et al. Vs. South East Asian
persons; (b) they consent to the issuance Arilines and Irene Cornier
of watered down stocks or when, having • Nature of the reinstatement
knowledge of such issuance, do not aspect of the LA’s decision on a
forthwith file with the corporate secretary finding of illegal dismissal
their written objection; (c) they agree to
hold themselves personally and solidarily Under paragraph 3, Article 223 of the
liable with the corporation; or (d) they are Labor Code, the LA’s order for the
made by specific provision of law reinstatement of an employee found
personally answerable for their corporate illegally dismissed is immediately
action.” executory even during pendency of the
employer’s appeal from the decision.
While the Court finds Mapua’s averments Under this provision, the employer must
against Villanueva, Nolan, Maquera and reinstate the employee – either by
Raina as detailed and exhaustive, the physically admitting him under the
Court takes notice that these are mostly conditions prevailing prior to his dismissal,
suppositions on her part. Thus, the Court and paying his wages; or, at the
cannot apply the above-enumerated employer’s option, merely reinstating the
exceptions when a corporate officer employee in the payroll until the decision
becomes personally liable for the is reversed by the higher court. Failure of
obligation of a corporation to this case. the employer to comply with the
reinstatement order, by exercising
With respect to the vehicle under the the options in the alternative, renders
company car plan which the LA awarded him liable to pay the employee’s
to Mapua, the Court rules that the subject salaries.
matter is not within the jurisdiction of the

39
Otherwise stated, a dismissed employee pendency of the appeal up to the reversal

whose case was favorably decided by the by a higher tribunal may still be held liable
LA is entitled to receive wages for the accrued wages of the employee,
pending appeal upon reinstatement, i.e., the unpaid salary accruing up to the
which reinstatement is immediately time the higher tribunal reverses the
executory. Unless the appellate tribunal decision.
issues a restraining order, the LA is duty
bound to implement the order of The rule, therefore, is that an employee
reinstatement and the employer has no may still recover the accrued wages up to
option but to comply with it. and despite the reversal by the higher
tribunal. This entitlement of the employee
Moreover, and equally worth emphasizing, to the accrued wages proceeds from the
is that an order of reinstatement immediate and self-executory nature of
issued by the LA is self-executory, i.e., the reinstatement aspect of the LA’s
the dismissed employee need not even decision.
apply for and the LA need not even issue a
writ of execution to trigger the employer’s By way of exception to the above rule, an
duty to reinstate the dismissed employee. employee may be barred from collecting
the accrued wages if shown that the delay
The employer is obliged to pay the in enforcing the reinstatement pending
dismissed employee’s salary if he appeal was without fault on the part of the
refuses to reinstate until actual employer. To determine whether an
reinstatement or reversal by a higher employee is thus barred, two tests must
tribunal; circumstances that may bar be satisfied: (1) actual delay or the fact
an employee from receiving the that the order of reinstatement pending
accrued wages appeal was not executed prior to its
reversal; and (2) the delay must not be
As we amply discussed above, an due to the employer’s unjustified act
employer is obliged to immediately or omission. Note that under the second
reinstate the employee upon the LA’s test, the delay must be without the
finding of illegal dismissal; if the employer employer’s fault. If the delay is due to
fails, it is liable to pay the salary of the the employer’s unjustified refusal, the
dismissed employee. Of course, it is not employer may still be required to pay
always the case that the LA’s finding of the salaries notwithstanding the reversal
illegal dismissal is, on appeal by the of the LA’s decision.
employer, upheld by the appellate court. • G.R. No. 181719. April 21, 2014 Eugene S.
After the LA’s decision is reversed by a Arabit, et al. Vs. Jerdine Pacific Finance,
higher tribunal, the employer’s duty to Inc.
reinstate the dismissed employee is • Redundancy in contrast with
effectively terminated. This means that an retrenchment
employer is no longer obliged to keep the
employee in the actual service or in the We cannot accept Jardine’s shallow
payroll. The employee, in turn, is not understanding of the concepts of
required to return the wages that he had redundancy and retrenchment in
received prior to the reversal of the LA’s determining the validity of the severance
decision. of an employer-employee relationship.
The fact that they are found together in
The reversal by a higher tribunal of the just one provision does not necessarily
LA’s finding (of illegal dismissal), give rise to the conclusion that the
notwithstanding, an employer, who, difference between them is immaterial.
despite the LA’s order of reinstatement, This Court has already ruled before that
did not reinstate the employee during the retrenchment and redundancy are

40
two different concepts; they are not requires.

synonymous; thus, they should not be
used interchangeably. From this perspective, it is illogical for
Jardine to terminate the petitioners’
Redundancy exists where the services employment and replace them with
of an employee are in excess of what contractual employees. The replacement
is reasonably demanded by the actual effectively belies Jardine’s claim that the
requirements of the enterprise. A petitioners’ positions were abolished due
position is redundant where it is to superfluity. Redundancy could have
superfluous, and superfluity of a position been justified if the functions of the
or positions may be the outcome of a petitioners were transferred to other
number of factors, such as over hiring of existing employees of the company.
workers, decreased volume of business, or
dropping of a particular product line or To dismiss the petitioners and hire new
service activity previously manufactured contractual employees as replacements
or undertaken by the enterprise. necessarily give rise to the sound
conclusion that the petitioners’ services
Retrenchment, on the other hand, is have not really become in excess of what
used interchangeably with the term Jardine’s business requires. To replace the
“lay-off.” It is the termination of petitioners who were all regular
employment initiated by the employer employees with contractual ones would
through no fault of the employee’s and amount to a violation of their right to
without prejudice to the latter, resorted security of tenure, and therefore illegal.
to by management during periods of
business recession, industrial Guidelines in implementing
depression, or seasonal fluctuations, redundancy
or during lulls occasioned by lack of
orders, shortage of materials, We recognize that management has the
conversion of the plant for a new prerogative to characterize an employee’s
production program or the services as no longer necessary or
introduction of new methods or more sustainable, and therefore properly
efficient machinery, or of automation. terminable.
Simply put, it is an act of the employer of
dismissing employees because of losses in
Jardine’s decision to hire contractual
the operation of a business, lack of work,
employees as replacements is a
and considerable reduction on the volume
management prerogative which the
of his business, a right consistently
company has the right to undertake to
recognized and affirmed by this Court.
implement a more economic and efficient
operation of its business.
These rulings appropriately clarify that
redundancy does not need to be always
The employer’s exercise of its
triggered by a decline in the business.
management prerogative, however, is not
Primarily, employers resort to redundancy
an unbridled right that cannot be
when the functions of an employee have
subjected to this Court’s scrutiny. The
already become superfluous or in excess
exercise of management prerogative is
of what the business requires. Thus, even
subject to the caveat that it should not
if a business is doing well, an employer
performed in violation of any law and that
can still validly dismiss an employee from
it is not tainted by any arbitrary or
the service due to redundancy if that
malicious motive on the part of the
employee’s position has already become in
employer.
excess of what the employer’s enterprise
In Golden Thread Knitting Industries, Inc.
41
v. NLRC, this Court laid down the principle ascertaining what positions are to be
that the employer must use fair and declared redundant and accordingly
reasonable criteria in the selection of abolished.
employees who will be dismissed from
employment due to redundancy. Such fair Under the circumstances of the case,
and reasonable criteria may include the Jardine’s move was thus illegal. We affirm
following, but are not limited to: (a) less the LA’s ruling that fair play and good
preferred status (e.g. temporary faith require that where one employee will
employee); (b) efficiency; and (c) be chosen over the others, the employer
seniority. The presence of these criteria must be able to clearly explain the merit
used by the employer shows good faith on of the choice it has taken.
its part and is evidence that the • G.R. No. 188190. April 21, 2014   Barko
implementation of redundancy was International, Inc., et al. Vs. Eberly S.
painstakingly done by the employer in Alcayno
order to properly justify the termination In the instant case, the respondent went
from the service of its employees. through the PEME. While there was a
notation of “pulmonary fibrosis right lower
As the petitioners pointed out, the records lung with calcified benign nodules cleared
are bereft of indications that Jardine by the pulmonary specialist” in said
employed clear criteria when it decided report, he was declared fit for sea duties.
who among its employees, who held The respondent was able to board the
similar positions as the petitioners, should vessel on December 1, 2005. On February
be removed from their posts because of 8, 2006, he was repatriated to Manila on
redundancy. Jardine never bothered to medical grounds. He was diagnosed to be
explain how and why the petitioners were suffering mainly from tuberculous adenitis
the ones dismissed. Jardine’s acts became and was treated thereof. The respondent
more suspect given that the petitioners asserted that he contracted the illness
were all union officers and some of them while on board the vessel.
were panel members in the scheduled CBA Notwithstanding the medical treatment he
negotiations between Jardine and the underwent, he was unable to go back to
Union. his sea duties for a period of more than
one hundred twenty (120) days.
Aside from the guidelines for the selection
of employees who will be terminated, the The Court finds merit in the respondent’s
Court, in Asian Alcohol Corp. v. NLRC, also contention regarding the suspicious
laid down guidelines for redundancy to be gesture of the petitioners in having a
characterized as validly undertaken by the medical certification declaring him as “fit
employer. The Court ruled: to work” despite apparent clear knowledge
that he has been subjected to a long
For the implementation of a redundancy period of medical treatment. Both the
program to be valid, the employer must company-designated physician and the
comply with the following requisites: (1) respondent’s private physician had similar
written notice served on both the findings that the respondent is suffering
employees and the Department of Labor from tuberculous adenitis which is
and Employment at least one month prior occupational in character and
to the intended date of retrenchment; (2) compensable under the attendant
payment of separation pay equivalent to circumstances.
at least one month pay or at least one
month pay for every year of service, Indeed, the fact that a certification
whichever is higher; (3) good faith in declaring the respondent as fit to work
abolishing the redundant positions; contrary to a prior finding of tuberculosis
and (4) fair and reasonable criteria in can be considered as a ploy to circumvent

42
the law intended to defeat the •

respondent’s right to be compensated for • Alcaraz posits that, contrary to the
a disability which the law considers as Court’s Decision, one’s job
permanent and total. description cannot by and of itself
be treated as a standard for
Permanent total disability means regularization as a standard
“disablement of an employee to earn denotes a measure of quantity or
wages in the same kind of work or work of quality. By way of example, Alcaraz
a similar nature that he was trained for or cites the case of a probationary
accustomed to perform, or any kind of salesperson and asks how does
work which a person of his mentality and such employee achieve regular
attainment can do. status if he does not know how
much he needs to sell to reach the
Again, what is important is that he same.
was unable to perform his customary •
work for more than 120 days which • The argument is untenable.
constitutes permanent total disability, •
and not the actual injury itself. • First off, the Court must correct
Undoubtedly, the illness of the respondent Alcaraz’s mistaken notion: it is not
which incapacitated him to work more the probationary employee’s job
than 120 days after repatriation is description but the adequate
considered as work-related which entitles performance of his duties and
him to disability benefits. responsibilities which constitutes
the inherent and implied standard
for regularization. To echo the
This Court, moreover, agrees with the CA
fundamental point of the Decision,
regarding the applicability of the doctrine
if the probationary employee had
in the case of Crystal Shipping that a
been fully apprised by his employer
seafarer's continuous inability to work due
of these duties and responsibilities,
to a work-related illness for a period of
then basic knowledge and common
more than 120 days need not be qualified
sense dictate that he must
by a declaration of fitness to work by a
adequately perform the same, else
company- designated physician for it to be
he fails to pass the probationary
considered as a permanent total disability
trial and may therefore be subject
which is compensable. It would, thus, be
to termination.8
illogical to apply the ruling laid down in
•
Vergara which was promulgated on
• The determination of “adequate
October 6, 2008, or more than two years
performance” is not, in all cases,
from the time the complaint was filed. The
measurable by quantitative
observance of the principle of
specification, such as that of a
prospectivity dictates that Vergara should
sales quota in Alcaraz’s example. It
not operate to strip the respondent of his
is also hinged on the qualitative
cause of action for total and permanent
assessment of the employee’s
disability that accrued since the time ofhis
work; by its nature, this largely
inability to perform his customary work.
rests on the reasonable exercise of
• G.R. No. 192571. April 22, 2014   Abbott
the employer’s management
Laboratories, Phils., Cecille A. Terrible,
prerogative. While in some
Edwin D. Feist, Maria Olivia T. Yabut-Misa,
instances the standards used in
Teresita C. Bernardo, and Allan G.
measuring the quality of work may
Alamazar Vs. Pearlie Ann F. Alcaraz
be conveyed – such as workers
Dissenting Opinion J. Brion  
who construct tangible products
• B. Standards for regularization; which follow particular metrics, not
• conceptual underpinnings. all standards of quality
43
measurement may be reducible to connotes an exercise of discretion,

hard figures or are readily the quality of effective
articulable in specific pre– management can only be
engagement descriptions. A good determined through subsequent
example would be the case of assessment. While at the time of
probationary employees whose engagement, reason dictates that
tasks involve the application of the employer can only inform the
discretion and intellect, such as – probationary managerial employee
to name a few – lawyers, artists, of his duties and responsibilities as
and journalists. In these kinds of such and provide the allowable
occupation, the best that the parameters for the same. Verily, as
employer can do at the time of stated in the Decision, the
engagement is to inform the adequate performance of such
probationary employee of his duties and responsibilities is, by
duties and responsibilities and to and of itself, an implied standard of
orient him on how to properly regularization.
proceed with the same. The •
employer cannot bear out in • In this relation, it bears mentioning
exacting detail at the beginning of that the performance standard
the engagement what he deems as contemplated by law should not, in
“quality work” especially since the all cases, be contained in a
probationary employee has yet to specialized system of feedbacks or
submit the required output. In the evaluation. The Court takes judicial
ultimate analysis, the notice of the fact that not all
communication of performance employers, such as simple
standards should be perceived businesses or small–scale
within the context of the nature of enterprises, have a sophisticated
the probationary employee’s duties form of human resource
and responsibilities. management, so much so that the
• adoption of technical indicators as
• The same logic applies to a utilized through “comment cards”
probationary managerial employee or “appraisal” tools should not be
who is tasked to supervise a treated as a prerequisite for every
particular department, as Alcaraz case of probationary engagement.
in this case. It is hardly possible for In fact, even if a system of such
the employer, at the time of the kind is employed and the
employee’s engagement, to map procedures for its implementation
into technical indicators, or convey are not followed, once an employer
in precise detail the quality determines that the probationary
standards by which the latter employee fails to meet the
should effectively manage the standards required for his
department. Factors which gauge regularization, the former is not
the ability of the managerial precluded from dismissing the
employee to either deal with his latter. The rule is that when a valid
subordinates (e.g., how to spur cause for termination exists, the
their performance, or command procedural infirmity attending the
respect and obedience from them), termination only warrants the
or to organize office policies, are payment of nominal damages. This
hardly conveyable at the outset of was the principle laid down in the
the engagement since the landmark cases of Agabon v.
employee has yet to be immersed NLRC9 (Agabon) and Jaka Food
into the work itself. Given that a Processing Corporation v. Pacot10
managerial role essentially (Jaka). In the assailed Decision,
44
the Court actually extended the considered as foreseeable, nor can it be

application of the Agabon and Jaka reasonably anticipated. Sunga’s duty as a
rulings to breaches of company fitter involved changing the valve, not to
procedure, notwithstanding the routinely carry a 200–kilogram globe
employer’s compliance with the valve singlehandedly. The loss of his
statutory requirements under the fellow workers’ group was also unforeseen
Labor Code.11 Hence, although in so far as Sunga was concerned.
Abbott did not comply with its own
termination procedure, its non– In Jarco Marketing Corporation, et al.,
compliance thereof would not v. Court of Appeals, we ruled that an
detract from the finding that there accident pertains to an unforeseen event
subsists a valid cause to terminate in which no fault or negligence attaches to
Alcaraz’s employment. Abbott, the defendant. It is “a fortuitous
however, was penalized for its circumstance, event or happening; an
contractual breach and thereby event happening without any human
ordered to pay nominal damages. agency, or if happening wholly or partly
• G.R. No. 198640. April 23, 2014 Carlo F. through human agency, an event which
Sunga Vs. Virjen Shipping Corporation, under the circumstances is unusual or
Nissho Odyssey Ship Management Pte., unexpected by the person to whom it
Ltd. and/or Capt. Angel Zambrano happens.”
ISSUE: WHETHER THE INCIDENT IN MT In other words, as the NLRC found,
SUNWAY WAS AN ACCIDENT Sunga’s disability benefits should fall
within the coverage of the parties’ CBA,
Sunga’s injury was the result of the which
accidental slippage in the handling of the provides:chanRoblesvirtualLawlibrary
200–kilogram globe valve which triggered
Sunga’s back pain;18 the weight of the Article 28: Disability
globe valve, coupled with the abruptness
of the fall, explain why the injury was so 28.1 A seafarer who suffers
severe as to render Sunga permanent disability as a result of an
immobile.19 While indeed Sunga had not accident whilst in the employment of the
explained in the request for repatriation Company regardless of fault, including
the proximate cause of the injury, there accidents occurring while traveling to or
was enough circumstantial evidence to from the ship, and whose ability to work
substantiate the claim. as a seafarer is reduced as a result
thereof, but excluding permanent
In the present case, Sunga did not incur disability due to willful acts, shall in
the injury while solely performing his addition to sick pay, be entitled to
regular duties; an intervening event compensation according to the provisions
transpired which brought upon the of this Agreement. (emphasis ours)30
injury. To repeat, the two other oilers • G.R. No. 181490. April 23, 2014   Mirant
who were supposed to help carry the (Philippines) Corporation, et al. Vs.
weight of the 200–kilogram globe valve Joselito A. Caro
lost their grasp of the globe valve. As a • We agree with the disposition of
result, Sunga’s back snapped when the the appellate court that there was
entire weight of the item fell upon illegal dismissal in the case at bar.
him. The sheer weight of the item is •
designed not to be carried by just one • While the adoption and
person, but as was observed, meant to be enforcement by petitioner
undertaken by several men and corporation of its Anti–Drugs Policy
expectedly greatly overwhelmed the is recognized as a valid exercise of
physical limits of an average person. its management prerogative as an
Notably, this incident cannot be employer, such exercise is not
45
absolute and shall be resolved in favor of labor.” In

unbridled. Managerial prerogatives Article 1702 of the New Civil Code, a
are subject to limitations provided similar provision states that “[i]n case of
by law, collective bargaining doubt, all labor legislation and all labor
agreements, and the general contracts shall be construed in favor of the
principles of fair play and safety and decent living for the
justice.46 In the exercise of its laborer.” Applying these provisions of law
management prerogative, an to the circumstances in the case at bar, it
employer must therefore ensure is not fair for this Court to allow an
that the policies, rules and ambiguous policy to prejudice the rights of
regulations on work–related an employee against illegal dismissal. To
activities of the employees must hold otherwise and sustain the stance of
always be fair and reasonable and petitioner corporation would be to adopt
the corresponding penalties, when an interpretation that goes against the
prescribed, commensurate to the very grain of labor protection in this
offense involved and to the degree jurisdiction. As correctly stated by the
of the infraction.47 The Anti–Drugs Labor Arbiter, “when a conflicting interest
Policy of Mirant fell short of these of labor and capital are weighed on the
requirements. scales of social justice, the heavier
• influence of the latter must be counter–
• Petitioner corporation’s subject balanced by the sympathy and
Anti–Drugs Policy fell short of being compassion the law must accord the
fair and reasonable. underprivileged worker.”49
•
• First. The policy was not clear on • Second. The penalty of
what constitutes “unjustified termination imposed by petitioner
refusal” when the subject drug corporation upon respondent fell
policy prescribed that an short of being
employee’s “unjustified refusal” to reasonable. Company policies and
submit to a random drug test shall regulations are generally valid and
be punishable by the penalty of binding between the employer and
termination for the first the employee unless shown to be
offense. To be sure, the term grossly oppressive or contrary to
“unjustified refusal” could not law50– as in the case at bar.
possibly cover all forms of “refusal” • To be sure, the unreasonableness
as the employee’s resistance, to be of the penalty of termination as
punishable by termination, must be imposed in this case is further
“unjustified.” To the mind of the highlighted by a fact admitted by
Court, it is on this area where petitioner corporation itself: that
petitioner corporation had fallen for the ten–year period that
short of making it clear to its respondent had been employed by
employees – as well as to petitioner corporation, he did not
management – as to what types of have any record of a violation of its
acts would fall under the purview company policies.
of “unjustified refusal.” Finally, the petition avers that petitioner
It is not a mere jurisprudential principle, Bautista should not be held personally
but an enshrined provision of law, that all liable for respondent’s dismissal as he
doubts shall be resolved in favor of acted in good faith and within the scope of
labor. Thus, in Article 4 of the Labor his official functions as then president of
Code, as amended, “[a]ll doubts in the petitioner corporation.
implementation and interpretation of the
provisions of [the Labor] Code, including A corporation has a personality separate
its implementing rules and regulations, and distinct from its officers and board of
46
directors who may only be held personally reasons/causes; 2] signing off from the
liable for damages if it is proven that they vessel; and 3] arrival at the point of hire.
acted with malice or bad faith in the
dismissal of an employee.57 Absent any In this case, there was no clear showing
evidence on record that petitioner Bautista that Caseñas signed off from the vessel
acted maliciously or in bad faith in upon the expiration of his employment
effecting the termination of respondent, contract, which was in February or April
plus the apparent lack of allegation in the 2005. He did not arrive either in Manila,
pleadings of respondent that petitioner his point of hire, because he was still on
Bautista acted in such manner, the board the vessel MV Haitien Pride on the
doctrine of corporate fiction dictates that supposed date of expiration of his
only petitioner corporation should be held contract. It was only on August 14, 2006
liable for the illegal dismissal of that he signed off21 from MV Haitien Pride
respondent. and arrived in Manila on August 30, 2006.
• APQ Shipmanagement Co., Ltd., and APQ
Crew Management USA, Inc. Vs. In Interorient Maritime Enterprises, Inc. v.
Angelito L. Caseñas   G.R. No. 197303. NLRC,22 the Court held that the obligations
June 4, 2014 and liabilities of the local agency and its
• The pivotal issue for resolution is foreign principal do not end upon the
whether or not the employment expiration of the contracted period as they
contract of Caseñas was extended were duty bound to repatriate the
with the consent of APQ/Crew seaman to the point of hire to
Management. effectively terminate the contract of
• employment.23cralaw
• The Court rules in the affirmative.
APQ’s primary argument revolves around Meanwhile, Caseñas claimed that his
the fact of expiration of Caseñas’ transfer was due to the fact that MV
employment contract, which it claims was Perseverance could not leave port because
not extended as it was without its of incomplete documents for its operation.
consent. While the contract stated that This was not disputed. To the mind of the
any extension must be made by mutual Court, having incomplete documents for
consent of the parties, it, however, the vessel’s operation renders it
incorporated Department Order (DO) No. unseaworthy. While seaworthiness is
4 and Memorandum Circular No. 09, both commonly equated with the physical
series of 2000, which provided for the aspect and condition of the vessel for
Standard Terms and Conditions Governing voyage as its ability to withstand the
the Employment of Filipino Seafarers on rigors of the sea, it must not be forgotten
Board Ocean Going Vessels. that a vessel should be armed with the
necessary documents required by the
It is to be observed that both provisions maritime rules and regulations, both local
require the seafarer to arrive at the point and international. It has been written that
of hire as it signifies the completion of the vessel seaworthiness further extends to
employment contract, and not merely its cover the documents required to ensure
expiration. Similarly, a seafarer’s that the vessel can enter and leave ports
employment contract is terminated even without problems.24cralawred
before the contract expires as soon as he
arrives at the point of hire and signs off Accordingly, Caseñas’ contract should
for medical reasons, due to shipwreck, have been terminated and he should have
voluntary resignation or for other just been repatriated to the Philippines
causes. In a nutshell, there are three (3) because a seafarer cannot be forced to
requirements necessary for the complete sail with an unseaworthy vessel, pursuant
termination of the employment contract: to Section 24 of the POEA-SEC.25 There
1] termination due to expiration or other was, however, no showing that his
47
contract was terminated by reason of such CA, however, the 120 day period lapsed
transfer. It is necessary to reiterate that without such a declaration being made.35
MV Haitien Pride appears to be manned Caseñas is now deemed to be in a state of
by, and accredited with, the same permanent total disability and, thus,
principal/ agency. His joining the said clearly entitled to the total disability
vessel could only mean that it was for the benefits provided by law.
purpose of completing his contract as the
transfer was made well within the period • Sara Lee Philippines, Inc. Vs. Emilinda D.
of his employment contract on board MV Macatlang, et al./Aris Philippines, Inc.
Perseverance. Vs. Emilinda D. Macatlang, et al./Sara
Lee Corporation Vs. Emilinda D.
As to his claim for medical and other Macatlang, et al./Cesar C. Cruz Vs.
benefits, there is no dispute that the Emilinda D. Macatlang, et al./Fashion
symptoms of Caseñas’ illness began to Accessories Phils. Inc. Vs. Emilinda D.
manifest during the term of his Macatlang, et al./Emilinda D.
employment contract. The fact that the Macatlang, et al. Vs. NLRC, et al. G.R.
manifestations of the illness only came No. 180147/G.R. No. 180148/G.R. No.
about in August 2006 will not bar a 180149/G.R .No. 180150/G.R. No.
conclusion that he contracted the ailment 180319/G.R. No. 180685. June 4, 2014
while the contract was subsisting. The The dilemma of the appeal bond in labor
overall state and condition that he was cases is epochal, present whenever the
exposed to over time was the very cause amount of monetary award becomes
of his illness. Thus, the CA was correct in debatably impedimental to the completion
reinstating the NLRC resolution awarding of remedies. Such instances exaggerate
sickness allowance as well as disability the ambivalence between rigidity and
benefits in favor of Caseñas. liberality in the application of the
requirement that the bond must be equal
In this case, Casenas immediately to the arbiter’s award. The rule of
reported to APQ for the required post- reasonableness in the determination of
employment medical examination upon his the compliant amount of the bond has
return to the Philippines. He was referred been formulated to allow the review of the
to the company-designated physician, who arbiter’s award. However, that rule
diagnosed him to be suffering from seemingly becomes inadequate when the
Ischemic Heart Disease, which was a award staggers belief but is, nonetheless,
manifestation of organ damage.33 Caseñas supported by the premises of the
likewise consulted two (2) other controversy. The enormity of the award
physicians who certified him to be cannot prevent the settlement of the
suffering from Essential Hypertension dispute. The amount of award may vary
aside from Ischemic Heart Disease.34 From case-to-case. But the law remains
the time of Caseñas’ diagnosis by the constant.
company-designated physician, he was The requisites for perfection of appeal as
under the state of temporary total embodied in Article 223, as amended, are:
disability, which lasted for at least 120 1) payment of appeal fees; 2) filing of the
days as provided by law. Such period memorandum of appeal; and 3) payment
could be extended up to 240 days, if of the required cash or surety
further medical attention was required. bond.47 These requisites must be satisfied
There was, however, no showing of any within 10 days from receipt of the decision
justification to extend said period. As the or order appealed from.
law requires, within 120 days from the
time he was diagnosed of his illness, the In sum, the NLRC may dispense of the
company-designated physician must make posting of the bond when the judgment
a declaration as to the fitness or unfitness award is: (1) not stated or (2) based on a
of Caseñas As correctly observed by the patently erroneous computation. Sans
48
these two (2) instances, the appellant is Million. Thus, P9 Million was held as the
generally required to post a bond to amount of the bond as reduced.
perfect his appeal.
The Court of Appeals found the amount of
The Court adhered to a strict application the appeal bond adjudged by the NLRC as
of Article 223 when appellants do not post measly and insufficient and raised it to P1
an appeal bond at all. By explicit provision Billion. Notably, the computation of the
of law, an appeal is perfected only upon judgment award in this case includes
the posting of a cash or surety bond. The damages.
posting of the appeal bond within the
period provided by law is not merely The NLRC Interim Rules on Appeals under
mandatory but jurisdictional.57 The Republic Act No. 6715 specifically provides
reason behind the imposition of this that damages shall be excluded in the
requirement is enunciated in Viron determination of the appeal bond,
Garments Mfg. Co., Inc. v. NLRC,58
thus:chanRoblesvirtualLawlibrary Thus, under the applicable rules, damages
and attorney’s fees are excluded from the
The requirement that the employer post a computation of the monetary award to
cash or surety bond to perfect its/his determine the amount of the appeal
appeal is apparently intended to assure bond. We shall refer to these exclusions
the workers that if they prevail in the as “discretionaries,” as distinguished from
case, they will receive the money the “mandatories” or those amounts fixed
judgment in their favor upon the dismissal in the decision to which the employee is
of the employer's appeal. It was intended entitled upon application of the law on
to discourage employers from using an wages. These mandatories include
appeal to delay, or even evade, their awards for backwages, holiday pay,
obligation to satisfy their employees' just overtime pay, separation pay and 13th
and lawful claims.59 month pay.
Clearly therefore, the Rules only allow the The judgment award in the instant case
filing of a motion to reduce bond on two amounted to an immense P3.45
(2) conditions: (1) that there is Billion. The award is broken down as
meritorious ground and (2) a bond in a follows: backwages, separation pay, moral
reasonable amount is posted. Compliance and exemplary damages. For purposes of
with the two conditions stops the running determining the reasonable amount of the
of the period to perfect an appeal provided appeal bond, we reduce the total amount
that they are complied within the 10-day of awards as follows:
reglementary period.
The mandatories comprise the backwages
In the case at bar, the motion to reduce and separation pay. The daily wage rate
bond filed by the Corporations was of an employee of Aris ranges from P170-
resolved by the NLRC in the affirmative P200. The average years of service
when it found that there are meritorious ranges from 5-35 years. The backwages
grounds in reducing the bond such as the were computed at 108 months or
huge amount of the award and reckoned from the time the employees
impossibility of proceeding against the were actually terminated until the finality
Corporations’ properties which correspond of the Labor Arbiter’s Decision.
to a lower valuation. Also, the NLRC took Approximately, the amount to be received
into consideration the fact of partial by an employee, exclusive of damages
payment of P419 Million. The NLRC found and attorney’s fees, is about
the P4.5 Million bond posted by the P600,000.00. The Labor Arbiter granted
Corporations as insufficient, hence moral damages amounting to P10,000.00,
ordering them to post an additional P4.5 and another P10,000.00 as exemplary
49
damages. The total number of employees validly filed, entertained and even
receiving P20,000.00 each for damages is granted; that it is not within the
5,984, bringing the total amount of discretion of BLR to choose which
damages to P119,680,000.00. This between the two appeals should be
amount should be deducted as well as the entertained, as it is the fact of the
P419 Million unpaid commitment plus the filing of the two appeals that is
P 9 Million already paid-up cash appeal being prohibited and not who
bond from the actual amount to determine among the representatives therein
the amount on which to base the appeal possessed the authority.
bond. Thus, the total amount is P2.9 •
Billion. • We are not persuaded.
•
We sustain the Court of Appeals in so far • We find no error committed by the
as it increases the amount of the required CA in finding that respondent
appeal bond. But we deem it reasonable committed no forum shopping. As
to reduce the amount of the appeal bond the CA correctly concluded, to
to P725 Million. This directive already wit:ChanRoblesVirtualawlibrary
considers that the award if not illegal, is •
extraordinarily huge and that no insurance • It is undisputed that BMP Paralegal
company would be willing to issue a bond Officer Domingo P. Mole was no
for such big money. The amount of P725 longer authorized to file an appeal
Million is approximately 25% of the basis on behalf of union SALAMAT and
above calculated. It is a balancing of the that BMP was duly informed that its
constitutional obligation of the state to services was already terminated.
afford protection to labor which, specific to SALAMAT even submitted before
this case, is assurance that in case of the BLR its “Resolusyon Blg. 01-
affirmance of the award, recovery is not 2009” terminating the services of
negated; and on the other end of the BMP and revoking the
spectrum, the opportunity of the employer representation of Mr. Domingo
to appeal. Mole in any of the pending cases
being handled by him on behalf of
By reducing the amount of the appeal the union. So, considering that
bond in this case, the employees would BMP Paralegal Officer Domingo P.
still be assured of at least substantial Mole was no longer authorized to
compensation, in case a judgment award file an appeal when it filed the
is affirmed. On the other hand, Notice and Memorandum of Appeal
management will not be effectively denied to DOLE Regional Office No. IV-A,
of its statutory privilege of appeal. the same can no longer be treated
• Takata (Philippines) Corporation Vs. as an appeal filed by union
Bureau of Labor Relations and SALAMAT. Hence, there is no forum
Samahang Lakas Manggagawa ng shopping to speak of in this case as
Takata (SALAMAT)   G.R. No. 196276. only the Appeal Memorandum with
June 4, 2014 Formal Entry of Appearance filed
• Anent the first issue, petitioner by Atty. Napoleon C. Banzuela, Jr.
contends that respondent had filed and Atty. Jehn Louie W. Velandrez
two separate appeals with two is sanctioned by SALAMAT.18
different representations at two •
different venues, in violation of the • Since Mole's appeal filed with the
rule on multiplicity of suits and BLR was not specifically authorized
forum shopping, and instead of by respondent, such appeal is
dismissing both appeals, the considered to have not been filed
appeal erroneously filed before the at all. It has been held that “if a
Labor Secretary was the one held complaint is filed for and in behalf
50
of the plaintiff who is not trade union center or an independent

authorized to do so, the complaint union shall acquire legal personality and
is not deemed filed. An shall be entitled to the rights and
unauthorized complaint does not privileges granted by law to legitimate
produce any legal labor organizations upon issuance of the
effect.”19cralawred certificate of registration based on the
• following requirements:
• Respondent through its authorized (a) Fifty pesos (P50.00) registration fee;
representative filed its Appeal (b) The names of its officers, their
Memorandum with Formal Entry of addresses, the principal address of the
Appearance before the Labor labor organization, the minutes of the
Secretary, and not with the BLR. organizational meetings and the list of the
As the appeal emanated from the workers who participated in such
petition for cancellation of meetings;
certificate of registration filed with (c) In case the applicant is an independent
the Regional Office, the decision union, the names of all its members
canceling the registration is comprising at least twenty percent (20%)
appealable to the BLR, and not of all the employees in the bargaining unit
with the Labor Secretary. However, where it seeks to operate;
since the Labor Secretary motu (d) If the applicant union has been in
propio referred the appeal with the existence for one or more years, copies of
BLR, the latter can now act on it. its annual financial reports; and
Considering that Mole's appeal with (e) Four copies of the constitution and by-
the BLR was not deemed filed, laws of the applicant union, minutes of its
respondent’s appeal, through adoption or ratification, and the list of the
Banzuela and Associates, which the members who participated in it."
Labor Secretary referred to the BLR
was the only existing appeal with And after the issuance of the certificate of
the BLR for resolution. There is, registration, the labor organization's
therefore, no merit to petitioner's registration could be assailed directly
claim that BLR chose the appeal of through cancellation of registration
Banzuela and Associates over proceedings in accordance with Articles
Mole's appeal. 238 and 239 of the Labor Code. And the
As to the second issue, petitioner seeks cancellation of union certificate of
the cancellation of respondent's registration and the grounds thereof are
registration on grounds of fraud and as follows:ChanRoblesVirtualawlibrary
misrepresentation bearing on the
minimum requirement of the law as to its ART. 238. Cancellation of Registration. -
membership, considering the big disparity The certificate of registration of any
in numbers, between the organizational legitimate labor organization, whether
meeting and the list of members, and so national or local, may be cancelled by the
misleading the BLR that it obtained the Bureau, after due hearing, only on the
minimum required number of employees grounds specified in Article 239 hereof.
for purposes of organization and
registration. ART. 239. Grounds for Cancellation of
Union Registration. - The following may
We find no merit in the arguments. constitute grounds for cancellation of
union registration:
Art. 234 of the Labor Code (a) Misrepresentation, false statement or
provides:ChanRoblesVirtualawlibrary fraud in connection with the adoption or
ratification of the constitution and by-laws
ART. 234. Requirements of Registration. - or amendments thereto, the minutes of
A federation, national union or industry or ratification, and the list of members who
51
took part in the ratification; entitled “Pangalan ng Mga Kasapi ng

(b) Misrepresentation, false statements or Unyon” showing the names of 119
fraud in connection with the election of employees as union members, thus
officers, minutes of the election of officers, respondent sufficiently complied even
and the list of voters; beyond the 20% minimum membership
(c) Voluntary dissolution by the members. requirement. Respondent also submitted
the attendance sheet of the organizational
Petitioner's charge that respondent meeting which contained the names and
committed misrepresentation and fraud in signatures of the 68 union members who
securing its certificate of registration is a attended the meeting. Considering that
serious charge and must be carefully there are 119 union members which are
evaluated. Allegations thereof should be more than 20% of all the employees of
compounded with supporting the bargaining unit, and since the law
circumstances and evidence.21 We find no does not provide for the required number
evidence on record to support petitioner's of members to attend the organizational
accusation. meeting, the 68 attendees which
comprised at least the majority of the 119
Petitioner's allegation of misrepresentation union members would already constitute a
and fraud is based on its claim that during quorum for the meeting to proceed and to
the organizational meeting on May 1, validly ratify the Constitution and By-laws
2009, only 68 employees attended, while of the union. There is, therefore, no basis
respondent claimed that it has 119 for petitioner to contend that grounds
members as shown in the document exist for the cancellation of respondent's
denominated as “Pangalan ng mga Kasapi union registration. For fraud and
ng Unyon;” hence, respondent misrepresentation to be grounds for
misrepresented on the 20% requirement cancellation of union registration under
of the law as to its membership. Article 239 of the Labor Code, the nature
of the fraud and misrepresentation must
We do not agree. be grave and compelling enough to vitiate
the consent of a majority of union
It does not appear in Article 234 (b) of the members.22cralawred
Labor Code that the attendees in the As to petitioner's argument that the total
organizational meeting must comprise number of its employees as of May 1,
20% of the employees in the bargaining 2009 was 470, and not 396 as respondent
unit. In fact, even the Implementing Rules claimed, still the 117 union members
and Regulations of the Labor Code does comprised more than the 20%
not so provide. It is only under Article 234 membership requirement for respondent's
(c) that requires the names of all its registration.
members comprising at least twenty
percent (20%) of all the employees in the In Mariwasa Siam Ceramics v. Secretary
bargaining unit where it seeks to operate. of the Department of Labor and
Clearly, the 20% minimum requirement Employment,24 we
pertains to the employees’ membership in said:ChanRoblesVirtualawlibrary
the union and not to the list of workers
who participated in the organizational For the purpose of de-certifying a union
meeting. Indeed, Article 234 (b) and (c) such as respondent, it must be shown that
provide for separate requirements, which there was misrepresentation, false
must be submitted for the union's statement or fraud in connection with the
registration, and which respondent did adoption or ratification of the constitution
submit. Here, the total number of and by-laws or amendments thereto, the
employees in the bargaining unit was 396, minutes of ratification; or, in connection
and 20% of which was about 79. with the election of officers, the minutes
Respondent submitted a document of the election of officers, the list of
52
voters, or failure to submit these on the processing and

documents together with the list of the documentation of Binalla’s
newly elected-appointed officers and their deployment papers to Al
postal addresses to the BLR. Adwani). Although the scheme
enabled Binalla to be employed
The bare fact that two signatures overseas, his two-year
appeared twice on the list of those who employment was marred from the
participated in the organizational meeting start by violations of the law on
would not, to our mind, provide a valid overseas employment.
reason to cancel respondent’s certificate •
of registration. The cancellation of a • First. Binalla was a victim of
union’s registration doubtless has an contract substitution. He worked
impairing dimension on the right of labor under an employment contract
to self-organization. For fraud and whose terms were inferior to the
misrepresentation to be grounds for terms certified by the POEA. Under
cancellation of union registration under the four-year contract he signed
the Labor Code, the nature of the fraud and implemented by his employer,
and misrepresentation must be grave and Al Adwani, he was paid only
compelling enough to vitiate the consent SR1500.00 or US$400 a month;
of a majority of union members. whereas, under the POEA- certified
two-year contract, he was to be
In this case, we agree with the BLR and paid $550.00. The POEA-certified
the CA that respondent could not have contract – for all intents and
possibly committed misrepresentation, purposes and despite his claim that
fraud, or false statements. The alleged his signature on the certified
failure of respondent to indicate with contract was forged – was the
mathematical precision the total number contract that governed Binalla’s
of employees in the bargaining unit is of employment with Al Adwani as it
no moment, especially as it was able to was the contract that the Philippine
comply with the 20% minimum government officially recognized
membership requirement. Even if the total and which formed the basis of his
number of rank-and-file employees of deployment to Saudi
petitioner is 528, while respondent Arabia. Clearly, the four-year
declared that it should only be 455, it still contract signed by Binalla
cannot be denied that the latter would substituted for the POEA-certified
have more than complied with the contract.
registration requirement. 25 •
• Princess Joy Placement and General • Under Article 34 (i) of the Labor
Services, Inc. Vs. German A. Binalla  Code on prohibited practices, “it
G.R. No. 197005. June 4, 2014 shall be unlawful for any individual,
• Is Princess Joy liable under the entity, licensee, or holder of
complaint? authority to substitute or alter
• employment contracts approved
• After an examination of the facts, and verified by the Department of
we find, contrary to the NLRC Labor and Employment from the
ruling, substantial evidence time of actual signing thereof by
showing that Binalla was employed the parties up to and including the
by Al Adwani in Saudi Arabia periods of expiration of the same
through a fraudulent scheme or without the approval of the
arrangement, called “reprocessing” Secretary of Labor.” Further,
or otherwise, participated in by contract substitution constitutes
Princess Joy and CBM, as well as “illegal recruitment” under
by Paguio and Lateo (who worked Article 38 (I) of the Code.
53
• allowed the submission of additional

• Under the circumstances, Princess evidence in support of the employee’s
Joy is as liable as CBM and Al appeal as it did not prejudice the
Adwani for the contract employer since it could submit counter
substitution, no matter how it tries evidence.
to avoid liability by disclaiming any
participation in the recruitment and In these lights, we find that the NLRC
deployment of Binalla to Al gravely abused its discretion in
Adwani. Before the labor arbiter, ignoring the presence of substantial
Princess Joy claimed that Paguio evidence in the records indicating
and Lateo were not its that Princess Joy is as responsible
employees/representatives or that and, therefore, as liable as CBM in
the principal piece of evidence Binalla’s fraudulent deployment to
relied upon by the labor arbiter, Saudi Arabia.
the “ticket/telegram/advise (sic)”40
handed to Binalla by Paguio had no Second. The substitution of Binalla’s
probative value as it was merely an contract imposed upon him terms and
unsigned and unauthenticated conditions of employment inferior to those
printout or that the four-year provided in the POEA-certified contract,
employment contract was signed especially in relation to his monthly salary
only by Binalla and there was no and the term of his contract. This should
showing that it was the contract be rectified. There were also Binalla’s
implemented by Al Adwani. claims of non-payment or withholding of
• contractual employee benefits by Al
• Princess Joy’s protestations fail to Adwani and imposition of unreasonable
convince us. We believe, as the financial burden or obligations in the
labor arbiter did, that the ticket course of his two-year
telegram/advice is proof enough employment. These claims, it bears
that Princess Joy recruited Binalla stressing, had not been disproved by
Significantly, there is evidence on record Princess Joy, CBM or Al Adwani. The
that belied Princess Joy’s submission that claims should be satisfied. We thus
it was not an agent of Al Adwani. We refer find that, except for the award of
to a nine-page Annex “A”43 to Binalla’s damages, all the other items awarded by
motion for reconsideration with the LA Aurellano are in order. He, however,
NLRC,44 showing that Princess Joy entered omitted the reimbursement of Binalla’s
into recruitment contracts, hired and placement fee. This must also be
placed Filipino workers for Al Adwani, rectified.
through Glenda Chua, Princess Joy’s
President, Reginaldo Paguio and Cynthia • McMer Corporation, Inc., Macario D.
Lateo in 2003 to 2004 which covered the Roque, Jr. and Cecilia R. Alvestis Vs.
period when Binalla was working for Al National Labor Relations Commission
Adwani. We consider this evidence and Feliciano C. Libunao, Jr. G.R. No.
relevant—even if it was submitted only on 193421. June 4, 2014
motion for reconsideration with the NLRC- • we have defined constructive
- as it supports LA Aurellano’s conclusion dismissal as a cessation of work
that Princess Joy was involved in Binalla’s because continued employment is
recruitment and deployment to Al rendered impossible, unreasonable
Adwani. In Clarion Printing House, or unlikely; when there is a
Inc., et al. v. NLRC,45 we reiterated the demotion in rank or diminution in
settled rule that the NLRC is not precluded pay or both; or when a clear
from receiving evidence on appeal as discrimination, insensibility, or
technical rules of evidence are not binding disdain by an employer becomes
in labor cases. In an earlier case,46 we unbearable to the employee.27
54
• reasoned that it was difficult for him to

• The test of constructive dismissal is look for another employment, considering
whether a reasonable person in the that at the time he filed his Position Paper,
employee’s position would have felt he was already 58 years old. His eventual
compelled to give up his position decision to leave petitioners due to the
under the circumstances.28 It is an agonizing situation at the workplace
act amounting to dismissal but cannot, therefore, be discounted.
made to appear as if it were not. 29
Constructive dismissal is, The NLRC and the CA, therefore, correctly
therefore, a dismissal in appreciated the foregoing events as
disguise.30As such, the law badges of constructive dismissal, since
recognizes and resolves this private respondent could not have given
situation in favor of employees in up a job he has engaged in for eight years
order to protect their rights and unless it has become so unbearable for
interests from the coercive acts of him to stay therein. Indeed, private
the employer.31 In fact, the respondent felt compelled to give up his
employee who is constructively employment.
dismissed may be allowed to keep
on coming to work. As far as private respondent is concerned,
As may gleaned from the records, what how the working place is being run has
transpired on July 20, 2007 was not caused inordinate strain on his
merely an isolated outburst on the part of professional work and moral principles,
petitioner Roque. The latter’s behaviour even stretching to desecration of dignity in
towards his employees shows a clear the workplace. The allegation that all of
insensibility rendering the working private respondent’s staff were removed
condition of private respondent one by one until finally only the latter was
unbearable. Private respondent had left alone performing managerial and
reason to dawdle and refuse to comply clerical duties is merely part of the greater
with the summon of petitioner Roque out scheme brought forth by the insensibility
of severe fear that he will be physically of petitioners in dealing with the
harmed. In fact, the same was clearly employees.
manifested by his immediate reaction to • Avelino S. Alilin, et al. Vs. Petron
the situation by going to the Valenzuela Corporation   G.R. No. 177592. June 9,
Police to report the incident. 2014
A contractor is presumed to be a labor-
Moreover, after a judicious scrutiny of the only contractor, unless it proves that it
records, we find that private respondent has the substantial capital, investment,
has exhibited a strong opposition to some tools and the like. However, where the
company practices resulting in a severe principal is the one claiming that the
marginal distance between him and contractor is a legitimate contractor, the
petitioners Roque and Alvestir at the burden of proving the supposed status of
workplace. This, together with the the contractor rests on the
harassment and intimidation displayed by principal.1cralawred
petitioner Roque to his employees, Labor-only contracting, distinguished
became so unbearable for private from permissible job contracting.
respondent to continue his employment
with petitioner McMer. The fact that none The prevailing rule on labor-only
of the employees complained or brought contracting at the time Petron and RDG
this to the attention of the appropriate entered into the Contract for Services in
authority does not validate petitioners’ June 2000 is DOLE Department Order No.
actions. For private respondent, retaining 10, series of 1997,43 the pertinent
the employment despite his despair was a provision of which
matter of principle. Private respondent reads:ChanRoblesVirtualawlibrary
55
introductory or promotional period;

Section 4. x x x
(d) Works or services not directly related
xxxx or not integral to the main business or
operation of the principal, including casual
(f) “Labor-only contracting” prohibited work, janitorial, security, landscaping, and
under this Rule is an arrangement where messengerial services, and work not
the contractor or subcontractor merely related to manufacturing processes in
recruits, supplies or places workers to manufacturing establishments;
perform a job, work or service for a
principal and the following elements are (e) Services involving the public display of
present: manufacturers’ products which do not
involve the act of selling or issuance of
(i) The contractor or subcontractor does receipts or invoices;
not have substantial capital or investment
to actually perform the job, work or (f) Specialized works involving the use of
service under its own account and some particular, unusual or peculiar skills,
responsibility; and expertise, tools or equipment the
performance of which is beyond the
(ii) The employees recruited, supplied or competence of the regular workforce or
placed by such contractor or subcontractor production capacity of the principal; and
are performing activities which are directly
related to the main business of the (g) Unless a reliever system is in place
principal. among the regular workforce, substitute
services for absent regular employees,
xxxx provided that the period of service shall be
coextensive with the period of absence
Section 6. Permissible contracting or and the same is made clear to the
subcontracting. - Subject to the conditions substitute employee at the time of
set forth in Section 3 (d) and (e) and engagement. The phrase “absent regular
Section 5 hereof, the principal may employees” includes those who are
engage the services of a contractor or serving suspensions or other disciplinary
subcontractor for the performance of any measures not amounting to termination of
of the following: employment meted out by the principal,
but excludes those on strike where all the
(a) Works or services temporarily or formal requisites for the legality of the
occasionally needed to meet abnormal strike have been prima facie complied
increase in the demand of products or with based on the records filed with the
services, provided that the normal National Conciliation and Mediation Board.
production capacity or regular workforce
of the principal cannot reasonably cope “Permissible job contracting or
with such demands; subcontracting refers to an arrangement
whereby a principal agrees to farm out
(b) Works or services temporarily or with a contractor or subcontractor the
occasionally needed by the principal for performance of a specific job, work, or
undertakings requiring expert or highly service within a definite or predetermined
technical personnel to improve the period, regardless of whether such job,
management or operations of an work or, service is to be performed or
enterprise; completed within or outside the premises
of the principal. Under this arrangement,
(c) Services temporarily needed for the the following conditions must be met: (a)
introduction or promotion of new the contractor carries on a distinct and
products, only for the duration of the independent business and undertakes the
56
contract work on his account under his have sufficient working capital to meet the
own responsibility according to his own requirements of its service contract. In
manner and method, free from the control fact, the financial evaluation conducted by
and direction of his employer or principal Petron of RDG’s financial statements for
in all matters connected with the years 1998-2000 showed RDG to have a
performance of his work except as to the maximum financial capability of Php4.807
results thereof; (b) the contractor has Million as of December 1998,49 and
substantial capital or investment; and (c) Php1.611 Million as of December
the agreement between the principal and 2000.50 Petron was able to establish
contractor or subcontractor assures the RDG’s sufficient capitalization when it
contractual employees’ entitlement to all entered into the service contract in
labor and occupational safety and health 2000. The Court stresses though that this
standards, free exercise of the right to determination of RDG’s status as an
self-organization, security of tenure, and independent contractor is only with
social welfare benefits.”44 Labor-only respect to its financial capability for the
contracting, on the other hand, is a period covered by the financial and other
prohibited act, defined as “supplying documents presented. In other words,
workers to an employer who does not the evidence adduced merely proves that
have substantial capital or investment in RDG was financially qualified as a
the form of tools, equipment, machineries, legitimate contractor but only with respect
work premises, among others, and the to its last service contract with Petron in
workers recruited and placed by such the year 2000.
person are performing activities which are
directly related to the principal business of Sections 8 and 9, Rule VIII, Book III51 of
such employer.”45 “[I]n distinguishing the implementing rules of the Labor Code,
between prohibited labor-only contracting in force since 1976 and prior to DOLE
and permissible job contracting, the Department Order No. 10, series of
totality of the facts and the surrounding 1997,52 provide that for job contracting to
circumstances of the case shall be be permissible, one of the conditions that
considered.”46cralawred has to be met is that the contractor must
have substantial capital or
Generally, the contractor is presumed to investment. Petron having failed to show
be a labor-only contractor, unless such that this condition was met by RDG, it can
contractor overcomes the burden of be concluded, on this score alone, that
proving that it has the substantial capital, RDG is a mere labor-only contractor.
investment, tools and the like. However, Otherwise stated, the presumption that
where the principal is the one claiming RDG is a labor-only contractor stands due
that the contractor is a legitimate to the failure of Petron to discharge the
contractor, as in the present case, said burden of proving the contrary.
principal has the burden of proving that
supposed status.47 It is thus incumbent The Court also finds, as will be discussed
upon Petron, and not upon petitioners as below, that the works performed by
Petron insists, 48 to prove that RDG is an petitioners were directly related to
independent contractor. Petron’s business, another factor which
Petron failed to discharge the burden negates Petron’s claim that RDG is an
of proving that RDG is a legitimate independent contractor.
contractor. Hence, the presumption Petron’s power of control over
that RDG is a labor-only contractor petitioners exists in this case.
stands.
“[A] finding that a contractor is a ‘labor-
Here, the audited financial statements and only’ contractor is equivalent to declaring
other financial documents of RDG for the that there is an employer-employee
years 1999 to 2001 establish that it does relationship between the principal and the
57
employees of the supposed contractor.” 53 such as those performed by the

In this case, the employer-employee petitioners, are inevitable if not at all
relationship between Petron and necessary. Indeed, Petron deals with
petitioners becomes all the more apparent commodities that are highly volatile and
due to the presence of the power of flammable which, if mishandled or not
control on the part of the former over the properly attended to, may cause serious
latter. injuries and damage to property and the
environment. Naturally, supervision by
It was held in Orozco v. The Fifth Division Petron is essential in every aspect of its
of the Hon. Court of Appeals54 product handling in order not to
that:ChanRoblesVirtualawlibrary compromise the integrity, quality and
safety of the products that it distributes to
This Court has constantly adhered to the the consuming public.
“four-fold test” to determine whether Petitioners already attained regular
there exists an employer-employee status as employees of Petron.
relationship between the parties. The four
elements of an employment relationship Petitioners were given various work
are: (a) the selection and engagement of assignments such as tanker receiving,
the employee; (b) the payment of wages; barge loading, sounding, gauging,
(c) the power of dismissal; and (d) the warehousing, mixing, painting, carpentry,
power to control the employee’s conduct. driving, gasul filling and other utility
works. Petron refers to these work
Of these four elements, it is the assignments as menial works which could
power to control which is the most be performed by any able-bodied
crucial and most determinative factor, individual. The Court finds, however, that
so important, in fact, that, the other while the jobs performed by petitioners
elements may even be disregarded.” may be menial and mechanical, they are
(Emphasis supplied) nevertheless necessary and related to
Petron’s business operations. If not for
Hence, the facts that petitioners were these tasks, Petron’s products will not
hired by Romeo or his father and that reach the consumers in their proper state.
their salaries were paid by them do not Indeed, petitioners’ roles were vital
detract from the conclusion that there inasmuch as they involve the preparation
exists an employer-employee relationship of the products that Petron will distribute
between the parties due to Petron’s power to its consumers.
of control over the petitioners.
Furthermore, while it may be true that
One manifestation of the power of control any able-bodied individual can perform
is the power to transfer employees from the tasks assigned to petitioners, the
one work assignment to another.55 Here, Court notes the undisputed fact that for
Petron could order petitioners to do work many years, it was the same able-bodied
outside of their regular individuals (petitioners) who performed
“maintenance/utility” job. Also, the tasks for Petron. The engagement of
petitioners were required to report for petitioners for the same works for a long
work everyday at the bulk plant, observe period of time is a strong indication that
an 8:00 a.m. to 5:00 p.m. daily work such works were indeed necessary to
schedule, and wear proper uniform and Petron’s business. In view of these, and
safety helmets as prescribed by the safety considering further that petitioners’ length
and security measures being implemented of service entitles them to become regular
within the bulk plant. All these imply employees under the Labor Code,
control. In an industry where safety is of petitioners are deemed by law to have
paramount concern, control and already attained the status as Petron’s
supervision over sensitive operations, regular employees. As such, Petron could
58
not terminate their services on the pretext necessary or desirable in the usual
that the service contract it entered with business or trade of the employer,
RDG has already lapsed. For one, and as regardless of their length of
previously discussed, such regular status service; while the latter refers to
had already attached to them even before those employees who have been
the execution of the service contract in performing the job, regardless of
2000. For another, the same does not its nature thereof, for at least a
constitute a just or authorized cause for a year.15
valid dismissal of regular employees. •
• In the case at bench, Noblejas was
In sum, the Court finds that RDG is a employed by IMAPI as a training
labor-only contractor. As such, it is instructor/assessor for a period of
considered merely as an agent of three (3) months effective May 20,
Petron. Consequently, the employer- 2009. After the end of the 3-month
employee relationship which the Court period, he was rehired by IMAPI for
finds to exist in this case is between the same position and continued to
petitioners as employees and Petron as work as such until March 16, 2010.
their employer. Petron therefore, being There is no dispute that the work
the principal employer and RDG, being the of Noblejas was necessary or
labor-only contractor, are solidarily liable desirable in the business or trade
for petitioners’ illegal dismissal and of IMAPI, a training and
monetary claims.56cralawred assessment center for seamen and
• Dionarto Q. Noblejas Vs. Italian Maritime officers of vessels. Moreover, such
Academy Phils., Inc., Capt. Nicolo S. continuing need for his services is
Terrei, Raceli B. Ferrez and Ma. sufficient evidence of the necessity
Teresa R. Mendoza   G.R. No. 207888. and indispensability of his services
June 9, 2014 to IMAPI’s business. Taken in this
• Before the Court tackles the issue light, Noblejas had indeed attained
of illegal dismissal, there should the status of a regular employee at
first be a determination of the the time he ceased to report for
status of his employment. In this work on March 17, 2010.
regard, the Court finds Noblejas to •
be a regular employee of IMAPI. • There was, however, no illegal
• dismissal.
• Pursuant to Article 280 of the Labor •
Code, there are two kinds of • Fair evidentiary rule dictates that
regular employees, namely: (1) before employers are burdened to
those who are engaged to perform prove that they did not commit
activities which are usually illegal dismissal, it is incumbent
necessary or desirable in the usual upon the employee to first
business or trade of the employer; establish by substantial evidence
and (2) those who have rendered the fact of his or her dismissal.16
at least one year of service, The Court is not unmindful of the
whether continuous or broken, with rule in labor cases that the
respect to the activities in which employer has the burden of
they are employed.13 Regular proving that the termination was
employees are further classified for a valid or authorized cause. It is
into (1) regular employees - by likewise incumbent upon the
nature of work and (2) regular employees, however, that they
employees - by years of service.14 should first establish by competent
The former refers to those evidence the fact of their dismissal
employees who perform a from employment.17 It is an age-
particular function which is old rule that the one who alleges a
59
fact has the burden of proving it illegally dismissed. All

and the proof should be clear, circumstances surrounding the
positive and convincing.18 Mere alleged termination should also be
allegation is not evidence. 19 taken into account.
• • Philippine Spring Water Resources,
• Aside from his mere assertion, no Inc./Danilo Y. Lua Vs. Court of
corroborative and competent Appeals and Juvenstein B. Mahilum 
evidence was adduced by Noblejas G.R. No. 205278. June 11, 2014
to substantiate his claim that he Mahilum was a regular employee
was dismissed from employment.
The record is bereft of any A probationary employee, like a regular
indication that he was prevented employee, enjoys security of tenure. In
from returning to work or cases of probationary employment,
otherwise deprived of any work however, aside from just or authorized
assignment. It is also noted that no causes of termination, an additional
evidence was submitted to show ground is provided under Article 281 of
that respondent Ferrez, the the Labor Code, that is, the probationary
secretary of Capt. Terrei, was employee may also be terminated for
actually authorized by IMAPI to failure to qualify as a regular employee in
terminate the employment of the accordance with reasonable standards
company’s employees or that made known by the employer to the
Ferrez was indeed instructed by employee at the time of the engagement.
Capt. Terrei to dismiss him from Thus, the services of an employee who
employment. has been engaged on probationary basis
• may be terminated for any of the
• The Court finds it odd that, instead following: (1) a just or (2) an authorized
of clarifying from Capt. Terrei what cause and (3) when he fails to qualify as a
he heard from Ferrez, Noblejas regular employee in accordance with
immediately instituted an illegal reasonable standards prescribed by the
dismissal case against the employer.14
respondents the day following the
alleged incident and never reported As applied to the petitioner’s arguments, it
back for work since then. would seem that PSWRI and Lua now
• Let it be underscored that the fact invoke the first and third ground for
of dismissal must be established by Mahilum’s termination. The Court,
positive and overt acts of an however, cannot subscribe to the premise
employer indicating the intention to that Mahilum failed to qualify as a regular
dismiss.21 Indeed, a party alleging employee when he failed to perform at par
a critical fact must support his with the standards made known by the
allegation with substantial company to him. In this case, it is clear
evidence, for any decision based on that the primary cause of Mahilum’s
unsubstantiated allegation cannot dismissal from his employment was borne
stand without offending due out of his alleged lapses as chairman for
process.22 Here, there is no the inauguration of the Bulacan plant
sufficient proof showing that company’s Christmas party. In fact, the
Noblejas was actually laid off from termination letter to him cited “loss of
work. In any event, his filing of a trust and confidence” as a ground for his
complaint for illegal dismissal, dismissal. Under the circumstances, the
irrespective of whether petitioners may not be permitted to
reinstatement or separation pay belatedly harp on its choice not to extend
was prayed for, could not by itself his alleged probationary status to regular
be the sole consideration in employment as a ground for his dismissal.
determining whether he has been Besides, having been allowed to work
60
after the lapse of the probationary period, on payment of appeal fee is unwarranted
Mahilum became a regular employee. He in this case.
was hired in June 2004 and was dismissed
on February 5, 2005. Thus, he served the Section 4, Rule 41 of the Rules of Court
company for eight (8) months. provides:ChanRoblesVirtualawlibrary
Mahilum was illegally dismissed Sec. 4. Appellate court docket and other
lawful fees. – Within the period for
According to the petitioners, Mahilum’s taking an appeal, the appellant shall pay
behavior during the inauguration/party to the clerk of court which rendered the
was allegedly tantamount to: 1] serious judgment or final order appealed from,
misconduct, as displayed by a drinking the full amount of the appellate court
binge with his own visitors causing the docket and other lawful fees. Proof of
shame and humiliation of Lua; and 2] payment of said fees shall be transmitted
willful disobedience, as shown by his to the appellate court together with the
refusal to carry out legitimate orders. original record or the record on appeal.
As previously explained, Mahilum was a Here, petitioners concede that payment of

regular employee who was entitled to the full amount of docket fees within the
security of tenure. Thus, he could only be prescribed period is not a mere
dismissed from service for causes technicality of law or procedure but a
provided in Article 282 of the Labor jurisdictional requirement. Nevertheless,
Code.16 At this point, it bears stressing they want this Court to relax the
that the NLRC and the CA, in their application of the rule on the payment of
decisions, both found Mahilum to have the appeal fee in the name of substantial
been illegally dismissed. justice and equity.
• Mega Magazine Publications, Inc., et al.
Vs. Margaret A. Defensor   G.R. No. The Court is not persuaded.
162021. June 16, 2014
In labor cases, the rules on the degree of The liberality which petitioners pray for
proof are enforced not as stringently as in has already been granted to them by the
other cases in order to better serve the CA at the outset. It may be recalled that
higher ends of justice. This lenity is while petitioners paid a substantial part of
intended to afford to the employee every the docket fees, they still failed to pay the
opportunity to level the playing field. full amount thereof since their payment
The grant of a bonus or special incentive, was short of P30.00. Based on the
being a management prerogative, is not a premise that the questioned Decision of
demandable and enforceable obligation, the RTC has already become final and
except when the bonus or special executory due to non-perfection, the CA
incentive is made part of the wage, salary could have dismissed the appeal outright.
or compensation of the employee,29 or is But owing to the fact that only the meager
promised by the employer and expressly amount of P30.00 was lacking and
agreed upon by the parties.30 By its very considering that the CA may opt not to
definition, bonus is a gratuity or act of proceed with the case until the docket
liberality of the giver,31 and cannot be fees are paid,40 it still required petitioners,
considered part of an employee’s wages if even if it was already beyond the
it is paid only when profits are realized or reglementary period, to complete their
a certain amount of productivity is payment of the appeal fee within 10 days
achieved. If the desired goal of production from notice. Clearly, the CA acted
or actual work is not accomplished, the conformably with the pronouncement
bonus does not accrue. made in Camposagrado, a case cited by
Payment of the full amount of appellate petitioners, that “[a] party’s failure to pay
court docket and lawful fees is mandatory the appellate docket fee within the
and jurisdictional; Relaxation of the rule reglementary period confers only a
61
discretionary and not a mandatory power the decision or order. However,

to dismiss the proposed appeal. Such this rule only applies when the
discretionary power should be used in the decision’s dispositive part is
exercise of the court’s sound judgment in definite, clear and
accordance with the tenets of justice and unequivocal.35Where a doubt or
fair play with great deal of circumspection, uncertainty exists between the
considering all attendant circumstances dispositive part and the body of
and must be exercised wisely and the decision, the Court must
prudently, never capriciously, with a view harmonize the former with the
to substantial justice.”4 latter in order to give effect to
the decision’s intention,
• Ruben C. Jordan Vs. Grandeur Security purpose and substantive
Services, Inc. G.R. No. 206716. June 18, terms.36cralawred
2014 B. The Court may correct clerical
• A. The dispositive part must be errors in a final and executory
harmonized with the whole judgment
body of the decision where
uncertainty exists in the It seems to us that the word “payroll” in
dispositive part. the dispositive part of the May 27, 2008
• decision is a mere surplusage — a clerical
• It does not escape this Court’s error that was beyond the LA’s
attention that the dispositive part contemplation in rendering that
of the May 27, 2008 decision decision. The reason is simple: the
contains two contradictory payroll reinstatement order manifestly and
judgments. The dispositive part patently contradicts the LA’s unequivocal
states that Jordan’s complaint for statement in the body of the decision that
illegal dismissal is dismissed for there were no strained relations
lack of merit. In the same breath, between Grandeur Security and
the LA ordered Grandeur Security Jordan. In fact, the LA categorically
to reinstate Jordan in declared that there was “no justification
employment, whether whatsoever for complainant Jordan’s
physically or in the allegation of strained relations.” The
payroll. These conflicting rationales for payroll reinstatement under
judgments are absurd because Article 223 of the Labor Code are to avoid
an employee who has not been the intolerable presence of the unwanted
dismissed, much less illegally employee as when there exist strained
dismissed, cannot be relations between labor and
reinstated. In legal parlance, management or due to the non-availability
reinstatement without loss of of positions.38 Since these circumstances
seniority rights is merely a are remarkably absent in the present
consequence of the employer’s case, coupled with the fact that Jordan
illegal dismissal;33 it merely was never separated from employment,
restores the employee who is we delete the word “payroll” in the
unjustly dismissed to his former dispositive part of the May 27, 2008
position.34cralawred decision.
• A. The NLRC has no original
• As a rule, the court’s resolution in a jurisdiction over termination disputes
given issue is embodied in the It is a basic rule that the averments in the
decision’s dispositive part. The body of the pleading and the character of
dispositive part is the controlling the relief sought determine the nature of
factor on the settlement of parties’ the action and which court has jurisdiction
rights, notwithstanding the over the case. It is not the title of the
confusing statement in the body of pleading but its allegations that must
62
control.40 A plain reading of the declare NLRC-NCR Case No. 00-05-05003-

“memorandum of appeal” shows that this 07 to be closed and terminated because
pleading was in fact another complaint the mere absence or failure to report for
for illegal dismissal. Jordan alleged in work, even after notice to return, does
his “memorandum of appeal” that his not necessarily amount to abandonment.
claims for backwages, separation pay, and Abandonment is a matter of intention and
attorney’s fees arose after Grandeur cannot lightly be presumed from certain
Security refused to heed the LA’s return to equivocal acts. To constitute
work order in the May 27, 2008 decision; abandonment, there must be clear proof
he vehemently insisted that he did not of deliberate and unjustified intent to
receive Grandeur Security’s letter ordering sever the employer-employee relationship.
him to return to work. Also, Jordan The operative act is still the employee’s
specifically asked for backwages beginning ultimate act of putting an end to his
June 2008 or after the promulgation of employment.47cralawred
the May 27, 2008 decision.
In the present case, Jordan’s filing of a
This procedural recourse is a serious error complaint for illegal dismissal – in the
that the NLRC and the CA should have form of a “memorandum of appeal” before
immediately spotted. The NLRC and the the NLRC – is inconsistent with
CA should have immediately dismissed the abandonment of employment. The filing of
“memorandum of appeal” for lack of this complaint is a proof of his desire to
jurisdiction. Under Article 217 (a) (2), and return to work, effectively negating any
(b) of the Labor Code, the LA has original suggestion of abandonment.48 We also
and exclusive jurisdiction over cannot fault him for his continuous
termination disputes; the NLRC only has absence because he faithfully relied on the
exclusive appellate jurisdiction over void NLRC rulings which ordered Grandeur
these cases. Furthermore, Jordan’s Security to pay backwages, separation
remedy against Grandeur’s Security pay, and attorney’s fees in lieu of the LA’s
alleged disobedience to the return to work return to work order.
order is not to file a complaint for illegal • Marlo A. Deoferio Vs. Intel Technology
dismissal, but to ask the NLRC to hold Philippines, Inc., et al.   G.R. No.
Grandeur Security in indirect 202996. June 18, 2014
contempt.41crala • Intel had an authorized cause
III. Jordan did not waive his right to dismiss Deoferio from
to return to work in Grandeur employment
Security •
At the outset, we clarify that whether • Concomitant to the employer’s
Jordan received Grandeur Security’s letter right to freely select and engage an
directing him to report to work is employee is the employer’s right to
irrelevant in determining his waiver of discharge the employee for just
employment in Grandeur Security. In and/or authorized causes. To
labor cases, rules of procedure should not validly effect terminations of
be applied in a very rigid and technical employment, the discharge must
sense because they are merely tools be for a valid cause in the manner
designed to facilitate the attainment of required by law. The purpose of
justice.46 That Jordan was actually these two-pronged qualifications is
informed of the return to work order and to protect the working class from
that Grandeur Security never prohibited the employer’s arbitrary and
him from reporting for work are sufficient unreasonable exercise of its right
compliance with the LA’s return to work to dismiss. Thus, in termination
order. cases, the law places the burden of
proof upon the employer to show
Nonetheless, we are unprepared to by substantial evidence that the
63
termination was for a lawful cause whose continued employment is

and in the manner required by law. prohibited by law or is prejudicial
• to his health as well as to the
• In concrete terms, these health of his co-employees:
qualifications embody the due Provided, That he is paid
process requirement in labor cases separation pay equivalent to at
- substantive and procedural least one (1) month salary or to
due process. Substantive due one-half (1/2) month salary for
process means that the termination every year of service, whichever is
must be based on just and/or greater, a fraction of at least six
authorized causes of dismissal. On (6) months being considered as
the other hand, procedural due one (1) whole year. [underscores,
process requires the employer to italics and emphases ours]
effect the dismissal in a manner • Consistent with this construction,
specified in the Labor Code and its we applied this provision in
IRR.32cralawred resolving illegal dismissal cases
• due to non-contagious diseases
• The present case involves such as stroke, heart attack,
termination due to disease – an osteoarthritis, and eye cataract,
authorized cause for dismissal among others.
under Article 284 of the Labor The third element substantiates the
Code. As substantive contention that the employee has indeed
requirements, the Labor Code been suffering from a disease that: (1) is
and its IRR33 require the presence prejudicial to his health as well as to the
of the following elements: health of his co-employees; and (2)
• cannot be cured within a period of six
(1) An employer has been found to be suffering from any
monthsdisease.even with proper medical
treatment. Without the medical certificate,
(2) His continued employment is prohibited by law orthereprejudicial
can be to no
his health,
authorized
as well
cause
as to for
the health
co-employees. the employee’s dismissal. The absence of
this element thus renders the dismissal
(3) A competent public health authority certifies thatvoid
the disease
and illegal.
is of such nature or at such a stage
cannot be cured within a period of six months even with proper medical treatment.
Simply stated, this requirement is not
• With respect to the first and second merely a procedural requirement, but
elements, the Court liberally a substantive one. The certification from a
construed the phrase “prejudicial competent public health authority is
to his health as well as to the precisely the substantial evidence
health of his co-employees” to required by law to prove the existence of
mean “prejudicial to his health or the disease itself, its non-curability within
to the health of his co-employees.” a period of six months even with proper
We did not limit the scope of this medical treatment, and the prejudice that
phrase to contagious diseases for it would cause to the health of the sick
the reason that this phrase is employee and to those of his co-
preceded by the phrase “any employees.
disease” under Article 284 of the
Labor Code, to • In the current case, we agree with
wit:ChanRoblesVirtualawlibrary the CA that Dr. Lee’s psychiatric
• Art. 284. Disease as ground for report substantially proves that
termination. – An employer may Deoferio was suffering from
terminate the services of an schizophrenia, that his disease was
employee who has been found to not curable within a period of six
be suffering from any disease and months even with proper medical
64
treatment, and that his continued employee. It also does not purely involve
employment would be prejudicial the employer’s willful and voluntary
to his mental health. This exercise of management prerogative – a
conclusion is further substantiated function associated with the employer's
by the unusual and bizarre acts inherent right to control and effectively
that Deoferio committed while at manage its enterprise.44 Rather,
Intel’s employ. terminations due to disease are
The twin-notice requirement applies occasioned by matters generally beyond
to terminations under Article 284 of the worker and the employer's control.
the Labor Code
In fixing the amount of nominal damages
• The Labor Code and its IRR are whose determination is addressed to our
silent on the procedural due sound discretion, the Court should take
process required in terminations into account several factors surrounding
due to disease. Despite the the case, such as: (1) the employer’s
seeming gap in the law, Section 2, financial, medical, and/or moral assistance
Rule 1, Book VI of the IRR to the sick employee; (2) the flexibility
expressly states that the employee and leeway that the employer allowed the
should be afforded procedural due sick employee in performing his duties
process in all cases of while attending to his medical needs; (3)
dismissals.38cralawred the employer’s grant of other termination
Deoferio is entitled to nominal benefits in favor of the employee; and (4)
damages for violation of his right to whether there was a bona fide attempt on
statutory procedural due process the part of the employer to comply with
the twin-notice requirement as opposed to
Intel’s violation of Deoferio’s right to giving no notice at all.
statutory procedural due process warrants
the payment of indemnity in the form of We award Deoferio the sum of P30,000.00
nominal damages. In Jaka Food as nominal damages for violation of his
Processing Corp. v. Pacot,41 we statutory right to procedural due process.
distinguished between terminations based Wentling is not personally liable for
on Article 282 of the Labor Code42 and the satisfaction of nominal damages
dismissals under Article 283 of the Labor in favor of Deoferio
Code.43 We then pegged the nominal
damages at P30,000.00 if the dismissal is Intel shall be solely liable to Deoferio for
based on a just cause but the employer the satisfaction of nominal damages.
failed to comply with the twin-notice Wentling, as a corporate officer, cannot be
requirement. On the other hand, we fixed held liable for acts done in his official
the nominal damages at P50,000.00 if the capacity because a corporation, by legal
dismissal is due to an authorized cause fiction, has a personality separate and
under Article 283 of the Labor Code but distinct from its officers, stockholders, and
the employer failed to comply with the members. There is also no ground for
notice requirement. The reason is that piercing the veil of corporate fiction
dismissals for just cause imply that the because Wentling acted in good faith and
employee has committed a violation merely relied on Dr. Lee’s psychiatric
against the employer, while terminations report in carrying out the
under Article 283 of the Labor Code are dismissal.48cralawred
initiated by the employer in the exercise
of his management prerogative. Deoferio is not entitled to salary
differential, backwages, separation
With respect to Article 284 of the Labor pay, moral and exemplary damages,
Code, terminations due to disease do not as well as attorney’s fees
entail any wrongdoing on the part of the
65
Deoferio’s claim for salary differential is discontinuing or eliminating the practice.

already barred by prescription. Under Verily, the phrase “supplements, or other
Article 291 of the Labor Code, all money employee benefits” in Article 100 is
claims arising from employer-employee construed to mean the compensation and
relations shall be filed within three years privileges received by an employee aside
from the time the cause of action accrued. from regular salaries or wages.
In the current case, more than four years
have elapsed from the pre-termination of With regard to the length of time the
his assignment to the United States until company practice should have been
the filing of his complaint against the observed to constitute a voluntary
respondents. We thus see no point in employer practice that cannot be
further discussing this matter. His claim unilaterally reduced, diminished,
for backwages, separation pay, moral and discontinued or eliminated by the
exemplary damages, as well as attorney’s employer, we find that jurisprudence has
fees must also necessarily fail as a not laid down any rule requiring a specific
consequence of our finding that his minimum number of years. In Davao
dismissal was for an authorized cause and Fruits Corporation v. Associated Labor
that the respondents acted in good faith Unions,14 the company practice lasted for
when they terminated his services. six years. In Davao Integrated Port
• Netlink Computer, Inc. Vs. Eric Delmo G.R. Stevedoring Services v. Abarquez,15 the
No. 160827. June 18, 2014 employer, for three years and nine
In the absence of a written agreement months, approved the commutation to
between the employer and the employee cash of the un- enjoyed portion of the sick
that sales commissions shall be paid in a leave with pay benefits of its intermittent
foreign currency, the latter has the right workers. In Tiangco v. Leogardo, Jr.,16 the
to be paid in such foreign currency once employer carried on the practice of giving
the same has become an established a fixed monthly emergency allowance
practice of the former. The rate of from November 1976 to February 1980, or
exchange at the time of payment, not the three years and four months. In Sevilla
rate of exchange at the time of the sales, Trading Company v. Semana,17 the
controls. employer kept the practice of including
There was no written contract between non-basic benefits such as paid leaves for
Netlink and Delmo stipulating that the unused sick leave and vacation in the
latter’s commissions would be paid in US computation of their 13th-month pay for at
dollars. The absence of the contractual least two years.
stipulation notwithstanding, Netlink was
still liable to pay Delmo in US dollars With the payment of US dollar
because the practice of paying its sales commissions having ripened into a
agents in US dollars for their US dollar- company practice, there is no way that
denominated sales had become a the commissions due to Delma were to be
company policy. This was impliedly paid in US dollars or their equivalent in
admitted by Netlink when it did not refute Philippine currency determined at the time
the allegation that the commissions of the sales. To rule otherwise would be to
earned by Delmo and its other sales cause an unjust diminution of the
agents had been paid in US dollars. commissions due and owing to Delma.
Instead of denying the allegation, Netlink • Teekay Shipping Philippines, Inc., et al.
only sought a declaration that the US Vs. Exequiel O. Jarin G.R. No. 195598.
dollar commissions be paid using the June 25, 2014
exchange rate at the time of sale. The • Under the 2000 POEA-SEC,42 a
principle of non-diminution of benefits, work-related illness is “any
which has been incorporated in Article sickness resulting to disability or
10013 of the Labor Code, forbade Netlink death as a result of an occupational
from unilaterally reducing, diminishing, disease listed under Section 32-A
66
with the conditions set therein The law and jurisprudence allow the award
satisfied.” of nominal damages in favor of an
• employee in a case where a valid cause
• The Court has held, however, that for dismissal exists but the employer fails
the enumeration in Section 32-A to observe due process in dismissing the
does not preclude other employee. On the other hand, financial
illnesses/diseases not so listed assistance is granted to a dismissed
from being compensable. The employee as a measure of equity or social
POEA-SEC cannot be presumed to justice, and is in the nature or takes the
contain all the possible injuries that place of severance compensation.
render a seafarer unfit for further • No. 177374. July 2, 2014
sea duties.43 This is in view of • Amecos Innovations, Inc. and Antonio F.
Section 20(B)(4)44 of the POEA- Mateo Vs. Eliza R. Lopez   G.R. No.
SEC which states that “(t)hose 178055. July 2, 2014
illnesses not listed in Section 32 of • The issues raised in this Petition
this Contract are disputably are:
presumed as work-related.” • WHETHER THE REGULAR CIVIL
Concomitant with such COURT AND NOT THE LABOR
presumption is the burden placed ARBITER OR X X X THE NATIONAL
upon the claimant to present LABOR RELATIONS COMMISSION
substantial evidence that his HAS JURISDICTION OVER
working conditions caused or at CLAIM[S] FOR REIMBURSEMENT
least increased the risk of ARISING FROM EMPLOYER-
contracting the disease.45 “[I]t is EMPLOYEE RELATIONS.
not sufficient to establish that the •
seafarer’s illness or injury has • WHETHER THE REGULAR CIVIL
rendered him permanently or COURT AND NOT THE LABOR
partially disabled; it must also be ARBITER OR X X X THE NATIONAL
shown that there is a causal LABOR RELATIONS COMMISSION
connection between the seafarer’s HAS JURISDICTION OVER
illness or injury and the work for CLAIM[S] FOR DAMAGES FOR
which he had been MISREPRESENTATION ARISING
contracted.”46cralawred FROM EMPLOYER-EMPLOYEE
In the case at bar, Jarin was able to prove RELATIONS.26
that his rheumatoid arthritis was •
contracted out of his daily duties as Chief This Court holds that as between the
Cook onboard M.T. Erik Spirit. parties, Article 217(a)(4) of the Labor
Code is applicable. Said provision bestows
It is well to note that in resolving disputes upon the Labor Arbiter original and
on disability benefits, the fundamental exclusive jurisdiction over claims for
consideration has been that the POEA-SEC damages arising from employer-employee
was designed primarily for the protection relations. The observation that the matter
and benefit of Filipino seamen in the of SSS contributions necessarily flowed
pursuit of their employment onboard from the employer-employee relationship
ocean-going vessels. As such, its between the parties – shared by the lower
provisions must be construed and applied courts and the CA – is correct; thus,
fairly, reasonably and liberally in their petitioners’ claims should have been
favor because only then can its beneficent referred to the labor tribunals. In this
provisions be fully carried into connection, it is noteworthy to state that
effect.54cralawred “the Labor Arbiter has jurisdiction to
• Libcap Marketing Corporation, et al. Vs. award not only the reliefs provided by
Lanny Jean B. Baquial G.R. No. 192011. labor laws, but also damages governed by
June 30, 2014 the Civil Code.”34cralawred
67
terminated sometime in mid-February of

At the same time, it cannot be assumed 2002.
that since the dispute concerns the
payment of SSS premiums, petitioners’ Given the above facts, it is thus clear that
claim should be referred to the Social petitioners have no cause of action against
Security Commission (SSC) pursuant to the respondent in Civil Case No. 04-
Republic Act No. 1161, as amended by 27802. Since Amecos did not remit
Republic Act No. 8282.35 As far as SSS is respondent’s full SSS contributions, the
concerned, there is no longer a dispute latter was never covered by and protected
with respect to petitioners’ accountability under the System. If she was never
to the System; petitioners already settled covered by the System, certainly there is
their pecuniary obligations to it. Since no sense in making her answerable for the
there is no longer any dispute regarding required contributions during the period of
coverage, benefits, contributions and her employment. And it follows as a
penalties to speak of, the SSC need not be matter of consequence that claims for
unnecessarily dragged into the picture.36 other damages founded on the foregoing
Besides, it cannot be made to act as a non-existent cause of action should
collecting agency for petitioners’ claims likewise fail.
against the respondent; the Social • Immaculate Conception Academy, et al.
Security Law should not be so interpreted, Vs. Evelyn E. Camilon G.R. No. 188035.
lest the SSC be swamped with cases of July 2, 2014
this sort. •
• Now to the main issue of whether
At any rate, it appears that petitioners do the CA correctly granted an award
not have a cause of action against of separation pay to respondent as
respondent. while respondent was a measure of social justice.
employed, Amecos did not remit premium •
contributions – both employer and • The issue of whether a validly
employees’ shares – to the SSS; the SSS dismissed employee is entitled to
demand letter38 sent to it covers non- separation pay has been settled in
payment of SSS premium contributions the 2007 case of Toyota Motor
from January 2001 up to April 2002, Philippines Corporation Workers
amounting to P85,687.84.39 The Amecos Association (TMPCWA) v. NLRC,20
payroll40 covering the period from January where it was further clarified that
30 to November 29, 2001 likewise shows “in addition to serious misconduct,
that no deductions for SSS contributions in dismissals based on other
were being made from respondent’s grounds under Art. 282 like willful
salaries. This can only mean that during disobedience, gross and habitual
the period, Amecos was not remitting SSS neglect of duty, fraud or willful
contributions – whether the employer or breach of trust, and commission of
employees’ shares – pertaining to a crime against the employer or his
respondent. As such, during her family, separation pay should
employment with Amecos, respondent not be conceded to the
was never covered under the System as dismissed employee.”
SSS did not know in the first instance that Pursuant to the aforementioned rulings,
petitioners employed her, since the respondent is clearly not entitled to
petitioners were not remitting her separation pay. Respondent was holding a
contributions. Petitioners were forced to position which involves a high degree of
remit monthly SSS contributions only responsibility requiring trust and
when SSS filed I.S. No. 03-6068 with the confidence as it involves the financial
Quezon City Prosecutor’s Office. By that interests of the school. However,
time, however, respondent was no longer respondent proved to be unfit for the
with Amecos, as her employment was position when she failed to exercise the
68
necessary diligence in the performance of creditable years of service in the

her duties and responsibilities as Chief employment record of the illegally
Accountant, thus justifying her dismissal dismissed employee as if he or she
from service. Respondent was guilty of never ceased working for the
gross and habitual negligence when she employer. In other words, the
failed to regularly pre-audit the report of employee’s years of service is
the school cashier, check the entries deemed continuous and never
therein and keep custody of the petty cash interrupted. Such is likewise the
fund. Had respondent been assiduously rationale for reinstatement’s twin
doing her job, the unaccounted school relief of full backwages.13
funds would have been discovered right •
away. Respondent’s dereliction in her • Ampeloquio is correct in asserting
duties spanned a period of 11 months that he is a senior employee
thus enabling the school cashier to compared to the other
misappropriate tuition fee payments, merchandisers whom he himself
manipulate the school records and destroy designates as casual or contractual
official receipts, in the total amount of merchandisers. He is likewise
P1,167,181.45 to the prejudice of senior to other regular employees
petitioners. Hence, she should not be subsequently hired by JAKA,
granted separation pay. To rule otherwise specifically two regular messenger
would be to reward respondent for her employees which Ampeloquio
negligent acts instead of punishing her for claims receive wages higher than
her offense. As we held in Reno Foods, what he is receiving from JAKA.
Inc. v. Nagkakaisang Lakas ng •
Manggagawa (NLM)-Katipunan,23 • Attached to the recognition of
“[s]eparation pay is only warranted when seniority rights of a reinstated
the cause for termination is not employee who had been illegally
attributable to the employee's fault, such dismissed is the entitlement to
as those provided in Articles 283 and 284 wages appurtenant thereto.
of the Labor Code, as well as in cases of •
illegal dismissal in which reinstatement is • The case of Ampeloquio is outside
no longer feasible. It is not allowed when the ordinary. His reinstatement
an employee is dismissed for just cause.” was ordered when merchandisers
like him were no longer employed
As to whether respondent’s length of by JAKA.
service with petitioners justifies the award •
of separation pay, we rule in the negative. • He is not entitled to the same
Respondent’s 12 years of service and terms and conditions of
clean employment record cannot simply employment as that which was
erase her gross and habitual negligence in offered to the other regular
her duties. Length of service is not a employees (not merchandisers)
bargaining chip that can simply be stacked subsequently hired by JAKA.
against the employer. •
• Monchito R. Ampeloquio Vs. Jaka • JAKA’s decision to grant or
Distribution, Inc. G.R. No. 196936. July withhold certain benefits to other
2, 2014 employees is part of its
• The issue for our resolution is the management prerogative as a
scope viz-a-viz wages of function of an employer’s
reinstatement “without loss of constitutionally protected right to
seniority rights and other reasonable return on
privileges.” investments.14
• •
• Seniority rights refer to the • Ampeloquio cannot likewise
69
compare his wages to that received and the mode, manner and terms
by “casual or contractual of payment.15
merchandisers” or merchandisers •
who are admittedly outsourced • On the other hand, existence of an
from manpower agencies or those employer-employee relationship is
who are considered seasonal established by the presence of the
employees hired only during peak following determinants: (1) the
season when JAKA is in need of selection and engagement of the
extra merchandisers. workers; (2) power of dismissal;
• (3) the payment of wages by
• To say the least, these whatever means; and (4) the
merchandisers are not, strictly power to control the worker's
speaking, employees of JAKA, but conduct, with the latter assuming
of a service provider company primacy in the overall
which has a service contract with consideration.16
JAKA. The merchandisers in this In the same vein, seasonal employees
case simply perform the work at hired only for the peak season do not
JAKA’s outlets, wearing uniforms have the same status as regular
approved by JAKA but provided by employees and do not receive amounts
the service company who is considered as part of a compensation and
actually their employer. There is benefits scheme for regular
no employer-employee relationship employees. These seasonal employees
between JAKA and these only receive payment for work rendered
merchandisers. during the period for which they were
• hired, i.e., peak season. The wages and
• Receipt by these merchandisers of other monies seasonal employees may
a benefit such as transportation or receive for the duration of their limited
meal allowance is part of the employment period constitute bulk or
monies they receive from their wholesale payment for services rendered.
employer and embedded in the
contract price of the service Seasonal employment involves work or
agreement the employer has with service that is seasonal in nature or
JAKA. lasting for the duration of the season.
• Seasonal employees differ from those
• The existence of an independent classified as regular employees, in that:
and permissible contractor (1) the employee must be performing
relationship is generally established work or services that are seasonal in
by considering the following nature; and (2) he had been employed for
determinants: whether the the duration of the season.17
contractor is carrying on an
independent business; the nature The phrase without loss of seniority rights
and extent of the work; the skill applies with practical and real effect to
required; the term and duration of Ampeloquio upon his retirement because
the relationship; the right to assign he will reach earlier than other regular
the performance of a specified employees of JAKA the required number of
piece of work; the control and years of service to qualify for retirement.
supervision of the work to another;
the employer's power with respect In all, the labor tribunals were right in
to the hiring, firing and payment of using as guidepost the existing statutory
the contractor's workers; the minimum wages and COLA during the
control of the premises; the duty to three (3) year prescriptive period within
supply the premises, tools, which Ampeloquio can make his money
appliances, materials and labor; claims.
70
Ampeloquio is not entitled to all

We are not unaware that reinstatement is benefits or privileges received by
the rule and such covers reinstatement to other employees subsequently
the same or substantially equivalent hired by JAKA just by the fact of
position without loss of seniority rights his seniority in the service with
and privileges. JAKA.
• Ariel L. David, doing business under the
In this case, JAKA did not claim exceptions name and style "Yiels Hog Dealer" Vs.
to the rule of reinstatement, i.e., (1) John G. Macasio G.R. No. 195466. July
strained relations, or (2) abolition of the 2, 2014
position;18 JAKA immediately complied Engagement on “pakyaw” or task basis
with the Labor Arbiter’s order of does not characterize the relationship that
reinstatement. may exist between the parties, i.e.,
whether one of employment or
We note that, specifically, JAKA could independent contractorship. Article 97(6)
have claimed that the position of of the Labor Code defines wages as “xxx
merchandiser no longer exists and has the remuneration or earnings, however
been abolished with the contracting of this designated, capable of being expressed in
job function. However, it merely opted to terms of money, whether fixed or
reinstate Ampeloquio to the same ascertained on a time, task, piece, or
position. There is no quarrel that with his commission basis, or other method of
reinstatement, Ampeloquio is now the calculating the same, which is payable
lone regular merchandiser of JAKA. by an employer to an employee under
a written or unwritten contract of
The option of reinstatement to a employment for work done or to be done,
substantially equivalent position does not or for services rendered or to be
apply herein as reinstatement to a rendered[.]”35 In relation to Article 97(6),
substantially equivalent position entails Article 10136 of the Labor Code speaks of
the same or similar job functions and not workers paid by results or those whose
just same wages or salary. As applied to pay is calculated in terms of the quantity
this case, Ampeloquio cannot be or quality of their work output which
reinstated to a messengerial position includes “pakyaw” work and other non-
although such is a regular employment time work.
enjoying the same employment benefits Even a factual review shows that
and privileges. His employment cannot Macasio is David’s employee
likewise be converted into a contractual
employment as such is actually a To determine the existence of an
downgrade from his regular employment employer-employee relationship, four
enjoying security of tenure with JAKA. elements generally need to be considered,
namely: (1) the selection and engagement
• As the sole regular merchandiser of of the employee; (2) the payment of
JAKA, Ampeloquio’s reinstatement wages; (3) the power of dismissal; and
entitles him, at the minimum, to (4) the power to control the employee’s
the standard minimum wage at the conduct. These elements or indicators
time of his employment and to the comprise the so-called “four-fold” test of
wages he would have received employment relationship. Macasio’s
from JAKA had he not been illegally relationship with David satisfies this test.
dismissed, as if there was no
cessation of employment. First, David engaged the services of
Ampeloquio is likewise entitled to Macasio, thus satisfying the element of
any increase which JAKA may have “selection and engagement of the
given across the board to all its employee.” David categorically confirmed
regular employees. To repeat, this fact when, in his “Sinumpaang
71
Salaysay,” he stated that “nag apply po rules and requirements and David would
siya sa akin at kinuha ko siya na necessarily exercise some degree of
chopper[.]”39 Also, Solano and Antonio control as the chopping of the hog meats
stated in their “Pinagsamang Sinumpaang would be subject to his
Salaysay”40 that “[k]ami po ay specifications. Also, since Macasio
nagtratrabaho sa Yiels xxx na pag-aari ni performed his tasks at David’s workplace,
Ariel David bilang butcher” and “kilala David could easily exercise control and
namin si xxx Macasio na isa ring butcher supervision over the former. Accordingly,
xxx ni xxx David at kasama namin siya sa whether or not David actually exercised
aming trabaho.” this right or power to control is beside the
point as the law simply requires the
Second, David paid Macasio’s existence of this power to control 4243 or,
wages. Both David and Macasio as in this case, the existence of the right
categorically stated in their respective and opportunity to control and supervise
pleadings before the lower tribunals and Macasio.44
even before this Court that the former had
been paying the latter P700.00 each day In sum, the totality of the surrounding
after the latter had finished the day’s circumstances of the present case
task. Solano and Antonio also confirmed sufficiently points to an employer-
this fact of wage payment in their employee relationship existing between
“Pinagsamang Sinumpaang Salaysay.”41 David and Macasio.
This satisfies the element of “payment of Macasio is engaged on “pakyaw” or
wages.” task basis
Third, David had been setting the day and A distinguishing characteristic of “pakyaw”
time when Macasio should report for work. or task basis engagement, as opposed to
This power to determine the work straight-hour wage payment, is the non-
schedule obviously implies power of consideration of the time spent in
control. By having the power to control working. In a task-basis work, the
Macasio’s work schedule, David could emphasis is on the task itself, in the sense
regulate Macasio’s work and could even that payment is reckoned in terms of
refuse to give him any assignment, completion of the work, not in terms of
thereby effectively dismissing him. the number of time spent in the
completion of work.45 Once the work or
And fourth, David had the right and power task is completed, the worker receives a
to control and supervise Macasio’s work as fixed amount as wage, without regard to
to the means and methods of performing the standard measurements of time
it. In addition to setting the day and time generally used in pay computation.
when Macasio should report for work, the
established facts show that David rents In Macasio’s case, the established facts
the place where Macasio had been show that he would usually start his work
performing his tasks. Moreover, Macasio at 10:00 p.m. Thereafter, regardless of
would leave the workplace only after he the total hours that he spent at the
had finished chopping all of the hog meats workplace or of the total number of the
given to him for the day’s task. Also, hogs assigned to him for chopping,
David would still engage Macasio’s Macasio would receive the fixed amount of
services and have him report for work P700.00 once he had completed his
even during the days when only few hogs task. Clearly, these circumstances show a
were delivered for butchering. “pakyaw” or task basis engagement that
all three tribunals uniformly found.
Under this overall setup, all those working
for David, including Macasio, could In sum, the existence of employment
naturally be expected to observe certain relationship between the parties is
72
determined by applying the “four-fold” employees “engaged on task basis” as a

test; engagement on “pakyaw” or task separate and distinct category from
basis does not determine the parties’ employees classified as “field personnel.”
relationship as it is simply a method of Rather, these employees are altogether
pay computation. Accordingly, Macasio is merged into one classification of
David’s employee, albeit engaged on exempted employees.
“pakyaw” or task basis.
Because of this difference, it may be
As an employee of David paid on pakyaw argued that the Labor Code may be
or task basis, we now go to the core issue interpreted to mean that those who are
of whether Macasio is entitled to holiday, engaged on task basis, per se, are
13th month, and SIL pay. excluded from the SIL and holiday
Provisions governing SIL and holiday payment since this is what the Labor Code
pay provisions, in contrast with the IRR,
strongly suggest. The arguable
Article 82 of the Labor Code provides the interpretation of this rule may be
exclusions from the coverage of Title I, conceded to be within the discretion
Book III of the Labor Code - provisions granted to the LA and NLRC as the quasi-
governing working conditions and rest judicial bodies with expertise on labor
periods. matters.
Among the Title I provisions are the However, as early as 1987 in the case of
provisions on holiday pay (under Article Cebu Institute of Technology v. Ople49 the
94 of the Labor Code) and SIL pay (under phrase “those who are engaged on task or
Article 95 of the Labor Code). Under contract basis” in the rule has already
Article 82, “field personnel” on one hand been interpreted to mean as
and “workers who are paid by results” on follows:chanroblesvirtuallawlibrary
the other hand, are not covered by the
Title I provisions. The wordings of Article [the phrase] should however, be related
82 of the Labor Code additionally with "field personnel" applying the rule on
categorize workers “paid by results” and ejusdem generis that general and
“field personnel” as separate and distinct unlimited terms are restrained and limited
types of employees who are exempted by the particular terms that they follow
from the Title I provisions of the Labor xxx Clearly, petitioner's teaching
Code. personnel cannot be deemed field
personnel which refers "to non-agricultural
Under these provisions, the general rule employees who regularly perform their
is that holiday and SIL pay provisions duties away from the principal place of
cover all employees. To be excluded from business or branch office of the employer
their coverage, an employee must be one and whose actual hours of work in the
of those that these provisions expressly field cannot be determined with
exempt, strictly in accordance with the reasonable certainty. [Par. 3, Article 82,
exemption. Labor Code of the Philippines]. Petitioner's
claim that private respondents are not
Under the IRR, exemption from the entitled to the service incentive leave
coverage of holiday and SIL pay refer to benefit cannot therefore be sustained.
“field personnel and other employees
whose time and performance is In short, the payment of an employee on
unsupervised by the employer including task or pakyaw basis alone is insufficient
those who are engaged on task or to exclude one from the coverage of SIL
contract basis[.]” Note that unlike Article and holiday pay. They are exempted from
82 of the Labor Code, the IRR on the coverage of Title I (including the
holiday and SIL pay do not exclude holiday and SIL pay) only if they qualify as
73
“field personnel.” The IRR therefore having been rendered with grave abuse of
validly qualifies and limits the general discretion.
exclusion of “workers paid by results”
found in Article 82 from the coverage of Entitlement to 13th month pay
holiday and SIL pay. This is the only
reasonable interpretation since the With respect to the payment of 13th month
determination of excluded workers who pay however, we find that the CA legally
are paid by results from the coverage of erred in finding that the NLRC gravely
Title I is “determined by the Secretary of abused its discretion in denying this
Labor in appropriate regulations.” benefit to Macasio.
Entitlement to holiday pay
in determining whether workers engaged The governing law on 13th month pay is
on “pakyaw” or task basis” is entitled to PD No. 851.53 As with holiday and SIL pay,
holiday and SIL pay, the presence (or 13th month pay benefits generally cover all
absence) of employer supervision as employees; an employee must be one of
regards the worker’s time and those expressly enumerated to be
performance is the key: if the worker is exempted. Section 3 of the Rules and
simply engaged on pakyaw or task basis, Regulations Implementing P.D. No. 851 54
then the general rule is that he is enumerates the exemptions from the
entitled to a holiday pay and SIL pay coverage of 13th month pay
unless exempted from the exceptions benefits. Under Section 3(e), “employers
specifically provided under Article 94 of those who are paid on xxx task basis,
(holiday pay) and Article 95 (SIL pay) of and those who are paid a fixed
the Labor Code. However, if the worker amount for performing a specific
engaged on pakyaw or task basis also falls work, irrespective of the time
within the meaning of “field personnel” consumed in the performance
under the law, then he is not entitled to thereof”55 are exempted.
these monetary benefits.
Note that unlike the IRR of the Labor Code
Macasio does not fall under the on holiday and SIL pay, Section 3(e) of
classification of “field personnel” the Rules and Regulations Implementing
PD No. 851 exempts employees “paid on
Based on the definition of field personnel task basis” without any reference to “field
under Article 82, we agree with the CA personnel.” This could only mean that
that Macasio does not fall under the insofar as payment of the 13th month pay
definition of “field personnel.” The CA’s is concerned, the law did not intend to
finding in this regard is supported by the qualify the exemption from its coverage
established facts of this case: first, with the requirement that the task worker
Macasio regularly performed his duties at be a “field personnel” at the same time.
David’s principal place of business; • The Late Alberto B. Javier, as substituted
second, his actual hours of work could be by his surviving wife, Ma. Theresa M.
determined with reasonable certainty; Javier, and children, Kladine Javier, et
and, third, David supervised his time and al. Vs. Philippine Transmarine
performance of duties. Since Macasio Carriers, Inc., et al. G.R. No. 204101.
cannot be considered a “field personnel,” July 2, 2014
then he is not exempted from the grant of • The seafarer is entitled to
holiday, SIL pay even as he was engaged medical
on “pakyaw” or task basis. • treatment at cost to the
employer apart
Not being a “field personnel,” we find the • from disability benefits and
CA to be legally correct when it reversed sickness
the NLRC’s ruling dismissing Macasio’s • allowance
complaint for holiday and SIL pay for •
74
• The employment of seafarers and workers overseas.”

its incidents are governed by the
contracts they sign every time they Accordingly, Section 20-B (2), paragraph
are hired or rehired. These 2, of the POEA-SEC imposes on the
contracts have the force of law employer the liability to provide, at its
between the parties as long as cost, for the medical treatment of the
their stipulations are not contrary repatriated seafarer for the illness or
to law, morals, public order or injury that he suffered on board the
public policy.24 Every seaman and vessel until the seafarer is declared fit to
the vessel owner (directly or work or the degree of his disability is
represented by a local manning finally determined by the company-
agency) are required to execute designated physician. This liability for
the POEA-SEC as a condition sine medical expenses is conditioned upon the
qua non to the seafarer’s seafarer’s compliance with his own
deployment for overseas work.25 obligation to report to the company-
While the seafarers and their designated physician within three (3) days
employers are governed by their from his arrival in the country for
mutual agreements, the POEA rules diagnosis and treatment.28 The medical
and regulations require that the treatment is aimed at the speedy recovery
POEA-SEC, which contains the of the seafarer and the restoration of his
standard terms and conditions of previous healthy working condition.
the seafarers’ employment in
foreign ocean-going vessels, be Since the seafarer is repatriated to the
integrated in every seafarer’s country to undergo treatment, his inability
contract.26 to perform his sea duties would normally
• result in depriving him of compensation
• In the present case, Section 20-B income. To address this contingency,
of the 2000 POEA-SEC27 (the Section 20-B (3), paragraph 1, of the
governing POEA-SEC at the time POEA-SEC imposes on the employer the
the respondents employed Alberto obligation to provide the seafarer with
in 2003) is the applicable provision. sickness allowance that is equivalent
Under this section, the employers to his basic wage until the seafarer is
assume several kinds of liabilities declared fit to work or the degree of his
to the seafarer for any work- permanent disability is determined by the
related illness or injury that the company-designated physician. The period
seafarer may have suffered during for the declaration should be made within
the term of the contract. the period of 120 days or 240 days, as the
case may be.
In reading these provisions, the Court
observes the evident intent of the POEA- Once a finding of permanent (total or
SEC to treat these liabilities of the partial) disability is made either within the
employer separately and distinctly from 120-day period or the 240-day period,29
one another by treating the different items Section 20-B (6) of the POEA-SEC requires
of liability under separate paragraphs. the employer to pay the seafarer
These individual paragraphs, in turn, show disability benefits for his permanent
the bases of each liability that are unique total or partial disability caused by the
from the others. This formulation is in work-related illness or injury. In practical
keeping with the POEA’s mandate under terms, a finding of permanent disability
Executive Order No. 247 to “secure the means a permanent reduction of the
best terms and conditions of employment earning power of a seafarer to perform
of Filipino contract workers and ensure future sea or on board duties;30
compliance therewith” and to “promote permanent disability benefits look to the
and protect the well-being of Filipino future as a means to alleviate the
75
seafarer’s financial condition based on the to provide the seafarer with the needed
level of injury or illness he incurred or medical attention at their cost, they shall
contracted. likewise provide the latter sickness
allowance equivalent to his basic wage.34
The separate treatment of, and the It also expressly states that the disability
distinct considerations in, these three benefits to which the seafarer may be
kinds of liabilities under the POEA-SEC can entitled shall be based solely on the listed
only mean that the POEA-SEC intended to disability gradings without regard to the
make the employer liable for each of these duration of the seafarer’s medical
three kinds of liabilities. In other words, treatment or the period with which he was
employers must: (1) pay the seafarer given sickness allowance.35 Without doubt,
sickness allowance equivalent to his basic medical expenses, sickness allowance and
wage in addition to the medical treatment disability benefits are separate and
that they must provide the seafarer with distinct from one another. Employers are
at their cost; and (2) compensate the liable to provide these compensation and
seafarer for his permanent total or partial benefits, subject to the satisfaction of the
disability as finally determined by the requisite degree of proof.
company-designated physician.31 • Girly G. Ico Vs. Systems Technology
Institute, Inc., et al. G.R. No. 185100.
Significantly, too, while Section 20 of the July 9, 2014
POEA-SEC did not expressly state that the When another employee is soon after
employer’s liabilities are cumulative in appointed to a position which the
nature – so as to hold the employer liable employer claims has been abolished, while
for the sickness allowance, medical the employee who had to vacate the same
expenses and disability benefits – it does is transferred against her will to a position
not also state that the compensation and which does not exist in the corporate
benefits are alternative or that the grant structure, there is evidently a case of
of one bars the grant of the others. illegal constructive dismissal.
• Colegio De San Juan De Letran-Calamba
Under this setup, the Court must be Vs. Engr. Deborah P. Tardeo G.R. No.
guided by the principle that as a labor 190303. July 9, 2014
contract, the POEA-SEC is imbued with • The Office of the Voluntary
public interest. Accordingly, its provisions Arbitrator and the Court of Appeals
must be construed fairly, reasonably and are one in holding that respondent
liberally in favor of the seafarer in the was not guilty of serious
pursuit of his employment on board misconduct when she omitted a
ocean-going vessels. After all, the portion of the invitation, and, in
constitutional policy, which we here effect, declared respondent’s
uphold and emphasize in construing as we suspension from employment for
do these POEA-SEC provisions, accords one semester, unlawful. For failing
and guarantees full protection to labor, to adduce substantial evidence to
both local and overseas.32 prove that respondent was guilty of
serious misconduct, both bodies
Notably, POEA Memorandum Circular No. held that respondent’s suspension
10, Series of 2010 (or the Amended from employment is unwarranted.
Standard Terms and Conditions Governing •
the Overseas Employment of Filipino • Misconduct is defined as improper
Seafarers On-Board Ocean-Going Ships)33 and wrongful conduct. It is the
makes more explicit the POEA-SEC’s transgression of some established
intent we earlier discussed. As matters and definite rule of action, a
stand, the pertinent POEA-SEC provisions forbidden act, a dereliction of duty,
now expressly and clearly state that, in willful in character, and implies
addition to the obligation of the employers wrongful intent and not mere error
76
in judgment. Of course, ordinary acted in malicious and contemptuous

misconduct would not justify the manner with the intent to cause damage
termination of the services of an to the petitioner. In other words, there is
employee. The law is explicit that no basis for the allegation that
the misconduct should be respondent’s act constituted serious
serious. It is settled that in order misconduct that warrants the imposition
for misconduct to be serious, it of penalty of suspension. Indeed,
must be of such grave and considering the fact that before the act
aggravated character and not complained of, respondent has been
merely trivial or unimportant. As rendering service untarnished for 23
amplified by jurisprudence, the years, it is not easy to conclude that for
misconduct must (1) be serious; P600.00, respondent would willfully and
(2) relate to the performance of for wrongful intentions omit portions of
the employee’s duties; and (3) the documents taken from the PPS
show that the employee has website. In other words, as found by the
become unfit to continue working Voluntary Arbitrator and the Court of
for the employer.20cralawred Appeals, there is no substantial proof of
• petitioner’s allegation of malicious conduct
• Under Article 282 of the labor against respondent.
Code, the misconduct, to be just
cause for termination, must be The Court recognizes the right of the
serious. This implies that it must employers to discipline its employees for
be of such grave and aggravated serious violations of company rules after
character and not merely trivial or affording the latter due process and if the
unimportant. Examples of serious evidence warrants.23 Such right, however,
misconduct justifying termination, should be exercised in consonance with
as held in some of our decisions, sound discretion putting into mind the
include: sexual harassment (the basic elements of justice and fair play.
manager’s acts of fondling the
hands, massaging the shoulder and • Alone Amar P. Tagle Vs. Anglo-Eastern
caressing the nape of the Crew Management, Phils., Inc., Anglo-
secretary); fighting within company Eastern Crew Management (ASIA)
premises, uttering obscene, and Capt. Gregorio B. Sialsa G.R. No.
insulting or offensive words against 209302. July 9, 2014
a superior; misrepresenting that a • core issue being whether or not
student is his nephew and petitioner is entitled to disability
pressuring and intimidating a co- benefits on account of his medical
teacher to change a student’s condition.
failing grade to passing.21cralawred •
• • The rule is that a seafarer’s right to
• Although respondent was not disability benefits is a matter
terminated from employment but governed by law, contract and
was merely suspended from work medical findings. The relevant legal
for one semester or equivalent to provisions are Articles 191 to 193
101 days school days, her of the Labor Code and Section 2,
infraction should still be measured Rule X of the Amended Rules on
against the foregoing standards Employee Compensation (AREC).
considering that the charge leveled The relevant contracts are the
against her is serious misconduct. POEA-SEC, the collective
As correctly pointed out by the appellate bargaining agreement, if any, and
court, there is no substantial evidence to the employment agreement
prove that in not including a portion of the between the seafarer and his
invitation to her fund request, respondent employer.3
77
fter an assiduous assessment of the the sporadic nature of his condition, it was
evidence, however, the Court finds that reasonable for the company-designated
petitioner’s claim for permanent disability physicians to require him to be routinely
benefits is without basis at all. re-evaluated.
Second. Even assuming ex gratia
First. Petitioner’s complaint is premature. argumenti that the company-designated
A perusal of the detailed medical reports physicians had arrived at a final
issued by the company-designated conclusion of Grade 11/12 disability,
physicians reveals that despite the petitioner’s evidence would still cast doubt
examinations and procedures that were on such findings. In stark contrast to the
conducted on petitioner, they were not yet detailed medical reports by the company-
able to form a definitive assessment of his designated physicians, a reading of the
ailment. Oft-repeated in the medical medical report of Dr. Escutin shows that it
reports of the company-designated was not supported by any diagnostic tests
physicians is the fact that despite the and/or procedures sufficient to refute the
described medical examinations conducted results of those administered to petitioner
on petitioner, he was to be re-evaluated by the company-designated physicians.
following continued physical therapy and Third. Assuming that petitioner indeed
medications. Then, when the company- suffered the most severe of back injuries,
designated physician suggested a in addition to his neck injury, he could still
disability grading of “Grade 12 (neck) – not be entitled to his claim for permanent
slight stiffness of the neck and Grade 11 total disability benefits. It should be
(chest-trunk-spine) – slight rigidity or 1/3 remembered that under the terms of the
loss of motion or lifting power of the POEA-SEC, for an illness suffered by a
trunk,” he was still required to come back seafarer to be compensable, it must first
for further re-evaluation, as he did when fall within the definition of the term “work-
he reported back in December 2008 and related illness,” that is, any sickness as a
on January 6, 2009. Unfortunately, result of an occupational disease listed
despite orders from the company- under Section 32-A with the conditions set
designated physician to come back once therein satisfied.
more on February 3, 2009 for re-
evaluation, he never did. While work-relatedness is indeed
presumed,41 the Court, in Leonis
In other words, when petitioner decided to Navigation Co., Inc. v. Villamater,42
seek the opinion of Dr. Escutin, it was yet explained that the legal presumption in
to be established by the company- Section 20(B)(4) of the POEA-SEC should
designated physicians whether he was be read together with the requirements
totally or partially disabled, as the specified by Section 32-A of the same
disability grading was tentatively given contract, in that Section 20(B)(4) only
and only as a suggestion, from the affords a disputable presumption.
results of the various examinations
conducted on him as of that time. Thus, for disability to be compensable
The fact that the company-designated under Section 20 (B)(4) of the POEA-SEC,
physicians needed to further examine two elements must concur: (1) the injury
petitioner’s condition following continued or illness must be work-related; and (2)
medication and therapy cannot be denied. the work-related injury or illness must
While initial treatment and medication have existed during the term of the
proved successful in alleviating his back seafarer’s employment contract. In
injury, he still continued to suffer on and other words, to be entitled to
off bouts of pain on his neck. After that, compensation and benefits under this
he again complained of back pains, so he provision, it is not sufficient to simply
was treated and required once more to establish that the seafarer’s illness or
report for re-evaluation. Thus, considering injury has rendered him permanently or
78
partially disabled; it must also be shown qua non to the seafarer’s deployment for
that there is a causal connection overseas work.55cralawred
between the seafarer’s illness or injury
and the work for which he had been While the seafarers and their employers
contracted.43 are governed by their mutual agreements,
the POEA rules and regulations require
In this case, the record is bereft of any that the POEA-SEC be integrated in every
evidence to prove satisfaction of the said contract. This contains the standard terms
conditions. Petitioner’s claim of permanent and conditions of the seafarer’s
total disability as a result of his neck and employment in foreign ocean-going
back condition is anchored solely on his vessels, 56 Under its Section 32-A, for an
bare and uncorroborated insistence that occupational disease and the resulting
he was declared fit to work as seaman disability or death from it to be
after his Pre-Employment Medical compensable, all of the following
Examination (PEME); that he acquired his conditions must first be
illness during the term of his employment satisfied:chanRoblesvirtualLawlibrary
with respondents; and that his illness was
a necessary result of his collapse after • The seafarer’s work must involve the
being exposed to heat while in the boiler risks described
room and because of “the 40 degree herein;chanroblesvirtuallawlibrary 
Celsius temperatures of the Dubai • The disease was contracted as a result
summertime.” of the seafarer’s exposure to the
described
There is even no substantiation at all that risks;chanroblesvirtuallawlibrary 
his collapse while on board the MV Al • The disease was contracted within a
Isha’a directly caused, or at least period of exposure and under such
increased the risk of, his neck and back other factors necessary to contract
injury. No medical history and/or record it; andChanRoblesVirtualawlibrary 
prior to his deployment on board the • There was no notorious negligence on
vessel MV Al Isha’a or any evidence as to the part of the seafarer.57
the nature of his work was ever presented
or alluded to in order to demonstrate that An examination of the surrounding facts
the working conditions on board the said and circumstances regarding Simbajon’s
vessel increased the risk of contracting his sickness will show that the third condition
illness. from the above enumeration is absent in
this case.
• Magsaysay Maritime Corporation, et al. Vs.
Henry M. Simbajon   G.R. No. 203472. Simbajon started exhibiting the symptoms
July 9, 2014 of DM Type II barely six days after
Compensability of Simbajon’s disease embarkation. If his disease had been
acquired because of his exposure to
“The employment of seafarers and its different kinds of work-related stress, it is
incidents, including claims for death very unusual that it developed in a
benefits, are governed by the contracts very short span of time.
they sign every time they are hired or
rehired. Such contracts have the force of To support his contention, Simbajon also
law between the parties as long as its pointed out that his PEME results cleared
stipulations are not contrary to law, him from pre-identified diseases including
morals, public order or public policy.”54 By Diabetes mellitus. This is a point,
way of background, every seaman and the however, that we have considered in other
vessel owner (directly or represented by a rulings. In Nisda v. Sea Serve Maritime
local manning agency) are required to Agency,58 we noted that it is an accepted
execute the POEA-SEC as a condition sine rule that PEMEs are usually not
79
exploratory in nature. The tests bind both of them. Under the POEA-SEC,
conducted are not intended to be an in- the applicable provision to resolve the
depth and thorough examination of an issue of conflicting medical findings is
applicant’s medical condition. They Section 20-B (3), which
merely determine whether the examinee states:chanRoblesvirtualLawlibrary
is “fit to work” at sea or “fit for sea
service”; they do not describe the real Upon sign-off from the vessel for medical
state of health of an treatment, the seafarer is entitled to
applicant.59cralawred sickness allowance equivalent to his basic
wage until he is declared fit to work or the
Thus, Simbajon cannot rely on his PEME degree of permanent disability has been
results alone to support his claim that his assessed by the company-designated
disease only developed after embarkation. physician but in no case shall this period
This is particularly true since several exceed one hundred twenty (120) days.
points during his treatment, his DM Type
II was found to be asymptomatic, i.e, as xxx
symptomless or presenting no subjective
evidence of disease.60 Thus, it is probable If a doctor appointed by the seafarer
that Simbajon’s disease was already pre- disagrees with the assessment, a
existing even before he boarded NCL’s third doctor may be agreed jointly
vessel; his diabetes was not detected between the Employer and the
because it was asymptomatic. seafarer. The third doctor’s decision
shall be final and binding on both
For failure to prove that his disease was parties. [emphasis ours]
contracted within his six days of service
because of factors necessary to contract The glaring disparity between the findings
it, we cannot support Simbajon’s assertion of the petitioners’ designated physicians
that his DM Type II was a work-related and Dr. Vicaldo calls for the intervention
disease that should merit compensation of a third independent doctor, agreed
from the petitioners. upon by petitioners and Simbajon. In this
Fit-to-work assessment of the case, no such third-party physician was
company-designated physicians ever consulted to settle the conflicting
versus the unfit-to-work findings findings of the first two sets of
of Simbajon’s physician doctors. After being informed of Dr.
Vicaldo’s unfit-to-work findings, Simbajon
We now resolve the issue of the conflicting proceeded to file his complaint for
findings of the petitioners’ designated disability benefits with the LA. This move
physicians and Simbajon’s own physician. totally disregarded the mandated
The company-designated physicians have procedure under the POEA-SEC requiring
declared Simbajon as “fit to work” after the referral of the conflicting medical
172 days of treatment from his opinions to a third independent doctor for
disembarkation on August 15, 2004. On final determination.62 Dr. Vicaldo, too, is a
the other hand, Simbajon’s chosen medical practitioner not unknown to this
physician, Dr. Vicaldo, came out with the Court, as he has issued certifications in
findings that Simbajon’s illness had several disability claims that proved
rendered him “unfit to resume work as a unsuccessful.63cralawred
seaman in any capacity,” with a Grade VI
(50%) disability rating. In Philippine Hammonia, we have ruled
that the duty to secure the opinion of
In Philippine Hammonia Ship Agency, Inc. a third doctor belongs to the
v. Dumadag,61 we have ruled that the employee asking for disability
POEA-SEC is the law between the benefits.6By failing to observe the
parties and as such, its provisions required procedure under the POEA-SEC,
80
he clearly violated its terms, i.e., the law for not reemploying Simbajon despite the
between the parties. And without a effectivity of his contract. However, we
binding third-party opinion, the fit-to-work cannot accept his argument that his non-
certification of petitioners’ designated rehiring translates to the permanent and
physicians prevails over that of Dr. total character of his disability.
Vicaldo’s unfit-to-return-to-work finding.
For one, we have already determined that
Simbajon is not entitled to his DM Type II was not a work-related
permanent and total disability disease for failure to comply with the
benefits POEA-SEC’s requisites for compensability.
Not being work-related, it cannot be the
We now resolve Simbajon’s claim that his basis of any disability claims. The findings
inability to resume his usual work as a of Simbajon’s chosen physician cannot
cook for a period exceeding 120 days, also be considered due to the absence of
automatically entitles him to permanent the medical opinion of a third independent
and total disability benefits based on a physician.
Grade I (120%) impediment rating.
We further note that this argument was
Under this ruling,69 a finding by the only raised in Simbajon’s motion for
company-designated doctor that the reconsideration with the NLRC. This was
seafarer needs further treatment never reiterated in his pleadings with the
beyond the initial 120-day period CA and in his comment to the present
results in the extension of the period petition.
for the declaration of the existence of
a permanent partial or total disability At the very least, Simbajon could have
to 240 days. Thus, contrary to used his non-rehiring to support the
Simbajon’s claim, his inability to resume argument that his contract was
work after the lapse of more than 120 prematurely terminated by petitioners. He
days from the time he suffered his illness was declared fit to work but he was not
does not by itself automatically entitle him reaccepted in his former or a similar
to permanent and total disability benefits. position despite the remaining 104 days in
his contract.
In the present case, Simbajon’s several
consultations with the company- But Simbajon never made an issue out of
designated doctors revealed that his DM this. Even at the level of the labor
Type II was asymptomatic. Because of tribunals, his pleadings focused solely on
this finding, the company-designated the classification of his disability as
doctors had to conduct further treatments permanent and total. Premature contract
and prescribe his continuous medication termination and entitlement to permanent
before finally concluding that he was fit to and total disability benefits are two
return to work on February 2, 2005, or different labor issues. One is based on the
172 days from his disembarkation. The untimely termination of the contract
period is 68 days short of the 240 days without any just or valid cause, while the
provided in Vergara. Within this period, other is on the compensation that the law
the company can continue to treat the aims to give to seafarers who are
employee or conduct an observation rendered unable to resume sea service
period (while continuing to pay his total due to work-related disease.
temporary disability pay), before the
Vergara deadline is reached. Thus, we cannot rule that Simbajon’s
Petitioners’ failure to rehire contract had been pre-terminated without
Simbajon despite the “fit to any just or valid cause, and hold him
work declaration” entitled to payment of his salaries for the
We can only surmise petitioners’ reasons unexpired portion of his contract.73
81
Otherwise we would be violating Olsen Cruise Lines Limited   G.R. No.

petitioners’ due process rights. Petitioners 180343. July 9, 2014
never controverted such claim precisely • First. The employment relationship
because Simbajon never raised it as an between Constantino and the
issue. Moreover, the CA and the labor petitioners is governed by the
tribunals’ rulings never touched on this. POEA-SEC, otherwise known as the
Hence, it is beyond the ambit of our Amended Standard Terms and
review. Conditions Governing the
Employment of Filipino Seafarers
On a final note, this Court would like to On-Board Ocean-Going Vessels.23
point out the amendments made of the Thus, when the seafarer enters into
POEA-SEC which now an individual contract with the
provides:chanRoblesvirtualLawlibrary employer, as Constantino did in
February 2002,24 the terms and
In case of permanent total or partial conditions of the contract must
disability of the seafarer caused by either be in accordance with the
injury or illness the seafarer shall be POEA-SEC and shall be strictly
compensated in accordance with the and faithfully observed.25 It is
schedule of benefits enumerated in customary therefore that the
Section 32 of this Contract. Computation individual contract between the
of his benefits arising from an illness or seafarer and the employer (such as
disease shall be governed by the rates the contract between Constantino
and the rules of compensation and the petitioners) is verified and
applicable at the time the illness or approved by the POEA. As had
disease was contracted. been declared by the Court in an
earlier ruling, the POEA-SEC is the
The disability shall be based solely on law between the parties,
the disability gradings provided under together with their CBA, if there
Section 32 of this Contract, and shall any.26cralawred
not be measured or determined by •
the number of days a seafarer is • Under the POEA-SEC, it is the
under treatment or the number of company-designated physician who
days in which sickness allowance is declares the fitness to work of a
paid.74 [emphasis and underscoring ours] seafarer who sustains a work-
related injury/illnes or the degree
The above amendment finally clarifies the of the seafarer’s disability. Section
basis for the declaration of a temporary or 20 (B) 3 of the POEA-SEC
permanent disability of a seafarer. For provides:ChanRoblesVirtualawlibrar
work-related illnesses acquired by y
seafarers from the time the 2010 •
amendment to the POEA-SEC took effect, • Upon sign-off from the vessel for
the declaration of disability should no medical treatment, the seafarer
longer be based on the number of days shall be entitled to sickness
the seafarer was treated or paid his allowance equivalent to his basic
sickness allowance, but rather on the wage until he is declared fit to
disability grading he received, whether work or the degree of his
from the company-designated physician or permanent disability has
from the third independent physician, if been assessed by the company-
the medical findings of the physician designated physician but in no
chosen by the seafarer conflicts with that case shall this period exceed one
of the company-designated doctor. hundred twenty (120 days)
• Bahia Shipping Services, Inc. and Fred We cannot fault VA Guerrero and the
82
NLRC for dismissing the complaint as it the conclusions of the company-

was in accordance with the above-cited designated physicians”28
provision of the POEA-SEC. Dr. Lim, the Second. There is no dispute that under
company-designated physician, declared the POEA-SEC, Constantino was not
Constantino fit to work after almost six precluded from seeking a second
months of extensive examination, opinion on his medical condition or
treatment and rehabilitation (therapy disability. The third paragraph of the
sessions) by the company-accredited Section 20 (B)3 of the POEA-SEC states
specialists, including an orthopedic that “If a doctor appointed by the
surgeon, upon his repatriation. seafarer disagrees with the
Dr. Almeda examined Constantino only assessment (of the company-
once (at most for several hours) and he designated physician), a third doctor
only interpreted the medical findings may be agreed jointly between the
of the company-accredited doctors. In Employer and the seafarer. The third
short, he applied his expertise on existing doctor’s decision shall be final and
medical findings of other physicians. It binding on both parties
also totally disregarded the petitioners • Republic of the Philippines, rep by the
submission that its team of doctors Hon. Secretary, DOLE Vs. Namboku
examined and treated Constantino 12 Peak, Inc./Phil-Japan Workers Union-
times for a period of almost six months Solodarity of Union in the Philippines
and, each time they treated him, they for Empowerment and Reforms
issued a report of Constantino’s medical (PJWU-Super), et al.   G.R. No.
condition, the particular treatment 169745/G.R. No. 170091. July 18, 2014
administered and medicines prescribed, The court or tribunal exercising quasi-
which eventually became the basis of Dr. judicial functions is bereft of any right or
Lim’s fit-to-work declaration. personality to question the decision of an
appellate court reversing its decision.1
We thus find no merit on Constantino’s The Secretary of Labor is not the real
objections on Dr. Lim’s qualification or the party-in- interest vested with personality
lack of it when Dr. Lim declared him fit to to file the present petitions. A real party-
work. Since Constantino failed to show in-interest is the party who stands to be
any bad faith that attended the company benefited or injured by the judgment in
doctors’ medical reports, or that the the suit, or the party entitled to the avails
reports were self-serving and were issued of the suit.40 As thus defined, the real
to allow the petitioners to avoid liability, parties-in-interest in these cases would
we rule that the NLRC did not commit any have been PALCEA-SUPER and PJWU-
grave abuse of discretion in its ruling; SUPER. It would have been their duty to
appear and defend the ruling of the
In Philippine Hammonia,27 where we Secretary of Labor for they are the ones
encountered a similar disability claim, we who were interested that the same be
said: “Dumadag cannot insist that the sustained. Of course, they had the option
‘favorable’ reports of his physicians be not to pursue the case before a higher
chosen over the certification of the court, as what they did in these cases. As
company-designated physician, especially to the Secretary of Labor, she was
if we were to consider that the physicians impleaded in the Petitions for Certiorari
he consulted examined him for only for a filed before the CA as a nominal party
day (or shorter) on four different dates because one of the issues involved therein
x x x Moreover, we point out that they was whether she committed an error of
merely relied on the same medical history, jurisdiction. But that does not make her a
diagnoses and analyses provided by the real party-in-interest or vests her with
company-designated specialists. Under authority to appeal the Decisions of the
the circumstances, we cannot simply say CA in case it reverses her ruling. Under
that their findings are more reliable than Section 1,41 Rule 45 of the Rules of Court,
83
only real parties-in-interest who by substantial evidence, or such relevant

participated in the litigation of the case evidence which a reasonable mind might
before the CA can avail of an appeal by accept as adequate to justify a conclusion,
certiorari. that the nature of his employment or
working conditions increased the risk of
Here, both cases emanated from the contracting the ailment or that its
petitions for certification election filed with progression or aggravation was brought
the Med-Arbiter and subsequently about thereby.24
appealed to the Secretary of Labor. She •
had occasion to hear the parties’ • St. Luke's Medical Center, Incorporated
respective contentions and rule thereon. Vs. Daniel Quebral, et al.   G.R. No.
As the officer who rendered the decision 193324. July 23, 2014
now subject of these cases, the Secretary • The petition is meritorious. This
of Labor should have remained impartial Court finds that the penalty of
and detached from the time the cases dismissal meted on Quebral is
reached her until the same were being commensurate to the offense he
scrutinized on appeal.53 committed.
• Estrella D. S. Bañez Vs. Social Security •
System and De la Salle University G.R. • Quebral cannot feign ignorance of
No. 189574. July 18, 2014 the policy limiting to patients the
• In order for the beneficiary of an privilege of the use of validated
employee to be entitled to death parking tickets. First, it is written
benefits under the SSS, the cause on the parking ticket itself. Having
of death of the employee must be used said parking tickets many
a sickness listed as an occupational times, it was incumbent upon him
disease by ECC; or any other to read the terms and conditions
illness caused by employment, stated thereon. And second, even
subject to proof that the risk of assuming he was not able to read
contracting the same is increased said policy, this Court agrees with
by the working conditions.20 petitioner that this only serves as a
• testament of his inefficiency in his
• It is undisputed that SLE is not job as he is not aware of his
listed as an occupational disease employer’s policies despite being
under Annex “A” of the Rules on employed for 7 years. Moreover, as
Employees’ Compensation. Thus, Wellness Center Assistant whose
petitioner has to prove by task is to extend all needed
substantial evidence the causal assistance to the ECU patients, it is
relationship between her husband’s expected that he is aware of all
illness and his working conditions. matters relating to patient rights
• and privileges.
• For petitioner’s claim to prosper, This Court, likewise, does not subscribe to
she must submit such proof as respondent’s argument that since there is
would constitute a reasonable basis no showing that the offense had
for concluding either that the prejudiced the operations of petitioner as
conditions of employment caused there are no records of damage sustained
her husband’s ailment or that such by the latter he does not deserve to be
working conditions had aggravated dismissed from employment. A company
the risk of contracting that has the right to dismiss its employees as a
ailment.21 measure of self-protection.24 It need not
While there are certain chemicals accepted wait for it to suffer actual damage or loss
as increasing the risks of contracting SLE before it can rightfully dismiss an
such as chlorinated pesticides and employee who it has already found to
crystalline silica,23 the law requires proof have been dishonest. The fact that
84
petitioner did not suffer losses from the cause, or without compliance with due
dishonesty of the respondent does not process.
excuse the latter from any II
culpability.25 Whether he has already Claim for accrued benefits should be
settled the amount he was supposed to sustained
pay for parking if not for the validated despite dismissal of the petitioner’s
parking tickets is of no complaint
consequence. 26
The fact remains that he
was dishonest in the performance of his The petitioner argues that according to
duties which is a valid ground for Roquero v. Philippine Airlines, Inc., 30 the
termination of employment. employer is obliged to reinstate and to
• Crisanto F. Castro, Jr. Vs. Ateneo De Naga pay the wages of the dismissed employee
University, Fr. Joel Tabora and Mr. during the period of appeal until its
Edwin Bernal G.R. No. 175293. July 23, reversal by the higher Court; and that
2014 because he was not reinstated either
actually or by payroll, he should be held
The employer is obliged to reinstate the entitled to the accrued salaries.
dismissed employee and to pay his wages
during the period of appeal of the decision The argument of the petitioner is correct.
in the latter’s favor until the reversal of
the decision. Article 279 of the Labor Code, as
I amended, entitles an illegally dismissed
Execution of the receipt and quitclaim was employee to reinstatement. Article 223 of
not a settlement of the petitioner’s claim the Labor Code requires the reinstatement
for accrued salaries to be immediately executory even pending
appeal. With its intent being ostensibly to
The text of the receipt and quitclaim was promote the benefit of the employee,
clear and straightforward, and it was to Article 223 cannot be the source of any
the effect that the sum received by the right of the employer to remove the
petitioner represented “full payment of employee should he fail to immediately
benefits … pursuant to the Employee’s comply with the order of reinstatement.31
retirement plan.” As such, both the NLRC In Roquero, the Court ruled that the
and the CA should have easily seen that unjustified refusal of the employer to
the quitclaim related only to the reinstate the dismissed employee would
settlement of the retirement benefits, entitle the latter to the payment of his
which benefits could not be confused with salaries effective from the time when the
the reliefs related to the complaint for employer failed to reinstate him; thus, it
illegal dismissal. became the ministerial duty of the LA to
implement the order of reinstatement.32
Worthy to stress is that retirement is of a According to Triad Security & Allied
different species from the reliefs awarded Services v. Ortega, Jr.,33 the law
to an illegally dismissed employee. mandates the prompt reinstatement of the
Retirement is a form of reward for an dismissed or separated employee, without
employee’s loyalty and service to the need of any writ of execution.
employer, and is intended to help the
employee enjoy the remaining years of his Hence, for as long as the employer
life, and to lessen the burden of worrying continuously fails to actually implement
about his financial support or upkeep.29 In the reinstatement aspect of the decision of
contrast, the reliefs awarded to an illegally the LA, the employer’s obligation to the
dismissed employee are in recognition of employee for his accrued backwages and
the continuing employer-employee other benefits continues to accumulate.36
relationship that has been severed by the • Rosemarie Esmarialino Vs. Employees'
employer without just or authorized Compensation Commission, Social
85
Security System (SSS) and Jimenez Commission:chanroblesvirtuallawli

Protective and Security Agency   G.R. brary
No. 192352. July 23, 2014 •
• The CA, ECC and SSS uniformly • The law, as it now stands requires
found that Rosemarie cannot be the claimant to prove a positive
granted death benefits as she had thing – the illness was caused by
failed to offer substantial evidence employment and the risk of
to prove her claims. Besides, even contracting the disease is increased
if this Court were to exercise by the working conditions. To say
leniency and resort to re- that since the proof is not
evaluating the factual findings available, therefore, the trust fund
below, still, the instant petition is has the obligation to pay is
susceptible to denial. The SSS, ECC contrary to the legal requirement
and CA decisions are amply that proof must be adduced. The
supported, hence, the Court finds existence of otherwise non-existent
no compelling reason to order their proof cannot be presumed.
reversal. •
• • It is well to stress that the
• In Benito E. Lorenzo v. principles of “presumption of
Government Service Insurance compensability” and “aggravation”
System (GSIS) and Department of found in the old Workmen’s
Education (DepEd),16 a case Compensation Act is expressly
involving a teacher, who likewise discarded under the present
died of leukemia, the Court ruled compensation scheme. As
that:chanroblesvirtuallawlibrary illustrated in the said Raro case,
• the new principle being applied is a
• [T]he coverage of leukemia as an system based on social security
occupational disease relates to principle; thus, the introduction of
one’s employment as an operating “proof of increased risk.” As further
room personnel ordinarily exposed declared
to anesthetics. x x x There was no therein:chanroblesvirtuallawlibrary
showing that her work involved •
frequent and sufficient exposure to • The present system is also
substances established as administered by social insurance
occupational risk factors of the agencies - the Government Service
disease. x x x. Insurance System and Social
• Security System - under the
• xxxx Employees Compensation
• Commission. The intent was to
• x x x Petitioner failed to show that restore a sensible equilibrium
the progression of the disease was between the employer's obligation
brought about largely by the to pay workmen's compensation
conditions in [x x x’s] work. Not and the employee's right to receive
even a medical history or records reparation for work-connected
was presented to support death or disability.
petitioner’s claim. •
• • xxxx
• xxxx •
• • Compassion for the victims of
• x x x [A] bare allegation [is] no diseases not covered by the law
different from a mere speculation. ignores the need to show a greater
As we held in Raro v. Employees concern for the trust fund to which
Compensation the tens of millions of workers and
86
their families look to for

compensation whenever covered Basic in the realm of labor union rights is
accidents, diseases and deaths that the certification election is the sole
occur.17 (Citations omitted) concern of the workers,29 and the
• employer is deemed an intruder as far as
• It is worth noting that in an the certification election is concerned.30
attempt to prove that Edwin's Thus, the petitioner lacked the legal
employment increased his chances personality to assail the proceedings for
of contracting leukemia, Rosemarie the certification election,31 and should
presented copies of her husband's stand aside as a mere bystander who
daily time records.18 However, could not oppose the petition, or even
even if the Court were to co-relate appeal the Med-Arbiter’s orders relative to
these to the medical abstract 19 the conduct of the certification election.32
submitted by Rosemarie, there is As the Court has explained in Republic v.
nothing in the documents from Kawashima Textile Mfg., Philippines, Inc.33
which the Court can infer or (Kawashima):chanRoblesvirtualLawlibrary
conclude that indeed, Edwin's risk
of contracting leukemia increased Except when it is requested to bargain
by reason of his work conditions. collectively, an employer is a mere
• Heritage Hotel Manila, acting through its bystander to any petition for certification
owner, Grand Plaza Hotel Corp. Vs. election; such proceeding is non-
Secretary of Labor & Employment, et adversarial and merely investigative, for
al. G.R. No. 172132. July 23, 2014 the purpose thereof is to determine which
Although case law has repeatedly held organization will represent the employees
that the employer was but a bystander in in their collective bargaining with the
respect of the conduct of the certification employer. The choice of their
election to decide the labor organization to representative is the exclusive concern of
represent the employees in the bargaining the employees; the employer cannot have
unit, and that the pendency of the any partisan interest therein; it cannot
cancellation of union registration brought interfere with, much less oppose, the
against the labor organization applying for process by filing a motion to dismiss or an
the certification election should not appeal from it; not even a mere allegation
prevent the conduct of the certification that some employees participating in a
election, this review has to look again at petition for certification election are
the seemingly never-ending quest of the actually managerial employees will lend an
petitioner employer to stop the conduct of employer legal personality to block the
the certification election on the ground of certification election. The employer's only
the pendency of proceedings to cancel the right in the proceeding is to be notified or
labor organization’s registration it had informed thereof.
initiated on the ground that the
membership of the labor organization was The petitioner’s meddling in the conduct of
a mixture of managerial and supervisory the certification election among its
employees with the rank-and-file employees unduly gave rise to the
employees. suspicion that it intended to establish a
ISSUE: should the petition for the company union.34 For that reason, the
cancellation of union registration based on challenges it posed against the
mixed membership of supervisors and certification election proceedings were
managers in a labor union, and the non- rightly denied.
submission of reportorial requirements to
the DOLE justify the suspension of the Under the long established rule, too, the
proceedings for the certification elections filing of the petition for the cancellation of
or even the denial of the petition for the NUWHRAIN-HHMSC’s registration should
certification election? not bar the conduct of the certification
87
election.35 In that respect, only a final give the Regional Director ample
order for the cancellation of the discretion in dealing with a petition for
registration would have prevented cancellation of a union's registration,
NUWHRAIN-HHMSC from continuing to particularly, determining whether the
enjoy all the rights conferred on it as a union still meets the requirements
legitimate labor union, including the right prescribed by law. It is sufficient to give
to the petition for the certification the Regional Director license to treat the
election.36 This rule is now enshrined in late filing of required documents as
Article 238-A of the Labor Code, as sufficient compliance with the
amended by Republic Act No. 9481,37 requirements of the law. After all, the law
which reads:chanRoblesvirtualLawlibrary requires the labor organization to submit
the annual financial report and list of
Article 238-A. Effect of a Petition for members in order to verify if it is still
Cancellation of Registration. – A petition viable and financially sustainable as an
for cancellation of union registration shall organization so as to protect the employer
not suspend the proceedings for and employees from fraudulent or fly-by-
certification election nor shall it prevent night unions. With the submission of the
the filing of a petition for certification required documents by respondent, the
election. purpose of the law has been achieved,
though belatedly.
xxxx
We cannot ascribe abuse of discretion to
Still, the petitioner assails the failure of the Regional Director and the DOLE
NUWHRAIN-HHMSC to submit its periodic Secretary in denying the petition for
financial reports and updated list of its cancellation of respondent's registration.
members pursuant to Article 238 and The union members and, in fact, all the
Article 239 of the Labor Code. It contends employees belonging to the appropriate
that the serious challenges against the bargaining unit should not be deprived of
legitimacy of NUWHRAIN-HHMSC as a a bargaining agent, merely because of the
union raised in the petition for the negligence of the union officers who were
cancellation of union registration should responsible for the submission of the
have cautioned the Med-Arbiter against documents to the BLR.
conducting the certification election.
Labor authorities should, indeed, act with
The petitioner does not convince us. circumspection in treating petitions for
cancellation of union registration, lest they
In The Heritage Hotel Manila v. National be accused of interfering with union
Union of Workers in the Hotel, Restaurant activities. In resolving the petition,
and Allied Industries-Heritage Hotel Manila consideration must be taken of the
Supervisors Chapter (NUWHRAIN- fundamental rights guaranteed by Article
HHMSC),38 the Court declared that the XIII, Section 3 of the Constitution, i.e.,
dismissal of the petition for the the rights of all workers to self-
cancellation of the registration of organization, collective bargaining and
NUWHRAIN-HHMSC was proper when negotiations, and peaceful concerted
viewed against the primordial right of the activities. Labor authorities should bear in
workers to self-organization, collective mind that registration confers upon a
bargaining negotiations and peaceful union the status of legitimacy and the
concerted actions, concomitant right and privileges granted
viz:chanRoblesvirtualLawlibrary by law to a legitimate labor organization,
particularly the right to participate in or
xxxx ask for certification election in a
bargaining unit. Thus, the cancellation of a
[Articles 238 and 239 of the Labor Code] certificate of registration is the equivalent
88
of snuffing out the life of a labor be submitted to the Bureau by the

organization. For without such legitimate labor organization
registration, it loses - as a rule - its rights concerned:chanRoblesvirtualLawlibrary
under the Labor Code.
(a) Its constitution and by-laws, or
It is worth mentioning that the Labor amendments thereto, the minutes of
Code's provisions on cancellation of union ratification, and the list of members who
registration and on reportorial took part in the ratification of the
requirements have been recently constitution and by-laws within thirty (30)
amended by Republic Act (R.A.) No. 9481, days from adoption or ratification of the
An Act Strengthening the Workers’ constitution and by-laws or amendments
Constitutional Right to Self-Organization, thereto;
Amending for the Purpose Presidential
Decree No. 442, As Amended, Otherwise (b) Its list of officers, minutes of the
Known as the Labor Code of the election of officers, and list of voters
Philippines, which lapsed into law on May within thirty (30) days from election;
25, 2007 and became effective on June
14, 2007. The amendment sought to (c) Its annual financial report within thirty
strengthen the workers’ right to self- (30) days after the close of every fiscal
organization and enhance the Philippines' year; and
compliance with its international
obligations as embodied in the (d) Its list of members at least once a
International Labor Organization (ILO) year or whenever required by the Bureau.
Convention No. 87, pertaining to the non-
dissolution of workers’ organizations by Failure to comply with the above
administrative authority. Thus, R.A. No. requirements shall not be a ground
9481 amended Article 239 to for cancellation of union registration
read:chanRoblesvirtualLawlibrary but shall subject the erring officers or
members to suspension, expulsion
ART. 239. Grounds for Cancellation of from membership, or any appropriate
Union Registration.--The following may penalty.
constitute grounds for cancellation of
union xxxx
registration:chanRoblesvirtualLawlibrary
The ruling thereby wrote finis to the
(a) Misrepresentation, false statement or challenge being posed by the petitioner
fraud in connection with the adoption or against the illegitimacy of NUWHRAIN-
ratification of the constitution and by-laws HHMSC.
or amendments thereto, the minutes of
ratification, and the list of members who The remaining issue to be resolved is
took part in the ratification; which among Toyota Motor, Dunlop
Slazenger and Tagaytay Highlands applied
(b) Misrepresentation, false statements or in resolving the dispute arising from the
fraud in connection with the election of mixed membership in NUWHRAIN-HHMSC.
officers, minutes of the election of officers,
and the list of voters; This is not a novel matter. In
Kawashima,39 we have reconciled our
(c) Voluntary dissolution by the members. rulings in Toyota Motor, Dunlop Slazenger
R.A. No. 9481 also inserted in the Labor and Tagaytay Highlands by emphasizing
Code Article 242-A, which on the laws prevailing at the time of filing
provides:chanroblesvirtuallawlibrary of the petition for the certification election.
ART. 242-A. Reportorial Requirements.--
The following are documents required to Presently, then, the mixed membership
89
does not result in the illegitimacy of the interpretation of its provisions. Thus,
registered labor union unless the same if the terms of the CBA are plain, clear
was done through misrepresentation, false and leave no doubt on the intention of
statement or fraud according to Article the contracting parties, the literal
239 of the Labor Code. In Air Philippines meaning of its stipulations, as they
Corporation v. Bureau of Labor appear on the face of the contract,
Relations,41 we categorically explained shall prevail.30 Only when the words
that— used are ambiguous and doubtful or
leading to several interpretations of
Clearly, then, for the purpose of de- the parties’ agreement that a resort to
certifying a union, it is not enough to interpretation and construction is
establish that the rank-and-file union called for.31
includes ineligible employees in its
membership. Pursuant to Article 239 (a) No service charges were due from
and (c) of the Labor Code, it must be the specified
shown that there was misrepresentation, entries/transactions; they either
false statement or fraud in connection fall within the
with the adoption or ratification of the CBA-excepted “Negotiated
constitution and by-laws or amendments Contracts” and
thereto, the minutes of ratification, or in “Special Rates” or did not involve
connection with the election of officers, “a sale
minutes of the election of officers, the list of food, beverage, etc.”
of voters, or failure to submit these
documents together with the list of the The Union anchors its claim for
newly elected-appointed officers and their services charges on Sections 68 and
postal addresses to the BLR. 69 of the CBA, in relation with Article
• National Union of Workers in Hotel 96 of the Labor Code. Section 68
Restaurant and Allied Industries states that the sale of food, beverage,
[NUWRAIN-APL-IUF], Philippine Plaza transportation, laundry and rooms are
Chapter Vs. Philippine Plaza Holdings, subject to service charge at the rate of
Inc. G.R. No. 177524. July 23, 2014 ten percent (10%). Excepted from the
Nature of a CBA; rules in the coverage of the 10% service charge
interpretation of CBA provisions are the so-called “negotiated
contracts” and “special rates.”
A collective bargaining agreement, as
used in Article 252 (now Article 262)27 Following the wordings of Section 68
of the Labor Code, is a contract of the CBA, three requisites must be
executed at the request of either the present for the provisions on service
employer or the employees’ exclusive charges to operate: (1) the transaction
bargaining representative with respect from which service charge is sought to
to wages, hours of work and all other be collected is a sale; (2) the sale
terms and conditions of employment, transaction covers food, beverage,
including proposals for adjusting any transportation, laundry and rooms;
grievances or questions under such and (3) the sale does not result from
agreement.28 Jurisprudence settles negotiated contracts and/or at
that a CBA is the law between the special rates.
contracting parties who are obliged
under the law to comply with its In plain terms, all transactions
provisions.29 involving a “sale of food, beverage,
transportation, laundry and rooms” are
As a contract and the governing law generally covered. Excepted from the
between the parties, the general rules coverage are, first, non-sale
of statutory construction apply in the transactions or transactions that do
90
not involve any sale even though they Union’s

involve “food, beverage, etc.” Second, claim for service charges on the
transactions that involve a sale but do specified entries/transactions
not involve “food, beverage, etc.” And
third, transactions involving Article 96 of the Labor Code provides for
“negotiated contracts” and “special the minimum percentage distribution
rates” i.e., a “sale of food, beverage, between the employer and the employees
etc.” resulting from “negotiated of the collected service charges, and its
contracts” or at “special rates;” non- integration in the covered employees’
sale transactions involving “food, wages in the event the employer
beverage, etc.” resulting from terminates its policy of providing for its
“negotiated contracts” and/or “special collection. It pertinently reads:
rates;” and sale transactions, but not Art. 96. Service Charges.
involving “food, beverage, etc.,”
resulting from “negotiated contracts” x x x In case the service charge is
and “special rates.” abolished, the share of the covered
employees shall be considered integrated
Notably, the CBA does not specifically in their wages.
define the terms “negotiated
contracts” and “special This last paragraph of Article 96 of the
rates.” Nonetheless, the CBA likewise Labor Code presumes the practice of
does not explicitly limit the use of collecting service charges and the
these terms to specified employer’s termination of this
transactions. With particular reference practice. When this happens, Article 96
to “negotiated contracts,” the CBA requires the employer to incorporate the
does not confine its application to amount that the employees had been
“airline contracts” as argued by the receiving as share of the collected service
Union. Thus, as correctly declared by charges into their wages. In cases where
the CA, the term “negotiated no service charges had previously been
contracts” should be read as applying collected (as where the employer never
to all types of negotiated contracts and had any policy providing for collection of
not to “airlines contracts” only. This is service charges or had never imposed the
in line with the basic rule of collection of service charges on certain
construction that when the terms are specified transactions), Article 96 will not
clear and leave no doubt upon the operate.
intention of the contracting parties, the
literal meaning of its stipulations shall In this case, the CA found that the PPHI
prevail. A constricted interpretation of had not in fact been collecting services
this term, i.e., as applicable to charges on the specified
“airlines contracts” only, must be entries/transactions that we pointed out
positively shown either by the as either falling under “negotiated
wordings of the CBA or by sufficient contracts” and/or “special rates” or did not
evidence of the parties’ intention to involve a “sale of food, beverage,
limit its application. The Union etc.” Accordingly, Article 96 of the Labor
completely failed to provide support Code finds no application in this case; the
for its constricted reading of the term PPHI did not abolish or terminate the
“negotiated contracts,” either from the implementation of any company policy
wordings of the CBA or from the providing for the collection of service
evidence. charges on specified entries/transactions
that could have otherwise rendered it
The PPHI did not violate Article 96 of liable to pay an amount representing the
the covered employees’ share in the alleged
Labor Code when they refused the abolished service charges.
91
under Article 291 of the Labor Code

The Union’s claim for service charges could have effectively been
for the year interrupted. Consequently, the
1997 and the early months of 1998 Union’s claims for the alleged
could not have uncollected service charges for the
yet prescribed at the time it filed its year 1997 could not have yet
complaint on prescribed at the time it filed its
May 3, 2001; Article 1155 of the Civil complaint on May 3, 2001.
Code applies
suppletorily to Article 291 of the • Joraina Dragon Talosig Vs. United
Labor Code Philippine Lines, Inc., et al. G.R. No.
198388. July 28, 2014
Article 291 (now Article 305)32 of the • The denial of petitioner’s claim is
Labor Code states that “all money claims based on two grounds: (1) that at
arising from employer-employee relations the time of his death, Talosig was
x x x shall be filed within three (3) no longer under the employment of
years from the time the cause of respondents; and (2) that there
action accrued; otherwise, they shall was neither any showing that the
forever be barred.” [Emphasis supplied] cause of his death was one of
those covered by the POEA
Like other causes of action, the Standard Employment Contract,
prescriptive period for money claims nor was there any proof that it was
under Article 291 of the Labor Code is work-related.
subject to interruption. And, in the •
absence of an equivalent Labor Code • It is undeniable that the death of a
provision for determining whether Article seafarer must have occurred
291’s three-year prescriptive period may during the term of his contract of
be interrupted, Article 1155 of the Civil employment for it to be
Code33 may be applied. Thus, the period compensable.
of prescription of money claims under •
Article 291 is interrupted by: (1) the filing • Records show that the contract of
of an action; (2) a written extrajudicial Talosig was for the duration of 12
demand by the creditor; and (3) a written months commencing on the date of
acknowledgment of the debt by the his actual departure from point of
debtor. hire;12 he was, however,
repatriated for medical reasons on
In the present petition, the facts 24 December 2005. The CA ruled
indisputably showed that as early as that upon his repatriation, his
1998, the Union demanded, via the 1st employment was effectively
audit report, from the PPHI the payment terminated pursuant to Section 18
and/or distribution of the alleged B(1) of the POEA Standard
uncollected service charges for the year Employment Contract.13
1997. From thereon, the parties went Parenthetically, petitioner does not
through negotiations (LCMC) to settle and question the fact of the termination
reconcile on their respective positions and of Talosig’s employment; she
claims. alleges, though, that the obligation
of respondents to the seafarer
Under these facts – the Union’s written subsists even after his repatriation.
extrajudicial demand through its 1st •
audit report and the successive • Section 32-A of the POEA Standard
negotiation meetings between the Employment Contract considers the
Union and the PPHI – the running of possibility of compensation for the
the three-year prescriptive period death of a seafarer occurring after
92
the termination of the employment It is a fundamental rule that an employee

contract on account of a work- can be discharged from employment only
related illness. But for death to be for a valid cause. Here, both the LA and
compensable, under this provision, the NLRC found that respondents have
the claimant must fulfill all the been validly terminated for gross and
requisites for compensability. habitual neglect of duties, constituting just
• cause for termination under Article 282 of
• Further, petitioner is correct in that the Labor Code. As a valid ground for
a disputable presumption in favor dismissal under said provision, neglect of
of the compensability of an illness duty must be both gross and
suffered by a seafarer during the habitual. Gross negligence entails want of
term of his contract is provided care in the performance of one’s duties,
under Section 20 B(4)14 of the while habitual neglect imparts repeated
POEA Standard Employment failure to perform such duties for a period
Contract. This disputable of time, depending on the
presumption works in favor of the circumstances.13
employee pursuant to the following In this case, as the CA correctly ruled,15 in
mandate under Executive Order order to sustain herein respondents’
No. 247 dated 21 July 1987, under dismissal, FLPE must show, by substantial
which the POEA-SEC was created: evidence, that the following are
“to secure the best terms and extant:chanroblesvirtuallawlibrary
conditions of employment of
Filipino contract workers and 1) the existence of the subject company
ensure compliance therewith” and policy;
“to protect the well-being of 2) the dismissed employee must have
Filipino workers overseas.” Hence, been properly informed of said policy;
unless contrary evidence is 3) actions or omissions on the part of the
presented by the seafarer’s dismissed employee manifesting
employer/s, this disputable deliberate refusal or wilful disregard of
presumption stands.15 said company policy; and
• 4) such actions or omissions have
• In this case, we agree with the CA occured repeatedly.
that colon cancer is not one of
those types of cancer that are FLPE claims that its company policy that
compensable under Section 32 of requires its sales managers and staff to
the POEA Standard Employment keep the sales proceeds in a shoebox in
Contract. the stockroom and not inside the cash
• As aptly ruled by the CA, petitioner register, have been in existence since
did not present any proof of a October 23, 2003. However, FLPE failed to
causal connection or at least a establish that such a company policy
work relation between the actually exists, and if it does truly exist,
employment of Talosig and his that it was, in fact, posted and/or
colon cancer. Petitioner merely disseminated accordingly. Neither is there
relied on presumption of causality. anything in the records which reveals that
She failed either to establish or the dismissed respondents were informed
even to mention the risks that of said policy. The company vehemently
could have caused or, at the very insists that it posted, announced, and
least, contributed to the disease implemented the subject Safekeeping
contracted by Talosig. Policy in all its retail stores, especially the
• FLP Enterprises Inc.-Francesco one in Alabang Town Center. It, however,
Shoes/Emilio Francisco B. Pajaro Vs. failed to substantiate said claim. It could
Ma. Joeralyn D. Dela Cruz and Vilma have easily produced a copy of said
Malunes G.R. No. 198093. July 28, 2014 memorandum bearing the signatures of
93
Dela Cruz and Malunes to show that, competent evidence showing that
indeed, they have been notified of the respondents have repeatedly violated said
existence of said company rule and that policy in the past.
they have received, read, and understood
the same. FLPE could likewise have True, an employer has the discretion to
simply called some of its employees to regulate all aspects of employment and
testify on the rule’s existence, the workers have the corresponding
dissemination, and strict obligation to obey company rules and
implementation. But aside from its self- regulations. Deliberately disregarding or
serving and uncorroborated declaration, disobeying the rules cannot be
and a copy of the supposed policy as countenanced, and any justification that
contained in the October 23, 2003 the disobedient employee might put forth
Memorandum, FLPE adduced nothing is deemed inconsequential.20 However,
more. the Court must emphasize that the
In termination cases, the burden of proof prerogative of an employer to dismiss an
rests on the employer to show that the employee on the ground of willful
dismissal is for a just cause.17 The one disobedience to company policies must be
who alleges a fact has the burden of exercised in good faith and with due
proving it; thus, FLPE should prove its regard to the rights of labor.21
allegation that it terminated respondents • Royale Homes Marketing Corporation Vs.
for a valid and just cause. It must be Fidel P. Alcantara G.R. No. 195190. July
stressed that the evidence to prove this 28, 2014
fact must be clear, positive, and • Not every form of control that a
convincing.18 When there is no showing of hiring party imposes on the hired
a clear, valid, and legal cause for the party is indicative of employee-
termination of employment, the law employer relationship. Rules and
considers the matter a case of illegal regulations that merely serve as
dismissal.19 Unfortunately, FLPE guidelines towards the
miserably failed to discharge this achievement of a mutually desired
burden. To rule otherwise and simply result without dictating the means
allow the presumption as to the existence and methods of accomplishing it do
and dissemination of the supposed not establish employer-employee
company policy would lead to a relationship.1cralawre
proliferation of fabricated notices, and The juridical relationship of the
entice further abuse by unscrupulous parties
persons. Workers could then be arbitrarily based on their written contract
terminated without much of an effort,
running afoul of the State’s clear duty to The primary evidence of the nature of the
show compassion and afford the utmost parties’ relationship in this case is the
protection to laborers. written contract that they signed and
executed in pursuance of their mutual
Assuming arguendo that respondents agreement. While the existence of
were aware of the alleged company policy, employer-employee relationship is a
FLPE failed to prove that they are guilty of matter of law, the characterization made
disobedience amounting to gross and by the parties in their contract as to the
habitual neglect of duty. On March 9, nature of their juridical relationship cannot
2008, Dela Cruz did not even report to be simply ignored, particularly in this case
work because it was her rest day. As for where the parties’ written contract
Malunes, she admitted putting the sales unequivocally states their intention at the
proceeds inside the cash register but she time they entered into it.
only did so upon the instructions of the
store manager, who is basically part of n this case, the contract,27 duly signed
management. There is likewise want of and not disputed by the parties,
94
conspicuously provides that “no employer- deemed to exist.33cralawred

employee relationship exists between”
Royale Homes and Alcantara, as well as In concluding that Alcantara is an
his sales agents. It is clear that they did employee of Royale Homes, the CA
not want to be bound by employer- ratiocinated that since the performance of
employee relationship at the time of the his tasks is subject to company rules,
signing of the contract. regulations, code of ethics, and periodic
Since “the terms of the contract are clear evaluation, the element of control is
and leave no doubt upon the intention of present.
the contracting parties, the literal meaning
of its stipulations should control.”28 No The Court disagrees.
construction is even needed as they
already expressly state their Not every form of control is indicative of
intention. Also, this Court adopts the employer-employee relationship. A
observation of the NLRC that it is rather person who performs work for another
strange on the part of Alcantara, an and is subjected to its rules, regulations,
educated man and a veteran sales broker and code of ethics does not necessarily
who claimed to be receiving P1.2 million become an employee.34 As long as the
as his annual salary, not to have level of control does not interfere with the
contested the portion of the contract means and methods of accomplishing the
expressly indicating that he is not an assigned tasks, the rules imposed by the
employee of Royale Homes if their true hiring party on the hired party do not
intention were otherwise. amount to the labor law concept of control
that is indicative of employer-employee
The juridical relationship of the relationship.
parties based on Control Test
In this case, the Court agrees with Royale
In determining the existence of an Homes that the rules, regulations, code of
employer-employee relationship, this ethics, and periodic evaluation alluded to
Court has generally relied on the four-fold by Alcantara do not involve control over
test, to wit: (1) the selection and the means and methods by which he was
engagement of the employee; (2) the to perform his job. Understandably,
payment of wages; (3) the power of Royale Homes has to fix the price, impose
dismissal; and (4) the employer’s power requirements on prospective buyers, and
to control the employee with respect to lay down the terms and conditions of the
the means and methods by which the sale, including the mode of payment,
work is to be accomplished.29 Among the which the independent contractors must
four, the most determinative factor in follow. It is also necessary for Royale
ascertaining the existence of employer- Homes to allocate its inventories among
employee relationship is the “right of its independent contractors, determine
control test”.30 “It is deemed to be such who has priority in selling the same, grant
an important factor that the other commission or allowance based on
requisites may even be predetermined criteria, and regularly
disregarded.”31 This holds true where the monitor the result of their marketing and
issues to be resolved is whether a person sales efforts. But to the mind of this
who performs work for another is the Court, these do not pertain to the means
latter’s employee or is an independent and methods of how Alcantara was to
contractor,32 as in this case. For where perform and accomplish his task of
the person for whom the services are soliciting sales. They do not dictate upon
performed reserves the right to control him the details of how he would solicit
not only the end to be achieved, but also sales or the manner as to how he would
the means by which such end is reached, transact business with prospective clients.
employer-employee relationship is Payment of Wages
95
due to loss of trust and confidence. As

The element of payment of wages is also provided in Art. 282(c) of Presidential
absent in this case. As provided in the Decree No. 442, otherwise known as the
contract, Alcantara’s remunerations Labor Code of the
consist only of commission override of Philippines:chanRoblesvirtualLawlibrary
0.5%, budget allocation, sales incentive
and other forms of company support. Article 282. Termination by employer. An
There is no proof that he received fixed employer may terminate an employment
monthly salary. No payslip or payroll was for any of the following
ever presented and there is no proof that causes:cralawlawlibrary
Royale Homes deducted from his
supposed salary withholding tax or that it xxxx
registered him with the Social Security
System, Philippine Health Insurance c. Fraud or willful breach by the employee
Corporation, or Pag-Ibig Fund. In fact, his of the trust reposed in him by his
Complaint merely states a ballpark figure employer or duly authorized
of his alleged salary of P100,000.00, more representative;chanrobleslaw
or less. All of these indicate an
independent contractual the first requisite is that the employee
relationship.44 Besides, if Alcantara concerned must be one holding a position
indeed considered himself an employee of of trust and confidence, thus, one who is
Royale Homes, then he, an experienced either: (1) a managerial employee; or (2)
and professional broker, would have a fiduciary rank-and-file employee, who,
complained that he was being denied in the normal exercise of his or her
statutorily mandated benefits. But for functions, regularly handles significant
nine consecutive years, he kept mum amounts of money or property of the
about it, signifying that he has agreed, employer. The second requisite is that
consented, and accepted the fact that he the loss of confidence must be based on a
is not entitled to those employee benefits willful breach of trust and founded on
because he is an independent contractor. clearly established facts.
This Court is, therefore, convinced that In Lima Land, Inc. v. Cuevas,24 We
Alcantara is not an employee of Royale discussed the difference between the
Homes, but a mere independent criteria for determining the validity of
contractor. The NLRC is, therefore, invoking loss of trust and confidence as a
correct in concluding that the Labor ground for terminating a managerial
Arbiter has no jurisdiction over the case employee on the one hand and a rank-
and that the same is cognizable by the and-file employee on the other. In the
regular courts. said case, We held that with respect to
• Wesleyan University-Philippines Vs. rank-and-file personnel, loss of trust and
Nowella Reyes   G.R. No. 208321. July confidence, as ground for valid dismissal,
30, 2014 requires proof of involvement in the
The issue in this petition boils down to the alleged events in question, and that mere
legality of respondent Nowella Reyes’ uncorroborated assertions and accusations
termination as University Treasurer of by the employer would not suffice. With
petitioner Wesleyan University – respect to a managerial employee, the
Philippines (WUP) on the ground of loss of mere existence of a basis for believing
trust and confidence. that such employee has breached the
Loss of trust and confidence as a trust of his employer would suffice for his
ground for termination dismissal.
We now proceed to the substantive issue Respondent’s employment

on the propriety of respondent’s dismissal classification is
96
irrelevant in light of her proven willful unliquidated cash advances; and (6)
breach spurious duplicate checks bearing her
signature were encashed causing damage
There is no doubt that respondent held a to petitioner.
position of trust; thus, greater fidelity is
expected of her. She was not an ordinary • University of Santo Tomas Faculty Union
rank-and-file employee but an employee Vs. University of Santo Tomas G.R. No.
occupying a very sensitive position. As 203957. July 30, 2014
University Treasurer, she handled and • Jurisdiction over the Present
supervised all monetary transactions and Case
was the highest custodian of funds •
belonging to WUP.26 To be sure, in the • On the issue of jurisdiction, we
normal exercise of her functions, she affirm with modification the ruling
regularly handled significant amounts of of the CA. The Labor Arbiter has no
money of her employer and managed a jurisdiction over the present case;
critical department. however, despite the lack of
jurisdiction, we rule on the issues
The presence of the first requisite is presented. We recognize that a
certain. So is as regards the second remand to the voluntary arbitration
requisite. Indeed, the Court finds that stage will give rise to the possibility
petitioner adequately proved respondent’s that this case will still reach this
dismissal was for a just cause, based on a Court through the parties’ appeals.
willful breach of trust and founded on Furthermore, it does not serve the
clearly established facts as required by cause of justice if we allow this
jurisprudence. At the end of the day, the case to go unresolved for an
question of whether she was a managerial inordinate amount of time.
or rank-and-file employee does not matter • Article 217(c) of the Labor Code
in this case because not only is there basis provides that the Labor Arbiter
for believing that she breached the trust shall refer to the grievance
of her employer, her involvement in the machinery and voluntary
irregularities attending to petitioner’s arbitration as provided in the CBA
finances has also been proved. those cases that involve the
interpretation of said agreements.
To recall, petitioner, per its account, Article 261 of the Labor Code
allegedly lost trust and confidence in further provides that all unresolved
respondent owing to any or an interplay of grievances arising from the
the following events: (1) she encashed a interpretation or implementation of
check payable to the University Treasurer the CBA, including violations of
in the amount of three hundred thousand said agreement, are under the
pesos (PhP 300,000); (2) she encashed original and exclusive jurisdiction
crossed checks payable to the University of the voluntary arbitrator or panel
Treasurer, when the intention of of voluntary arbitrators. Excluded
management in this regard was to merely from this original and exclusive
transfer funds from one of petitioner’s jurisdiction is gross violation of the
accounts to another in the same bank; (3) CBA, which is defined in Article 261
she allowed the Treasury Department to as “flagrant and/or malicious
encash the checks issued to WUP refusal to comply with the
personnel rather than requiring the latter economic provisions” of the CBA.
to have said checks encashed by the • Despite the allegation that UST
bank, in violation of the imprest system of refused to comply with the
accounting; (4) she caused the economic provisions of the 1996-
disbursement of checks without 2001 CBA, we cannot characterize
supporting check vouchers; (5) there were UST’s refusal as “flagrant and/or
97
malicious.” Indeed, UST’s literal contribute, or “slide in,” the correct

interpretation of the CBA was, in amount to the fund to file its complaint.
fact, what led USTFU to file its USTFU had one year for every alleged
complaint. To our mind, USTFU breach by UST: school year (SY) 1997-
actually went beyond the text of 1998, SY 1998-1999, SY 1999-2000, SY
the 1996-2001 CBA when it 2000-2001, SY 2001-2002, and SY 2002-
claimed that the integrated tuition 2003. USTFU did not file any complaint
fee increase as described in Section within the respective one-year
1D(2) is the basis for UST’s alleged prescriptive periods. USTFU decided
deficiency. to file its complaint only in 2007,
Accrual of Cause of Action and several years after the accrual of its
Prescription of Claims several possible causes of action. Even
The 1996-2001 CBA, as well as the if USTFU filed its complaint under the
applicable laws, is silent as to when UST’s theory of money claims from employer-
alleged violation becomes actionable. employee relations, its cause of action still
Thus, we apply Article 1150 of the Civil has prescribed.
Code of the Philippines: “The time for • Status Maritime Corporation, et al. Vs.
prescription for all kinds of actions, when Spouses Margarito B. Delalamon and
there is no special provision which ordains Priscila A. Delalamon G.R. No. 198097.
otherwise, shall be counted from the day July 30, 2014
they may be brought.”26 Prescription of • In view of the factual milieu of
an action is counted from the time the the
action may be brought.27cralawred • case, the 3-day mandatory
reporting
It is error to state that USTFU’s cause of • requirement can be dispensed
action accrued only upon UST’s categorical with.
denial of its claims on 2 March 2007. •
USTFU’s cause of action accrued when • As a general rule, a medically
UST allegedly failed to comply with the repatriated seafarer is required to
economic provisions of the 1996-2001 submit himself to a post-
CBA. Upon such failure by UST, USTFU employment medical examination
could have brought an action against UST. by the company’s designated
physicians within three (3) working
Article 290 of the Labor Code provides days upon his return.
that unfair labor practices prescribe within
one year “from accrual of such unfair labor Equally outlined in the provision is the
practice; otherwise, they shall be forever single instance which exempts a medially
barred.” Article 291 of the same Code repatriated seafarer from complying with
provides that money claims arising from the 3-day mandatory reporting rule that is
employer-employee relations prescribe – when he is physically incapacitated to do
“within three (3) years from the time the so, in which case a written notice of such
cause of action accrued; otherwise they fact to the employer within the same
shall be forever barred.” USTFU’s claims period shall be deemed as sufficient
under the 1996-2001 CBA, whether compliance.
characterized as one for unfair labor
practice or for money claims from We applied the exemption in Wallem
employer-employee relations, have Maritime Services, Inc. v. NLRC30 and
already prescribed when USTFU filed a excused the failure of the seafarer to
complaint before the LA. report within the three-day period for the
reason that when he disembarked from
USTFU filed its complaint under the theory the vessel, he was terminally ill and in
of unfair labor practice. Thus, USTFU had need of urgent medical attention. His
one year from UST’s alleged failure to employer manning agency was also found
98
sufficiently notified when his wife went to outlined in Article 217 of the Labor Code,
the office a month later to inquire about as amended by Section 9 of Republic Act
his husband’s sickness (R.A.) No. 6715, to
benefits.31cralawred wit:chanRoblesvirtualLawlibrary
The very same circumstances exist in the ART. 217. Jurisdiction of Labor
present factual setting. When Margarito Arbiters and the Commission -- (a)
was repatriated on September 6, 2006 he Except as otherwise provided under this
was already suffering from “Renal Code the Labor Arbiter shall have original
Insufficiency: Diabetes Mellitus; IHD and exclusive jurisdiction to hear and
Blood+CBC+Anemia.” Less than a week decide, within thirty (30) calendar days
thereafter, he was confined at the Las after the submission of the case by the
Piñas Doctor’s Hospital for the same parties for decision without extension,
ailment of renal insufficiency but this time even in the absence of stenographic
aggravated by coronary artery notes, the following cases involving all
disease. He started undergoing workers, whether agricultural or non-
hemodialysis treatments in December agricultural:
when his ailment worsened to end stage • Unfair labor practice cases;
renal disease due to a cyst at the right • Termination disputes;
renal cortical. He became bedridden • If accompanied with a claim for
thereafter until he passed away on reinstatement, those cases that
September 11, 2007. workers may file involving
wages, rates of pay, hours of work
The medical episodes that transpired after and other terms and conditions
his disembarkation from the vessel show of employment;
that he was already in a deteriorating • Claims for actual, moral, exemplary
physical condition when he arrived in the and other forms of damages
Philippines. Thus, it cannot be reasonably arising from employer-
expected of him to prioritize the errand of employee relations;
personally reporting to the petitioners’ • Cases arising from any violation of
office instead of yielding to the physical Article 264 of this Code including
strain caused by his serious health questions involving the legality of
problems. strikes and lockouts; and
Nevertheless, Margarito is • Except claims for Employees
disqualified Compensation, Social Security,
from receiving compensation benefits Medicare and maternity benefits,
for all other claims, arising from
knowingly concealing his pre-existing employer-employee relations,
illness including those of persons in
of diabetes. domestic or household service,
involving an amount exceeding five
• Notwithstanding that his failure to thousand pesos (P5,000.00)
report within 3-days is excusable, regardless of whether accompanied
Margarito is still disqualified from with a claim for reinstatement.
receiving any compensation or x x x.35chanrobleslaw
benefits for his illness because he
did not disclose during his PEME While we have upheld the present trend to
that he was suffering from refer worker-employer controversies to
diabetes. labor courts in light of the aforequoted
• Indophil Textile Mills, Inc. Vs. Engr. provision, we have also recognized that
Salvador Adviento   G.R. No. 171212. not all claims involving employees can be
August 4, 2014 resolved solely by our labor courts,
The jurisdiction of the LA and the NLRC is specifically when the law provides
99
otherwise.36 For this reason, we have article.43 Only if there is such a

formulated the “reasonable causal connection with the other claims can a
connection rule,” wherein if there is a claim for damages be considered as
reasonable causal connection between the arising from employer-employee
claim asserted and the employer- relations.44cralawred
employee relations, then the case is within
the jurisdiction of the labor courts; and in In the case at bench, we find that such
the absence thereof, it is the regular connection is nil.
courts that have jurisdiction.37 Such
distinction is apt since it cannot be True, the maintenance of a safe and
presumed that money claims of workers healthy workplace is ordinarily a subject of
which do not arise out of or in connection labor cases. More, the acts complained of
with their employer-employee appear to constitute matters involving
relationship, and which would therefore employee-employer relations since
fall within the general jurisdiction of the respondent used to be the Civil Engineer
regular courts of justice, were intended by of petitioner. However, it should be
the legislative authority to be taken away stressed that respondent’s claim for
from the jurisdiction of the courts and damages is specifically grounded on
lodged with Labor Arbiters on an exclusive petitioner’s gross negligence to provide a
basis.38cralawred safe, healthy and workable environment
for its employees - a case of quasi-delict.
In fact, as early as Medina vs. Hon.
Castro-Bartolome,39 in negating the In the case at bar, respondent alleges that
jurisdiction of the LA, although the parties due to the continued and prolonged
involved were an employer and two exposure to textile dust seriously inimical
employees, the Court succinctly held to his health, he suffered work-contracted
that:chanRoblesvirtualLawlibrary disease which is now irreversible and
incurable, and deprived him of job
The pivotal question to Our mind is opportunities.52 Clearly, injury and
whether or not the Labor Code has any damages were allegedly suffered by
relevance to the reliefs sought by the respondent, an element of quasi-
plaintiffs. For if the Labor Code has no delict. Secondly, the previous contract of
relevance, any discussion concerning employment between petitioner and
the statutes amending it and whether respondent cannot be used to counter the
or not they have retroactive effect is element of “no pre-existing contractual
unnecessary. relation” since petitioner’s alleged gross
negligence in maintaining a hazardous
It is obvious from the complaint that the work environment cannot be considered a
plaintiffs have not alleged any unfair labor mere breach of such contract of
practice. Theirs is a simple action for employment, but falls squarely within the
damages for tortious acts allegedly elements of quasi-delict under Article
committed by the defendants. Such 2176 of the Civil Code since the
being the case, the governing statute negligence is direct, substantive and
is the Civil Code and not the Labor independent
Code. It results that the orders under
review are based on a wrong premise.40 It also bears stressing that respondent is
not praying for any relief under the Labor
Indeed, jurisprudence has evolved the Code of the Philippines. He neither claims
rule that claims for damages under Article for reinstatement nor backwages or
217(a)(4) of the Labor Code, to be separation pay resulting from an illegal
cognizable by the LA, must have a termination. The cause of action herein
reasonable causal connection with any of pertains to the consequence of petitioner’s
the claims provided for in that omission which led to a work-related
10
0 COMPILATION OF SUPREME COURT DECISIONS
disease suffered by respondent, causing dreams. It is our duty, given the

harm or damage to his person. Such facts and the law, to approximate
cause of action is within the realm of Civil justice for her.
Law, and jurisdiction over the controversy •
belongs to the regular courts.56cralawred Sameer Overseas Placement Agency failed
to show that there was just cause for
Where the resolution of the dispute causing Joy’s dismissal. The employer,
requires expertise, not in labor Wacoal, also failed to accord her due
management relations nor in wage process of law.
structures and other terms and conditions
of employment, but rather in the Indeed, employers have the prerogative to
application of the general civil law, such impose productivity and quality standards
claim falls outside the area of competence at work.58 They may also impose
of expertise ordinarily ascribed to the LA reasonable rules to ensure that the
and the NLRC.59cralawred employees comply with these standards.59
Failure to comply may be a just cause for
their dismissal.60 Certainly, employers
• Conrado A. Lim Vs. HMR Philippines, Inc., cannot be compelled to retain the services
et al. G.R. No. 201483. August 4, 2014 of an employee who is guilty of acts that
• article 279 of the Labor Code is are inimical to the interest of the
clear in providing that an illegally employer.61 While the law acknowledges
dismissed employee is entitled to the plight and vulnerability of workers, it
his full backwages computed from does not “authorize the oppression or self-
the time his compensation was destruction of the employer.”62
withheld up to the time of his Management prerogative is recognized in
actual reinstatement, to law and in our jurisprudence.
wit:chanRoblesvirtualLawlibrary
• This prerogative, however, should not be
• Art. 279. Security of tenure. In abused. It is “tempered with the
cases of regular employment, the employee’s right to security of tenure.” 63
employer shall not terminate the Workers are entitled to substantive and
services of an employee except for procedural due process before
a just cause or when authorized by termination. They may not be removed
this Title. An employee who is from employment without a valid or just
unjustly dismissed from work cause as determined by law and without
shall be entitled to going through the proper procedure.
reinstatement without loss of
seniority rights and other Security of tenure for labor is guaranteed
privileges and to his full by our Constitution.64cralawred
backwages, inclusive of
allowances, and to his other Employees are not stripped of their
benefits or their monetary security of tenure when they move to
equivalent computed from the work in a different jurisdiction. With
time his compensation was respect to the rights of overseas Filipino
withheld from him up to the workers, we follow the principle of lex loci
time of his actual contractus. the law of the place where
reinstatement. the contract is made)
• Sameer Oversees Placement Agency, Inc.
Vs. Joy C. Cabiles   G.R. No. 170139. By our laws, overseas Filipino workers
August 5, 2014 Concurring and Dissenting (OFWs) may only be terminated for a just
Opinion J. Brion  or authorized cause and after compliance
• This case involves an overseas with procedural due process requirements.
Filipino worker with shattered
10
Petitioner’s allegation that respondent was together with attorney’s fees and
inefficient in her work and negligent in her reimbursement of amounts withheld from
duties69 may, therefore, constitute a just her salary.
cause for termination under Article
282(b), but only if petitioner was able to Section 10 of Republic Act No. 8042,
prove it. otherwise known as the Migrant Workers
and Overseas Filipinos Act of 1995, states
The burden of proving that there is just that overseas workers who were
cause for termination is on the employer. terminated without just, valid, or
“The employer must affirmatively show authorized cause “shall be entitled to the
rationally adequate evidence that the full reimbursement of his placement fee
dismissal was for a justifiable cause.”70 with interest of twelve (12%) per annum,
Failure to show that there was valid or plus his salaries for the unexpired portion
just cause for termination would of his employment contract or for three
necessarily mean that the dismissal was (3) months for every year of the
illegal.71cralawred unexpired term, whichever is less.”
To show that dismissal resulting from We uphold the finding that respondent is
inefficiency in work is valid, it must be entitled to all of these awards. The award
shown that: 1) the employer has set of the three-month equivalent of
standards of conduct and workmanship respondent’s salary should, however,
against which the employee will be be increased to the amount
judged; 2) the standards of conduct and equivalent to the unexpired term of
workmanship must have been the employment contract.
communicated to the employee; and 3)
the communication was made at a In Serrano v. Gallant Maritime Services,
reasonable time prior to the employee’s Inc. and Marlow Navigation Co., Inc.,82
performance assessment. this court ruled that the clause “or for
three (3) months for every year of the
In this case, petitioner merely alleged that unexpired term, whichever is less”83 is
respondent failed to comply with her unconstitutional for violating the equal
foreign employer’s work requirements and protection clause and substantive due
was inefficient in her work.74No evidence process.84cralawred
was shown to support such allegations.
Petitioner did not even bother to specify A statute or provision which was declared
what requirements were not met, what unconstitutional is not a law. It “confers
efficiency standards were violated, or no rights; it imposes no duties; it affords
what particular acts of respondent no protection; it creates no office; it is
constituted inefficiency. inoperative as if it has not been passed at
all.”85cralawred
There was also no showing that
respondent was sufficiently informed of We are aware that the clause “or for three
the standards against which her work (3) months for every year of the
efficiency and performance were judged. unexpired term, whichever is less” was
The parties’ conflict as to the position reinstated in Republic Act No. 8042 upon
held by respondent showed that even promulgation of Republic Act No. 10022 in
the matter as basic as the job title 2010. Republic Act No. 10022 was
was not clear. promulgated on March 8, 2010. This
means that the reinstatement of the
Respondent Joy Cabiles, having been clause in Republic Act No. 8042 was not
illegally dismissed, is entitled to her salary yet in effect at the time of respondent’s
for the unexpired portion of the termination from work in 1997.86 Republic
employment contract that was violated Act No. 8042 before it was amended by
10
Republic Act No. 10022 governs this case. Constitution, the nullity cannot be cured
by reincorporation or reenactment of the
When a law is passed, this court awaits an same or a similar law or provision. A law
actual case that clearly raises adversarial or provision of law that was already
positions in their proper context before declared unconstitutional remains as such
considering a prayer to declare it as unless circumstances have so changed as
unconstitutional. to warrant a reverse conclusion.
However, we are confronted with a unique We reiterate our finding in Serrano v.

situation. The law passed incorporates the Gallant Maritime that limiting wages
exact clause already declared as that should be recovered by an
unconstitutional, without any perceived illegally dismissed overseas worker to
substantial change in the circumstances. three months is both a violation of
due process and the equal protection
This may cause confusion on the part of clauses of the Constitution.
the National Labor Relations Commission
and the Court of Appeals. At minimum, Equal protection of the law is a guarantee
the existence of Republic Act No. 10022 that persons under like circumstances and
may delay the execution of the judgment falling within the same class are treated
in this case, further frustrating remedies alike, in terms of “privileges conferred and
to assuage the wrong done to petitioner. liabilities enforced.”97 It is a guarantee
Hence, there is a necessity to decide this against “undue favor and individual or
constitutional issue. class privilege, as well as hostile
discrimination or the oppression of
Moreover, this court is possessed with the inequality.”98cralawr
constitutional duty to “[p]romulgate rules
concerning the protection and Overseas workers regardless of their
enforcement of constitutional rights.”87 classifications are entitled to security of
When cases become moot and academic, tenure, at least for the period agreed upon
we do not hesitate to provide for guidance in their contracts. This means that they
to bench and bar in situations where the cannot be dismissed before the end of
same violations are capable of repetition their contract terms without due process.
but will evade review. This is analogous to If they were illegally dismissed, the
cases where there are millions of Filipinos workers’ right to security of tenure is
working abroad who are bound to suffer violated.
from the lack of protection because of the
restoration of an identical clause in a The rights violated when, say, a fixed-
provision previously declared as period local worker is illegally terminated
unconstitutional. are neither greater than nor less than the
rights violated when a fixed-period
In the hierarchy of laws, the Constitution overseas worker is illegally terminated. It
is supreme. No branch or office of the is state policy to protect the rights of
government may exercise its powers in workers without qualification as to the
any manner inconsistent with the place of employment.119 In both cases, the
Constitution, regardless of the existence workers are deprived of their expected
of any law that supports such exercise. salary, which they could have earned had
The Constitution cannot be trumped by they not been illegally dismissed. For both
any other law. All laws must be read in workers, this deprivation translates to
light of the Constitution. Any law that is economic insecurity and disparity.120 The
inconsistent with it is a nullity. same is true for the distinctions between
overseas workers with an employment
Thus, when a law or a provision of law is contract of less than one year and
null because it is inconsistent with the overseas workers with at least one year of
10
employment contract, and between incompetence, and negligence in

overseas workers with at least a year left the keeping of school or student
in their contracts and overseas workers records, or tampering with or
with less than a year left in their contracts falsification of records.
when they were illegally dismissed. •
• As we already held, gross
For this reason, we cannot subscribe to inefficiency is closely related to
the argument that “[overseas workers] gross neglect because both involve
are contractual employees who can never specific acts of omission resulting
acquire regular employment status, unlike in damage to another.17 Gross
local workers”121 because it already neglect of duty or gross negligence
justifies differentiated treatment in terms refers to negligence characterized
of the computation of money claims. by the want of even slight care,
acting or omitting to act in a
Putting a cap on the money claims of situation where there is a duty to
certain overseas workers does not act, not inadvertently but willfully
increase the standard of protection and intentionally, with a conscious
afforded to them. On the other hand, indifference to consequences
foreign employers are more incentivized insofar as other persons may be
by the reinstated clause to enter into affected.18cralawred
contracts of at least a year because it •
gives them more flexibility to violate our • As borne by the records,
overseas workers’ rights. Their liability for petitioner’s actions fall within the
arbitrarily terminating overseas workers is purview of the above-definitions.
decreased at the expense of the workers Petitioner failed to diligently
whose rights they violated. Meanwhile, perform her duties. It was
these overseas workers who are unrefuted that: (1) there were
impressed with an expectation of a stable dates when a medical examination
job overseas for the longer contract period was supposed to have been
disregard other opportunities only to be conducted and yet the dates fell on
terminated earlier. They are left with weekends; (2) failure to conduct
claims that are less than what others in medical examination on all
the same situation would receive. The students for two (2) to five (5)
reinstated clause, therefore, creates a consecutive years; (3) lack of
situation where the law meant to protect medical records on all students;
them makes violation of rights easier and and (4) students having medical
simply benign to the violator. records prior to their enrollment.
• Dr. Phylis C. Rio Vs. Colegio De Sta. Rosa- • Our Haus Realty Development Corporation
Makati and/or Sr. Marilyn B. Gustilo  Vs. Alexander Parian, et al.  G.R. No.
G.R. No. 189629. August 6, 2014 204651. August 6, 2014
• the antecedents of the letter dated No substantial distinction between
30 July 2002 show that respondent deducting and charging a facility’s
Colegio de Sta. Rosa-Makati had value from the employee’s wage;
enough reason to, as it did, the legal requirements for
terminate the services of creditability
petitioner. apply to both
•
• Based on Article 282 of the Labor To justify its non-compliance with the
Code,15 in relation to Section 94 of requirements for the deductibility of a
the 1992 Manual of Regulations for facility, Our Haus asks us to believe that
Private Schools,16 petitioner was there is a substantial distinction between
legally dismissed on the ground of the deduction and the charging of a
gross inefficiency and facility’s value to the wages. Our Haus
10
explains that in deduction, the amount of salaries.41 To comply with this, Our Haus
the wage (which may already be below presented in its motion for reconsideration
the minimum) would still be lessened by with the NLRC the joint sinumpaang
the facility’s value, thus needing the salaysay of four of its alleged employees.
employee’s consent. On the other hand, in These employees averred that they were
charging, there is no reduction of the recipients of free lodging, electricity and
employee’s wage since the facility’s value water, as well as subsidized meals from
will just be theoretically added to the Our Haus.42cralawred
wage for purposes of complying with the
minimum wage requirement.39cralawred We agree with the NLRC’s finding that the
sinumpaang salaysay statements
Our Haus’ argument is a vain attempt to submitted by Our Haus are self-serving.
circumvent the minimum wage law by For one, Our Haus only produced the
trying to create a distinction where none documents when the NLRC had already
exists. earlier determined that Our Haus failed to
prove that it was traditionally giving the
In reality, deduction and charging both respondents their board and lodging. This
operate to lessen the actual take- document did not state whether these
home pay of an employee; they are two benefits had been consistently enjoyed by
sides of the same coin. In both, the the rest of Our Haus’ employees.
employee receives a lessened amount Moreover, the records reveal that the
because supposedly, the facility’s value, board and lodging were given on a per
which is part of his wage, had already project basis. Our Haus did not show if
been paid to him in kind. As there is no these benefits were also provided in its
substantial distinction between the two, other construction projects, thus negating
the requirements set by law must apply to its claimed customary nature.
both.
Even assuming the sinumpaang salaysay
As the CA correctly ruled, these to be true, this document would still work
requirements, as summarized in Mabeza, against Our Haus’ case. If Our Haus really
are the had the practice of freely giving lodging,
following:chanRoblesvirtualLawlibrary electricity and water provisions to its
employees, then Our Haus should not
• proof must be shown that such facilities deduct its values from the respondents’
are customarily furnished by wages. Otherwise, this will run contrary to
the trade; the affiants’ claim that these benefits were
• the provision of deductible facilities traditionally given free of charge.
must be voluntarily accepted in
writing by the employee; and Apart from company policy, the employer
• The facilities must be charged at fair may also prove compliance with the first
and reasonable value.40 requirement by showing the existence of
an industry-wide practice of
We examine Our Haus’ compliance with furnishing the benefits in question
each of these requirements in seriatim. among enterprises engaged in the
The facility must be customarily same line of business. If it were
furnished by the trade customary among construction companies
In a string of cases, we have concluded to provide board and lodging to their
that one of the badges to show that a workers and treat their values as part of
facility is customarily furnished by the their wages, we would have more reason
trade is the existence of a company to conclude that these benefits were really
policy or guideline showing that facilities.
provisions for a facility were As part of the project cost that
designated as part of the employees’ construction companies already charge to
10
their clients, the value of the housing of top of their basic pay and are free of
their workers cannot be charged again to charge.48 Since it does not form part of
their employees’ salaries. Our Haus the wage, a supplement’s value may not
cannot pass the burden of the OSH costs be included in the determination of
of its construction projects to its whether an employer complied with the
employees by deducting it as facilities. prescribed minimum wage rates.
This is Our Haus’ obligation under the law.
In the present case, the board and lodging
Lastly, even if a benefit is customarily provided by Our Haus cannot be
provided by the trade, it must still pass categorized as facilities but as
the purpose test set by jurisprudence. supplements. In SLL International Cables
Under this test, if a benefit or privilege Specialist v. National Labor Relations
granted to the employee is clearly for the Commission,49 this Court was confronted
employer’s convenience, it will not be with the issue on the proper
considered as a facility but a characterization of the free board and
supplement.45 Here, careful consideration lodging provided by the employer. We
is given to the nature of the employer’s explained:chanRoblesvirtualLawlibrary
business in relation to the work performed
by the employee. This test is used to The Court, at this point, makes a
address inequitable situations wherein distinction between “facilities” and
employers consider a benefit deductible “supplements”. It is of the view that the
from the wages even if the factual food and lodging, or the electricity and
circumstances show that it clearly water allegedly consumed by private
redounds to the employers’ greater respondents in this case were not facilities
advantage. but supplements. In the case of Atok-Big
Wedge Assn. v. Atok-Big Wedge Co., the
While the rules serve as the initial test in two terms were distinguished from one
characterizing a benefit as a facility, the another in this wise:cralawlawlibrary
purpose test additionally recognizes that
the employer and the employee do not “Supplements”, therefore, constitute extra
stand at the same bargaining positions on remuneration or special privileges or
benefits that must or must not form part benefits given to or received by the
of an employee’s wage. In the ultimate laborers over and above their ordinary
analysis, the purpose test seeks to earnings or wages. “Facilities”, on the
prevent a circumvention of the minimum other hand, are items of expense
wage law. necessary for the laborer's and his family's
a1. The purpose test in jurisprudence existence and subsistence so that by
Under the law,46 only the value of the express provision of law (Sec. 2[g]), they
facilities may be deducted from the form part of the wage and when furnished
employees’ wages but not the value of by the employer are deductible therefrom,
supplements. Facilities include articles or since if they are not so furnished, the
services for the benefit of the employee or laborer would spend and pay for them just
his family but exclude tools of the trade or the same.
articles or services primarily for the
benefit of the employer or necessary to In short, the benefit or privilege given to
the conduct of the employer’s the employee which constitutes an extra
business.47cralawred remuneration above and over his basic or
ordinary earning or wage is supplement;
The law also prescribes that the and when said benefit or privilege is part
computation of wages shall exclude of the laborers' basic wages, it is a facility.
whatever benefits, supplements or The distinction lies not so much in the
allowances given to employees. kind of benefit or item (food, lodging,
Supplements are paid to employees on bonus or sick leave) given, but in the
10
purpose for which it is given. In the performed continuously, day and night, in
case at bench, the items provided were order to finish the project on the
given freely by SLL for the purpose of designated turn-over date. Thus, it will be
maintaining the efficiency and health more convenient to the employer if its
of its workers while they were workers are housed near the construction
working at their respective projects.50 site to ensure their ready availability
during urgent or emergency
Ultimately, the real difference lies not on circumstances. Also, productivity issues
the kind of the benefit but on the like tardiness and unexpected absences
purpose why it was given by the would be minimized. This observation
employer. If it is primarily for the strongly bears in the present case since
employee’s gain, then the benefit is a three of the respondents are not residents
facility; if its provision is mainly for the of the National Capital Region. The board
employer’s advantage, then it is a and lodging provision might have been a
supplement. Again, this is to ensure that substantial consideration in their
employees are protected in circumstances acceptance of employment in a place
where the employer designates a benefit distant from their provincial residences.
as deductible from the wages even though
it clearly works to the employer’s greater Based on these considerations, we
convenience or advantage. conclude that even under the purpose
test, the subsidized meals and free
Under the purpose test, substantial lodging provided by Our Haus are actually
consideration must be given to the nature supplements. Although they also work to
of the employer’s business in relation to benefit the respondents, an analysis of the
the character or type of work performed nature of these benefits in relation to Our
by the employees involved. Haus’ business shows that they were
given primarily for Our Haus’ greater
Our Haus is engaged in the construction convenience and advantage. If weighed on
business, a labor-intensive enterprise. The a scale, the balance tilts more towards
success of its projects is largely a function Our Haus’ side. Accordingly, their values
of the physical strength, vitality and cannot be considered in computing the
efficiency of its laborers. Its business will total amount of the respondents’ wages.
be jeopardized if its workers are weak, The provision of deductible facilities
sickly, and lack the required energy to must be voluntarily accepted in
perform strenuous physical activities. writing
Thus, by ensuring that the workers are by the employee In Mayon Hotel, we
adequately and well fed, the employer is reiterated that a facility may only be
actually investing on its business. deducted from the wage if the employer
was authorized in writing by the
Unlike in office enterprises where the work concerned employee.51 As it diminishes
is focused on desk jobs, the construction the take-home pay of an employee, the
industry relies heavily and directly on the deduction must be with his express
physical capacity and endurance of its consent.
workers. This is not to say that desk jobs
do not require muscle strength; we simply Again, in the motion for reconsideration
emphasize that in the construction with the NLRC, Our Haus belatedly
business, bulk of the work performed are submitted five kasunduans, supposedly
strenuous physical activities. executed by the respondents, containing
their conformity to the inclusion of the
Moreover, in the construction business, values of the meals and housing to their
contractors are usually faced with the total wages. Oddly, Our Haus only offered
problem of meeting target these documents when the NLRC had
deadlines. More often than not, work is already ruled that respondents did not
10
accomplish any written authorization, to records, receipts and other relevant

allow deduction from their wages. These documents, where he could have, as has
five kasunduans were also undated, been pointed out in the Solicitor General's
making us wonder if they had really been manifestation, “secured certified copies
executed when respondents first assumed thereof from the nearest regional
their jobs. office of the Department of Labor, the
SSS or the BIR”.52 [emphasis ours]
Moreover, in the earlier sinumpaang
salaysay by Our Haus’ four employees, it In the present case, Our Haus never
was not mentioned that they also explained how it came up with the
executed a kasunduan for their board and values it assigned for the benefits it
lodging benefits. Because of these provided; it merely listed its supposed
surrounding circumstances and the expenses without any supporting
suspicious timing when the five document. Since Our Haus is using these
kasunduans were submitted as evidence, additional expenses (cook’s salary, water
we agree with the CA that the NLRC and LPG) to support its claim that it did
committed no grave abuse of discretion in not withhold the full amount of the meals’
disregarding these documents for being value, Our Haus is burdened to present
self serving. evidence to corroborate its claim. The
The facility must be charged at records however, are bereft of any
a fair and reasonable value Our Haus evidence to support Our Haus’ meal
admitted that it deducted the amount of expense computation. Even the value it
P290.00 per week from each of the assigned for the respondents’ living
respondents for their meals. But it now accommodations was not supported by
submits that it did not actually withhold any documentary evidence. Without any
the entire amount as it did not figure in corroborative evidence, it cannot be said
the computation the money it expended that Our Haus complied with this third
for the salary of the cook, the water, and requisite.
the LPG used for cooking, which amounts
to P249.40 per week per person. From • Benson Industries Employees Union-ALU-
these, it appears that the total meal TUCP and/or Vilma Genon, et al. Vs.
expense per week for each person is Benson Industries, Inc.   G.R. No.
P529.40, making Our Haus’ P290.00 200746. August 6, 2014
deduction within the 70% ceiling Closure of business may be considered as
prescribed by the rules. a reversal of an employer’s fortune
whereby there is a complete cessation of
However, Our Haus’ valuation cannot be business operations and/or an actual
plucked out of thin air. The valuation of a locking-up of the doors of the
facility must be supported by relevant establishment, usually due to financial
documents such as receipts and losses. Under the Labor Code, it is treated
company records for it to be considered as an authorized cause for termination,
as fair and reasonable. In Mabeza, we aimed at preventing further financial drain
noted:chanRoblesvirtualLawlibrary upon an employer who cannot anymore
pay its employees since business has
Curiously, in the case at bench, the only already stopped. As a form of
valuations relied upon by the labor recompense, the employer is required to
arbiter in his decision were figures pay its employees separation benefits,
furnished by the private respondent's except when the closure is due to
own accountant, without serious business losses.1
corroborative evidence. On the pretext While serious business losses generally
that records prior to the July 16, 1990 exempt the employer from paying
earthquake were lost or destroyed, separation benefits, it must be pointed
respondent failed to produce payroll that the exemption only pertains to the
10
obligation of the employer under Article an examination of the latter’s provisions

297 of the Labor Code. This is because of becomes necessary in order to determine
the law’s express parameter that the governing parameters for the said
mandates payment of separation benefits obligation. To reiterate, an employer
“in case of closures or cessation of which closes shop due to serious business
operations of establishment or losses is exempt from paying separation
undertaking not due to serious benefits under Article 297 of the Labor
business losses or financial reverses.” Code for the reason that the said provision
The policy distinction underlying Article explicitly requires the same only when the
297 – that is, the distinction between closure is not due to serious business
closures due to serious business losses losses; conversely, the obligation is
and those which are not – was deftly maintained when the employer’s closure is
discussed by the Court in the case of not due to serious business losses. For a
Cama v. Joni’s Food Services, Inc.,21 as similar exemption to obtain against a
follows:chanRoblesvirtualLawlibrary contract, such as a CBA, the tenor of the
parties’ agreement ought to be similar to
The Constitution, while affording full the law’s tenor. When the parties,
protection to labor, nonetheless, however, agree to deviate therefrom, and
recognizes “the right of enterprises to unqualifiedly covenant the payment of
reasonable returns on investments, and to separation benefits irrespective of the
expansion and growth.” In line with this employer’s financial position, then the
protection afforded to business by the obligatory force of that contract prevails
fundamental law, Article 283 [(now, and its terms should be carried out to its
Article 297)] of the Labor Code clearly full effect. Verily, it is fundamental that
makes a policy distinction. It is only in obligations arising from contracts have the
instances of “retrenchment to prevent force of law between the contracting
losses and in cases of closures or parties and thus should be complied with
cessation of operations of in good faith;24 and parties are bound by
establishment or undertaking not due the stipulations, clauses, terms and
to serious business losses or financial conditions they have agreed to, the only
reverses” that employees whose limitation being that these stipulations,
employment has been terminated as a clauses, terms and conditions are not
result are entitled to separation pay. In contrary to law, morals, public order or
other words, Article 283 [(now, Article public policy.25 Hence, if the terms of a
297)] of the Labor Code does not obligate CBA are clear and there is no doubt as to
an employer to pay separation benefits the intention of the contracting parties,
when the closure is due to serious losses. the literal meaning of its stipulations shall
To require an employer to be generous prevail.
when it is no longer in a position to do so, In this case, it is undisputed that a CBA
in our view, would be unduly oppressive, was forged by the employer, Benson, and
unjust, and unfair to the employer. Ours its employees, through the Union, to
is a system of laws, and the law in govern their relations effective July 1,
protecting the rights of the working man, 2005 to June 30, 2010. It is equally
authorizes neither the oppression nor the undisputed that Benson agreed to and was
self-destruction of the employer. x x x. 22 thus obligated under the CBA to pay its
(Emphasis supplied) employees who had been terminated
without any fault attributable to them
When the obligation to pay separation separation benefits at the rate of 19 days
benefits, however, is not sourced from law for every year of service.
(particularly, Article 297 of the Labor
Code), but from contract,23 such as an Thus, in view of the foregoing, the Court
existing collective bargaining agreement disagrees with the CA in negating
between the employer and its employees, Benson’s obligation to pay petitioners their
10
full separation benefits under the said upon sign-off from his vessel, must report
agreement. The postulation that Benson to the company-designated physician
had closed its establishment and ceased within three (3) days from arrival for
operations due to serious business losses diagnosis and treatment. For the
cannot be accepted as an excuse to clear duration of the treatment but in no
itself of any liability since the ground of case to exceed 120 days, the seaman
serious business losses is not, unlike is on temporary total disability as he is
Article 297 of the Labor Code, considered totally unable to work. He receives his
as an exculpatory parameter under the basic wage during this period until he is
aforementioned CBA. Clearly, Benson, declared fit to work or his temporary
with full knowledge of its financial disability is acknowledged by the company
situation, freely and voluntarily entered to be permanent, either partially or
into such agreement with petitioners. totally, as his condition is defined under
Hence, having failed to show that the the POEA Standard Employment Contract
subject CBA provision on separation and by applicable Philippine laws. If the
benefits is contrary to law, morals, public 120 days initial period is exceeded and no
order or public policy, or that the same such declaration is made because the
can be interpreted as one with a condition seafarer requires further medical
– for instance, that the parties actually attention, then the temporary total
contemplated non-payment of separation disability period may be extended up to a
benefits in the event of closure due to maximum of 240 days, subject to the
serious business losses – the Court is right of the employer to declare within this
constrained to reinstate the October 24, period that a permanent partial or total
2008 VA Decision ordering Benson to pay disability already exists. The seaman may
each of the petitioners separation benefits of course also be declared fit to work at
in “an amount equivalent to four (4) days any time such declaration is justified by
for every year of service based on the his medical condition.
latest rate of pay of the [individual
petitioner] concerned, subject to whatever In other words, the mere lapse of the
legally valid deductions chargeable against 120-day period itself does not
[said individual petitioner], whenever automatically warrant the payment of
applicable.”33cralawred permanent total disability
• OSG Shipmanagement Manila Inc., benefits. Hence, the NLRC could not have
Mercedes M. Ravanopolous, OSG gravely abused its discretion in not
Shipmanagement (UK) Ltd. and M/T granting Pellazar permanent total
Delphina Vs. Joselito B. Pellazar G.R. disability benefits based on this as the
No. 198367. August 6, 2014 entitlement to disability is governed not
• A. Disability benefits as a by the period of disability per se but by
matter of contract and law the specific provisions of the law and
• Mere lapse of the 120 day contract. It must be observed that
period does Pellazar continued to undergo medical
• not warrant payment of treatment under the care of the
permanent petitioners’ company designated doctors
• total disability benefits until he was finally given a Grade 10
In Vergara v. Hammonia Maritime disability in August 2006.
Services,22 the Court interpreted the
interplay of these legal and contractual Under the CBA and the POEA-SEC, it is the
provisions relating to the kind of disability company-designated physician who shall
recognized and the period involved. The determine a seafarer’s disability or his
Court fitness to work. In granting Pellazar a
observed:chanRoblesvirtualLawlibrary Grade 10 disability rating in accordance
with the finding of the company
As these provisions operate, the seafarer, designated physician, the NLRC simply
11
observed the provisions of the parties’ medical attention which resulted in

POEA-SEC. For this reason, no grave the discovery of his pneumonia and
abuse of discretion can similarly be cancer of the lungs, it cannot be
imputed against the NLRC. hastily assumed that it was
It has been the consistent pronouncement likewise the cause of his
of this Court that the determination of just disease. Indeed, one’s
compensation is basically a judicial predisposition to develop cancer is
function. Also, it is settled that in the affected not only by one’s work,
computation of just compensation for land but also by many factors outside of
taken for agrarian reform, both Section 17 one’s working environment. In the
of Republic Act No. 6657 (RA 6657 or the absence of substantial evidence,
Comprehensive Agrarian Reform Law of Dovee Yap’s accidental slip on
1988/CARL) and the formula prescribed in board the vessel cannot be
the applicable Administrative Order of the automatically believed to have
Department of Agrarian Reform (DAR) increased his risk of contracting
should be considered. lung cancer.42cralawred
•
• Wallem Maritime Services, Inc., and • Hence, while it is true that labor
Reginaldo Oben/Wallem contracts are impressed with public
Shipmanagement Limited Vs. interest and that the provisions of
Donnabelle Pedrajas and Sean Jade the POEA Standard Employment
Pedrajas   G.R. No. 192993. August 11, Contract must be construed
2014 logically and liberally in favor of
The death of a seaman during the term of Filipino seamen in the pursuit of
his employment makes the employer their employment on board ocean-
liable to the former's heirs for death going vessels, still the rule is that
compensation benefits.10 This rule, justice is in every case for the
however, is not absolute. The employer deserving, to be dispensed with in
may be exempt from liability if it can the light of established facts, the
successfully prove that the seaman's applicable law, and existing
death was caused by an injury directly jurisprudence.4
attributable to his deliberate or willful • Lei Sheryll Fernandez Vs. Botica Claudio,
act.11 Hence, respondents' entitlement to represented by Guadalupe Jose   G.R.
any death benefit depends on whether No. 205870. August 13, 2014
petitioners' evidence suffices to prove that • While Article 22347 of the Labor
Hernani committed suicide, and the Code and Section 3(a), Rule VI of
burden of proof rests on his the then New Rules of Procedure of
employer.12cralawred the NLRC48 require the party
intending to appeal from the LA’s
Since the petitioners were able to prove ruling to furnish the other party a
that Hernani committed suicide, Hernani’s copy of his memorandum of
death is not compensable and his heirs appeal, the Court has held that the
are not entitled to any compensation or mere failure to serve the same
benefits. It is settled that when the death upon the opposing party does not
of a seaman resulted from a deliberate or bar the NLRC from giving due
willful act on his own life, and it is directly course to an appeal.49 Such failure
attributable to the seaman, such death is is only treated as a formal lapse,
not compensable.24cralawred an excusable neglect, and, hence,
• Remedios O. Yap Vs. Rover Maritime not a jurisdictional defect
Services Corporation, et al.   G.R. No. warranting the dismissal of an
198342. August 13, 2014 appeal.50 Instead, the NLRC should
• While the accident may have led require the appellant to provide the
petitioner’s husband to seek opposing party copies of the notice
11
of appeal and memorandum of barred.

appeal.51cralawred
• Article 291 covers claims for overtime
• In this case, however, the NLRC pay,43 holiday pay,44 service incentive
could not be expected to require leave pay,45 bonuses,46 salary
compliance from Fernandez, the differentials,47 and illegal deductions by an
appellant, since it was not aware employer.48 It also covers money claims
that the opposing party, Jose, was arising from seafarer contracts.49cralawred
not notified of her appeal. Hence, it
cannot be faulted in relying on The provision, however, does not cover
Fernandez’s representation that “money claims” consequent to an illegal
she had sent Jose, through her dismissal such as backwages. It also does
counsel, a copy of her not cover claims for damages due to
memorandum of appeal by illegal dismissal. These claims are
registered mail,52 as evidenced by governed by Article 1146 of the Civil Code
Registry Receipt No. of the Philippines, which
006511.53cralawred provides:ChanRoblesVirtualawlibrary
• George A. Arriola Vs. Pilipino Star Ngayon,
Inc., et al. G.R. No. 175689. August 13, Art. 1146. The following actions must be
2014 instituted within four
The prescriptive period for filing an illegal years:ChanRoblesVirtualawlibrary
dismissal complaint is four years from the
time the cause of action accrued. This (1) Upon injury to the rights of the
four-year prescriptive period, not the plaintiff[.]
three-year period for filing money claims This court ruled that Callanta’s complaint
under Article 291 of the Labor Code, for illegal dismissal had not yet
applies to claims for backwages and prescribed. Although illegal dismissal is a
damages due to illegal dismissal. violation of the Labor Code, it is not the
Arriola’s claims for backwages and “offense” contemplated in Article
damages have not yet prescribed 290.56 Article 290 refers to illegal acts
when penalized under the Labor Code, including
he filed his complaint with the committing any of the prohibited activities
National during strikes or lockouts, unfair labor
Labor Relations Commission practices, and illegal recruitment
activities.57 The three-year prescriptive
The Labor Arbiter, the National Labor period under Article 290, therefore, does
Relations Commission, and the Court of not apply to complaints for illegal
Appeals all ruled that Arriola’s claims for dismissal.
unpaid salaries, backwages, damages, and
attorney’s fees have prescribed. They Instead, “by way of supplement,”58 Article
cited Article 291 of the Labor Code, which 1146 of the Civil Code of the Philippines
requires that money claims arising from governs complaints for illegal
employer-employee relations be filed dismissal. Under Article 1146, an action
within three years from the time the cause based upon an injury to the rights of a
of action plaintiff must be filed within four
accrued:ChanRoblesVirtualawlibrary years. This court
explained:ChanRoblesVirtualawlibrary
Art. 291. MONEY CLAIMS. All money
claims arising from employer-employee . . . when one is arbitrarily and unjustly
relations accruing during the effectivity of deprived of his job or means of livelihood,
this Code shall be filed within three (3) the action instituted to contest the legality
years from the time the cause of action of one's dismissal from employment
accrued; otherwise they shall be forever constitutes, in essence, an action
11
predicated “upon an injury to the rights of

the plaintiff,” as contemplated under Art. However, we find that Arriola’s claims for
1146 of the New Civil Code, which must backwages, damages, and attorney’s fees
be brought within four 4 years.59 arising from his claim of illegal dismissal
have not yet prescribed when he filed his
This four-year prescriptive period applies complaint with the Regional Arbitration
to claims for backwages, not the three- Branch for the National Capital Region of
year prescriptive period under Article 291 the National Labor Relations
of the Labor Code. A claim for Commission. As discussed, the
backwages, according to this court, may prescriptive period for filing an illegal
be a money claim “by reason of its dismissal complaint is four years from the
practical effect.”60 Legally, however, an time the cause of action accrued. Since
award of backwages “is merely one of the an award of backwages is merely
reliefs which an illegally dismissed consequent to a declaration of illegal
employee prays the labor arbiter and the dismissal, a claim for backwages likewise
NLRC to render in his favor as a prescribes in four years.
consequence of the unlawful act
committed by the employer.”61 Though it The four-year prescriptive period under
results “in the enrichment of the individual Article 1146 also applies to actions for
[illegally dismissed], the award of damages due to illegal dismissal since
backwages is not in redress of a private such actions are based on an injury to the
right, but, rather, is in the nature of a rights of the person dismissed.
command upon the employer to make
public reparation for his violation of the In this case, Arriola filed his complaint
Labor Code.”62cralawred three years and one day from his alleged
illegal dismissal. He, therefore, filed his
Actions for damages due to illegal claims for backwages, actual, moral and
dismissal are likewise actions “upon an exemplary damages, and attorney’s fees
injury to the rights of the plaintiff.” Article well within the four-year prescriptive
1146 of the Civil Code of the Philippines, period.
therefore, governs these
actions.63cralawred All told, the Court of Appeals erred in
finding that Arriola’s claims for damages
Callanta filed his complaint for illegal have already prescribed when he filed his
dismissal with claims for backwages and illegal dismissal complaint.
damages three years, one month, and five Arriola abandoned his employment
days from his termination. Thus, this with Pilipino Star Ngayon, Inc.
court ruled that Callanta filed his claims We agree that Pilipino Star Ngayon, Inc.
for backwages and damages well within did not illegally dismiss Arriola. As the
the four-year prescriptive Court of Appeals ruled, “the removal of
period.64cralawred [Arriola’s] column from private respondent
[Pilipino Star Ngayon, Inc.’s newspaper] is
Applying these principles in this case, we not tantamount to a termination of his
agree that Arriola’s claims for unpaid employment as his job is not dependent
salaries have prescribed. Arriola filed his on the existence of the column ‘Tinig ng
complaint three years and one day from Pamilyang OFWs.’”84 When Pilipino Star
the time he was allegedly dismissed and Ngayon, Inc. removed “Tinig ng Pamilyang
deprived of his salaries. Since a claim for OFWs” from publication, Arriola remained
unpaid salaries arises from employer- as section editor.
employee relations, Article 291 of the
Labor Code applies.72 Arriola’s claim for Moreover, a newspaper publisher has the
unpaid salaries was filed beyond the management prerogative to determine
three-year prescriptive period. what columns to print in its newspaper.
11
Arriola abandoned his employment with collective bargaining [agreement

Pilipino Star Ngayon, Inc. Abandonment (CBA)] and other agreements shall
is the “clear, deliberate and unjustified not be less than those provided”
refusal of an employee to continue his under the same – that is, at least
employment, without any intention of one-half (½) month salary for
returning.”87 It has two elements: first, every year of service, a fraction of
the failure to report for work or absence at least six (6) months being
without valid or justifiable reason and, considered as one whole year –
second, a clear intention to sever and that “[u]nless the parties
employer-employee relations provide for broader inclusions, the
exists.88 The second element is “the more term one-half (½) month salary
determinative factor and is manifested by shall mean fifteen (15) days plus
overt acts from which it may be deduced one-twelfth (1/12) of the 13 th
that the employee has no more intention month pay and the cash equivalent
to work.”89cralawred of not more than five (5) days of
service incentive leaves.”
Assuming that Arriola started writing for •
Imbestigador only on February 17, 2003, • The foregoing provision is
he nonetheless failed to report for work at applicable where (a) there is no
Pilipino Star Ngayon, Inc. after November CBA or other applicable agreement
15, 1999 and only filed his illegal providing for retirement benefits to
dismissal complaint on November 15, employees, or (b) there is a CBA or
2002. He took three years and one day to other applicable agreement
remedy his dismissal. This shows his providing for retirement benefits
clear intention to sever his employment but it is below the requirement set
with Pilipino Star Ngayon, Inc. by law.33 Verily, the determining
• Grace Christian High School, represented factor in choosing which retirement
by its Principal, Dr. Jame Tan Vs. scheme to apply is still superiority
Filipinas A. Lavandera   G.R. No. in terms of benefits
177845. August 20, 2014 provided.34cralawred
• The Issue before the Court •
• • In the present case, GCHS has a
• The essential issue in this case is retirement plan for its faculty and
whether or not the CA committed non-faculty members, which gives
reversible error in using the it the option to retire a teacher who
multiplier “22.5 days” in computing has rendered at least 20 years of
the retirement pay differentials of service, regardless of age, with a
Filipinas. retirement pay of one-half (½)
• month for every year of service.
• The Court’s Ruling Considering, however, that GCHS
• computed Filipinas’ retirement pay
• The petition is bereft of merit. without including one-twelfth
• (1/12) of her 13th month pay and
• RA 7641, which was enacted on the cash equivalent of her five (5)
December 9, 1992, amended days SIL, both the NLRC and the
Article 287 of the Labor Code, CA correctly ruled that Filipinas’
providing for the rules on retirement benefits should be
retirement pay to qualified private computed in accordance with
sector employees in the absence of Article 287 of the Labor Code, as
any retirement plan in the amended by RA 7641, being the
establishment. The said law32 more beneficent retirement
states that “an employee’s scheme. They differ, however, in
retirement benefits under any the resulting benefit differentials
11
due to divergent interpretations of the Secretary of Labor and Employment,

the term “one-half (½) month of food, lodging or other facilities
salary” as used under the law. customarily furnished by the employer to
• his employees. The term does not include
• The Court, in the case of Elegir v. cost of living allowance, profit-sharing
Philippine Airlines, Inc.,35 has payments and other monetary benefits
recently affirmed that “one-half which are not considered as part of or
(½) month salary means 22.5 integrated into the regular salary of the
days: 15 days plus 2.5 days employees.
representing one-twelfth
(1/12) of the 13th month pay (b) The cash equivalent of not more
and the remaining 5 days for than five (5) days of service incentive
[SIL].”36 The Court sees no reason leave;
to depart from this interpretation.
GCHS’ argument37 therefore that (c) One-twelfth of the 13th month pay
the 5 days SIL should be likewise due the employee.
pro-rated to their 1/12 equivalent
must fail. (d) All other benefits that the employer
Section 5.2, Rule II38 of the Implementing and employee may agree upon that
Rules of Book VI of the Labor Code, as should be included in the computation of
amended, promulgated to implement RA the employee’s retirement pay.
7641, further clarifies what comprises the
“½ month salary” due a retiring employee, x x x x (Emphases supplied)chanrobleslaw
to wit:chanRoblesvirtualLawlibrary
The foregoing rules are, thus, clear that
RULE II the whole 5 days of SIL are included in
Retirement Benefits the computation of a retiring employees’
pay,39 as correctly ruled by the CA.
•
xxxx
• Crispin B. Lopez Vs. Irvine Construction
SEC. 5. Retirement Benefits. Corp. and Tomas Sy Santos G.R. No.
207253. August 20, 2014
xxxx • The Issue Before the Court
•
5.2 Components of One-half (½) Month • The core issue for the Court's
Salary. — For the purpose of determining resolution is whether or not the CA
the minimum retirement pay due an erred in finding that the NLRC
employee under this Rule, the term “one- gravely abused its discretion in
half month salary” shall include all the affirming the LA's ruling that Lopez
following:cralawlawlibrary was illegally dismissed.
•
(a) Fifteen (15) days salary of the • The Court's Ruling
employee based on his latest salary •
rate. As used herein, the term “salary” • The petition is meritorious.
includes all remunerations paid by an •
employer to his employees for services • Ruling on the propriety of Irvine's
rendered during normal working days and course of action in this case
hours, whether such payments are fixed preliminarily calls for a
or ascertained on a time, task, piece or determination of Lopez's
commission basis, or other method of employment status that is, whether
calculating the same, and includes the fair Lopez was a project or a regular
and reasonable value, as determined by employee.
11
• that Lopez had been employed by

• Case law states that the principal Irvine since November 1994,32 or
test for determining whether more than 10 years from the time
particular employees are properly he was laid off on December 27,
characterized as "project 2005.33 Article 280 of the Labor
employees" as distinguished from Code provides that any employee
"regular employees," is whether or who has rendered at least one year
not the "project employees" were of service, whether such service is
assigned to carry out a "specific continuous or broken, shall be
project or undertaking," the considered a regular employee
duration and scope of which were • As a regular employee, Lopez is
specified at the time the employees entitled to security of tenure, and,
were engaged for that project. The hence, dismissible only if a just or
project could either be (1) a authorized cause exists therefor.
particular job or undertaking that is • Among the authorized causes for
within the regular or usual business termination under Article 283 of
of the employer company, but the Labor Code is retrenchment, or
which is distinct and separate, and what is sometimes referred to as a
identifiable as such, from the other "lay-off':chanRobles
undertakings of the company; or It is defined as the severance of
(2) a particular job or undertaking employment, through no fault of and
that is not within the regular without prejudice to the employee,
business of the corporation. In resorted to by management during the
order to safeguard the rights of periods of business recession, industrial
workers against the arbitrary use depression, or seasonal fluctuations, or
of the word "project" to prevent during lulls caused by lack of orders,
employees from attaining the shortage of materials, conversion of the
status of regular employees, plant to a new production program or the
employers claiming that their introduction of new methods or more
workers are project employees efficient machinery, or of automation.34
should not only prove that the Elsewise stated, lay-off is an act of the
duration and scope of the employer of dismissing employees
employment was specified at the because of losses in the operation, lack of
time they were engaged, but also work, and considerable reduction on the
that there was indeed a volume of its business, a right recognized
project.30cralawlawlibrary and affirmed by the Court.35 However, a
• lay-off would be tantamount to a dismissal
• In this case, the NLRC found that only if it is pennanent. When a lay-off is
no substantial evidence had been only temporary, the employment status of
presented by Irvine to show that the employee is not deemed terminated,
Lopez had been assigned to carry but merely suspended.36cralawlawlibrary
out a "specific project or
undertaking," with its duration and Pursuant to Article 286 of the Labor Code,
scope specified at the time of the suspension of the operation of
engagement. In view of the weight business or undertaking in a temporary
accorded by the courts to factual lay-off situation must not exceed six (6)
findings of labor tribunals such as months:37cralawlawlibrary
the NLRC, the Court, absent any • virtualLawlibraryWithin this six-
cogent reason to hold otherwise, month period, the employee should
concurs with its ruling that Lopez either be recalled or permanently
was not a project but a regular retrenched. Otherwise, the
employee.31 This conclusion is employee would be deemed to
bolstered by the undisputed fact have been dismissed, and the
11
employee held liable therefor. temporary lay-off of its employees

• Notably, in both a permanent and for a period not exceeding six (6)
temporary lay-off, jurisprudence months in accordance with Article
dictates that the one-month notice 286 of the Labor Code.
rule to both the DOLE and the In this case, Irvine failed to prove
employee under Article 283 of the compliance with the parameters of Article
Labor Code, as above cited, is 286 of the Labor Code. As the records
mandatory.40 Also, in both cases, would show, it merely completed one of
the lay-off, being an exercise of the its numerous construction projects which
employer's management does not, by and of itself, amount to a
prerogative, must be exercised in bona fide suspension of business
good faith that is, one which is operations or undertaking. In invoking
intended for the advancement of Article 286 of the Labor Code, the
employers' interest and not for the paramount consideration should be
purpose of defeating or the dire exigency of the business of
circumventing the rights of the the employer that compels it to put
employees under special laws or some of its employees temporarily
under valid agreements. out of work.51 This means that the
As the NLRC correctly ruled in this case, employer should be able to prove that it is
Lopez, who, as earlier discussed was a faced with a clear and compelling
regular employee of Irvine, was not economic reason which reasonably forces
merely temporarily laid off from work but it to temporarily shut down its business
was terminated from his employment operations or a particular undertaking,
without any valid cause therefor; thus, the incidentally resulting to the temporary lay-
proper disposition is to affirm the LA's off of its employees.
ruling that Lopez had been illegally
dismissed. • Due to the grim economic
consequences to the employee,
• Although the NLRC did not expound case law states that the employer
on the matter, it is readily should also bear the burden of
apparent that the supposed lay-off proving that there are no posts
of Lopez was hardly justified available to which the
considering the absence of any employee temporarily out of
causal relation between the work can be assigned.52
cessation of Irvine's project in • The same can be said of the
Cavite with the suspension of employee in this case as no
Lopez's work. To repeat, Lopez is a evidence was submitted by Irvine
regular and not a project to show any dire exigency which
employee. Hence, the continuation rendered it incapable of assigning
of his engagement with Irvine, Lopez to any of its projects. Add to
either in Cavite, or possibly, in any this the fact that Irvine did not
of its business locations, should not proffer any sufficient justification
have been affected by the for singling out Lopez for lay-off
culmination of the Cavite project among its other three hundred
alone. In light of the well- employees, thereby casting a cloud
entrenched rule that the burden to of doubt on Irvine's good faith in
prove the validity and legality of pursuing this course of action.
the termination of employment Verily, Irvine cannot conveniently
falls on the employer,47 Irvine suspend the work of any of its
should have established the bona employees in the guise of a
fide suspension of its business temporary lay-off when it has not
operations or undertaking that shown compliance with the legal
would have resulted in the parameters under Article 286 of
11
the Labor Code. With Irvine failing including faculty, may be

to prove such compliance, the terminated for any of the following
resulting legal conclusion is that causes:ChanRoblesVirtualawlibrary
Lopez had been constructively •
dismissed; and since the same was • xxx
effected without any valid cause •
and due process, the NLRC • b) Negligence in keeping school
properly affirmed the LA's ruling or student records, or
that Lopez's dismissal was illegal. tampering with or falsification
• Colegio De San Juan De Letran Vs. Isidra of the same;”80
Dela Rosa-Meris   G.R. No. 178837. •
September 1, 2014 • Negligence in keeping school or
• To our mind, the acts of the student records, or tampering with
respondent in altering the grades or falsification of the same can
in the Clean Records even after the neither be cured nor cossetted by
same were already reviewed and compassion towards the students,
approved by the subject because the means does not justify
coordinators; of effecting the the end. While respondent’s motive
alterations and erasures without for increasing the grades of certain
placing her initials thereon; of not students in the Clean Records was
informing the subject coordinators not known or could have been
of such alterations and erasures; of noble, the fact is, unauthorized and
allowing the discrepancies to last improper alterations were effected
without any effort to reconcile the in the official records of petitioner,
same to avoid any doubts on the a clear violation of petitioner’s
grading system of petitioner; of Elementary Faculty Manual as well
refusing to accept the memo as the Private School Manual
informing her of the aforesaid adhered to by petitioners and its
tampering and snubbing any faculties. Respondent is deemed to
explanation relevant thereto, are have exercised an unreasonable
all acts of transgression of school degree of discretion in failing to
rules, regulations and policies. provide a concrete basis for
Truly, then, respondent had increasing the grades of certain
committed a misconduct, serious students. For this, respondent
enough to warrant her dismissal should be made to face the
from employment under paragraph consequences of her actions. To
(a) of Article 282 of the Labor tolerate such conduct will, indeed,
Code, as well as Section 94(b), undermine the integrity of
Article XVII of the Manual of petitioner’s grading system, and its
Regulations for Private Schools, standing as an academic institution
which provides that the as well.
employment of a teacher may be It is now settled that petitioner duly
terminated for negligence in complied with the requirement of
keeping school or student records, substantial due process in terminating the
or tampering with or falsification of employment of respondent. We will now
the same, to determine whether petitioner had
wit:ChanRoblesVirtualawlibrary complied with the procedural aspect of
• lawful dismissal.
• Section 94. Causes for
Terminating Employment – In In the termination of employment, the
addition to the just causes employer must (a) give the employee a
enumerated in the Labor Code, the written notice specifying the ground or
employment of school personnel, grounds of termination, giving to said
11
employee reasonable opportunity within backwages or other claims for

which to explain his side; (b) conduct a damages. No court, not even this
hearing or conference during which the Court, can make an award that is
employee concerned, with the assistance not based on law.90cralawred
of counsel if the employee so desires, is • Omni Hauling Services, Inc., Lolita Franco,
given the opportunity to respond to the Aniceto Franco Vs. Bernardo Bon,
charge, present his evidence or rebut the Roberto Tortoles, Romeo Torres,
evidence presented against him; and (c) Rodello Ramos, et al. G.R. No. 199388.
give the employee a written notice of September 3, 2014
termination indicating that upon due • Article 280 of the Labor Code
consideration of all circumstances, distinguishes a “project employee”
grounds have been established to justify from a “regular employee” in this
his termination.82cralawred wise:ChanRoblesVirtualawlibrary
•
• Petitioners had complied with all of • Art. 280. Regular and casual
the above-stated requirements employment. The provisions of
Based on the foregoing, it is clear that written agreement to the contrary
respondent refused to present her side by notwithstanding and regardless of
choice. It can be said that ample the oral agreement of the parties,
opportunity was afforded to respondent to an employment shall be deemed to
defend herself from the charges levelled be regular where the employee has
on her, but she opted not to take it. In a been engaged to perform activities
plethora of cases, we have ruled that the which are usually necessary or
essence of due process lies simply in an desirable in the usual business or
opportunity to be heard; and not that an trade of the employer, except
actual hearing should always and where the employment has
indispensably be held,89 especially when been fixed for a specific project
the employee herself precluded the same or undertaking the completion
from happening, as in this case. or termination of which has
been determined at the time of
It is also worthy to note that failure on the the engagement of the
part of petitioner to convert the parents’ employee or where the work or
concerns in writing does not deprive service to be performed is seasonal
respondent from facing the charges in nature and the employment is
against her, since the offense was for the duration of the season.
committed against petitioner as an •
educational institution, the students being • x x x x (Emphasis and
merely a collateral damage thereof. underscoring supplied)
•
After deliberately and knowingly • A project employee is assigned to a
disregarding the show cause letters and project which begins and ends at
her opportunities to be heard, as well as determined or determinable
the termination letter, respondent cannot times.31 Unlike regular employees
now claim that she was denied due who may only be dismissed for just
process. and/or authorized causes under the
Labor Code, the services of
• Indubitably, respondent was employees who are hired as
dismissed from employment for a “project employees” may be
just cause and in accordance with lawfully terminated at the
due process under existing labor completion of the
laws, rules and regulations. project.32cralawred
Accordingly, she is not entitled to •
reinstatement or separation pay, • According to jurisprudence, the
11
principal test for determining viz.:ChanRoblesVirtualawlibrary

whether particular employees are •
properly characterized as “project • While the absence of a written
employees” as distinguished from contract does not automatically
“regular employees,” is whether or confer regular status, it has
not the employees were assigned been construed by this Court as
to carry out a “specific project or a red flag in cases involving the
undertaking,” the duration (and question of whether the
scope) of which were specified at workers concerned are regular
the time they were engaged for or project employees. In
that project. The project could Grandspan Development
either be (1) a particular job or Corporation v. Bernardo and
undertaking that is within the Audion Electric Co., Inc. v. National
regular or usual business of the Labor Relations Commission, this
employer company, but which is Court took note of the fact that the
distinct and separate, and employer was unable to present
identifiable as such, from the other employment contracts signed by
undertakings of the company; or the workers, which stated the
(2) a particular job or undertaking duration of the project. In another
that is not within the regular case, Raycor v. Aircontrol Systems,
business of the corporation. In Inc. v. National Labor Relations
order to safeguard the rights of Commission, this Court refused to
workers against the arbitrary use give any weight to the employment
of the word “project” to prevent contracts offered by the employers
employees from attaining a regular as evidence, which contained the
status, employers claiming that signature of the president and
their workers are project general manager, but not the
employees should not only signatures of the employees. In
prove that the duration and cases where this Court ruled that
scope of the employment was construction workers repeatedly
specified at the time they were rehired retained their status as
engaged, but also that there project employees, the employers
was indeed a project.33cralawred were able to produce employment
• contracts clearly stipulating that
• Even though the absence of a the workers’ employment was
written contract does not by itself coterminous with the project to
grant regular status to support their claims that the
respondents, such a contract is employees were notified of the
evidence that respondents were scope and duration of the project.
informed of the duration and scope •
of their work and their status as • Hence, even though the absence of
project employees.34 As held in a written contract does not by itself
Hanjin Heavy Industries and grant regular status to
Construction Co., Ltd. v. Ibañez,35 respondents, such a contract is
citing numerous precedents on the evidence that respondents were
matter, where no other evidence informed of the duration and
was offered, the absence of the scope of their work and their status
employment contracts raises a as project employees. In this
serious question of whether the case, where no other evidence
employees were properly informed was offered, the absence of an
of their employment status as employment contract puts into
project employees at the time of serious question whether the
their engagement, employees were properly
12
informed at the onset of their hauling, thereby confirming the

employment status as project strength of the aforesaid
employees. It is doctrinally conclusion.
entrenched that in illegal dismissal •
cases, the employer has the • The determination that
burden of proving with clear, respondents are regular and not
accurate, consistent and convincing merely project employees
evidence that a dismissal was resultantly means that their
valid. x x x.36 (Emphases supplied; services could not have been
citations omitted) validly terminated at the expiration
• of the project, or, in this case, the
• In this case, records are bereft of service contract of Omni with the
any evidence to show that Quezon City government. As
respondents were made to sign regular employees, it is incumbent
employment contracts explicitly upon petitioners to establish that
stating that they were going to be respondents had been dismissed
hired as project employees, with for a just and/or authorized cause.
the period of their employment to However, petitioners failed in this
be co-terminus with the original respect; hence, respondents were
period of Omni’s service contract illegally dismissed.
with the Quezon City government.
Neither is petitioners’ allegation • Philippine Touristers, Inc. and/or
that respondents were duly Alejandro R. Yague, Jr. Vs. Mas
apprised of the project-based Transit Workers Union-Anglo KMU and
nature of their employment its members represented by Abraham
supported by any other evidentiary Tumala, Jr. G.R. No. 201237. September
proof. Thus, the logical conclusion 3, 2014
is that respondents were not For an appeal from the LA’s ruling to the
clearly and knowingly informed of NLRC to be perfected, Article 223 (now
their employment status as mere Article 229)61 of the Labor Code requires
project employees, with the the posting of a cash or surety bond in an
duration and scope of the project amount equivalent to the monetary award
specified at the time they were in the judgment appealed
engaged. As such, the presumption While it has been settled that the posting
of regular employment should be of a cash or surety bond is indispensable
accorded in their favor pursuant to to the perfection of an appeal in cases
Article 280 of the Labor Code which involving monetary awards from the
provides that “[employees] who decision of the LA,62 the Rules of
have rendered at least one year of Procedure of the NLRC63 (the Rules),
service, whether such service is particularly Section 6, Rule VI thereof,
continuous or broken [– as nonetheless allows the reduction of the
respondents in this case –] shall be bond upon a showing of (a) the existence
considered as [regular of a meritorious ground for reduction,
employees] with respect to the and (b) the posting of a bond in a
activity in which [they] are reasonable amount in relation to the
employed and [their] employment monetary award.
shall continue while such activity
actually exists.” Add to this the In this regard, it bears stressing that the
obvious fact that respondents have reduction of the bond provided thereunder
been engaged to perform activities is not a matter of right on the part of the
which are usually necessary or movant and its grant still lies within the
desirable in the usual business or sound discretion of the NLRC upon a
trade of Omni, i.e., garbage showing of meritorious grounds and the
12
reasonableness of the bond tendered under Article 28 of the Civil Code.

under the circumstances.64cralawred Prefatorily, we would like to stress that
the instant case falls under Article 28 of
Here, it is not disputed that petitioners the Civil Code on human relations, and not
filed an appeal memorandum and unfair competition under Republic Act No.
complied with the other requirements for 8293,7 as the present suit is a damage
perfecting an appeal, save for the posting suit and the products are not covered by
of the full amount equivalent to the patent registration. A fortiori, the
monetary award of existence of patent registration is
P12,833,210.00. Instead, petitioners filed immaterial in the present case.
a motion to reduce bond claiming that
they were suffering from liquidity The concept of “unfair competition” under
problems and, in support of their claim, Article 28 is very much broader than that
submitted PTI’s AFS which showed a covered by intellectual property laws.
deficit in income.68 Since this claim was Under the present article, which follows
not amply controverted by respondents, the extended concept of “unfair
and considering further the significance of competition” in American jurisdictions, the
petitioners’ argument raised in their term covers even cases of discovery of
appeal, i.e., that there exists no trade secrets of a competitor, bribery of
employer-employee relationship between his employees, misrepresentation of all
PTI and the individual respondents, on the kinds, interference with the fulfillment of a
basis of which lies their non-liability, the competitor’s contracts, or any malicious
Court deems that the NLRC did not interference with the latter’s
gravely abuse its discretion in deciding business.8cralawred
that these circumstances constitute
meritorious grounds for the reduction of With that settled, we now come to the
the bond.69cralawred issue of whether or not petitioner
committed acts amounting to unfair
• Willaware Products Corporation Vs. competition under Article 28 of the Civil
Jesichris Manufacturing Corporation   Code.
G.R. No. 195549. September 3, 2014
• Hence, the present Petition for We find the petition bereft of merit.
Review wherein petitioner raises
the following issues for our Article 28 of the Civil Code provides that
resolution:ChanRoblesVirtualawlibr “unfair competition in agricultural,
ary commercial or industrial enterprises or in
• labor through the use of force,
(1) Whether or not there is unfair competition under humanintimidation,
relations deceit, machination
when the parties re or not
any
competitors and there is actually no damage on theother unjust,
part of oppressive or high-handed
Jesichris?
(2) Consequently, if there is no unfair competition,method shouldshall
there give
berise to adamages
moral right of action
and
attorney’s fees? by the person who thereby suffers
(3) Whether or not the addition of nominal damagesdamage.” is proper although no rights have been
established?
(4) If ever the right of Jesichris refers to its copyrightFrom ontheautomotive
foregoing, itparts,
is clear that what
should it beis
being sought
considered in the light of the said copyrights were considered to betovoidbebyprevented
no less than is this
not
Honorable Court in SC GR No. 161295? competition per se but the use of unjust,
(5) If the right involved is “goodwill” then the issue is:oppressive
whether or or high- handed
not Jesichris methods
has established
“goodwill?” 6 which may deprive others of a fair chance
• to engage in business or to earn a living.
• In essence, the issue for our Plainly, what the law prohibits is unfair
resolution is: whether or not competition and not competition where
petitioner committed acts the means used are fair and legitimate.
amounting to unfair competition
12
In order to qualify the competition as malevolent purpose, he is guilty of wanton

“unfair,” it must have two characteristics: wrong.
(1) it must involve an injury to a
competitor or trade rival, and (2) it must • Ricardo A. Dalusong Vs. Eagle Clarc
involve acts which are characterized as Shipping Philippines, Inc., et al. G.R.
“contrary to good conscience,” or No. 204233. September 3, 2014
“shocking to judicial sensibilities,” or Section 20(B)(3)15 of the POEA-SEC
otherwise unlawful; in the language of our provides that “[i]f a doctor appointed by
law, these include force, intimidation, the seafarer disagrees with the
deceit, machination or any other unjust, assessment [of the company-designated
oppressive or high-handed method. The doctor], a third doctor may be agreed
public injury or interest is a minor factor; jointly between the Employer and the
the essence of the matter appears to be a seafarer,” and “[t]he third doctor’s
private wrong perpetrated by decision shall be final and binding on both
unconscionable means.9cralawred parties.” In this case, there was no third
doctor appointed by both parties whose
Here, both characteristics are present. decision would be binding on the parties.
Hence, it is up to the labor tribunal and
First, both parties are competitors or trade the courts to evaluate and weigh the
rivals, both being engaged in the merits of the medical reports of the
manufacture of plastic-made automotive company-designated doctor and the
parts. Second, the acts of the petitioner seafarer’s doctor. The Labor Arbiter did
16
were clearly “contrary to good conscience” not give probative value to the medical
as petitioner admitted having employed report issued by petitioner’s doctor
respondent’s former employees, primarily because there was no evidence
deliberately copied respondent’s products of tests and examinations conducted to
and even went to the extent of selling support his medical report. On the other
these products to respondent’s hand, the NLRC ruled that “[t]he findings
customers.10cralawred of [petitioner’s] doctor, who gave him
Grade 1 Disability rating is more
To bolster this point, the CA correctly appropriate and applicable to the injury
pointed out that petitioner’s hiring of the suffered by [petitioner].”17 The Court of
former employees of respondent and Appeals gave more credence to the
petitioner’s act of copying the subject findings of the company-designated
plastic parts of respondent were doctor, which were supported by multiple
tantamount to unfair competition. tests and examinations on petitioner,
compared to the medical report of
Thus, it is evident that petitioner is petitioner’s doctor which was not
engaged in unfair competition as shown supported by adequate tests and
by his act of suddenly shifting his business examinations.
from manufacturing kitchenware to Just because the seafarer is unable to
plastic-made automotive parts; his luring perform his job and is undergoing medical
the employees of the respondent to treatment for more than 120 days does
transfer to his employ and trying to not automatically entitle the seafarer to
discover the trade secrets of the total and permanent disability
respondent.12cralawred compensation.26 In this case, petitioner’s
medical treatment lasted more than 120
Moreover, when a person starts an days but less than 240 days, after which
opposing place of business, not for the the company-designated doctor gave
sake of profit to himself, but regardless of petitioner a final disability grading under
loss and for the sole purpose of driving his the POEA schedule of disabilities of “grade
competitor out of business so that later on 11 - complete immobility of an ankle joint
he can take advantage of the effects of his in normal position.” Thus, before the
12
maximum 240-day medical treatment affects employment must pass due

period expired, petitioner was issued a process scrutiny in both its substantive
final disability grade 11 which is merely and procedural aspects.
equivalent to a permanent partial
disability, since under Section 32 of the The constitutional protection for workers
POEA-SEC, only those classified under elevates their work to the status of a
grade 1 are considered total and vested right. It is a vested right protected
permanent disability. Clearly, petitioner is not only against state action but against
only entitled to permanent partial the arbitrary acts of the employers as
disability compensation, since his well. This court in Philippine Movie
condition cannot be considered as Pictures Workers’ Association v. Premier
permanent total disability. Productions, Inc.63 categorically stated
that “[t]he right of a person to his labor is
• Nancy S. Montinola Vs. Court of Appeals  deemed to be property within the meaning
G.R. No. 198656. September 8, 2014 of constitutional guarantees.”64 Moreover,
Illegally suspended employees, similar to it is of that species of vested constitutional
illegally dismissed employees, are entitled right that also affects an employee’s
to moral damages when their suspension liberty and quality of life. Work not only
was attended by bad faith or fraud, contributes to defining the individual, it
oppressive to labor, or done in a manner also assists in determining one’s purpose.
contrary to morals, good customs, or Work provides for the material basis of
public policy. human dignity.
The sole issue in this case is whether
Montinola’s illegal suspension entitled her Suspension from work is prima facie a
to an award of moral and exemplary deprivation of this right. Thus, termination
damages and attorney’s fees. and suspension from work must be
Montinola is entitled to moral and reasonable to meet the constitutional
exemplary damages. She is also entitled requirement of due process of law. It will
to attorney’s fees. be reasonable if it is based on just or
authorized causes enumerated in the
The Labor Code Labor Code.65cralawred
provides:ChanRoblesVirtualawlibrary
On the other hand, articulation of
Art. 279. Security of Tenure – In cases of procedural due process in labor cases is
regular employment, the employer shall found in Article 277(b) of the Labor Code,
not terminate the services of an employee which states:ChanRoblesVirtualawlibrary
except for a just cause or when authorized
by this Title. An employee who is unjustly (b) Subject to the constitutional right of
dismissed from work shall be entitled to workers to security of tenure and their
reinstatement without loss of seniority right to be protected against dismissal
rights and other privileges and to full except for a just and authorized cause and
backwages, inclusive of allowances, and to without prejudice to the requirement of
his other benefits or their monetary notice under Article 283 of this Code, the
equivalent computed from the time his employer shall furnish the worker whose
compensation was withheld from him up employment is sought to be terminated a
to the time of his actual reinstatement. written notice containing a statement of
the causes for termination and shall afford
Security of tenure of workers is not only the latter ample opportunity to be heard
statutorily protected, it is also a and to defend himself with the assistance
constitutionally guaranteed right.61 Thus, of his representative if he so desires in
any deprivation of this right must be accordance with the company rules and
attended by due process of law.62 This regulations promulgated pursuant to
means that any disciplinary action which guidelines set by the Department of Labor
12
and Employment. Any decision taken by PAL, however, merely relied on these
the employer shall be without prejudice to pieces of information in finding
the right of the worker to consent the administrative liability against
validity or legality of his dismissal by filing Montinola:ChanRoblesVirtualawlibrary
a complaint with the regional branch of
the National Labor Relations Commission. 1) a list of offenses found in PAL’s Code of
The burden of proving that the Discipline that Montinola allegedly
termination was for a valid or authorized violated;
cause shall rest on the employer.
2) a list of flight crew members that were
The procedure can be summarized in this checked at the Honolulu airport; and
manner. First, the employer must furnish
the employee with a written notice 3) a list of all items confiscated from all
containing the cause for termination. these flight crew members.
Second, the employer must give the
employee an opportunity to be heard. This The lists are not sufficient to show the
could be done either through a position participation of any of the flight crew
paper or through a clarificatory hearing.66 members, least of all Montinola. None of
The employee may also be assisted by a the evidence presented show that the
representative or counsel. Finally, the customs officials confiscated any of these
employer must give another written notice items from her. Thus, the evidence by
apprising the employee of its findings and themselves do not show that Montinola
the penalty to be imposed against the pilfered airline items.
employee, if any.67 In labor cases, these
requisites meet the constitutional Together with the manner in which the
requirement of procedural due process, investigation proceeded, i.e., that
which “contemplates notice and Montinola was prevented from asking for
opportunity to be heard before judgment clarification of the charges against her,
is rendered, affecting one’s person or the absence of substantial evidence is so
property.”68cralawred apparent that disciplining an employee
only on these bases constitutes bad faith.
In this case, PAL complied with procedural
due process as laid out in Article 277, The employee is entitled to moral
paragraph (b) of the Labor Code. PAL damages when the employer acted a) in
issued a written notice of administrative bad faith or fraud; b) in a manner
charge, conducted a clarificatory hearing, oppressive to labor; or c) in a manner
and rendered a written decision contrary to morals, good customs, or
suspending Montinola. However, we public policy.
emphasize that the written notice of
administrative charge did not serve the Bad faith “implies a conscious and
purpose required under due process. PAL intentional design to do a wrongful act for
did not deny her allegation that there a dishonest purpose or moral
would be a waiver of the clarificatory obliquity.”73Cathay Pacific Airways v.
hearing if she insisted on a specific notice Spouses Vazquez74 established that bad
of administrative charge. With Montinola faith must be proven through clear and
unable to clarify the contents of the notice convincing evidence.75 This is because
of administrative charge, there were “[b]ad faith and fraud . . . are serious
irregularities in the procedural due process accusations that can be so conveniently
accorded to her. and casually invoked, and that is why they
are never presumed. They amount to
Moreover, PAL denied Montinola mere slogans or mudslinging unless
substantial due process. convincingly substantiated by whoever is
alleging them.”76 Here, there was clear
12
and convincing evidence of bad faith in the pilferage.

adduced in the lower tribunals.
Moral damages are, thus, appropriate. In
PAL’s actions in implicating Montinola and Almira v. B.F. Goodrich Philippines, this
penalizing her for no clear reason show court noted that unemployment “brings
bad faith. PAL’s denial of her request to untold hardships and sorrows on those
clarify the charges against her shows its dependent on the wage-earner.”81 This is
intent to do a wrongful act for moral also true for the case of suspension.
obliquity. If it were acting in good faith, it Suspension is temporary unemployment.
would have gathered more evidence from During the year of her suspension,
its contact in Honolulu or from other Montinola and her family had to survive
employees before it started pointing without her usual salary. The deprivation
fingers. PAL should not have haphazardly of economic compensation caused mental
implicated Montinola and denied her anguish, fright, serious anxiety,
livelihood even for a moment. besmirched reputation, and wounded
feelings. All these are grounds for an
PAL apparently granted Montinola award of moral damages under the Civil
procedural due process by giving her a Code.82cralawr
notice of administrative charge and II
conducting a hearing. However, this was
more apparent than real. The notice of Montinola is also entitled to exemplary
administrative charge did not specify the damages.
acts committed by Montinola and how
these acts violated PAL’s Code of Under Article 2229 of the Civil Code,
Discipline. The notice did not state which “[e]xemplary or corrective damages are
among the items confiscated by the US imposed, by way of example or correction
customs officials were originally found in for the public good, in addition to the
Montinola’s possession. Worse, the panel moral, temperate, liquidated or
of PAL officers led by Atty. Pascual did not compensatory damages.” As this court has
entertain any query to clarify the charges stated in the past: “Exemplary damages
against her. are designed by our civil law to permit the
courts to reshape behaviour that is
When the alleged participation of the socially deleterious in its consequence by
employee in the illicit act which serves as creating negative incentives or deterrents
a basis for the disciplinary action is not against such behaviour.”83cralawred
clear from the notice, the opportunity to
be heard will not be reasonable. The If the case involves a contract, Article
notice fails to meet reasonable standards. 2332 of the Civil Code provides that “the
It does not have enough information to court may award exemplary damages if
enable the employee to adequately the defendant acted in a wanton,
prepare a defense. fraudulent, reckless, oppressive or
malevolent manner.” Thus, in Garcia v.
Nothing in PAL’s action supports the NLRC,84 this court ruled that in labor
finding that Montinola committed specific cases, the court may award exemplary
acts constituting violations of PAL’s Code damages “if the dismissal was effected in
of Discipline. a wanton, oppressive or malevolent
manner.”85cralawred
This act of PAL is contrary to morals, good
customs, and public policy. PAL was It is socially deleterious for PAL to
willing to deprive Montinola of the wages suspend Montinola without just cause in
she would have earned during her year of the manner suffered by her. Hence,
suspension even if there was no exemplary damages are necessary to
substantial evidence that she was involved deter future employers from committing
12
the same acts. fees and expenses of litigation should be

III recovered.
Montinola is also entitled to attorney’s In all cases, the attorney’s fees and
fees. expenses of litigation must be reasonable.
(Emphasis supplied)
Article 2208 of the Civil Code enumerates
the instances when attorney’s fees can be This case qualifies for the first, second,
awarded:ChanRoblesVirtualawlibrary and seventh reasons why attorney’s fees
are awarded under the Civil Code.
ART. 2208. In the absence of stipulation,
attorney’s fees and expenses of litigation, First, considering that we have awarded
other than judicial costs, cannot be exemplary damages in this case,
recovered, attorney’s fees can likewise be awarded.
except:ChanRoblesVirtualawlibrary
Second, PAL’s acts and omissions
(1) When exemplary damages are compelled Montinola to incur expenses to
awarded; protect her rights with the National Labor
Relations Commission and the judicial
(2) When the defendant’s act or omission system. She went through four tribunals,
has compelled the plaintiff to litigate with and she was assisted by counsel. These
third persons or to incur expenses to expenses would have been unnecessary if
protect his interest; PAL had sufficient basis for its decision to
discipline Montinola.
(3) In criminal cases of malicious
prosecution against the plaintiff; Finally, the action included recovery for
wages. To bring justice to the illegal
(4) In case of a clearly unfounded civil suspension of Montinola, she asked for
action or proceeding against the plaintiff; backwages for her year of suspension.
• Northwest Airlines, Inc. Vs. Ma.
(5) Where the defendant acted in gross Concepcion M. Del Rosario   G.R. No.
and evident bad faith in refusing to satisfy 157633. September 10, 2014
the plaintiff’s plainly valid, just and An act of dishonesty by an employee who
demandable claim; has been put in charge of the employer’s
money and property amounts to breach of
(6) In actions for legal support; the trust reposed by the employer, and
normally leads to loss of confidence in her.
(7) In actions for the recovery of wages of Such dishonesty comes within the just and
household helpers, laborers and skilled valid causes for the termination of her
workers; employment under Article 282 of the
Labor Code.
(8) In actions for indemnity under The just and valid causes for the dismissal
workmen’s compensation and employer’s of an employee, as enumerated in Article
liability laws; 282 of the Labor Code, include: (a)
serious misconduct or willful disobedience
(9) In a separate civil action to recover by the employee of the lawful orders of his
civil liability arising from a crime; employer or representative in connection
with her work; (b) gross and habitual
(10) When at least double judicial costs neglect by the employee of her duties; (c)
are awarded; fraud or willful breach by the
employee of the trust reposed in her
(11) In any other case where the court by her employer or duly authorized
deems it just and equitable that attorney’s representative; (d) commission of a
12
crime or offense by the employee against Agabon partly restored the doctrine in
the person of her employer or any Wenphil Corporation. And, secondly, both
immediate member of her family or her Wenphil Corporation and Serrano should
duly authorized representative; and (e) apply only when there is a finding that the
other causes analogous to the foregoing. termination was valid but the requirement
of due process was not followed.
The dishonesty imputed to the petitioner Obviously, neither would be applicable to
included the making of double entries in the petitioner whose dismissal was valid
the production reports and thereby and legal, and the respondent as her
enriching herself by pocketing the extra employer complied with the demands of
cash generated from the double entries. due process.
Contrary to her assertion that there was • Rosalie L. Gargoles Vs. Reylita S. Del
no substantial evidence to justify her Rosario G.R. No. 158583. September 10,
dismissal, the production reports 2014
containing the double entries were An act of dishonesty by an employee who
presented as evidence; and her double has been put in charge of the employer’s
entries were confirmed in the affidavit money and property amounts to breach of
executed by Redelito Caranay, Jr., her co- the trust reposed by the employer, and
employee. As such, the finding of the just normally leads to loss of confidence in her.
cause for her dismissal did not emanate Such dishonesty comes within the just and
from mere speculation, suspicion or valid causes for the termination of her
assumption. employment under Article 282 of the
Lastly, the petitioner posits that the CA Labor Code.
should have applied the pronouncement in The just and valid causes for the dismissal
Serrano v. National Labor Relations of an employee, as enumerated in Article
Commission19 instead of that in Wenphil 282 of the Labor Code, include: (a)
Corporation v. National Labor Relations serious misconduct or willful disobedience
Commission.20 To recall, the Court held in by the employee of the lawful orders of his
Wenphil Corporation that the employer employer or representative in connection
should still be sanctioned with an order to with her work; (b) gross and habitual
indemnify the dismissed employee despite neglect by the employee of her duties; (c)
the termination being for cause provided fraud or willful breach by the
the employer did not observe due process. employee of the trust reposed in her
This holding was modified in Serrano, with by her employer or duly authorized
the Court ruling that where due process representative; (d) commission of a
(i.e., the two-notice rule) was not crime or offense by the employee against
observed, the employer should award the the person of her employer or any
dismissed employee full backwages as the immediate member of her family or her
penalty for the violation of due process. duly authorized representative; and (e)
Essentially, Serrano tightened the penalty other causes analogous to the foregoing.
in Wenphil Corporation from mere
indemnity to full backwages. The dishonesty imputed to the petitioner
included the making of double entries in
The position of the petitioner is untenable the production reports and thereby
for two reasons. Firstly, Serrano has been enriching herself by pocketing the extra
abandoned in Agabon v. National Labor cash generated from the double entries.
Relations Commission ,21 in which the Contrary to her assertion that there was
Court ruled that if the termination was no substantial evidence to justify her
valid but due process was not followed, dismissal, the production reports
the employee remains dismissed but the containing the double entries were
employer must pay an indemnity heavier presented as evidence; and her double
than that imposed in Wenphil Corporation entries were confirmed in the affidavit
but lighter than full backwages. In effect, executed by Redelito Caranay, Jr., her co-
12
employee. As such, the finding of the just 9, 2002; the following day, or on May 10,
cause for her dismissal did not emanate 2002, he reported to the office of
from mere speculation, suspicion or InterOrient. Although he averred that he
assumption. informed InterOrient about the pain he
experienced while on board the vessel, the
It is true that every person is entitled to company allegedly only advised him to
be presumed innocent of wrongdoing. The consult a doctor but did not give any
objective of the presumption has been to referral.
lay the burden of proof on the shoulders
of the alleger of wrongdoing. The We are not persuaded by Victor’s
presumption extends to the petitioner and contention. It must be stressed that his
to every other employee charged with any repatriation was not due to any medical
wrongdoing that may cause them to be reasons but because his employment
sanctioned, including being dismissed contract had already expired. Other than
from employment. But the presumption, his self-serving allegation that he
which is disputable, by no means excuses experienced pain while on board, he was
the employee charged with wrongdoing not able to substantiate the same. There
from answering and defending herself was no showing that he reported his injury
once the presumption has been overcome to his officers while on board the vessel;
by a showing to the contrary. The failure neither did he prove that he sought
of the employee to rebut or disprove the medical attention but was
proof of wrongdoing then establishes the refused. Likewise, other than his bare and
charge against her.12 This is especially self-serving assertion that he informed
true in a case for dismissal grounded on InterOrient about his pain, he presented
loss of confidence or breach of trust, in no evidence or tangible proof that he
which the employer may proceed to indeed requested for medical attention,
dismiss the erring employee once the much more that he was rebuffed.
employer becomes morally convinced that
she was guilty of a breach of trust and On the contrary, the records show that
confidence.13 Based on the record, the when he reported to InterOrient
petitioner did not sufficiently contradict or immediately after his repatriation, he
rebut the charge of dishonesty. signed a Receipt and Release stating that
• Interorient Maritime Enteprises, Inc. Vs. he has not contracted or suffered any
Victor M. Creer, III  G.R. No. 181921. illness or injury from work and that he
September 17, 2014 Concurring Opinion  was discharged in good and perfect
J. Leonen  health. Moreover, we are baffled why, if
The oft repeated rule is that whoever indeed Victor needed medical services, he
claims entitlement to the benefits opted to consult several doctors other
provided by law should establish his or her than the company-designated
right thereto by substantial physician. He offered no explanation for
evidence.”1cralawred this.
For a seaman’s claim for disability to
prosper, it is mandatory that within three “The rationale for the rule [on mandatory
days from his repatriation, he is examined post-employment medical examination
by a company-designated physician. within three days from repatriation by a
Non-compliance with this mandatory company-designated physician] is that
requirement results in the forfeiture of the reporting the illness or injury within three
right to claim for compensation and days from repatriation fairly makes it
disability benefits. easier for a physician to determine the
cause of the illness or injury. Ascertaining
It is undisputed that on May 7, 2002, the real cause of the illness or injury
Victor’s employment contract was beyond the period may prove difficult. To
completed. He arrived in Manila on May ignore the rule might set a precedent with
12
negative repercussions, like opening board, or that he reported the same to his
floodgates to a limitless number of superiors so that he will be provided with
seafarers claiming disability benefits, or medical assistance. On the contrary, upon
causing unfairness to the employer who repatriation, he signed a Receipt and
would have difficulty determining the Release wherein he acknowledged that he
cause of a claimant’s illness because of worked under normal conditions on board
the passage of time. The employer would the vessel; that he did not contract or
then have no protection against unrelated suffer any injury; and that he was
disability claims.”28cralawred discharged in good health. Victor never
alleged that he was coerced into signing
In fine, we hold that Victor’s non- the Receipt and Release or that he did not
compliance with the three-day rule on understand the same. Thus, it was crucial
post-employment medical examination is that Victor presented “concrete proof
fatal to his cause. As a consequence, his showing that he acquired or contracted
right to claim for compensation and the x x x illness that resulted to his
disability benefits is forfeited. On this disability during the term of his
score alone, his Complaint could have employment contract.”31 Proof of this
been dismissed outright. circumstance was particularly crucial
Victor’s illness is not compensable. considering the absence of any evidence
that he reported his illness while on board
Even if we disregard the mandatory three- and after his repatriation.32 However, all
day rule on post-employment medical that Victor put forward were bare
examination by the company-designated allegations that he experienced what
physician, Victor’s claim for disability appeared to be symptoms of pulmonary
benefits must still fail for not being tuberculosis on board the vessel, and the
compensable. dogged insistence that his working
conditions are proof enough that his work
For an illness to be compensable, Section contributed to his contracting the disease.
20(B)(6)29 of the 2000 Amended Standard b) Victor failed to show that his illness is
Terms and Conditions Governing the work-related.
Employment of Filipino Seafarers on Board “Work-related illness” is defined under the
Ocean-Going Vessels (2000 Amended 2000 Amended Standard Terms and
Standard Terms and Conditions), deemed Condition “as any sickness resulting in
incorporated in the POEA Contract, disability or death due to an occupational
requires the concurrence of two elements: disease listed under Section 32-A of [the
first, that the illness must be work- said] contract[,] with the conditions set
related; and second, that the work-related therein satisfied.”33 There is no question
illness must have existed during the term that Pulmonary Tuberculosis is listed as an
of the seafarer’s employment occupational disease under Section 32-
contract.30cralawred A(18). However, for the disability caused
a) Victor failed to show that his illness by this occupational disease to be
existed during the term of his contract. compensable, the POEA Contract provides
In this case, Victor submitted no proof conditions that must be satisfied,
that his illness was contracted during the viz:ChanRoblesVirtualawlibrary
term of his contract with InterOrient. As
already mentioned, the reason for Victor’s SECTION 32-A OCCUPATIONAL
repatriation was the completion/expiration DISEASES
of his contract and not because of any
sickness. Other than his uncorroborated For an occupational disease and the
and self-serving assertion that he resulting disability or death to be
experienced chest pains while on board compensable, all of the following
the vessel, there was absolutely no proof conditions must be
at all that he consulted a doctor while on satisfied:ChanRoblesVirtualawlibrary
13
evidence on record to prove that the TB

1. The seafarer’s work must involve the was contracted within a period of
risks describe herein; exposure and under such other factors
necessary to contract it. Neither is there
2. The disease was contracted as a result substantial evidence presented to show
of the seafarer’s exposure to the that his working conditions activated the
describe[d] risks; disease-causing organism that may be
dormant in his system. As pointed out by
3. The disease was contracted within a both parties, pulmonary tuberculosis is
period of exposure and under such other airborne and easily transmissible by
factors necessary to contract it; infected patients. The risk of being
infected, or acquiring, the tuberculosis
4. There was no notorious negligence on infection is mainly determined by
the part of the seafarer. x x x (Emphasis exogenous factors.35 The probability of
supplied) contact with a case of tuberculosis, the
intimacy and duration of that contact, the
Victor miserably failed to comply with degree of infectiousness of the case, and
these conditions. the shared environment of the contact are
all important determinants of
While pulmonary tuberculosis is listed as transmission.36 On the other hand, the
an occupational disease, the Court is not risk of developing the disease after being
convinced that Victor’s pulmonary infected is largely dependent on
tuberculosis is work-acquired or work- endogenous factors.37 The tuberculosis
aggravated because if it were so, then at bacteria may lie dormant in the infected
the outset, Victor should have already person’s immune system for years before
been diagnosed with pulmonary it becomes reactivated, or he may
tuberculosis when he sought medical help ultimately develop the disease within the
one month from his repatriation. Instead, first year or two after infection, depending
Dr. Ayuyao diagnosed him with on the innate susceptibility to disease of
Community Acquired Pneumonia I and the person and level of
Bronchial Asthma34 – sicknesses which immunity.38 Simply put, there are so
aside from being different from pulmonary many possibilities how and when Victor
tuberculosis, were not shown to have any could have acquired pulmonary
relation thereto. tuberculosis. It is “[t]he oft repeated rule
x x x that whoever claims entitlement to
Furthermore, while it is undisputed that the benefits provided by law should
Victor’s work as a Galley Boy/2nd Cook establish his x x x right thereto by
involved the risks provided in the POEA substantial evidence.”39 “The general
Contract (first condition), i.e., overwork or principle is that one who makes an
fatigue and exposure to rapid variations in allegation has the burden of proving it. A
temperature, there was failure to prove party alleging a critical fact must support
that the TB was contracted as a result of his allegation with substantial
his exposure to the said described risks evidence. Any decision based on
(second condition). No evidence on unsubstantiated allegation cannot stand
record shows how Victor’s working as it will offend due process.”40cralawred
conditions caused or aggravated his In fine, Victor’s claim for disability benefits
TB. On the contrary, Victor himself must be denied for failure to comply with
acknowledged that he worked under the mandatory three-day rule on post-
normal conditions while on board the employment medical examination without
vessel. any valid or justifiable reason, and for
being non-compensable there being no
Likewise, the third and fourth conditions showing that the illness existed during the
were not satisfied. There was no credible term of his employment contract or that it
13
is work-related. resulting illness or injury which he

• Jebsen Maritime Inc., et al. Vs. Wilfredo E. may have suffered during the term
Ravena G.R. No. 200566. September 17, of his employment contract.
2014 •
• Ravena is not entitled to • This disputable presumption is
disability benefits; made in the law to signify that the
• he failed to comply with the non-inclusion in the list of
prescribed procedures compensable diseases/illnesses
• and to prove the required does not translate to an absolute
connection or aggravation exclusion from disability
• between his illness and work benefits. In other words, the
conditions disputable presumption does not
• signify an automatic grant of
• As we pointed out above, Section compensation and/or benefits
20-B of the POEA-SEC governs the claim; the seafarer must still prove
compensation and benefits for the his entitlement to disability
work-related injury or illness that a benefits by substantial evidence of
seafarer on board sea-going his illness' work-relatedness.
vessels may have suffered during Thus, in situations where the seafarer
the term of his employment seeks to claim the compensation and
contract. This section should be benefits that Section 20-B grants to him,
read together with Section 32-A of the law requires the seafarer to prove
the POEA-SEC that enumerates the that: (1) he suffered an illness; (2) he
various diseases deemed suffered this illness during the term of his
occupational and therefore employment contract; (3) he complied
compensable. Thus, for a seafarer with the procedures prescribed under
to be entitled to the compensation Section 20-B; (4) his illness is one of the
and benefits under Section 20-B, enumerated occupational disease or that
the disability causing illness or his illness or injury is otherwise work-
injury must be one of those listed related; and (5) he complied with the four
under Section 32-A. conditions enumerated under Section 32-A
• for an occupational disease or a
• Of course, the law recognizes that disputably-presumed work-related disease
under certain circumstances, to be compensable.
certain diseases not otherwise
considered as an occupational Under these considerations, Ravena's
disease under the POEA-SEC may claim must obviously fail; he failed to
nevertheless have been caused or substantially satisfy the prescribed
aggravated by the seafarer's requirements to be entitled to disability
working conditions. In these benefits.
situations, the law recognizes the
inherent paucity of the list and the First, Ravena failed to comply with the
difficulty, if not the outright procedural requirements of Section 20-B
improbability, of accounting for all of the POEA-SEC. Under Section 20-B(3),
the known and unknown diseases paragraph 2, a seafarer who was
that may be associated with, repatriated for medical reasons must,
caused or aggravated by such within three working days from his
working conditions. disembarkation, submit himself to a post-
• employment medical examination (PEME)
• Hence, the POEA-SEC provides for to be conducted by the company-
a disputable presumption of work- designated physician. Failure of the
relatedness for non-POEA-SEC- seafarer to comply with this three-day
listed occupational disease and the mandatory reporting requirement shall
13
result in the forfeiture of his right to claim not go to and report directly and
the POEA-SEC granted benefits. personally to Jebsens or to its designated-
physician for the mandatory medical check
In this case, the records show that Ravena up. Note that this duty to report to the
was repatriated on May 12, 2007; he company-designated physician for the
reported to Jebsen only on June 18, 2007 required medical examination lies with
or more than one (1) month from the time him; the POEA-SEC did not impose on
of his disembarkation. Without doubt, Jebsens, as the local agent of the foreign
therefore, Ravena failed to comply with employer, any duty to meet him upon his
his three-day reporting duty under the arrival and bring him to the company-
POEA-SEC. designated physician for the medical
examination. Thus, assuming that no
The reporting requirement, of course, is Jebsens employee picked him up upon his
not absolute as we have allowed, in arrival, the absence did not excuse him
certain exceptional circumstances, a from complying with his reporting duty
seafarer's claim despite his non-reporting within the three-day mandated period.
within the mandated three-day period,
i.e., when the seafarer is physically In addition, there is absolutely no
incapacitated to comply with the reporting evidence on the record showing a
requirement, provided, he gives, within determination of total or partial
the same three-day period, a written permanent disability with the
notice of his incapacity to the manning corresponding determination of the
agency. appropriate disability grading that could
have formed the basis for his disability
The facts of this case, unfortunately, do claims.
not support a disregard of the three-day
reporting rule for as soon as he Under Section 20-B(3), the company-
disembarked in Manila, Ravena designated physician initially determines
immediately went to his hometown in either the fitness-to-work or the degree of
Iloilo which is at a considerable distance the permanent disability (total or partial)
from Manila, compared with Jebsen’s of the seafarer who suffered and was
office which is in Manila. Even if he had repatriated for work-related illness or
been physically incapacitated, it would injury. The seafarer, of course, is not
have been easier for him to contact irretrievably bound by such
Jebsen in Manila than to go home in determination. Should he disagree with
Iloilo. We note that he took three days to the determination of the company-
consult with a doctor in Iloilo City and five designated physician, the POEA-SEC
days (or on May 12, 2007) to inform the allows him to seek a second opinion from
petitioners of his illness and the scheduled an independent physician of his choice. If
Whipple surgery. the assessment of his chosen physician
conflicts with those of the company-
What made matters worse for Ravena was designated physician, the seafarer and the
his failure to offer an adequate employer may agree on a third doctor
explanation that could have excused his whose determination shall be final and
non-reporting within the three-day binding on them.
period. In the pleadings that he
submitted before the LA, the NLRC and In this case, neither Dr. Cruz nor Ravena's
even before the CA, he simply claimed chosen physician made any determination
that "he opted to go straight home to of Ravena's disability. In fact, we note
Iloilo when no agents from [Jebsens] were that Ravena's physician did not even
present to fetch him and attend to his certify that he was no longer fit-to-work,
medical need." Yet, he did not explain or at the very least determine the
why, this absence notwithstanding, he did appropriate disability grading; he simply
13
stated that “he must not be away from a development of, or aggravated his
treatment area for an indefinite period of ampullary cancer. He likewise did not
time.” On the other hand, Dr. Cruz specify the substances or chemicals which
certified that Ravena's illness is not at all he claimed he was exposed to.
work-related.
Further, he failed to prove that he had
Second, Ampullary cancer is not an indeed been exposed to the
occupational disease. Section 32-A of the chemicals/substances he claimed he was
POEA-SEC considers only two types of exposed to during his employment
cancers as compensable occupational contract; how these substances/chemicals
disease: (1) cancer of the epithelial lining could have caused his ampullary cancer;
of the bladder; and (2) cancer, or measures that the company did or did
epitheliomatous or ulceration of the skin not take to control the hazards occasioned
or of the corneal surface of the eye due to by the use of such substances/chemicals,
certain chemicals.37cralawlawlibrary to prevent or to lessen his exposure to
them.
The LA and the CA may have correctly
afforded Ravena the benefit of the legal To be exact, he simply claimed that "his
presumption of work-relatedness. The assignment had always been on (sic) the
legal correctness of the CA's appreciation engine room" and that "exposure to
of Ravena's claim, however, ends here for various substances over the years caused
as we pointed out above, Section 20-B(4) his disease."38 These bare allegations,
affords only a disputable presumption that however, are not the equivalent of the
should be read together with the substantial evidence that the law requires
conditions specified by Section 32-A of the of Ravena to adduce for the grant of his
POEA-SEC. Under Section 32-A, for the disability benefits claim.
disputably-presumed disease resulting in
disability to be compensable, all of the he cause of ampullary cancer is medically
following conditions must be unknown, although certain risk factors
satisfied:chanRoblesvirtualLawlibrary are believed to contribute to its
development, i.e., genetic factors, like
• The seafarer's work must involve the patients with familial adenomatous
risks describe therein; polyposis, and certain genetic
• The disease was contracted as a result alterations; smoking;
43
and certain
of the seafarer's exposure to the diseases such as diabetes
described risks; milletus.44 Ampullary cancer is a rare
• The disease was contracted within a condition and experts are not certain what
period of exposure and under such preventive steps, if any, may be taken,
factors necessary to contract it; although it is known to be more prevalent
and in men than women.45cralawlawlibrary
• There was no notorious negligence on
the part of the seafarer. Hence, granting, arguendo, that Ravena
had in fact been exposed to various, albeit
Ravena failed to prove the work- unspecified, substances/chemicals while
relatedness of his ampullary cancer as he working on board M/V Tate J, his
failed to satisfy these conditions. exposure could still not be deemed, for
purposes of disability compensation, to
For one, he did not enumerate his specific have caused, aggravated or contributed to
duties as a 4th engineer or the specific the development of his ampullary cancer
tasks which he performed on a daily basis given the nature of the contributory risk
on board M/V Tate J. Also, he did not factors that we cited above.
show how his duties or the tasks that he
performed caused, contributed to the In the same manner, neither could "a diet
13
consisting mostly of processed and red a regular employee. Petitioner insisted

meat on board M/V Tate J" be reasonably that it was Villegas who has stopped
considered as having caused, aggravated working in the hacienda and that he was
or contributed to the development of his not dismissed.
ampullary cancer. We point out again that A perusal of the records would show that
the medically determined risk factors for respondent, having been employed in the
the development of ampullary cancer are subject Hacienda while the same was still
genetic factors and alterations, smoking being managed by petitioner's father until
and certain diseases. A diet high in the latter's death in 1993, is undisputed
processed and red meat is far from being as the same was even admitted by
related to these risk factors. Gamboa in his earlier pleadings.14 While
refuting that Villegas was a regular
As a final word and a cautionary employee, petitioner however failed to
clarification, we do not here rule with categorically deny that Villegas was
absolute precision on the non-causing, indeed employed in their hacienda albeit
non-aggravating, or non-contributing he insisted that Villegas was merely a
effect that any or all substances/chemicals casual employee doing odd jobs.
and a processed-and-red-meat-rich diet
may have on ampullary cancer. We are The rule is long and well settled that, in
not experts on the matter and we illegal dismissal cases like the one at
recognize the considerable degree of bench, the burden of proof is upon the
uncertainty inherent in the field of employer to show that the employee’s
medicine and its study. Our ruling on this termination from service is for a just and
petition should, therefore, be understood valid cause. The employer’s case succeeds
strictly in the light of and limited to the or fails on the strength of its evidence and
surrounding circumstances of this case. not the weakness of that adduced by the
employee, in keeping with the principle
Stated differently, we declare that that the scales of justice should be tilted
Ravena's ampullary cancer is not work- in favor of the latter in case of doubt in
related, and therefore not compensable, the evidence presented by them. Often
because he failed to prove, by substantial described as more than a mere scintilla,
evidence, its work-relatedness and his the quantum of proof is substantial
compliance with the parameters that the evidence which is understood as such
law had precisely set out in disability relevant evidence as a reasonable mind
benefits claim. For, while we adhere to might accept as adequate to support a
the principle of liberality in favour of the conclusion, even if other equally
seafarer in construing the POEA-SEC, we reasonable minds might conceivably opine
cannot allow claims for disability otherwise.15cralawlawlibrary
compensation based on surmises. Liberal
construction is never a license to In the instant case, if we are to follow the
disregard the evidence on record and to length of time that Villegas had worked
misapply the law.46cralawlawlibrary with the Gamboas, it should be more than
• Hacienda Leddy/Ricardo Gamboa, Jr. Vs. 20 years of service. Even Gamboa
Paquito Villegas   G.R. No. 179654. admitted that by act of generosity and
September 22, 2014 compassion, Villegas was given a privilege
Petitioner disputed that there exists an of erecting his house inside the hacienda
employer-employee relationship between during his employment.16 While it may
him and Villegas. He claimed that indeed be an act of good will on the part
respondent was paid on a piece-rate basis of the Gamboas, still, such act is usually
without supervision.12 Petitioner added done by the employer either out of
that since his job was not necessary or gratitude for the employee’s service or for
desirable in the usual business or trade of the employer's convenience as the nature
the hacienda, he cannot be considered as of the work calls for it. Indeed, petitioner's
13
length of service is an indication of the petitioner admitted that Villegas had

regularity of his employment. Even worked in the hacienda until his father's
assuming that he was doing odd jobs demise. Clearly, even assuming that
around the farm, such long period of Villegas' employment was only for a
doing said odd jobs is indicative that the specific duration, the fact that he was
same was either necessary or desirable to repeatedly re-hired over a long period of
petitioner's trade or business. Owing to time shows that his job is necessary and
the length of service alone, he became a indispensable to the usual business or
regular employee, by operation of law, trade of the employer.
one year after he was employed. Gamboa likewise argued that Villegas was
paid on a piece-rate basis.18 However,
Article 280 of the Labor Code, describes a payment on a piece-rate basis does not
regular employee as one who is either (1) negate regular employment. “The term
engaged to perform activities which are ‘wage’ is broadly defined in Article 97 of
necessary or desirable in the usual the Labor Code as remuneration or
business or trade of the employer; and (2) earnings, capable of being expressed in
those casual employees who have terms of money whether fixed or
rendered at least one year of service, ascertained on a time, task, piece or
whether continuous or broken, with commission basis. Payment by the piece is
respect to the activity in which he is just a method of compensation and does
employed. not define the essence of the
relations.”19cralawlawlibrary
In Integrated Contractor and Plumbing We are likewise unconvinced that it was
Works, Inc. v. National Labor Relations Villegas who suddenly stopped working.
Commission,17 we held that the test to Considering that he was employed with
determine whether employment is regular the Gamboas for more than 20 years and
or not is the reasonable connection was even given a place to call his home, it
between the particular activity performed does not make sense why Villegas would
by the employee in relation to the usual suddenly stop working therein for no
business or trade of the employer. If the apparent reason. To justify a finding of
employee has been performing the job for abandonment of work, there must be
at least one year, even if the performance proof of a deliberate and unjustified
is not continuous or merely intermittent, refusal on the part of an employee to
the law deems the repeated and resume his employment. The burden of
continuing need for its performance as proof is on the employer to show an
sufficient evidence of the necessity, if not unequivocal intent on the part of the
indispensability of that activity to the employee to discontinue employment.
business. Clearly, with more than 20 years Mere absence is not sufficient. It must be
of service, Villegas, without doubt, passed accompanied by manifest acts unerringly
this test to attain employment regularity. pointing to the fact that the employee
simply does not want to work
While length of time may not be the anymore.20cralawlawlibrary
controlling test to determine if Villegas is
indeed a regular employee, it is vital in Petitioner failed to discharge this burden.
establishing if he was hired to perform Other than the self-serving declarations in
tasks which are necessary and the affidavit of his employee, petitioner
indispensable to the usual business or did not adduce proof of overt acts of
trade of the employer. If it was true that Villegas showing his intention to abandon
Villegas worked in the hacienda only in the his work. Abandonment is a matter of
year 1993, specifically February 9, 1993 intention; it cannot be inferred or
and February 11, 1993, why would then presumed from equivocal acts. On the
he be given the benefit to construct his contrary, the filing of the instant illegal
house in the hacienda? More significantly, dismissal complaint negates any intention
13
on his part to sever their employment instance.24 Considering that

relationship. The delay of more than 1 reinstatement is no longer feasible
year in filing the instant illegal dismissal because of strained relations between the
case likewise is non-issue considering employee and the employer, separation
that the complaint was filed within a pay should be granted. The basis for
reasonable period during the three-year computing separation pay is usually the
period provided under Article 291 of the length of the employee’s past service,
Labor Code.21 As aptly observed by the while that for backwages is the actual
appellate court, Villegas appeared to be period when the employee was unlawfully
without educational attainment. He could prevented from working.25 It should be
not have known that he has rights as a emphasized, however, that the finality of
regular employee that is protected by law. the illegal dismissal decision becomes the
reckoning point. In allowing separation
The Labor Code draws a fine line between pay, the final decision effectively declares
regular and casual employees to protect that the employment relationship ended
the interests of labor. We ruled in Baguio so that separation pay and backwages are
Country Club Corporation v. NLRC 22 that to be computed up to that point. The
"its language evidently manifests the decision also becomes a judgment for
intent to safeguard the tenurial interest of money from which another consequence
the worker who may be denied the rights flows – the payment of interest in case of
and benefits due a regular employee by delay.26cralawlawlibrary
virtue of lopsided agreements with the • Government Service Insurance
economically powerful employer who can Corporation Vs. Jose M. Capacite G.R.
maneuver to keep an employee on a No. 199780. September 24, 2014
casual status for as long as convenient." • We find the petition
Thus, notwithstanding any agreements to meritorious.
the contrary, what determines whether a •
certain employment is regular or casual is • PD 626, as amended, defines
not the will and word of the employer, to compensable sickness as “any
which the desperate worker often accedes, illness definitely accepted as an
much less the procedure of hiring the occupational disease listed by the
employee or the manner of paying his Commission, or any illness caused
salary. It is the nature of the activities by employment subject to proof by
performed in relation to the particular the employee that the risk of
business or trades considering all contracting the same is increased
circumstances, and in some cases the by the working conditions.” Of
length of time of its performance and its particular significance in this
continued existence.23cralawlawlibrary definition is the use of the
conjunction “or,” which indicates
All these having discussed, as a regular alternative situations.
worker, Villegas is entitled to security of •
tenure under Article 279 of the Labor • Based on this definition, we ruled
Code and can only be removed for cause. in GSIS v. Vicencio12 that for
We found no valid cause attending to his sickness and the resulting death of
dismissal and found also that his dismissal an employee to be compensable,
was without due process. the claimant must show either: (1)
The failure of the petitioner to comply with that it is a result of an occupational
these procedural guidelines renders its disease listed under Annex "A" of
dismissal of Villegas illegal. An illegally the Amended Rules on Employees'
dismissed employee should be entitled to Compensation with the conditions
either reinstatement – if viable, or set therein satisfied; or (2) if not
separation pay if reinstatement is no so listed, that the risk of
longer viable, plus backwages in either contracting the disease was
13
increased by the working compensability" and "aggravation" and

conditions. substituted a system based on social
• security principles. The intent was to
• While item 17, Annex “A” of the restore a sensible equilibrium between the
Amended Rules of Employee’s employer's obligation to pay workmen's
Compensation considers lung compensation and the employee's right to
cancer to be a compensable receive reparation for work-connected
occupational disease, it likewise death or disability.21cralawlawlibrary
provides that the employee should
be employed as a vinyl chloride The new employee compensation program
worker or a plastic worker. In this now directs that all covered employers
case, however, Elma did not work throughout the country be required by law
in an environment involving the to contribute fixed and regular premiums
manufacture of chlorine or plastic, or contributions to a trust fund for their
for her lung cancer to be employees. Benefits are paid from this
considered an occupational trust fund. If diseases not intended by
disease.13 There was, therefore, no the law to be compensated are
basis for the CA to simply inadvertently or recklessly included,
categorize her illness as an the integrity of the trust fund would
occupational disease without first be endangered. In this sense,
establishing the nature of Elma’s compassion for the victims of diseases not
work. Both the law and the covered by the law ignores the need to
implementing rules clearly state show a greater concern for the trust
that the given alternative fund to which the tens of millions of
conditions must be satisfied for a workers and their families look up to for
disease to be compensable. compensation whenever covered
No proof exists showing that Elma’s accidents, salary and deaths
lung cancer occur.22cralawlawlibrary
was induced or aggravated by her
working conditions As an agency charged by law to manage
and administer the limited trust fund of
We also do not find that Elma’s cause of the government officials and employees,
death was work-connected. As we earlier the GSIS has the difficult task of insuring
pointed out, entitlement to death benefits all legitimate claims. Suffice it to say that
depends on whether the employee’s a misplaced compassion for victims of
disease is listed as an occupational diseases or injuries would prejudice the
disease or, if not so listed, whether the very same workers and their beneficiaries
risk of contracting the disease has been in times of need.
increased by the employee’s working
conditions. In sum, for insufficiency of evidence of
Insurance trust fund should only be causation or aggravation, we cannot grant
applied to legitimate claims for Jose’s claim for compensation benefits.
compensation benefits • Mount Carmel College Employees Union
(MCCEU)/Romulo S. Bascar, et al. Vs.
While PD 626, as amended, is a social Mount Carmel College, Incoporated  
legislation whose primary purpose is to G.R. No. 187621. September 24, 2014
provide meaningful protection to the • Thus, the first question that must
working class against the hazards of be resolved is whether the CA
disability, illness, and other contingencies correctly ruled that the NLRC did
resulting in loss of income, it was not not commit any grave abuse of
enacted to cover all ailments of discretion when it allowed the
workingmen. The law discarded, among respondent’s appeal despite the
others, the concepts of "presumption of blacklisting of CBIC at the time it
13
issued the appeal bond. certain prohibited acts and/or violations of

law, prescribed rules and
Section 6 requiring the issuance of a bond regulations.21 Trivializing it would release
by a reputable bonding company duly a blacklisted bonding company from the
accredited by the NLRC or the Supreme effects sought to be achieved by the
Court was substantially carried over to the blacklisting and would make the entire
2005 Revised Rules of Procedure of the process insignificant.
NLRC13 and the 2011 NLRC Rules of
Procedure.14 In this regard, the Court Also, the lifting of CBIC’s blacklisting on
has ruled that in a judgment involving a January 24, 2005 does not render the
monetary award, the appeal shall be bond it issued on March 15, 2004
perfected only upon: (1) proof of subsequently valid. It should be stressed
payment of the required appeal fee; (2) that what the law requires is that the
posting of a cash or surety bond appeal bond must be issued by a
issued by a reputable bonding reputable bonding company duly
company; and (3) filing of a accredited by the NLRC or the Supreme
memorandum of appeal.15cralawlawlibrary Court at the time of the filing of the
appeal. To rule otherwise would make
In this case, it was not disputed that at the requirement ineffective, and
the time CBIC issued the appeal bond, it employers using “fly-by-night” and
was already blacklisted by the NLRC. The untrustworthy bonding companies could
latter, however, opined that “respondents easily manipulate their obligation to post a
should not be faulted if the Bacolod valid bond by raising such justification.
branch office of the bonding company
issued the surety bond” and that On the foregoing point alone, it is clear
“[r]espondents acted in good faith when that the CA committed a reversible error
they transacted with the bonding company when it ruled out any grave abuse of
for the issuance of the surety discretion on the part of the NLRC in
bond.”16cralawlawlibrary admitting the respondent’s appeal and
reversing the decision of the LA. It should
Good faith, however, is not an excuse for be stressed that the requirement of the
setting aside the mandatory and posting of an appeal bond by a reputable
jurisdictional requirement of the law. In company is jurisdictional.22 It cannot be
Cawaling v. Menese,17 the Court subject to the NLRC’s discretion and there
categorically ruled that the defense of is a “little leeway for condoning a liberal
good faith does not render the issued interpretation of the
bond valid. rule.”23cralawlawlibrary
The condition of posting a cash or surety Even if the Court were to relax the rules
bond is not a meaningless requirement – and consider the respondent’s appeal, the
it is meant to assure the workers that if Court still finds that the CA committed an
they prevail in the case, they will receive error when it ruled that the NLRC did not
the money judgment in their favor upon commit grave abuse of discretion in
the dismissal of the former’s finding that the petitioners’ retrenchment
appeal.19 Such aim is defeated if the was valid under the circumstances of the
bond issued turned out to be invalid due case.
to the surety company’s expired
accreditation.20 Much more in this case Retrenchment, as an authorized
where the bonding company was cause for the dismissal of employees,
blacklisted at the time it issued the appeal finds basis in Article 28324 of the Labor
bond. The blacklisting of a bonding Code
company is not a whimsical Standards25 have been laid down by the
exercise. When a bonding company is Court in order to prevent its abuse by an
blacklisted, it meant that it committed employer, to
13
wit:chanRoblesvirtualLawlibrary purported overwhelming evidence consists

largely of generalizations, suppositions
(1) That retrenchment is reasonably necessary and likely and tobare
prevent
conclusions
business of losses
Cantos'which,
direct
if
already incurred, are not merely de minimis, but substantial,
involvement serious,
or participation
actual and real, inorthe
if
only expected, are reasonably imminent as perceived alleged
objectively
anomalous
and in good execution
faith by theof
employer; PDTAs for eleven (11) POs, mostly
(2) That the employer served written notice both to the between
employees
2005and andto2006,
the Department
which as theof
Labor and Employment at least one month prior toevidence
the intended shows,
date of even
46
retrenchment;
pertained to
(3) That the employer pays the retrenched employees CTEPI
separation
and pay not equivalent
to Temic. to We
one (1)
thus
month pay or at least one-half (½) month pay wonder for every howyear ofTemic
service,
arrived
whichever
at isits
higher; conclusion that Cantos was caught red-
(4) That the employer exercises its prerogative to retrench
handed employees
to have patently
in good faith
violated
for the
the
advancement of its interest and not to defeat or circumvent
company's theclear
employees’
policies,
rightparticularly
to security
of tenure; and its purchasing procedures, which he
(5) That the employer used fair and reasonable criteria even
in ascertaining
co-authored. who47cralawred
would be dismissed
and who would be retained among the employees, such as status, efficiency, seniority,
physical fitness, age, and financial hardship for certain
In conclusion,
workers.26 we(Emphasis
quote withours)
approval the
following CA
In the present case, the observation:chanRoblesvirtualLawlibrary
respondent’s justification for implementing
the retrenchment of the petitioners was xxx [the petitioner] did not commit
due to the alleged closure or cessation of any act which was dishonest or
its elementary and high school deceitful. He did not use his authority
departments. According to them, the as the Purchasing Manager to
continued operations of these misappropriate company property and
departments was an exercise of derive benefits therein nor did he
management prerogative to protect its abuse the trust reposed in him by
business and it was no longer viable to respondent Temic with respect to his
maintain the two departments as it was responsibilities. There was no
already being subsidized by the college demonstration of moral perverseness
department. As proof thereof, the that would justify the claimed loss of
respondent submitted its audited Financial trust and confidence attendant to
Statements for the years 1997, 1998 and [the] petitioner's job. Temic failed to
1999. Respondent also alleged that such adduce any proof that [the] petitioner
closure was recognized by the “Tuition Fee ever profited from the transactions
Law,” which mandates that 70% of the involved in the purchase orders. The
tuition incremental proceeds should be supplies described in the purchase
allocated for salaries, wages and other orders are still with the company
benefits of its personnel. Respondent even up to the time when petitioner's
claimed that in its case, personnel benefits services were terminated. And neither
are already “eating into” the portion of the was there evidence shown that the
budget allocated for capital and same deviates from the specifications
administrative development, and faced of the company or has no more use to
further with the demands of the the company.53
employees of additional increase in
salaries and benefits, it had “no choice” • Exocet Security and Allied Services
but to close down.27cralawlawlibrary Corporation and/or Ma. Teresa
• Temic Automotive (Phils), Inc. Vs. Renato  Marcelo Vs. Armando D. Serrando G.R.
G.R. No. 200729. September 29, 2014 No. 198538. September 29, 2014
As we see it, the overwhelming evidence 45
• The Issue
which Temic claims supported the rulings •
of LA Reyno and the NLRC that Cantos • The sole issue for resolution is
was validly dismissed does not exist. This whether or not Serrano was
14
constructively dismissed. replaced security guard may be

While there is no specific provision in the placed on temporary “off-detail” if
Labor Code which governs the “floating there are no available posts under
status” or temporary “off-detail” of respondent’s existing contracts.
security guards employed by private
security agencies, this situation was When a security guard is placed on a
considered by this Court in several cases “floating status,” he does not receive
as a form of temporary retrenchment or any salary or financial benefit
lay-off.18 The concept has been defined as provided by law. Due to the grim
that period of time when security guards economic consequences to the employee,
are in between assignments or when they the employer should bear the burden of
are made to wait after being relieved from proving that there are no posts available
a previous post until they are transferred to which the employee temporarily out of
to a new one.19 As pointed out by the CA, work can be assigned.” (emphasis
it takes place when the security agency’s supplied)
clients decide not to renew their contracts
with the agency, resulting in a situation It must be emphasized, however, that
where the available posts under its although placing a security guard on
existing contracts are less than the “floating status” or a temporary “off-
number of guards in its roster. It also detail” is considered a temporary
happens in instances where contracts for retrenchment measure, there is similarly
security services stipulate that the client no provision in the Labor Code which
may request the agency for the treats of a temporary retrenchment or lay-
replacement of the guards assigned to it, off. Neither is there any provision which
even for want of cause, such that the provides for its requisites or its duration.22
replaced security guard may be placed on Nevertheless, since an employee cannot
temporary “off-detail” if there are no be laid-off indefinitely, the Court has
available posts under the agency’s applied Article 292 (previously Article 286)
existing contracts.20cralawlawlibrary of the Labor Code by analogy to set the
specific period of temporary lay-off to a
As the circumstance is generally outside maximum of six (6) months.
the control of the security agency or the Thus, this Court has held, citing
employer, the Court has ruled that when Sebuguero v. NLRC,23 that the placement
a security guard is placed on a of the employee on a floating status
“floating status,” he or she does not should not last for more than six months.
receive any salary or financial benefit After six months, the employee should be
provided by law. Pido v. National Labor recalled for work, or for a new
Relations Commission21 explains assignment; otherwise, he is deemed
why:chanRoblesvirtualLawlibrary terminated.
Verily, a floating status requires the dire Thus, to validly terminate a security guard
exigency of the employer’s bona fide for lack of service assignment for a
suspension of operation of a business or continuous period of six months under
undertaking. In security services, this Secs. 6.5 and 9.3 of DO 14-01, the
happens when the security agency’s security agency must comply with the
clients which do not renew their contracts provisions of Article 289 (previously Art.
are more than those that do and the new 283) of the Labor Code,25 which mandates
ones that the agency gets. Also, in that a written notice should be served on
instances when contracts for security the employee on temporary off-detail or
services stipulate that the client may floating status and to the DOLE one (1)
request the agency for the month before the intended date of
replacement of the guards assigned termination. This is also clear in Sec. 9.2
to it even for want of cause, the of DO 14-01
14
In the controversy now before the Court, Indeed, from the facts presented, Serrano
there is no question that the security was guilty of wilful disobedience to a
guard, Serrano, was placed on floating lawful order of his employer in connection
status after his relief from his post as a with his work, which is a just cause for his
VIP security by his security agency’s termination under Art.288 (previously Art.
client. Yet, there is no showing that his 282)of the Labor Code.31 Nonetheless,
security agency, petitioner Exocet, acted Exocet did not take Serrano’s wilful
in bad faith when it placed Serrano on disobedience against him. Hence, Exocet
such floating status. What is more, the is considered to have waived its right to
present case is not a situation where terminate Serrano on such ground.
Exocet did not recall Serrano to work
within the six-month period as In this factual milieu, since respondent
required by law and jurisprudence. Serrano was not actually or constructively
Exocet did, in fact, make an offer to dismissed from his employment by
Serrano to go back to work. It is just petitioner Exocet, it is best that petitioner
that the assignment—although it does not Exocet direct him to report for work, if any
involve a demotion in rank or diminution security assignment is still available to
in salary, pay, benefits or privileges—was him. If respondent Serrano still refuses to
not the security detail desired by Serrano. be assigned to any available guard
position, he shall be deemed to have
Clearly,Serrano’s lack of assignment for abandoned his employment with
more than six months cannot be petitioner.
attributed to petitioner Exocet. On the
contrary, records show that, as early as If no security assignment is available for
September 2006, or one month after respondent, petitioner Exocet should
Serrano was relieved as a VIP security, comply with the requirements of DO 14-
Exocet had already offered Serrano a 01, in relation to Art. 289 of the Labor
position in the general security service Code, and serve a written notice on
because there were no available Serrano and the DOLE one (1) month
clients requiring positions for VIP before the intended date of termination,
security. Notably, even though the new and pay Serrano separation pay
assignment does not involve a demotion equivalent to half month pay for every
in rank or diminution in salary, pay, or year of his actual service.
benefits, Serrano declined the position • Am-Phil Food Concepts, Inc. Vs. Paolo
because it was not the post that Jesus T. Padilla   G.R. No. 188753.
suited his preference, as he insisted October 1, 2014
on being a VIP Security. For resolution is the issue of whether
respondent Paolo Jesus T. Padila was
Thus, it is manifestly unfair and dismissed through a valid retrenchment
unacceptable to immediately declare the implemented by petitioner Am-Phil Food
mere lapse of the six-month period of Concepts, Inc. Related to this, we must
floating status as a case of constructive likewise resolve the underlying issue of
dismissal, without looking into the peculiar whether it was proper for Labor Arbiter
circumstances that resulted in the security Eric V. Chuanico to have ruled that Padilla
guard’s failure to assume another post. was illegally dismissed despite Am-Phil’s
This is especially true in the present case pending motion for leave to file
where the security guard’s own refusal to supplemental rejoinder.
accept a non-VIP detail was the reason Retrenchment and its
that he was not given an assignment requirements
within the six-month period. The security Thus, retrenchment has been described as
agency, Exocet, should not then be held “a measure of last resort when other less
liable. drastic means have been tried and found
14
to be inadequate.”53cralawlawlibrary Am-Phil’s 2001 to 2004 audited financial

statements, the sole proof upon which
Retrenchment is, therefore, not a tool to Am-Phil relies on to establish its claim that
be wielded and used nonchalantly. To it suffered business losses, have been
justify retrenchment, it “must be due to deemed unworthy of consideration. These
business losses or reverses which are audited financial statements were mere
serious, actual and real.”54cralawlawlibrary annexes to the motion for leave to admit
supplemental rejoinder which Labor
There are substantive requirements Arbiter Chuanico validly disregarded. No
relating to the losses or reverses that credible explanation was offered as to why
must underlie a retrenchment. That these these statements were not presented
losses are serious relates to their gravity when the evidence-in-chief was being
and that they are actual and real relates considered by the labor arbiter. It follows
to their veracity and that there is no clear and convincing
verifiability. Likewise, that a evidence to sustain the substantive
retrenchment is anchored on serious, ground on which the supposed validity of
actual, and real losses or reverses is to Padilla’s retrenchment rests.
say that the retrenchment is done in good
faith and not merely as a veneer to Moreover, it is admitted that Am-Phil did
disguise the illicit termination of not serve a written notice to the
employees. Equally significant is an Department of Labor and Employment one
employer’s basis for determining who (1) month before the intended date of
among its employees shall be Padilla’s retrenchment, as required by
retrenched. Apart from these substantive Article 283 of the Labor
requirements are the procedural Code.56cralawlawlibrary
requirements imposed by Article 283 of
the Labor Code. While it is true that Am-Phil gave Padilla
separation pay, compliance with none but
Thus, this court has outlined the one (1) of the many requisites for a valid
requirements for a valid retrenchment, retrenchment does not absolve Am-Phil of
each of which must be shown by clear and liability.
convincing evidence, as Padilla’s quitclaim and release
follows:chanRoblesvirtualLawlibrary does not negate his having been
illegally dismissed
(1) that the retrenchment is reasonably necessary and likely to prevent business losses which,
if already incurred, are not merely de minimis, but It
substantial,
is of noserious, actual and
consequence real,Padilla
that or if
only expected, are reasonably imminent as perceived objectively
ostensibly and in good
executed faith by the
a quitclaim and
employer; release in favor of Am-Phil. This court’s
(2) that the employer served written notice both to the employees and tointhe Department
pronouncements F.F. of
Marine
Labor and Employment at least one month prior toCorporation
the intendedv. date of retrenchment;
National Labor Relations
(3) that the employer pays the retrenched employeesCommission,
separation pay 57 equivalent
which to one
similarly month
involved an
pay or at least ½ month pay for every year of service, whichever
invalid is higher;
retrenchment, are of
(4) that the employer exercises its prerogative to retrench employees in good faith for the
note:chanRoblesvirtualLawlibrary
advancement of its interest and not to defeat or circumvent the employees’ right to security
of tenure; and Considering that the ground for
(5) that the employer used fair and reasonable criteriaretrenchment
in ascertaining who would
availed be dismissed
of by petitioners was
and who would be retained among the employees, notsuch sufficiently
as status (i.e.,and whether they are
convincingly
temporary, casual, regular or managerial employees), efficiency,
established, theseniority, physicalisfitness,
retrenchment hereby
age, and financial hardship for certain workers.55 (Citations
declared omitted)
illegal and of no effect. The
Am-Phil failed to establish quitclaims executed by retrenched
compliance with the requisites employees in favor of petitioners were
for a valid retrenchment therefore not voluntarily entered into by
them. Their consent was similarly vitiated
14
by mistake or fraud. The law looks with

disfavor upon quitclaims and releases by • Since the POEA-SEC requires the
employees pressured into signing by employer to prove not only that the
unscrupulous employers minded to evade death is directly attributable to the
legal responsibilities. As a rule, deeds of seafarer himself but also that the
release or quitclaim cannot bar employees seafarer willfully caused his death,
from demanding benefits to which they evidence of insanity or mental
are legally entitled or from contesting the sickness may be presented to
legality of their dismissal. The acceptance negate the requirement of
of those benefits would not amount to willfulness as a matter of
estoppel. The amounts already received counter-defense. Since the
by the retrenched employees as willfulness may be inferred from
consideration for signing the quitclaims the physical act itself of the
should, however, be deducted from their seafarer (his jump into the open
respective monetary awards.58 sea), the insanity or mental illness
• Agile Maritime Resources, Inc., et al. Vs. required to be proven must be one
Apolinario N. Siador G.R. No. 191034. that deprived him of the full control
October 1, 2014 of his senses; in other words, there
• There was substantial evidence must be sufficient proof to negate
to prove voluntariness.
• that Dennis’ death was directly But his strange behavior cannot be the
attributable to his own action basis for a finding of grave abuse of
• In the present case, the LA, NLRC discretion because portions of the
and the CA28 uniformly found that Crewmembers’ Statement itself
Dennis jumped from the ship. rendered the basis for a finding of
Additionally, the petitioners cited insanity insufficient. To recall, a few
the following personal hours before the accident, Filipino crew
circumstances that may have members approached Dennis to ask him if
driven Dennis to do what he did: anything was wrong with him and Dennis
his dysfunctional family; the death simply replied that everything was in
of his mother after a lingering order. No proof was ever adduced as well
illness; the bitter parting with his showing that whatever personal problems
father whom he had not seen for Dennis had were enough to negate the
three (3)29 after he and his two (2) voluntariness he showed in stepping
brothers were thrown out from overboard.
their home in Talisay, Cebu; and
his disappointment with his sister The Court observes that, more often
whose medical education he than not, the question of willfulness in
supported, only to learn that she causing one’s death is explained away
got married and did not even invite as arising from insanity because the
him to the wedding.30cralawred very nature of the defense that the
• employer is allowed to put up is
• Based on these facts and the legal mentally tough to grasp. Differences of
presumption of sanity, we conclude opinion can arise and have arisen, as
that the NLRC did not gravely in this case; hence, it becomes
abuse its discretion when it imperative for the courts to proceed on
affirmed the LA’s dismissal of the the basis of a correct framework of
complaint; we hold that the review if stability and consistency in
seafarer’s death was due to his rulings can be approximated.
willful act, as the employer posited • Formerly INC Shipmanagement
and proved. Incorporated (now INC Navigation
Shift in the burden of evidence; Co., Phils, Inc.), et al. Vs. Benjamin I.
proof of insanity Rosales   G.R. No. 195832. October 1,
14
2014 incapacity to work and earn his

• It is the doctor’s findings which wages.
• should prevail over the simple
• lapse of the 120-day period It is the doctor’s findings that should
The law and this pronouncement make it prevail as he/she is equipped with the
clear that INC is obligated to pay for the proper discernment,
treatment of Rosales, plus his basic knowledge, experience and expertise on
wage, during the 120-day period from what constitutes total or partial
repatriation while he is undergoing disability. His declaration serves as the
treatment; he could not work during this basis for the degree of disability that can
period and hence was on temporary range anywhere from Grade 1 to Grade
total disability. 14.19 Notably, this is a serious
consideration that cannot be determined
Permanent disability transpires when by simply counting the number of
the inability to work continues beyond treatment lapsed days.
one hundred twenty (120) days,
regardless of whether or not he loses the In light of these distinctions, to confuse
use of any part of his body. In comparison the concepts of permanent and total
with the concept of permanent disability, disability is to trigger a situation where
total disability means the incapacity of disability would be determined by simply
an employee to earn wages in the counting the duration of the seafarer’s
same or similar kind of work that he illness. This system would inevitably
was trained for, or is accustomed to induce the unscrupulous to delay
perform, or in any kind of work that a treatment for more than one hundred
person of his mentality and twenty (120) days to avail of the more
attainments can do. It does not mean favorable award of permanent total
absolute helplessness. disability benefits.
In disability compensation, it is not Non-referral to a third physician,

the injury that is compensated; it is whose decision shall be considered as
the incapacity to work resulting in the final
impairment of one’s earning and binding, constitutes a breach of
capacity.18cralawred the
POEA-SEC
Thus, while Rosales was entitled to
temporary total disability benefits After establishing the importance of the
during his treatment period (because he physician’s assessment of disability
could not totally work during this whole claims, the present case should have
period), it does not follow that he should already been resolved had it not been for
likewise be entitled to permanent total the conflicting findings of Dr. Cruz and Dr.
disability benefits when his disability was Vicaldo.
assessed by the company-designated
physician after his treatment. He may be In the settlement of this conflict, we need
recognized to be have permanent not provide a lengthy discussion as we
disability because of the period he was have resolved this matter in Philippine
out of work and could not work [in this Hammonia Ship Agency, Inc. v.
case, more than one hundred twenty Dumadag,20 citing Section 20(B)(3) of the
(120) days], but the extent of his POEA-SEC:chanRoblesvirtualLawlibrary
disability (whether total or partial) is
determined, not by the number of days If a doctor appointed by the seafarer
that he could not work, but by the disagrees with the assessment, a third
disability grading the doctor doctor may be agreed jointly between
recognizes based on his resulting the [e]mployer and the seafarer. The
14
third doctor’s decision shall be final notification that the seafarer disagrees
and binding on both with the company doctor’s assessment
parties. (Emphasis ours) based on the duly and fully disclosed
contrary assessment from the seafarer’s
This referral to a third doctor has been own doctor, the seafarer shall then signify
held by this Court to be a mandatory his intention to resolve the conflict by the
procedure as a consequence of the referral of the conflicting assessments to a
provision that it is the company- third doctor whose ruling, under the
designated doctor whose assessment POEA-SEC, shall be final and binding on
should prevail. In other words, the the parties. Upon notification, the
company can insist on its disability rating company carries the burden of initiating
even against a contrary opinion by the process for the referral to a third
another doctor, unless the seafarer doctor commonly agreed between the
expresses his disagreement by asking for parties.
the referral to a third doctor who shall
make his or her determination and whose Thus, as matters stand in the present
decision is final and binding on the case, the complaint was premature; it
parties. We have followed this rule in a should have been dismissed as early as
string of cases, among them, Philippine the LA’s level since the fit-to-work
Hammonia,21Ayungo v. Beamko certification and grading by the company-
Shipmanagement Corp.,22Santiago v. designated physician prevails unless a
Pacbasin Shipmanagement, Inc.,23Andrada third party doctor, sought by the parties,
v. Agemar Manning Agency,24 and declares otherwise.
Masangkay v. Trans-Global Maritime
Agency, Inc.25 Thus, at this point, the Significantly, no reason was ever given
matter of referral pursuant to the why the LA and the NLRC both
provision of the POEA-SEC is a settled disregarded the third-doctor provision
ruling. under the POEA-SEC. For similarly ruling,
the CA fell into the same error.
Since Rosales signed the POEA-SEC, he 29
cralawred
bound himself to abide by its conditions
throughout his employment. The records Once again, it appears to us, that the
show that after obtaining a medical third-doctor-referral provision of the
certificate from Dr. Vicaldo classifying his POEA-SEC, has been honored more in the
illness as Grade 1 (contrary to Dr. Cruz’ breach than in the compliance. This is
Grade 7 assessment that the company unfortunate considering that the provision
insisted on), Rosales immediately is intended to settle disability claims at
proceeded to secure the services of a the parties’ level where the claims can be
counsel and forthwith filed a complaint for resolved more speedily than if they were
disability benefits.26cralawred to be brought to court.30cralawred
By so acting, Rosales proceeded in a Even granting that the complaint should

manner contrary to the terms of his be given due course, we hold that the
contract with INC in challenging the company-designated physician’s
company doctor’s assessment; he failed to assessment should prevail over that of the
signify his intent to submit the disputed private physician. The company-
assessment to a third doctor and to wait designated physician had thoroughly
for arrangements for the referral of the examined and treated Rosales from
conflicting assessments of his disability to the time of his repatriation until his
a third doctor. disability grading was issued, which
was from February 20, 2006 until
To definitively clarify how a conflict October 10, 2006. In contrast, the
situation should be handled, upon private physician only attended to
14
Rosales once, on November 9, the accused is acquitted. However, the

2006.31This is not the first time that civil action based on delict may be
this Court met this situation. Under deemed extinguished if there is a finding
these circumstances, the assessment of on the final judgment in the criminal
the company-designated physician is more action that the act or omission from which
credible for having been arrived at after the civil liability may arise did not exist or
months of medical attendance and where the accused did not commit the
diagnosis, compared with the assessment acts or omission imputed to
of a private physician done in one day on him.”22cralawlawlibrary
the basis of an examination or existing
medical records. In this case, Rimando’s civil liability did
not arise from any purported act
We are thus compelled to dismiss the constituting the crime of estafa as the RTC
present complaint, as we had similarly clearly found that Rimando never
done in Philippine Hammonia,32 to impress employed any deceit on Sps. Aldaba to
upon the public the significance of a induce them to invest money in Multitel.
binding obligation. This pronouncement Rather, her civil liability was correctly
shall not only speed up the processing of traced from being an accommodation
maritime disability claims and decongest party to one of the checks she issued to
court dockets; more importantly, our Sps. Aldaba on behalf of Multitel. In
ruling would restore faith and confidence lending her name to Multitel, she, in
in obligations that have voluntarily been effect, acted as a surety to the latter, and
entered upon. As an institution tasked to as such, she may be held directly liable for
uphold and respect the law, it is our the value of the issued check.23 Verily,
primary duty to ensure faithful compliance Rimando’s civil liability to Sps. Aldaba in
with the law whether the dispute affects the amount of P500,000.00 does not arise
strictly private interests or one imbued from or is not based upon the crime she is
with public interest. We shall not hesitate charged with, and hence, the CA correctly
to dismiss a petition wrongfully filed, or to upheld the same despite her acquittal in
hold any persons liable for its malicious the estafa case.
initiation.
In this relation, the CA is also correct in
The Court’s Ruling holding that Rimando’s acquittal and
subsequent exoneration in the BP 22
The petition is without merit. cases had no effect in the estafa case,
even if both cases were founded on the
At the outset, the Court notes that same factual circumstances. In Nierras v.
Rimando’s acquittal in the estafa case Judge Dacuycuy,24 the Court laid down the
does not necessarily absolve her from any fundamental differences between BP 22
civil liability to private complainants, Sps. and estafa, to
Aldaba. It is well-settled that “the wit:chanRoblesvirtualLawlibrary
acquittal of the accused does not
automatically preclude a judgment against What petitioner failed to mention in his
him on the civil aspect of the case. The argument is the fact that deceit and
extinction of the penal action does not damage are essential elements in Article
carry with it the extinction of the civil 315 (2-d) Revised Penal Code, but are not
liability where: (a) the acquittal is based required in Batas Pambansa Bilang 22.
on reasonable doubt as only Under the latter law, mere issuance of a
preponderance of evidence is required; (b) check that is dishonored gives rise to the
the court declares that the liability of the presumption of knowledge on the part of
accused is only civil; and (c) the civil the drawer that he issued the same
liability of the accused does not arise from without sufficient funds and hence
or is not based upon the crime of which punishable which is not so under the Penal
14
Code. Other differences between the two indicate that respondent has been working
also include the following: (1) a drawer of for petitioners since 1988; that per his
a dishonored check may be convicted service record,37 he has been serving as
under Batas Pambansa Bilang 22 even if Third Mate for twelve (12) years; and that
he had issued the same for a pre-existing as Third Mate, he was saddled with heavy
obligation, while under Article 315 (2-d) of responsibilities relative to navigation of
the Revised Penal Code, such the vessel, ship safety and management
circumstance negates criminal liability; (2) of emergencies. It is beyond doubt that
specific and different penalties are respondent was subjected to physical and
imposed in each of the two offenses; (3) mental stress and strain: as Third Mate,
estafa is essentially a crime against he is the ship’s fourth in command, and
property, while violation of Batas he is the ship’s safety officer; these
Pambansa Bilang 22 is principally a crime responsibilities have been heavy burdens
against public interest as it does injury to on respondent’s shoulders all these years,
the entire banking system; (4) violations and certainly contributed to the
of Article 315 of the Revised Penal Code development of his illness. Besides, “[i]t
are mala in se, while those of Batas is already recognized that any kind of
Pambansa Bilang 22 are mala work or labor produces stress and strain
prohibita.25chanrobleslaw normally resulting in wear and tear of the
human body.”38 “Notably, it is a matter
Owing to such differences, jurisprudence of judicial notice that an overseas worker,
in People v. Reyes26 even instructs that having to ward off homesickness by
the simultaneous filing of BP 22 and estafa reason of being physically separated from
cases do not amount to double his family for the entire duration of his
jeopardy:chanRoblesvirtualLawl contract, bears a great degree of
emotional strain while making an effort to
Essentially, while a BP 22 case and an perform his work well. The strain is even
estafa case may be rooted from an greater in the case of a seaman who is
identical set of facts, they nevertheless constantly subjected to the perils of the
present different causes of action, which, sea while at work abroad and away from
under the law, are considered “separate, his family.”39cralawlawlibrary
distinct, and independent” from each
other. Therefore, both cases can proceed Having worked for petitioners since 1988
to their final adjudication – both as to under employment contracts that were
their criminal and civil aspects – subject to continuously renewed, it can be said that
the prohibition on double recovery.28 respondent spent much of his productive
Perforce, a ruling in a BP 22 case years with petitioners; his years of service
concerning the criminal and civil liabilities certainly took a toll on his body, and he
of the accused cannot be given any could not have contracted his illness
bearing whatsoever in the criminal and elsewhere except while working for
civil aspects of a related estafa case, as in petitioners. To be sure, the Court has
this instance. ruled that “the list of illnesses/diseases in
Section 32-A40 does not preclude other
• Magsaysay Mitsui Osk Marine, Inc. and/or illnesses/diseases not so listed from being
MOL Tankship Management (Asia) compensable. The POEA-SEC cannot be
Pte. Ltd. Vs. Juanito G. Bengson G.R. presumed to contain all the possible
No. 198528. October 13, 2014 injuries that render a seafarer unfit for
Time and again, this Court has held that further sea duties.”41 And equally
cardiovascular disease, coronary artery significant, “it is not the injury which is
disease, and other heart ailments are compensated, but rather it is the
work-related and, thus, compensable. incapacity to work resulting in the
the Court finds that Bengson’s illness is impairment of one’s earning
work-related. The undisputed facts capacity.”42cralawlawlibrary
14
weakness or disease,
• Anita N. Canuel, for herself and on behalf Clearly, Nancing’s injury was the
of her minor children, namely, proximate cause of his death
Charmaine, Charlene and Charl Smith, considering that the same, unbroken by
all surnamed Canuel Vs. Magsaysay any efficient, intervening cause, triggered
Maritime Corporation, et al.  G.R. No. the following sequence of events: (a)
190161. October 13, 2014 Nancing’s hospitalization at the Shanghai
• First Requirement: Seamen’s Hospital47 where he was
• The Seafarer’s Death Should Be diagnosed with “bilateral closed traumatic
Work-Related. haemothorax”;48(b) his repatriation and
• eventual admission to the Manila Doctor’s
• While the 2000 POEA-SEC does not Hospital;49 and (c) his acute respiratory
expressly define what a “work- failure, which was declared to be the
related death” means, it is immediate cause of his
palpable from Part A (4) as above- death.50cralawlawlibrary
cited that the said term refers to
the seafarer’s death resulting • Thus, for the foregoing reasons, it
from a work-related injury or cannot be seriously disputed that
illness. the first requirement for death
Given that the seafarer’s death in this compensability concurs in this
case resulted from a work-related injury case.
as defined in the 2000 POEA-SEC above, it
is clear that the first requirement for Second Requirement:
death compensability is present. The Seafarer’s Death Should Occur
During The Term Of Employment.
• As the records show, Nancing
suffered a work-related injury With respect to the second requirement
within the term of his employment for death compensability, the Court takes
contract when he figured in an this opportunity to clarify that while the
accident while performing his general rule is that the seafarer’s death
duties as Third Assistant Engineer should occur during the term of his
at cylinder number 7 of the vessel employment, the seafarer’s death
on February 20, 2007.41 The occurring after the termination of his
foregoing circumstances aptly fit employment due to his medical
the legal attribution of the phrase repatriation on account of a work-related
“arising out of and in the course of injury or illness constitutes an exception
employment” thereto. This is based on a liberal
• That Nancing was suffering from construction of the 2000 POEA-SEC as
lung cancer, which was found to impelled by the plight of the bereaved
have been pre-existing, hardly heirs who stand to be deprived of a just
impels a contrary conclusion since and reasonable compensation for the
– as the LA herein earlier noted – seafarer’s death, notwithstanding its
the February 20, 2007 injury evident work-connection. The present
actually led to the deterioration of petition is a case in point.
his condition.44 As held in More
Maritime Agencies, Inc. v. NLRC,45 Here, Nancing’s repatriation occurred
“[i]f the injury is the proximate during the eighth (8th) month of his one
cause of [the seafarer’s] death or (1) year employment contract. Were it not
disability for which compensation is for his injury, which had been earlier
sought, [his] previous physical established as work-related, he would not
condition x x x is unimportant and have been repatriated for medical reasons
recovery may be had for injury and his contract consequently terminated
independent of any pre-existing pursuant to Part 1 of Section 18 (B) of the
14
2000 POEA-SEC that the seafarer’s work-related death

should have precisely occurred during the
The terminative consequence of a medical term of his employment. Rather, it is
repatriation case then appears to present enough that the seafarer’s work-
a rather prejudicial quandary to the related injury or illness which
seafarer and his heirs. Particularly, if the eventually causes his death should
Court were to apply the provisions of have occurred during the term of his
Section 20 of the 2000 POEA-SEC as employment. Taking all things into
above-cited based on a strict and literal account, the Court reckons that it is by
construction thereof, then the heirs of this method of construction that undue
Nancing would stand to be barred from prejudice to the laborer and his heirs may
receiving any compensation for the latter’s be obviated and the State policy on labor
death despite its obvious work- protection be championed. For if the
relatedness. Again, this is for the reason laborer’s death was brought about
that the work-related death would, by (whether fully or partially) by the work he
mere legal technicality, be considered to had harbored for his master’s profit, then
have occurred after the term of his it is but proper that his demise be
employment on account of his medical compensated. Here, since it has been
repatriation. It equally bears stressing established that (a) the seafarer had been
that neither would the heirs be able to suffering from a work-related injury or
receive any disability compensation since illness during the term of his employment,
the seafarer’s death in this case precluded (b) his injury or illness was the cause for
the determination of a disability grade, his medical repatriation, and (c) it was
which, following Section 20 (B)51 in later determined that the injury or illness
relation to Section 3252 of the 2000 POEA- for which he was medically repatriated
SEC, stands as the basis therefor. was the proximate cause of his actual
death although the same occurred after
However, a strict and literal construction the term of his employment, the above-
of the 2000 POEA-SEC, especially when mentioned rule should squarely apply.
the same would result into inequitable Perforce, the present claim for death
consequences against labor, is not benefits should be granted.
subscribed to in this jurisdiction.
Concordant with the State’s avowed policy To quell any confusion, it is but fitting to
to give maximum aid and full make clear that a liberal construction of
protection to labor as enshrined in Section 20 of the 2000 POEA-SEC as
Article XIII of the 1987 Philippine above-discussed would not offend the
Constitution,53 contracts of labor, such as Court’s ruling in Klaveness,57 which was
the 2000 POEA-SEC, are deemed to be so inaccurately relied upon by the CA to
impressed with public interest that the justify its decision. The inaccuracy so
more beneficial conditions must be recognized stems from the glaring factual
endeavoured in favor of the laborer.54 The and legal variance between Klaveness and
rule therefore is one of liberal the present case. Upon careful scrutiny,
construction. the seafarer in Klaveness was not
Applying the rule on liberal construction, medically repatriated but was actually
the Court is thus brought to the signed off from the vessel after the
recognition that medical repatriation cases completion of his contract. He was
should be considered as an exception to subsequently diagnosed to have urinary
Section 20 of the 2000 POEA-SEC. bladder cancer, which was not proven to
Accordingly, the phrase “work-related be work-related, and died almost two
death of the seafarer, during the term (2) years after the termination of his
of his employment contract” under contract of employment. Hence, since the
Part A (1) of the said provision should not employment contract was terminated
be strictly and literally construed to mean without any connection to a work-related
15
cause, but rather because of its mere prove the cause of the termination of the
lapse, death benefits were denied to the contract of employment, whereas it was
seafarer’s heirs. In contrast, the seafarer found that the seafarer therein died three
in this case was medically repatriated (3) years after his disembarkation of an
due to a work-related injury which illness which was not shown to have been
resulted to his death a month after his contracted during his employment. An
confinement in a local hospital. Again, identical ruling was rendered in Prudential
were it not for said injury, the seafarer Shipping and Management Corp. v. Sta.
would not have been medically repatriated Rita,62 wherein the seafarer in said case
and his employment contract, in turn, was repatriated due to umbilical hernia
terminated. By these circumstances, it is but died one (1) year after of
clear that the termination of the cardiopulmonary arrest, which was not,
employment contract was forced upon by however, established as work-related.
a work-related cause. As alluded earlier, it Similarly, death compensation was denied
would then be antithetical to the State’s the claimants in Ortega v. CA,63
policy on labor to deprive the seafarer’s considering that the seafarer therein died
heirs of death compensation despite its of lung cancer which was not found to be
palpable work-connection. Based on the work-related.
foregoing, it is, hence, apparent that the
Court’s pronouncement herein would not Meanwhile, on the opposite end of the
conflict that in Klaveness. Truth be told, jurisprudential spectrum, the Court, in a
the defining parameter in workers’ number of cases, granted claims for death
compensation cases should be the benefits although the seafarers’ death
element of work-relatedness which therein had occurred after their
was clearly absent in the “contract- repatriation primarily because of the
completion” situation in Klaveness.58 To causal connection between their work and
reiterate, if the death is work-related, as the illness which had eventually resulted
herein ascribed, then the seafarer’s heirs in their death.
should not be denied compensation.
In the 1999 case of Wallem Maritime
To reinforce the point, a survey of Service, Inc. v. NLRC,64 the death benefit
previous Court rulings wherein death claims of the heirs of the seafarer who had
compensability had been denied the heirs died after having been repatriated on
of the seafarer actually demonstrates the account of “mutual consent” between him
significance of the work-relatedness and his employer was allowed by the
element in workers’ compensation cases. Court because of the “reasonable
For instance, in Gau Sheng Phils., Inc. v. connection” between his job and his
Joaquin,59 the illness of the seafarer illness. As pertinently stated in that
therein, who was terminated based on case:chanRoblesvirtualLawlibrary
mutual consent, was found to be non-
compensable since he died of chronic It is not required that the employment be
renal failure which was not listed as a the sole factor in the growth, development
compensable illness. Likewise, in Aya-ay, or acceleration of the illness to entitle the
Sr. v. Arpaphil Shipping Corp.,60 the Court claimant to the benefits provided therefor.
denied the claim for death compensation It is enough that the employment had
because the seafarer therein was contributed, even in a small degree,
repatriated due to an eye injury but to the development of the disease and
subsequently died of a stroke, which was in bringing about his death.
not listed as a compensable illness under
the POEA-SEC. Death compensation was It is indeed safe to presume that, at the
also denied to the claimants in very least, the nature of Faustino
Hermogenes v. Osco Shipping Services, Inductivo’s employment had contributed
Inc.,61 since no evidence was offered to to the aggravation of his illness — if
15
indeed it was pre-existing at the time of compensation, that the employee must
his employment — and therefore it is but have been in perfect health at the time he
just that he be duly compensated for it. It contracted the disease. A worker brings
cannot be denied that there was at with him possible infirmities in the course
least a reasonable connection of his employment, and while the
between his job and his lung employer is not the insurer of the health
infection, which eventually developed of the employees, he takes them as he
into septicemia and ultimately caused finds them and assumes the risk of
his death. As a [utility man] on board liability. If the disease is the proximate
the vessel, he was exposed to harsh cause of the employee’s death for
sea weather, chemical irritants, dusts, which compensation is sought, the
etc., all of which invariably previous physical condition of the
contributed to his illness. employee is unimportant, and
recovery may be had for said death,
Neither is it necessary, in order to recover independently of any pre-existing
compensation, that the employee must disease. 67 (Emphases and underscoring
have been in perfect condition or health at supplied; citations omitted)
the time he contracted the disease. Every
workingman brings with him to his The Court similarly took into account the
employment certain infirmities, and while work-relatedness element in granting the
the employer is not the insurer of the death benefits claim in Interorient
health of the employees, he takes them as Maritime Enterprises, Inc. v. Remo,68 a
he finds them and assumes the risk of 2010 case decided under the 1996 POEA-
liability. If the disease is the proximate SEC which operated under parameters
cause of the employee’s death for which identical to the 1984 POEA-SEC. Quoted
compensation is sought, the previous hereunder are the pertinent portions of
physical condition of the employee is that ruling:chanRoblesvirtualLawlibrary
unimportant and recovery may be had
therefor independent of any pre-existing It was established on record that before
disease.65 (Emphases and underscoring the late Lutero Remo signed his last
supplied) contract with private respondents as
Cook-Steward of the vessel “M/T Captain
Later, the Court, in Seagull Mitsos L,” he was required to undergo a
Shipmanagement and Transport, Inc. v. series of medical examinations. Yet, he
NLRC66 – a sickness and permanent was declared “fit to work” by private
disability claims case decided under the respondents’ company designated-
auspices of the 1984 version of the POEA- physician. On April 19, 1999, Remo was
SEC (which, unlike the present standard discharged from his vessel after he was
contract, only requires that the illness of hospitalized in Fujairah for atrial
death occur during the term of the fibrillation and congestive heart failure.
employment whether work-related or not) His death on August 28, 2000, even if
– significantly observed it occurred months after his
that:chanRoblesvirtualLawlibrary repatriation, due to hypertensive
cardio-vascular disease, could clearly
Even assuming that the ailment of the have been work related. Declared as
worker was contracted prior to his “fit to work” at the time of hiring, and
employment, this still would not deprive hospitalized while on service on account of
him of compensation benefits. For what “atrial fibrillation and congestive heart
matters is that his work had failure,” his eventual death due to
contributed, even in a small degree, “hypertensive cardio-vascular disease”
to the development of the disease and could only be work related. The death due
in bringing about his eventual death. to “hypertensive cardio-vascular disease”
Neither is it necessary, in order to recover could in fact be traced to Lutero Remo’s
15
being the “Cook-Steward.” As Cook- Section 20 (A) of the 2000 POEA-SEC.

Steward of an ocean going vessel, The provision cannot be construed
Remo had no choice but to prepare otherwise for to do so would not only
and eat hypertension inducing food, a transgress prevailing constitutional policy
kind of food that eventually caused and deride the bearings of relevant case
his “hypertensive cardio-vascular law but also result in a travesty of fairness
disease,” a disease which in turn and an indifference to social justice.
admittedly caused his death.
For all these reasons, the Court hereby
Private respondents cannot deny grants the petition.
liability for the subject death by
claiming that the seafarer’s death • Concerned Citizens of Naval Biliran Vs.
occurred beyond the term of his Florante F. Ralar, Court Stenographer
employment and worsely, that there III, Regional Trial Court, Branch 37,
has been misrepresentation on the Caibiran, Biliran   A.M. No. P-14-3278.
part of the seafarer. For, as employer, October 21, 2014
the private respondents had all the The falsification of an official document
opportunity to pre-qualify, thoroughly like the personal data sheet required for
screen and choose their applicants to employment in the Judiciary is gross
determine if they are medically, dishonesty, and constitutes a serious
psychologically and mentally fit for administrative offense that warrants the
employment. That the seafarer here was dismissal of the employee.
subjected to the required pre-qualification • Imasen Philippine Manufacturing
standards before he was admitted as Corporation Vs. Ramonchito T. Alcon
Cook-Steward, it thus has to be safely and Joann S. Papa   G.R. No. 194884.
presumed that the late Remo was in a October 22, 2014
good state of health when he boarded the • The Issue
vessel.69 (Emphases and underscoring •
supplied; citation omitted) • The sole issue for this Court's
resolution is whether the
More recently, in the 2013 case of Inter- respondents' infraction — engaging
Orient Maritime, Incorporated v. in sexual intercourse inside
Candava,70 also decided under the company premises during work
framework of the 1996 POEA-SEC, the hours — amounts to serious
Court pronounced that the seafarer’s misconduct within the terms of
death therein, despite occurring after his Article 282 (now Article 296) of the
repatriation, remains “compensable for Labor Code justifying their
having been caused by an illness duly dismissal.
established to have been contracted in the Preliminary considerations:
course of his tenurial security vis-a-vis
employment.”71cralawlawlibrary management prerogative
Thus, considering the constitutional The law and jurisprudence guarantee to

mandate on labor as well as relative every employee security of tenure. This
jurisprudential context, the rule, restated textual and the ensuing jurisprudential
for a final time, should be as follows: if commitment to the cause and welfare of
the seafarer’s work-related injury or the working class proceed from the social
illness (that eventually causes his justice principles of the Constitution that
medical repatriation and, thereafter, the Court zealously implements out of its
his death, as in this case) occurs concern for those with less in life. Thus,
during the term of his employment, the Court will not hesitate to strike down
then the employer becomes liable for as invalid any employer act that attempts
death compensation benefits under to undermine workers' tenurial security.
15
All these the State undertakes under The just causes for dismissing an
Article 279 (now Article 293)22 of the employee are provided under Article 28226
Labor Code which bar an employer from (now Article 296)27 of the Labor Code.
terminating the services of an employee, Under Article 282(a), serious misconduct
except for just or authorized cause and by the employee justifies the employer in
upon observance of due process. terminating his or her employment.
In protecting the rights of the workers, Misconduct is defined as an improper or

the law, however, does not authorize the wrong conduct. It is a transgression of
oppression or self-destruction of the some established and definite rule of
employer.23 The constitutional action, a forbidden act, a dereliction of
commitment to the policy of social justice duty, willful in character, and implies
cannot be understood to mean that every wrongful intent and not mere error in
labor dispute shall automatically be judgment.28 To constitute a valid cause for
decided in favor of labor.24 The the dismissal within the text and meaning
constitutional and legal protection equally of Article 282 of the Labor Code, the
recognize the employer's right and employee's misconduct must be serious,
prerogative to manage its operation i.e., of such grave and aggravated
according to reasonable standards and character and not merely trivial or
norms of fair play. unimportant.29cralawred
Accordingly, except as limited by special Additionally, the misconduct must be

law, an employer is free to regulate, related to the performance of the
according to his own judgment and employee's duties showing him to be
discretion, all aspects of employment, unfit to continue working for the
including hiring, work assignments, employer.30 Further, and equally
working methods, time, place and manner important and required, the act or conduct
of work, tools to be used, processes to be must have been performed with
followed, supervision of workers, working wrongful intent.31cralawred
regulations, transfer of employees, worker
supervision, layoff of workers and the To summarize, for misconduct or improper
discipline, dismissal and recall of behavior to be a just cause for dismissal,
workers.25 As a general proposition, an the following elements must concur: (a)
employer has free reign over every aspect the misconduct must be serious; (b) it
of its business, including the dismissal of must relate to the performance of the
his employees as long as the exercise of employee's duties showing that the
its management prerogative is done employee has become unfit to continue
reasonably, in good faith, and in a manner working for the employer;32 and (c) it
not otherwise intended to defeat or must have been performed with wrongful
circumvent the rights of workers. intent.
The respondents' infraction amounts
In these lights, the Court's task in the to
present petition is to balance the serious misconduct within the terms
conflicting rights of the respondents to of
security of tenure, on one hand, and of Article 282 (now Article 296) of the
Imasen to dismiss erring employees Labor Code justifying their dismissal
pursuant to the legitimate exercise of its
management prerogative, on the other. Dismissal situations (on the ground of
serious misconduct) involving sexual acts,
Management's right to dismiss an particularly sexual intercourse committed
employee; serious misconduct as just by employees inside company premises
cause for the dismissal and during work hours, are not usual
violations33 and are not found in
15
abundance under jurisprudence. Thus, in of socially and morally accepted human

resolving the present petition, we are public behavior, and at the same time
largely guided by the principles we showed brazen disregard for the respect
discussed above, as applied to the totality that their employer expected of them as
of the circumstances that surrounded the employees. By their misconduct, the
petitioners' dismissal. respondents, in effect, issued an open
invitation for others to commit the same
Sexual acts and intimacies between two infraction, with like disregard for their
consenting adults belong, as a principled employer's rules, for the respect owed to
ideal, to the realm of purely private their employer, and for their co-
relations. Whether aroused by lust or employees' sensitivities. Taken together,
inflamed by sincere affection, sexual acts these considerations reveal a depraved
should be carried out at such place, time disposition that the Court cannot but
and circumstance that, by the generally consider as a valid cause for dismissal.
accepted norms of conduct, will not offend
public decency nor disturb the generally In ruling as we do now, we considered the
held or accepted social morals. Under balancing between the respondents'
these parameters, sexual acts between tenurial rights and the petitioner's
two consenting adults do not have a place interests - the need to defend their
in the work environment. management prerogative and to maintain
as well a high standard of ethics and
Indisputably, the respondents engaged in morality in the workplace. Unfortunately
sexual intercourse inside company for the respondents, in this balancing
premises and during work hours. under the circumstances of the case, we
These circumstances, by themselves, are have to rule against their tenurial rights in
already punishable misconduct. Added to favor of the employer's management
these considerations, however, is the rights.
implication that the respondents did not • Radio Mindanao Network, Inc. Vs. Michael
only disregard company rules but flaunted Maximo R. Amurao III   G.R. No.
their disregard in a manner that could 167225. October 22, 2014
reflect adversely on the status of ethics • This appeal deals with the issue of
and morality in the company. whether the quitclaim executed by
the employee was valid and
Additionally, the respondents engaged in effective against him.
sexual intercourse in an area where co- •
employees or other company personnel •
have ready and available access. The Ruling of the Court
respondents likewise committed their act
at a time when the employees were That Michael was illegally dismissed from
expected to be and had, in fact, been at his employment is beyond question. RMN
their respective posts, and when they does not dispute this. Its only submission
themselves were supposed to be, as all now is that it was discharged from
other employees had in fact been, whatever claims Michael had against it
working. arising from his employment by virtue of
the Affidavit of Release/Quitclaim he
Under these factual premises and in the signed in its favor. Accordingly, the
context of legal parameters we discussed, remaining question to resolve is whether
we cannot help but consider the the quitclaim was valid and binding.
respondents' misconduct to be of grave Worth noting is that Michael signed the
and aggravated character so that the quitclaim to release RMN from any and all
company was justified in imposing the claims that could be due to him by reason
highest penalty available — dismissal. of his employment after he receiving the
Their infraction transgressed the bounds agreed settlement pay of P311,922.00.
15
execution was coerced. Having agreed to

Not all quitclaims are per se invalid or part with a substantial amount of money,
against public policy. A quitclaim is invalid RMN took steps to protect its interest and
or contrary to public policy only: (1) obtain its release from all obligations once
where there is clear proof that the waiver it paid Michael his settlement pay, which it
was wrangled from an unsuspecting or did in this case.
gullible person; or (2) where the terms of
settlement are unconscionable on their And, lastly, that he signed the quitclaim
face. In instances of invalid quitclaims, the out of fear of not being able to provide for
law steps in to annul the questionable the needs of his family and for the
waiver. Indeed, there are legitimate schooling of his children did not
waivers that represent the voluntary and immediately indicate that he had been
reasonable settlements of laborers’ claims forced to sign the same.22 Dire necessity
that should be respected by the Court as should not necessarily be an acceptable
the law between the parties. Where the ground for annulling the quitclaim,
party has voluntarily made the waiver, especially because it was not at all shown
with a full understanding of its terms as that he had been forced to execute it. Nor
well as its consequences, and the was it even proven that the consideration
consideration for the quitclaim is credible for the quitclaim was unconscionably low,
and reasonable, the transaction must be and that he had been tricked into
recognized as a valid and binding accepting the consideration.23
undertaking, and may not later be
disowned simply because of a change of With the quitclaim having been freely and
mind.20 A waiver is essentially contractual. voluntarily signed, RMN was released and
absolved from any liability in favor of
In our view, the requisites for the validity Michael. Suffice it to say that the quitclaim
of Michael’s quitclaim were satisfied. We is ineffective in barring recovery of the full
explain. measure of an employee’s rights only
when the transaction is shown to be
Firstly, Michael acknowledged in his questionable and the consideration is
quitclaim that he had read and thoroughly scandalously low and inequitable.24 Such
understood the terms of his quitclaim and is not true here.
signed it of his own volition. Being a radio • FVR Skills and Services Exponents, Inc.
broadcaster and production manager, he (SKILLEX), Fulgencio V. Rana and
occupied a highly responsible position in Monina R. Burgos Vs. Jovert Seva,
the company. It would be implausible to Josuel V. Valencerina, et al. G.R. No.
hold, therefore, that he could be easily 200857. October 22, 2014
duped into simply signing away his rights. • The respondents are regular
Besides, the language and content of the • employees, not project
quitclaim were clear and uncomplicated employees.
such that he could not claim that he did •
not understand what he was signing. • Article 280 (now Article 294)23 of
the Labor Code governs the
Secondly, the settlement pay of determination of whether an
P311,922.00 was credible and reasonable employee is a regular or a project
considering that Michael did not even employee.24
assail such amount as unconscionably low, •
or even state that he was entitled to a • Under this provision, there are two
higher amount. kinds of regular employees,
namely: (1) those who were
Thirdly, that he was required to sign the engaged to perform activities which
quitclaim as a condition to the release of are usually necessary or desirable
the settlement pay21 did not prove that its in the usual business or trade of
15
the employer; and (2) those casual work and occupying the same
employees who became regular positions from the time they
after one year of service, whether were hired and until they were
continuous or broken, but only with dismissed in January 2009. The
respect to the activity for which petitioner did not present any
they have been hired. evidence to refute the respondents'
• claim that from the time of their
• We distinguish these two types of hiring until the time of their
regular employees from a project dismissal, there was no gap in
employee, or one whose between the projects where they
employment was fixed for a were assigned to. The petitioner
specific project or undertaking, continuously availed of their
whose completion or termination services by constantly deploying
had been determined at the time of them to its clients.
engagement. •
• • Lastly, under Department Order
• A careful look at the factual (DO) 18-02,27 the applicable labor
circumstances of this case leads us issuance to the petitioner's case,
to the legal conclusion that the the contractor or subcontractor is
respondents are regular and not considered as the employer of the
project employees. contractual employee for purposes
• of enforcing the provisions of the
• The primary standard in Labor Code and other social
determining regular employment is legislation.28
the reasonable connection •
between the particular activity • DO 18-02 grants contractual
performed by the employee and employees all the rights and
the employer's business or trade. privileges due a regular
This connection can be ascertained employee, including the following:
by considering the nature of the (a) safe and healthful working
work performed and its relation to conditions; (b) labor standards
the scheme of the particular such as service incentive leave,
business, or the trade in its rest days, overtime pay,
entirety.25cralawred holiday pay, 13th month pay
• and separation pay; (c) social
• Guided by this test, we conclude security and welfare benefits; (d)
that the respondents' work as self-organization, collective
janitors, service crews and bargaining and peaceful concerted
sanitation aides, are necessary action; and (e) security of
or desirable to the petitioner's tenure.29
business of providing janitorial •
and manpower services to its • In this light, we thus conclude that
clients as an independent although the respondents were
contractor. assigned as contractual employees
• to the petitioner's various clients,
• Also, the respondents had already under the law, they remain to be
been working for the petitioner as the petitioner's regular employees,
early as 1998. Even before the who are entitled to all the rights
service contract with and benefits of regular
Robinsons, the respondents employment.
were already under the The respondents' employment
petitioner's employ.26They had contracts, which were belatedly
been doing the same type of signed, are voidable.
15
employment. The petitioner's failure to do

The records show that at the time of the so supports the conclusion that it had
respondents' dismissal, they had already been in bad faith in evading the
been continuously working for the respondents' right to security of tenure.
petitioner for more than a year. Despite
this, they never signed any employment In Glory Philippines, Inc. v. Vergara,30 the
contracts with the petitioner, except the Court rejected the validity of a fixed term
contracts they belatedly signed when the contract belatedly executed, and ruled
petitioner's own contract of janitorial that its belated signing was a deliberate
services with Robinsons neared expiration. employer ploy to evade the employees'
right to security of tenure.
As already discussed, for an employee to
be validly categorized as a project Moreover, under Article 1390 of the Civil
employee, it is necessary that the Code, contracts where the consent of a
specific project or undertaking had party was vitiated by mistake, violence,
been identified and its period and intimidation, undue influence or fraud, are
completion date determined and voidable or annullable. The petitioner's
made known to the employee at the threat of non-payment of the respondents'
time of his engagement. This provision salaries clearly amounted to intimidation.
ensures that the employee is completely Under this situation, and the suspect
apprised of the terms of his hiring and the timing when these contracts were
corresponding rights and obligations executed, we rule that these employment
arising from his undertaking. Notably, the contracts were voidable and were
petitioner's service contract with effectively questioned when the
Robinsons was from January 1 to respondents filed their illegal dismissal
December 31, 2008. The respondents complaint.
were only asked to sign their employment The respondents were
contracts for their deployment with illegally dismissed.
Robinsons halfway through 2008, when
the petitioner's service contract was about To be valid, an employee's dismissal
to expire. must comply with the substantive and
procedural requirements of due
We find the timing of the execution of the process. Substantively, a dismissal
respondents' respective employment should be supported by a just or
contracts to be indicative of the authorized cause.32 Procedurally, the
petitioner's calculated plan to evade the employer must observe the twin notice
respondents' right to security of tenure, to and hearing requirements in carrying out
ensure their easy dismissal as soon as the an employee's dismissal.33
Robinsons' contract expired. The
attendant circumstances cannot but raise The petitioner argues that these
doubts as to the petitioner's good faith. substantive and procedural requisites do
not apply to the respondents' case since
If the petitioner really intended the they were employed under fixed term
respondents to be project employees, contracts. According to the petitioner, the
then the contracts should have been respondents' employment contracts lapsed
executed right from the time of by operation of law as the necessary
hiring, or when the respondents were consequence of the termination and non-
first assigned to Robinsons, not when renewal of its service contract with
the petitioner's service contract was Robinsons. Because of this, there was no
winding up. The terms and conditions of illegal dismissal to speak of, only contract
the respondents' engagement should have expiration.
been disclosed and explained to them
from the commencement of their We do not agree with the petitioner.
15
that the respondents are entitled to their

Having already determined that the full backwages, inclusive of their
respondents are regular employees and allowances and other benefits from the
not project employees, and that the time of their dismissal up to their actual
respondents' belated employment reinstatement.35
contracts could not be given any binding
effect for being signed under duress, we With regard to the award of separation
hold that illegal dismissal took place when pay, we agree with the CA's finding that
the petitioner failed to comply with the this litigation resulted to strained relations
substantive and procedural due process between the petitioner and the
requirements of the law. respondents. Thus, we also affirm the CA's
ruling that instead of reinstatement, the
The petitioner also asserts that the respondents should be paid their
respondents' subsequent absorption by respective separation pays equivalent to
Robinsons' new contractors - Fieldmen one (1) month pay for every year of
Janitorial Service Corporation and Altaserv service.36
- negates their illegal dismissal. This
reasoning is patently erroneous. The We cannot give credence to the
charge of illegal dismissal was made only petitioner's assertion that under Section
against the petitioner which is a separate 10 of DO 18-02,37 the respondents are not
juridical entity from Robinsons' new entitled to separation pay because their
contractors; it cannot escape liability by employment was terminated due to the
riding on the goodwill of others. completion of the project where they had
been engaged. This provision must be
By law, the petitioner must bear the legal construed with the rest of DO 18-02's
consequences of its violation of the other provisions.
respondents' right to security of tenure.
The facts of this case show that since the As earlier pointed out, Section 7 of DO 18-
respondents' hiring, they had been under 02 treats contractual employees as the
the petitioner's employ as janitors, service independent contractor's regular
crews and sanitation aides. Their employees for purposes of enforcing the
services had been continuously Labor Code and other social legislation
provided to the petitioner without any laws. Consequently, a finding of regular
gap. Notably, the petitioner never employment entitles them to the rights
refuted this allegation of the granted to regular employees, particularly
respondents. Further, there was no the right to security of tenure and to
allegation that the petitioner went out separation pay.
of business after the non-renewal of
the Robinsons' service contract. Thus, Thus, a holistic reading of DO 18-02,38
had it not been for the respondents' guides us to the conclusion that Section
dismissal, they would have been deployed 10 only pertains to contractual employees
to the petitioner's other existing clients. who are really project employees. They
are not entitled to separation pay since
In DM. Consunji, Inc. v. Jamin,34 an the end of the project for which they had
employee was dismissed after the been hired necessarily results to the
expiration of the project he was last termination of their employment. On the
engaged in. After ruling that the other hand, we already found that the
respondent-employee was a regular and respondents are the petitioner's regular
not a project employee, this Court employees. Thus, their illegal dismissal
affirmed the grant of backwages, entitles them to backwages and
computed from the time of the employee's reinstatement or separation pay, in case
illegal dismissal until his actual reinstatement is no longer feasible.
reinstatement. In these lights, we rule Solidary liability of the petitioner's
15
officers officers are not personally liable for the

money claims of the discharged
Finally, we modify the CA's ruling that employees, unless they acted with evident
Rana and Burgos, as the petitioner's malice and bad faith in terminating their
president and general manager, should be employment.42
held solidarity liable with the corporation • Goodyear Philippines, Inc. and Remegio M.
for its monetary liabilities with the Ramos Vs. Marina L. Angus G.R. No.
respondents. 185449. November 12, 2014
In the absence of an express or implied
A corporation is a juridical entity with legal prohibition against it, collection of both
personality separate and distinct from retirement benefits and separation pay
those acting for and in its behalf and, in upon severance from employment is
general, from the people comprising it. allowed. This is grounded on the social
The general rule is that, obligations justice policy that doubts should always be
incurred by the corporation, acting resolved in favor of labor rights.1
through its directors, officers and Angus is entitled to both separation pay
employees, are its sole liabilities.39 and early retirement benefit due to the
absence of a specific provision in the
A director or officer shall only be CBA prohibiting recovery of both.
personally liable for the obligations of the
corporation, if the following conditions In Aquino v. National Labor Relations
concur: (l)the complainant alleged in the Commission,33 citing Batangas Laguna
complaint that the director or officer Tayabas Bus Company v. Court of
assented to patently unlawful acts of the Appeals34 and University of the East v.
corporation, or that the officer was guilty Hon. Minister of Labor35 the Court held
of gross negligence or bad faith; and (2) that an employee is entitled to recover
the complainant clearly and convincingly both separation pay and retirement
proved such unlawful acts, negligence or benefits in the absence of a specific
bad faith.40 prohibition in the Retirement Plan or CBA.
Concomitantly, the Court ruled that an
In the present case, the respondents employee's right to receive separation pay
failed to show the existence of the first in addition to retirement benefits depends
requisite. They did not specifically allege upon the provisions of the company's
in their complaint that Rana and Burgos Retirement Plan and/or CBA.36
willfully and knowingly assented to the It is worthy to mention at this point that
petitioner's patently unlawful act of forcing retirement benefits and separation pay are
the respondents to sign the dubious not mutually exclusive.38 Retirement
employment contracts in exchange for benefits are a form of reward for an
their salaries. The respondents also failed employee's loyalty and service to an
to prove that Rana and Burgos had been employer39 and are earned under existing
guilty of gross negligence or bad faith in laws, CBAs, employment contracts and
directing the affairs of the corporation. company policies.40 On the other hand,
separation pay is that amount which an
To hold an officer personally liable for the employee receives at the time of his
debts of the corporation, and thus pierce severance from employment, designed to
the veil of corporate fiction, it is necessary provide the employee with the
to clearly and convincingly establish the wherewithal during the period that he is
bad faith or wrongdoing of such officer, looking for another employment and is
since bad faith is never presumed.41 recoverable only in instances enumerated
Because the respondents were not able to under Articles 283 and 284 of the Labor
clearly show the definite participation of Code or in illegal dismissal cases when
Burgos and Rana in their illegal dismissal, reinstatement is not feasible.41 In the
we uphold the general rule that corporate case at bar, Article 283[42 clearly entitles
16
Angus to separation pay apart from the •

retirement benefits she received from • The Court is more inclined to
petitioners. believe respondent's version which
Release and Quitclaim signed by Angus was duly corroborated by Dr.
is invalid. Fabon who heard petitioner saying
that: "Meron pa nga kami sa DR
The release and quitclaim signed by Angus macrosomnia, polyhydramnios pa,
cannot be used by petitioners to legalize pero paanakin na long 'yon.
the denial of Angus' rightful claims. As Abnormal din naman ang bata
aptly observed by the CA, the terms of the kahit mabuhay." This puts into
quitclaim authorizes Angus to receive less doubt petitioner's supposed finding
than what she is legally entitled to. "Under that the baby was already dead
prevailing jurisprudence, x x x a quitclaim upon respondent's admission at
cannot bar an employee from demanding OMPH and that it was respondent
benefits to which he is legally entitled."43 who insisted on a normal delivery.
It was held to be "ineffective in barring Even assuming that petitioner had
claims for the full measure of the worker's actually confirmed intrauterine
rights and the acceptance of benefits fetal death, this only aggravates
therefrom does not amount to estoppel".44 the patient's condition and it was
Moreover, release and quitclaims are often incumbent upon petitioner as the
looked upon with disfavor when the waiver obstetrician on duty to personally
was not done voluntarily by employees attend to her and render
who were pressured into signing them by appropriate management or
unscrupulous employers seeking to evade treatment.
their obligations.45 •
• In deliberately leaving the
• Dr. Idol L. Bondoc Vs. Marilou R. Mantala  respondent to a midwife and two
G.R. No. 203080. November 12, 2014 inexperienced assistants despite
• As per the admitting diagnosis[25 knowing that she was under
submitted by petitioner, the latter prolonged painful labor and about
was aware of macrosomia and the to give birth to a macrosomic baby
fetal heartbeat not appreciated. He by vaginal delivery, petitioner
also maintains that respondent's clearly committed a dereliction of
baby was already dead due to duty and a breach of his
prolonged labor but she had professional obligations. The
insisted on having a normal gravity of respondent's condition is
delivery. However, this claim is highlighted by the expected
belied by the sworn statements of complications she suffered - her
respondent, her husband and her stillborn baby, a ruptured uterus
sisters, all of whom averred that that necessitated immediate
they requested for a cesarean surgery and blood transfusion, and
section as per the advice given by vulvar hematomas.
Dr. Atienza who examined her in •
March 2009, and as confirmed at • Article II, Section 1 of the Code of
the Bansud Health Center where Medical Ethics of the Medical
she was told that it would be risky Profession in the Philippines
for her to have a normal delivery. states:chanroblesvirtuallawlibrary
Moreover, Joel Mantala asserted •
that what petitioner said to him • A physician should attend to his
was that the baby was too big and patients faithfully and
if born alive it would probably have conscientiously. He should secure
abnormalities so it would be better for them all possible benefits that
that the baby is stillborn. may depend upon his professional
16
skill and care. As the sole tribunal respondent's difficult and

to adjudge the physician's failure complicated delivery. But there is
to fulfill his obligation to his no indication in the records that
patients is, in most cases, his own petitioner duly informed or referred
conscience, violation of this rule on the matter to the other doctors or
his part is discreditable and the administrators of OMPH.
inexcusable.26chanrobleslaw •
• • We therefore hold that the CA
• A doctor's duty to his patient is not correctly affirmed the Ombudsman
required to be extraordinary. The in finding the petitioner guilty of
standard contemplated for doctors grave misconduct. His violation of
is simply the reasonable average the sworn duty to attend to his
merit among ordinarily good patients faithfully and
physicians, i.e. reasonable skill and conscientiously is inexcusable.
competence.27 Even by this Such flagrant disregard of
standard, petitioner fell short when established rule and improper
he routinely delegated an conduct were proven by substantial
important task that requires his evidence.
professional skill and competence Not only did petitioner routinely delegate
to his subordinates who have no his responsibility to his subordinates, he
requisite training and capability to casually instructed them to press down
make crucial decisions in difficult repeatedly on respondent's abdomen,
childbirths. unmindful of her critical condition as borne
• out by his very own findings. Worse,
• Petitioner's proffered excuse that it petitioner haughtily and callously spoke of
was the practice in OMPH to allow respondent's case to the other doctors and
midwives to administer to patients medical staff while performing a CS after
during deliveries, is unacceptable. he had briefly attended to her at the
No proof of such alleged hospital delivery room "...paanakin na long 'yon,
practice such as an official written abnormal din naman ang bata kahit
directive was presented. Besides, it mabuhay, kawawa lang siya." Such
is doubtful whether hospital insensitive and derisive language was
administrators would remedy again heard from the petitioner when he
personnel shortage by permitting referred for the second time to
inexperienced staff, by themselves, respondent's traumatic delivery, saying
to handle laboring patients with that: "Pinilit no 'ng tatlong ungas, ayon
high-risk pregnancies and lumusot pero patay ang bata, tapos ito,
maternal/fetal complications. mukhang pumutok" As a government
• physician, petitioner's demeanor is
• As to the two other scheduled CS unbecoming and bespeaks of his
performed by petitioner on the indifference to the well-being of his
same day, this will not exculpate patients.
him from administrative liability. As
correctly pointed out by the CA, Petitioner thus not only committed a
there was no showing of similar dereliction of duty, but also transgressed
urgency in the said operations, and the ethical norms of his profession when
petitioner could have referred he failed to render competent medical
respondent to another competent care with compassion and respect for his
physician. He could have likewise patient's dignity.
arranged for adjustment in the
operation schedules considering • A physician should be dedicated to
that his personal attention and provide competent medical care
management is urgently needed in with full professional skill in
16
accordance with the current the processing of claims and the

standards of care, compassion, settlement of disputes arising therefrom
independence and respect for as prescribed by the System," the ECC
human dignity.28 has issued the Amended Rules on
• Bernardina P. Bartolome Vs. Social Employees' Compensation, interpreting
Security System and Scanmar the above-cited provision as
Maritime Services, Inc.   G.R. No. follows:chanroblesvirtuallawlibrary
192531. November 12, 2014
In resolving the case, the pivotal RULE XV - BENEFICIARIES
issue is this: Are the biological
parents of the covered, but legally SECTION 1. Definition, (a) Beneficiaries
adopted, employee considered shall be either primary or secondary, and
secondary beneficiaries and, thus, determined at the time of employee's
entitled, in appropriate cases, to death.
receive the benefits under the (b) The following beneficiaries shall be
ECP?ChanRoblesVirtualawlibrary considered
The rule limiting death benefits primary:chanroblesvirtuallawlibrary
claims to the legitimate
parents is contrary to law (1) The legitimate spouse living with the
employee at the time of the employee's
This brings us to the question of whether death until he remarries; and
or not petitioner is entitled to the death
benefits claim in view of John's work- (2)
related demise. The pertinent provision, in Legitimate, legitimated, legally adopted
this regard, is Article 167 (j) of the Labor or acknowledged natural children, who
Code, as amended, which are unmarried not gainfully employed, not
reads:chanroblesvirtuallawlibrary over 21 years of age, or over 21 years of
age provided that he is incapacitated and
ART. 167. Definition of terms. - As used in incapable of self - support due to physical
this Title unless the context indicates or mental defect which is congenital or
otherwise:chanroblesvirtuallawlibrary acquired during minority; Provided,
further, that a dependent acknowledged
xxxx natural child shall be considered as a
primary beneficiary only when there are
(j) 'Beneficiaries' means the dependent no other dependent children who are
spouse until he remarries and dependent qualified and eligible for monthly income
children, who are the primary benefit; provided finally, that if there are
beneficiaries. In their absence, the two or more acknowledged natural
dependent parents and subject to the children, they shall be counted from the
restrictions imposed on dependent youngest and without substitution, but not
children, the illegitimate children and exceeding five.
legitimate descendants who are the
secondary beneficiaries; Provided, that (c) The following beneficiaries shall be
the dependent acknowledged natural child considered
shall be considered as a primary secondary:chanroblesvirtuallawlibrary
beneficiary when there are no other
dependent children who are qualified and (1) The legitimate parents wholly
eligible for monthly income benefit. dependent upon the employee for regular
(Emphasis supplied) support;cralawlawlibrary
Concurrently, pursuant to the succeeding (2) The legitimate descendants and

Article 177(c) supervising the ECC "[T]o illegitimate children who are unmarried,
approve rules and regulations governing not gainfully employed, and not over 21
16
years of age, or over 21 years of age As applied, this Court held in

provided that he is incapacitated and Commissioner of Internal Revenue v.
incapable of self - support due to physical Fortune Tobacco Corporation16
or mental defect which is congenital or that:chanroblesvirtuallawlibrary
acquired during minority. (Emphasis
supplied) As we have previously declared, rule-
making power must be confined to details
Guilty of reiteration, the ECC denied for regulating the mode or proceedings in
petitioner's claim on the ground that she order to carry into effect the law as it has
is no longer the deceased's legitimate been enacted, and it cannot be extended
parent, as required by the implementing to amend or expand the statutory
rules. As held by the ECC, the adoption requirements or to embrace matters not
decree severed the relation between John covered by the statute. Administrative
and petitioner, effectively divesting her of regulations must always be in
the status of a legitimate parent, and, harmony with the provisions of the
consequently, that of being a secondary law because any resulting
beneficiary. discrepancy between the two will
always be resolved in favor of the
We disagree. basic law. (Emphasis supplied)
Rule XV, Sec. l(c)(l) of the Amended
Rules on Employees' Compensation Guided by this doctrine, We find that Rule
deviates from the clear language of XV of the Amended Rules on Employees'
Art. 167 (j) of the Labor Code, Compensation is patently a wayward
as amended restriction of and a substantial deviation
Examining the Amended Rules on from Article 167 (j) of the Labor Code
Employees' Compensation in light of the when it interpreted the phrase "dependent
Labor Code, as amended, it is at once parents" to refer to "legitimate parents."
apparent that the ECC indulged in an
unauthorized administrative legislation. In In the same vein, the term "parents" in
net effect, the ECC read into Art. 167 of the phrase "dependent parents" in the
the Code an interpretation not afore-quoted Article 167 (j) of the Labor
contemplated by the provision. Pertinent Code is used and ought to be taken in its
in elucidating on this point is Article 7 of general sense and cannot be unduly
the Civil Code of the Philippines, which limited to "legitimate parents" as what the
reads:chanroblesvirtuallawlibrary ECC did. The phrase "dependent parents"
should, therefore, include all parents,
Article 7. Laws are repealed only by whether legitimate or illegitimate and
subsequent ones, and their violation or whether by nature or by adoption. When
non-observance shall not be excused by the law does not distinguish, one should
disuse, or custom or practice to the not distinguish. Plainly, "dependent
contrary. parents" are parents, whether legitimate
or illegitimate, biological or by adoption,
When the courts declared a law to be who are in need of support or assistance.
inconsistent with the Constitution, the
former shall be void and the latter shall Moreover, the same Article 167 (j), as
govern. couched, clearly shows that Congress did
not intend to limit the phrase "dependent
Administrative or executive acts, parents" to solely legitimate parents. At
orders and regulations shall be valid the risk of being repetitive, Article 167
only when they are not contrary to provides that "in their absence, the
the laws or the Constitution. (Emphasis dependent parents and subject to the
supplied) restrictions imposed on dependent
children, the illegitimate children and
16
legitimate descendants who are secondary limited to existing conditions only; and (4)
beneficiaries." Had the lawmakers It applies equally to all members of the
contemplated "dependent parents" to same class. "Superficial differences do not
mean legitimate parents, then it would make for a valid classification."20
have simply said descendants and not
"legitimate descendants." The manner by In the instant case, there is no compelling
which the provision in question was reasonable basis to discriminate against
crafted undeniably show that the phrase illegitimate parents. Simply put, the
"dependent parents" was intended to above-cited rule promulgated by the ECC
cover all parents - legitimate, illegitimate that limits the claim of benefits to the
or parents by nature or adoption. legitimate parents miserably failed the
Rule XV, Section l(c)(l) of the test of reasonableness since the
Amended Rules on Employees' classification is not germane to the law
Compensation is in contravention being implemented. We see no pressing
of the equal protection clause government concern or interest that
To insist that the ECC validly interpreted requires protection so as to warrant
the Labor Code provision is an affront to balancing the rights of unmarried parents
the Constitutional guarantee of equal on one hand and the rationale behind the
protection under the laws for the rule, as law on the other. On the contrary, the
worded, prevents the parents of an SSS can better fulfill its mandate, and the
illegitimate child from claiming policy of PD 626 - that employees and
benefits under Art. 167 (j) of the their dependents may promptly secure
Labor Code, as amended by PD 626. adequate benefits in the event of work-
To Our mind, such postulation cannot be connected disability or death -will be
countenanced. better served if Article 167 (j) of the Labor
Code is not so narrowly interpreted.
As jurisprudence elucidates, equal
protection simply requires that all persons There being no justification for limiting
or things similarly situated should be secondary parent beneficiaries to the
treated alike, both as to rights conferred legitimate ones, there can be no other
and responsibilities imposed. It requires course of action to take other than to
public bodies and institutions to treat strike down as unconstitutional the phrase
similarly situated individuals in a similar "illegitimate" as appearing in Rule XV,
manner.18 In other words, the concept of Section l(c)(l) of the Amended Rules on
equal justice under the law requires the Employees' Compensation.
state to govern impartially, and it may not Petitioner qualifies as John's
draw distinctions between individuals dependent parent
solely on differences that are irrelevant to
a legitimate governmental objective.19 In attempting to cure the glaring
constitutional violation of the adverted
The concept of equal protection, however, rule, the ECC extended illegitimate
does not require the universal application parents an opportunity to file claims for
of the laws to all persons or things without and receive death benefits by equating
distinction. What it simply requires is dependency and legitimacy to the exercise
equality among equals as determined of parental authority. Thus, as insinuated
according to a valid classification. Indeed, by the ECC in its assailed Decision, had
the equal protection clause permits petitioner not given up John for adoption,
classification. Such classification, however, she could have still claimed death benefits
to be valid must pass the test of under the law.
reasonableness. The test has four
requisites: (1) The classification rests on To begin with, nowhere in the law nor in
substantial distinctions; (2) It is germane the rules does it say that "legitimate
to the purpose of the law; (3) It is not parents" pertain to those who exercise
16
parental authority over the employee obligations of the adopter(s) and the
enrolled under the ECP. It was only in the adoptee to each other shall be
assailed Decision wherein such extinguished, (emphasis added)
qualification was made. In addition,
assuming arguendo that the ECC did not The provision adverted to is applicable
overstep its boundaries in limiting the herein by analogy insofar as the
adverted Labor Code provision to the restoration of custody is concerned. The
deceased's legitimate parents, and that manner herein of terminating the
the commission properly equated adopter's parental authority, unlike the
legitimacy to parental authority, petitioner grounds for rescission,23 justifies the
can still qualify as John's secondary retention of vested rights and obligations
beneficiary. between the adopter and the adoptee,
while the consequent restoration of
True, when Cornelio, in 1985, adopted parental authority in favor of the biological
John, then about two (2) years old, parents, simultaneously, ensures that the
petitioner's parental authority over John adoptee, who is still a minor, is not left to
was severed. However, lest it be fend for himself at such a tender age.
overlooked, one key detail the ECC
missed, aside from Cornelio's death, was To emphasize, We can only apply the rule
that when the adoptive parent died by analogy, especially since RA 8552 was
less than three (3) years after the enacted after Cornelio's death. Truth be
adoption decree, John was still a told, there is a lacuna in the law as to
minor, at about four (4) years of age. which provision shall govern contingencies
in all fours with the factual milieu of the
John's minority at the time of his instant petition. Nevertheless, We are
adopter's death is a significant factor in guided by the catena of cases and the
the case at bar. Under such circumstance, state policies behind RA 855224 wherein
parental authority should be deemed to the paramount consideration is the best
have reverted in favor of the biological interest of the child, which We invoke to
parents. Otherwise, taking into account justify this disposition. It is, after all, for
Our consistent ruling that adoption is a the best interest of the child that someone
personal relationship and that there are will remain charged for his welfare and
no collateral relatives by virtue of upbringing should his or her adopter fail
adoption,[21 who was then left to care for or is rendered incapacitated to perform his
the minor adopted child if the adopter duties as a parent at a time the adoptee is
passed away? still in his formative years, and, to Our
mind, in the absence or, as in this case,
To be sure, reversion of parental authority death of the adopter, no one else could
and legal custody in favor of the biological reasonably be expected to perform the
parents is not a novel concept. Section 20 role of a parent other than the adoptee's
of Republic Act No. 855222 (RA 8552), biological one.
otherwise known as the Domestic
Adoption Act, Moreover, this ruling finds support on the
provides:chanroblesvirtuallawlibrary fact that even though parental authority is
severed by virtue of adoption, the ties
Section 20. Effects of Rescission. - If between the adoptee and the biological
the petition [for rescission of adoption] is parents are not entirely eliminated. To
granted, the parental authority of the demonstrate, the biological parents, in
adoptee's biological parent(s), if some instances, are able to inherit from
known, or the legal custody of the the adopted, as can be gleaned from Art.
Department shall be restored if the 190 of the Family
adoptee is still a minor or Code:chanroblesvirtuallawlibrary
incapacitated. The reciprocal rights and
16
Art. 190. Legal or intestate succession to parent. We cannot leave undetermined

the estate of the adopted shall be the fate of a minor child whose second
governed by the following chance at a better life under the care of
rules:chanroblesvirtuallawlibrary the adoptive parents was snatched from
him by death's cruel grasp. Otherwise, the
xxx adopted child's quality of life might have
been better off not being adopted at all if
(2) When the parents, legitimate or he would only find himself orphaned in the
illegitimate, or the legitimate ascendants end. Thus, We hold that Cornelio's death
of the adopted concur with the adopter, at the time of John's minority resulted in
they shall divide the entire estate, one- the restoration of petitioner's parental
half to be inherited by the parents or authority over the adopted child.
ascendants and the other half, by the
adopters;cralawlawlibrary On top of this restoration of parental
authority, the fact of petitioner's
xxx dependence on John can be established
from the documentary evidence submitted
(6) When only collateral blood relatives of to the ECC. As it appears in the records,
the adopted survive, then the ordinary petitioner, prior to John's adoption, was a
rules of legal or intestate succession shall housekeeper. Her late husband died in
apply. 1984, leaving her to care for their seven
(7) children. But since she was unable to
Similarly, at the time of Cornelio Colcol's "give a bright future to her growing
death, which was prior to the effectivity of children" as a housekeeper, she consented
the Family Code, the governing provision to Cornelio's adoption of John and
is Art. 984 of the New Civil Code, which Elizabeth in 1985.
provides:chanroblesvirtuallawlibrary
Following Cornelio's death in 1987, so
Art. 984. In case of the death of an records reveal, both petitioner and John
adopted child, leaving no children or repeatedly reported "Brgy. Capurictan,
descendants, his parents and relatives by Solsona, Ilocos Norte" as their residence.
consanguinity and not by adoption, shall In fact, this very address was used in
be his legal heirs. John's Death Certificate25cralawred
executed in Brazil, and in the Report of
From the foregoing, it is apparent that the Personal Injury or Loss of Life
biological parents retain their rights of accomplished by the; master of the vessel
succession to the estate of their child who boarded by John.26 Likewise, this is John's
was the subject of adoption. While the known address as per the ECC's assailed
benefits arising from the death of an SSS Decision.27 Similarly, this same address
covered employee do not form part of the was used by petitioner in filing her claim
estate of the adopted child, the pertinent before the SSS La Union branch and,
provision on legal or intestate succession thereafter, in her appeal with the ECC.
at least reveals the policy on the rights of Hence, it can be assumed that aside from
the biological parents and those by having been restored parental authority
adoption vis-a-vis the right to receive over John, petitioner indeed actually
benefits from the adopted. execised the same, and that they lived
together under one roof.
In the same way that certain rights still
attach by virtue of the blood relation, so Moreover, John, in his SSS application,28
too should certain obligations, which, We named petitioner as one of his
rule, include the exercise of parental beneficiaries for his benefits under RA
authority, in the event of the untimely 8282, otherwise known as the "Social
passing of their minor offspring's adoptive Security Law." While RA 8282 does not
16
cover compensation for work-related the employment of Filipino

deaths or injury and expressly allows the seafarers on board foreign ocean-
designation of beneficiaries who are not going
related by blood to the member unlike in vessels.47chanroblesvirtuallawlibrar
PD 626, John's deliberate act of indicating y
petitioner as his beneficiary at least •
evinces that he, in a way, considered • Among other basic provisions, the
petitioner as his dependent. Consequently, POEA-SEC – specifically, its 2000
the confluence of circumstances - from version – stipulates that the
Cornelio's death during John's minority, beneficiaries of a deceased
the restoration of petitioner's parental seafarer may be able to claim
authority, the documents showing death benefits for as long as they
singularity of address, and John's clear are able to establish that (a) the
intention to designate petitioner as a seafarer’s death is work-
beneficiary - effectively made petitioner, related, and (b) such death had
to Our mind, entitled to death benefit occurred during the term of his
claims as a secondary beneficiary under employment contract.
PD 626 as a dependent parent. • While it is true that Brainstem
(pontine) Cavernous Malformation
All told, the Decision of the ECC dated is not listed as an occupational
March 17, 2010 is bereft of legal basis. disease under Section 32-A of the
Cornelio's adoption of John, without more, 2000 POEA-SEC, Section 20 (B) (4)
does not deprive petitioner of the right to of the same explicitly provides that
receive the benefits stemming from John's “[t[he liabilities of the employer
death as a dependent parent given when the seafarer suffers work-
Cornelio's untimely demise during John's related injury or illness during the
minority. Since the parent by adoption term of his contract are as
already died, then the death benefits follows: (t)hose illnesses not
under the Employees' Compensation listed in Section 32 of this
Program shall accrue solely to herein Contract are disputably
petitioner, John's sole remaining presumed as work related.” In
beneficiary. other words, the 2000 POEA-SEC
• Conchita J. Racelis Vs. United Philippine “has created a disputable
Lines, Inc. and/or Holland America presumption in favor of
Lines, Inc. and Fernando T. Lising   compensability[,] saying that those
G.R. No. 198408. November 12, 2014 illnesses not listed in Section 32
• The Court’s Ruling are disputably presumed as work-
• related. This means that even if
• Deemed incorporated in every the illness is not listed under
seafarer’s employment contract, Section 32-A of the POEA-SEC as
denominated as the POEA-SEC or an occupational disease or illness,
the Philippine Overseas it will still be presumed as work-
Employment Administration- related, and it becomes incumbent
Standard Employment Contract, is on the employer to overcome the
a set of standard provisions presumption.”52 This presumption
determined and implemented by should be overturned only when
the POEA, called the “Standard the employer’s refutation is found
Terms and Conditions Governing to be supported by substantial
the Employment of Filipino evidence,53 which, as traditionally
Seafarers on Board Ocean Going defined is “such relevant evidence
Vessels,” which are considered to as a reasonable mind might accept
be the minimum requirements as sufficient to support a
acceptable to the government for conclusion.”54
16
• Bahia Shipping Services, Inc., et al. Vs. that “it would be impossible for him
Joel P. Hipe, Jr.   G.R. No. 204699. to work as seaman-plumber”71 and
November 12, 2014 recommending a disability grade of
• Pursuant to the afore-quoted five, records show, however, that
provision, two (2) elements must such opinion was not supported by
concur for an injury or illness of a any diagnostic tests and/or
seafarer to be compensable: (a) procedures as would adequately
the injury or illness must be work- refute the fit-to-work assessment,
related; and (b) that the work- but merely relied on a review of
related injury or illness must have Hipe’s medical history and his
existed during the term of the physical examination;72 and
seafarer’s employment •
contract.70chanroblesvirtuallawlibra Second, Hipe failed to comply with the
ry procedure laid down under Section 20 (B)
• (3) of the 2000 POEA-SEC with regard to
• In the present case, Hipe was the joint appointment by the parties of a
made to continuously perform work third doctor whose decision shall be final
aboard the vessel beyond his six- and binding on them in case the seafarer’s
month contract without the benefit personal doctor disagrees with the
of a formal contract. Considering company-designated physician’s fit-to-
that any extension of his work assessment. In Philippine Hammonia
employment is discretionary on the Ship Agency, Inc. v. Dumadag73
part of respondents and that the (Philippine Hammonia), the Court held
latter offered no explanation why that the seafarer’s non-compliance with
Hipe was not repatriated when his the said conflict-resolution procedure
contract expired on June 5, 2008, results in the affirmance of the fit-to-work
the CA correctly ruled that he was certification of the company-designated
still under the employ of physician
respondents when he sustained an In light of the contrasting diagnoses of the
injury on June 22, 2008. company-designated physician and Hipe’s
Consequently, the injury suffered personal doctor, Hipe filed his complaint
by Hipe was a work-related injury before the NLRC but prematurely did so
and his eventual repatriation on without any regard to the conflict-
August 5, 2008, for which he was resolution procedure under Section 20 (B)
treated/rehabilitated can only be (3) of the 2000 POEA-SEC. Thus,
considered as a medical consistent with Philippine Hammonia, the
repatriation. fit-to-work certification of the company-
• designated physician ought to be upheld.
• Nonetheless, Hipe was
subsequently declared fit to work • In fine, given that Hipe’s
by the company-designated permanent disability was not
physician on October 9, 2008, or established through substantial
merely 65 days after his evidence for the reasons above-
repatriation, thus negating the stated, the NLRC did not gravely
existence of any permanent abuse its discretion in dismissing
disability for which compensability the complaint for permanent
is sought. Said fit-to-work disability benefits, thereby
certification must stand for two (2) warranting the reversal of the CA’s
reasons:cralawlawlibrary contrary ruling. Verily, while the
• Court adheres to the principle of
• First, while Hipe’s personal doctor liberality in favor of the seafarer in
disagreed with the above- construing the POEA-SEC, when
mentioned assessment, opining the evidence presented then
16
negates compensability, the claim of pawnshop branches all over the

for disability benefits must country. On October 29, 2007, a customer
necessarily fail,75 as in this case. sent P500.00 through its branch in
• P.J. Lhuillier, Inc. and Mario Ramon Capistrano, Cagayan de Oro City, and paid
Ludeña Vs. Flodeliz Velayo   G.R. No. a remittance fee of P40.00. Inexplicably,
198620. November 12, 2014 however, no corresponding entry was
made to recognize the cash receipt of
• WHETHER OR NOT P540.00 in the computerized accounting
THE MISAPPROPRIATION BY A system (operating system) of the PJLI.
PAWNSHOP PERSONNEL IN THE The respondent claimed that she tried
AMOUNT OF [P]540.00, COUPLED very hard but could not trace the source
WITH SUBSEQUENT DENIALS, of her unexplained cash surplus of
AMOUNT TO A SERIOUS P540.00, but a branch audit conducted
MISCONDUCT IN OFFICE?  sometime in December 2007 showed that
WHETHER OR NOT THE IMPOSITION OF it came from a "Pera Padala" customer.
THE PENALTY OF TERMINATION FROM
OFFICE [UPON] A PAWNSHOP PERSONNEL To be sure, no significant financial injury
WHO MISAPPROPRIATED AN AMOUNT OF was sustained by the PJLI in the loss of a
P540.00 FROM THE COFFERS OF THE mere P540.00 in cash, which, according to
PAWNSHOP, AND WHO MADE the respondent she sincerely wanted to
SUBSEQUENT DENIALS, IS CRUEL AND account for except that she was pre-
UNJUST?12 empted by fear of what her branch
It need not be stressed that the nature or manager might do once she learned of it.
extent of the penalty imposed on an erring But in treating the respondent's
employee must be commensurate to the misconduct as a simple negligence or a
gravity of the offense as weighed against simple mistake, both the CA and the NLRC
the degree of responsibility and trust grossly failed to consider that she held a
expected of the employee's position. On position of utmost trust and confidence in
the other hand, the respondent is not just the company.
charged with a misdeed, but with loss of
trust and confidence under Article 282(c) There are two classes of corporate
of the Labor Code, a cause premised on positions of trust: on the one hand are the
the fact that the employee holds a managerial employees whose primary
position whose functions may only be duty consists of the management of the
performed by someone who enjoys the establishment in which they are employed
trust and confidence of management. or of a department or a subdivision
Needless to say, such an employee bears thereof, and other officers or members of
a greater burden of trustworthiness than the managerial staff; on the other hand
ordinary workers, and the betrayal of the are the fiduciary rank-and-file
trust reposed is the essence of the loss of employees, such as cashiers, auditors,
trust and confidence which is a ground for property custodians, or those who, in the
the employee's dismissal.15 normal exercise of their functions,
regularly handle significant amounts of
The respondent's misconduct must money or property. These employees,
be viewed in light of the strictly though rank-and-file, are routinely
fiduciary charged with the care and custody of the
nature of her position. employer's money or property, and are
thus classified as occupying positions of
In addition to its pawnshop operations, trust and confidence.16
the PJLI offers its "Pera Padala" cash
remittance service whereby, for a fee or The respondent was first hired by the
"sending charge," a customer may remit petitioners as an accounting clerk on June
money to a consignee through its network 13, 2003, for which she received a basic
17
monthly salary of P9,353.00. On October "Other Income," and that the same must
29, 2007, the date of the subject incident, be so recognized and recorded at the end
she performed the function of vault of the day in the branch books or
custodian and cashier in the petitioners' "operating system." No such entry was
Branch 4 pawnshop in Capistrano, made by the respondent, resulting in
Cagayan de Oro City. In addition to her unrecorded cash in her possession of
custodial duties, it was the respondent P540.00, which the company learned
who electronically posted the day's about only two months thereafter through
transactions in the books of accounts of a branch audit.
the branch, a function that is essentially
separate from that of cashier or custodian. Significantly, when Tuling returned on
It is plain to see then that when both November 3, 2007 from her leave of
functions are assigned to one person to absence, the respondent did not just
perform, a very risky situation of withhold from her the fact that she had an
conflicting interests is created whereby unaccounted overage, but she refused to
the cashier can purloin the money in her seek her help on what to do about it,
custody and effectively cover her tracks, despite having had five days to mull over
at least temporarily, by simply not the matter until Tuling's return.
recording in the books the cash receipt
she misappropriated. This is commonly In order that an employer may invoke loss
referred to as lapping of accounts.17 Only of trust and confidence in terminating an
a most trusted clerk would be allowed to employee under Article 282(c) of the
perform the two functions, and the Labor Code, certain requirements must be
respondent enjoyed this trust. complied with, namely: (1) the employee
The series of willful misconduct must be holding a position of trust and
committed by the respondent in confidence; and (2) there must be an act
mishandling the unaccounted cash that would justify the loss of trust and
receipt exposes her as unworthy confidence.18 While loss of trust and
of the utmost trust inherent in her confidence should be genuine, it does not
position as branch cashier and vault require proof beyond reasonable doubt,19
custodian and bookkeeper. it being sufficient that there is some basis
to believe that the employee concerned is
The respondent insists that she never responsible for the misconduct and that
intended to appropriate the money but the nature of the employee's participation
was afraid that Tuling would scold her, therein rendered him unworthy of trust
and that she kept the money for a long and confidence demanded by his
time in her drawer and only decided to position.20
take it home after her search for the
cause of the cash overage had proved The petitioners are fully justified in
futile. Both the CA and the NLRC agreed claiming loss of trust and confidence in the
with her, and held that what she respondent. While it is natural and
committed was a simple mistake or simple understandable that the respondent
negligence. should feel apprehensive about Tuling's
reaction concerning her cash overage,
The Court disagrees. considering that it was their first time to
be working together in the same branch,
Granting arguendo that for some reason we must keep in mind that the
not due to her fault, the respondent could unaccounted cash can only be imputed to
not trace the source of the cash surplus, the respondent's own negligence in failing
she nonetheless well knew and to keep track of the transaction from
understood the company's policy that which the money came. A subsequent
unexplained cash must be treated as branch audit revealed that it came from a
miscellaneous income under the account "Pera Padala" remittance, implying that
17
although the amount had been duly Article 28222 of the Labor Code allows an
remitted to the consignee, the sending employer to dismiss an employee for
branch failed to record the payment willful breach of trust or loss of
received from the consigning customer. confidence. It has been held that a special
For days following the overage, the and unique employment relationship
respondent tried but failed to reconcile her exists between a corporation and its
records, and for this inept handling of a cashier. Truly, more than most key
"Pera Padala" remittance, she already positions, that of a cashier calls for utmost
deserved to be sanctioned. trust and confidence,23 and it is the breach
of this trust that results in an employer's
Further, as a matter of strict company loss of confidence in the employee.24 In
policy, unexplained cash is recognized at San Miguel Corporation v. NLRC, et
the end of the day as miscellaneous al.,25cralawred the Court
income. Inexplicably, despite being with held:chanroblesvirtuallawlibrary
the company for four years as accounting
clerk and cashier, the respondent failed to As a rule this Court leans over backwards
make the required entry in the branch to help workers and employees continue
operating system recognizing in their employment. We have mitigated
miscellaneous income. Such an entry penalties imposed by management on
could have been easily reversed once it erring employees and ordered employers
became clear how the overage came to reinstate workers who have been
about. But the respondent obviously punished enough through suspension.
thought that by skipping the entry, she However, breach of trust and
could keep Tuling from learning about the confidence and acts of dishonesty and
overage. Her trustworthiness as branch infidelity inthe handling of funds
cashier and bookkeeper has been and properties are an entirely
irreparably tarnished. The respondent's different matter. 26 (Emphasis ours)
untrustworthiness is further demonstrated
when she began to concoct lies concerning It has been held that in dismissing a
the overage: first, by denying its cashier on the ground of loss of
existence to Tuling and again to the confidence, it is sufficient that there is
company auditor; later, when she falsely some basis for the same or that the
claimed that a computer glitch or employer has a reasonable ground to
malfunction had prevented her from believe that the employee is responsible
posting the amount on October 29, 2007; for the misconduct, thus making him
and finally, when she was forced to admit unworthy of the trust and confidence
before the company's investigating panel reposed in him.27 Therefore, if there is
that she took and spent the money.[21 sufficient evidence to show that the
Mere substantial evidence is employer has ample reason to distrust the
sufficient to establish loss of trust employee, the labor tribunal cannot justly
and confidence deny the employer the authority to
dismiss him.[28 Indeed, employers are
The respondent's actuations were willful allowed wider latitude in dismissing an
and deliberate. A cashier who, through employee for loss of trust and confidence,
carelessness, lost a document evidencing as the Court held in Atlas Fertilizer
a cash receipt, and then wilfully chose not Corporation v. NLRC:[29
to record the excess cash as
miscellaneous income and instead took it As a general rule, employers are allowed a
home and spent it on herself, and later wider latitude of discretion in terminating
repeatedly denied or concealed the cash the services of employees who perform
overage when confronted, deserves to be functions which by their nature require the
dismissed. employer's full trust and confidence. Mere
existence of basis for believing that the
17
employee has breached the trust of the (Emphasis and underscoring in the
employer is sufficient and does not require original)
proof beyond reasonable doubt. Thus,
when an employee has been guilty of In holding a position requiring full trust
breach of trust or his employer has ample and confidence, the respondent gave up
reason to distrust him, a labor tribunal some of the rigid guarantees available to
cannot deny the employer the authority to ordinary employees. She insisted that her
dismiss him. x x x.30 (Citations omitted) misconduct was just an "innocent
mistake," and maybe it was, had it been
Furthermore, it must also be stressed that committed by other employees. But surely
only substantial evidence is required in not as to the respondent who precisely
order to support a finding that an because of the special trust and
employer's trust and confidence accorded confidence given her by her employer
to its employee had been breached. As must be penalized with a more severe
explained in Lopez v. Alturas Group of sanction.33
Companies:[31 A cashier's inability to safeguard
and account for missing cash is
[T]he language of Article 282(c) of the sufficient
Labor Code states that the loss of trust cause to dismiss her.
and confidence must be based on
willful breach of the trust reposed in The respondent insisted that she never
the employee by his employer. Such intended to misappropriate the missing
breach is willful if it is done intentionally, fund, but in Santos v. San Miguel Corp.,34
knowingly, and purposely, without the Court held that misappropriation of
justifiable excuse, as distinguished from company funds, notwithstanding that the
an act done carelessly, thoughtlessly, shortage has been restituted, is a valid
heedlessly or inadvertently. Moreover, it ground to terminate the services of an
must be based on substantial employee for loss of trust and
evidence and not on the employer's confidence.35 Also, in Cañeda v. Philippine
whims or caprices or suspicions Airlines, Inc. ,36 the Court held that it is
otherwise, the employee would eternally immaterial what the respondent's intent
remain at the mercy of the employer. Loss was concerning the missing fund, for the
of confidence must not be indiscriminately undisputed fact is that cash which she
used as a shield by the employer against a held in trust for the company was missing
claim that the dismissal of an employee in her custody. At the very least, she was
was arbitrary. And, in order to constitute a negligent and failed to meet the degree of
just cause for dismissal, the act care and fidelity demanded of her as
complained of must be work-related cashier. Her excuses and failure to give a
and shows that the employee satisfactory explanation for the missing
concerned is unfit to continue cash only gave the petitioners sufficient
working for the employer. In addition, reason to lose confidence in her. 37 As it
loss of confidence as a just cause for was held in Metro Drug Corporation v.
termination of employment is NLRC:38
premised on the fact that the
employee concerned holds a position It would be most unfair to require an
of responsibility, trust and confidence or employer to continue employing as its
that the employee concerned is entrusted cashier a person whom it reasonably
with confidence with respect to delicate believes is no longer capable of giving full
matters, such as the handling or care and wholehearted trustworthiness in the
and protection of the property and stewardship of company
assets of the employer. The betrayal of funds.39chanrobleslaw
this trust is the essence of the offense for • Joel b. Monana Vs. MEC Global
which an employee is penalized.32 Shipmanagement and Manning Corp.
17
and HD Herm Davelsberg GMBH G.R. Pursuant to this communication, petitioner

No. 196122. November 12, 2014 entered into an employment contract and
This labor case involves a seafarer's claim hired respondent on 24 October 2002.
for disability benefits. It involves an Subsequent communications, though,
application of Section 20(B) of the show that the foreign principal approved a
Philippine Overseas Employment different candidate for the position of
Administration Standard Employment BSN.15 Thus, petitioner did not deploy
Contract (POEA contract). The POEA respondent.
contract states that for an illness to be
compensable, (1) it must be work-related There was an apparent violation of the
and (2) it must have existed during the contract at the time that the foreign
term of the seafarer's employment principal decided to promote another
contract.1 person as expressed in its
• Peak Ventures Corporation and/or El Tigre communications dated 10 November 2002
Security Investigation Agency Vs. and 14 November 2002. The vacancy for
Heirs of Nestor B. Villareal   G.R. No. the position of boatswain ceased to exist
184618. November 19, 2014 upon the execution of the contract
The twin reliefs that should be given to an between petitioner and respondent on 24
illegally dismissed employee are full October 2002, a contract subsequently
backwages and approved by the POEA on 25 October
reinstatement.1 Backwages restore the 2002. Clearly, there was no vacancy when
lost income of an employee and is the foreign principal changed its mind,
computed from the time compensation since the position of boatswain had
was withheld up to actual already been filled up by respondent.
reinstatement.2 Anent reinstatement,
only when it is not viable is separation pay The contract was already perfected on the
given.3chanroblesvirtuallawlibrary date of its execution, which occurred when
petitioner and respondent agreed on the
• Abosta Shipmanagement Corporation Vs. object and the cause, as well as on the
Wilhilm M. Hilario   G.R. No. 195792. rest of the terms and conditions therein.
November 24, 2014 Naturally, contemporaneous with the
The Court is left with the issue of whether perfection of the employment contract
such breach would entitle respondent to was the birth of certain rights and
the payment of actual damages for the obligations, a breach of which may give
failure of petitioner to comply with the rise to a cause of action against the erring
latter's obligations in accordance with the party.16 Also, the POEA Standard Contract
employment contract. must be recognized and respected. Thus,
It is the contention of petitioner that neither the manning agent nor the
respondent's non-deployment was due to employer can simply prevent a seafarer
the foreign principal's management from being deployed without a valid
prerogative to promote an able seaman. reason.17chanroblesvirtuallawlibrary
Supposedly, this exercise of management
prerogative is a valid and justifiable True, the promotion and choice of
reason that would negate any liability for personnel is an exercise of management
damages. prerogative. In fact, this Court has upheld
management prerogatives, so long as they
We do not agree. are exercised in good faith for the
advancement of the employer's interest,
Based on a communication sent by a and not for the purpose of defeating or
certain M.K. Jin dated 10 October 2002,14 circumventing the rights of the employees
the foreign principal had already chosen under special laws or under valid
respondent from among the other agreements.18 However, there are
candidates as BSN (bosun or boatswain). limitations on the exercise of management
17
prerogatives, such as existing laws and is due him.23chanroblesvirtuallawlibrary

the principle of equity and substantial
justice.19chanroblesvirtuallawlibrary In sum, the failure to deploy respondent
was an exercise of a management
Under the principle of equity and prerogative that went beyond its limits
substantial justice, change of mind was and resulted in a breach of contract. In
not a valid reason for the non-deployment turn, petitioner's breach gave rise to
of respondent. He lost the opportunity to respondent's cause of action to claim
apply for other positions in other agencies actual damages for the pecuniary loss
when he signed the contract of suffered by the latter in the form of the
employment with petitioner. Simply put, loss of nine months' worth of salary as
that contract was binding on the parties provided in the POEA-approved contract of
and may not later be disowned simply employment.
because of a change of mind of either one
of them.
• Government Service Insurance System Vs.
The unilateral and unreasonable failure to Aurelia Y. Calumpiano   G.R. No.
deploy respondent constitutes breach of 196102. November 26, 2014
contract, which gives rise to a liability to • the Court agrees with the CA's
pay actual damages. The sanctions conclusion and so declares that
provided for non-deployment do not end respondent's illness is
with the suspension or cancellation of compensable.
license or the imposition of a fine and the •
return of all documents at no cost to the • Respondent served the government
worker. They do not forfend a seafarer for 30 long years; veritably, as the
from instituting an action for damages ECC itself said, "[h]er duties were
against the employer or agency that has no doubt stressful and the same
failed to deploy may have caused her to develop
him.20chanroblesvirtuallawlibrary her ailment, hypertension"29 -
which is a listed occupational
Considering that it was petitioner who disease, contrary to the CA's
entered into the contract of employment pronouncement that it is not. And
with respondent for and on behalf of the because it is a listed occupational
foreign principal, it has the primary disease, the "increased risk theory"
obligation to ensure the implementation of does not apply - again, contrary to
that contract. Furthermore, in line with the CA's declaration; no proof of
the policy of the state to protect and causation is required.
alleviate the plight of the working class, •
Section 1, paragraph f (3) of Rule II of the • It can also be said that given
POEA Rules and Regulations,21 clearly respondent's age at the time, and
provides that the private employment taking into account the nature,
agency shall assume joint and solidary working conditions, and pressures
liability with the employer. Indeed, this of her work as court stenographer
Court has consistently held that private — which requires her to faithfully
employment agencies are held jointly and record each and every day virtually
severally liable with the foreign-based all of the court's proceedings;
employer for any violation of the transcribe these notes immediately
recruitment agreement or contract of in order to malee them available to
employment.22 This joint and solidary the court or the parties who
liability imposed by law on recruitment require them; take down dictations
agencies and foreign employers is meant by the judge, and transcribe them;
to assure the aggrieved worker of and type in final form the judge's
immediate and sufficient payment of what decisions, which activities extend
17
beyond office hours and without regular employee.

additional compensation or
overtime pay30 - all these Although it is true that the length of time
contributed to the development of of the employee’s service is not a
her hypertension -or hypertensive controlling determinant of project
cardiovascular disease, as employment, it is vital in determining
petitioner would call it.31 whether he was hired for a specific
Consequently, her age, work, and undertaking or in fact tasked to perform
hypertension caused the functions vital, necessary and
impairment of vision in both eyes indispensable to the usual business or
due to "advanced to late stage trade of the employer.34 Petitioners’
glaucoma", which rendered her successive re-engagement in order to
"legally blind."32chanrobleslaw perform the same kind of work firmly
• Jeannete V. Manalo, Vilma P. Barrious, manifested the necessity and desirability
Lourdes Lynn Michelle Fernandez and of their work in the usual business of TNS
Leila B. Taiño Vs. TNS Philippines Inc., as a market research facility.35 Undisputed
and Gary Ocampo   G.R. No. 208567. also is the fact that the petitioners were
November 26, 2014 assigned office-based tasks from 9:00
• Upon review of the records, the o’clock in the morning up to 6:00 o’clock
evidence failed to clearly, in the evening, at the earliest, without any
accurately, consistently, and corresponding remuneration.
convincingly show that petitioners
were still project employees of • The project employment scheme
TNS. used by TNS easily circumvented
• the law and precluded its
• Article 280 of the Labor Code, as employees from attaining regular
amended, clearly defined a project employment status in the subtlest
employee as one whose way possible.Petitioners were
employment has been fixed for rehired not intermittently, but
a specific project or continuously,contract after
undertaking the completion or contract, month after month,
termination of which has been involving the very same tasks.
determined at the time of the They practically performed exactly
engagement of the employee or the same functions over several
where the work or service to be years. Ultimately,without a doubt,
performed is seasonal in nature the functions they performed were
and the employment is for the indeed vital and necessary to the
duration of the season.Additionally, very business or trade of TNS.
a project employee is one whose • Philippine Airlines, Inc. Vs. Reynaldo V.
termination of his employment Paz   G.R. No. 192924. November 26,
contract is reported to the DOLE 2014
everytime the project for which The rule is that the employee is entitled to
he was engaged has been reinstatement salaries notwithstanding the
completed. reversal of the LA decision granting him
In Maraguinot, Jr. v. NLRC,33 the Court said relief. In Roquero v. Philippine
held that once a project or work pool Airlines,28 the Court underscored that it is
employee has been: (1) continuously, as obligatory on the part of the employer to
opposed to intermittently, rehired by the reinstate and pay the wages of the
same employer for the same tasks or dismissed employee during the period of
nature of tasks; and (2) these tasks are appeal until reversal by the higher court.
vital, necessary and indispensable to the This is so because the order of
usual business or trade of the employer, reinstatement is immediately executory.
then the employee must be deemed a Unless there is a restraining order issued,
17
it is ministerial upon the LA to implement Arbiter rendered his decision, the SEC
the order of reinstatement. The unjustified replaced the Interim Rehabilitation
refusal of the employer to reinstate a Receiver with a Permanent Rehabilitation
dismissed employee entitles him to Receiver.
payment of his salaries effective from the
time the employer failed to reinstate Case law recognizes that unless there is a
him.29 restraining order, the implementation of
the order of reinstatement is ministerial
It is clear from the records that PAL failed and mandatory. This injunction or
to reinstate the respondent pending suspension of claims by legislative fiat
appeal of the LA decision to the NLRC. It partakes of the nature of a restraining
can be recalled that the LA rendered the order that constitutes a legal justification
decision ordering the reinstatement of the for respondent’s non-compliance with the
respondent on March 5, 2001. And, reinstatement order. Respondent’s failure
despite the self-executory nature of the to exercise the alternative options of
order of reinstatement, the respondent actual reinstatement and payroll
nonetheless secured a partial writ of reinstatement was thus justified. Such
execution on May 25, 2001. Even then, being the case, respondent’s obligation to
the respondent was not reinstated to his pay the salaries pending appeal, as the
former position or even through payroll. normal effect of the non-exercise of the
options, did not attach.32 (Citations
A scrutiny of the circumstances, however, omitted)
will show that the delay in reinstating the In light of the fact that PAL’s failure to
respondent was not due to the unjustified comply with the reinstatement order was
refusal of PAL to abide by the order but justified by the exigencies of corporation
because of the constraints of corporate rehabilitation, the respondent may no
rehabilitation. It bears noting that a year longer claim salaries which he should have
before the respondent filed his complaint received during the period that the LA
for illegal dismissal on June 25, 1999, PAL decision ordering his reinstatement is still
filed a petition for approval of pending appeal until it was overturned by
rehabilitation plan and for appointment of the NLRC. Thus, the CA committed a
a rehabilitation receiver with the SEC. On reversible error in recognizing the
June 23, 1998, the SEC appointed an respondent’s right to collect reinstatement
Interim Rehabilitation Receiver. salaries albeit suspending its execution
Thereafter, the SEC issued an Order31 while PAL is still under corporate
dated July 1, 1998, suspending all claims rehabilitation.
for payment against PAL.
• Stanley Fine Furniture, Elena and Carlos
The inopportune event of PAL’s entering Wang Vs. Victor T. Gallano and
rehabilitation receivership justifies the Enriquito Siarez   G.R. No. 190486.
delay or failure to comply with the November 26, 2014
reinstatement order of the LA. Thus, in • To terminate the employment of
Garcia, the Court workers simply because they
held:chanroblesvirtuallawlibrary asserted their legal rights by filing
It is settled that upon appointment by the a complaint is illegal. It violates
SEC of a rehabilitation receiver, all actions their right to security of tenure and
for claims before any court, tribunal or should not be tolerated.
board against the corporation shall ipso •
jure be suspended. As stated early on, • Fuji Television, Inc. Vs. Arlene S. Espiritu 
during the pendency of petitioners’ G.R. Nos. 204944-45. December 3, 2014
complaint before the Labor Arbiter, the • It is the burden of the employer to
SEC placed respondent under an Interim prove that a person whose services
Rehabilitation Receiver. After the Labor it pays for is an independent
17
contractor rather than a regular whether it supports her argument that she
employee with or without a fixed was a regular employee, or the argument
term. That a person has a disease of Fuji that she was an independent
does not per se entitle the contractor. We shall scrutinize whether
employer to terminate his or her the nature of Arlene’s work was necessary
services. Termination is the last and desirable to Fuji’s business or whether
resort. At the very least, a Fuji only needed the output of her work. If
competent public health authority the circumstances show that Arlene’s work
must certify that the disease was necessary and desirable to Fuji, then
cannot be cured within six (6) she is presumed to be a regular employee.
months, even with appropriate The burden of proving that she was an
treatment. independent contractor lies with Fuji.
•
III In labor cases, the quantum of proof
Determination of employment status; required is substantial evidence.136
burden of proof “Substantial evidence” has been defined
as “such amount of relevant evidence
In this case, there is no question that which a reasonable mind might accept as
Arlene rendered services to Fuji. However, adequate to justify a
Fuji alleges that Arlene was an conclusion.”137chanRoblesvirtualLawlibrary
independent contractor, while Arlene
alleges that she was a regular employee. If Arlene was a regular employee, we then
To resolve this issue, we ascertain determine whether she was illegally
whether an employer-employee dismissed. In complaints for illegal
relationship existed between Fuji and dismissal, the burden of proof is on the
Arlene. employee to prove the fact of dismissal.138
Once the employee establishes the fact of
This court has often used the four-fold dismissal, supported by substantial
test to determine the existence of an evidence, the burden of proof shifts to the
employer-employee relationship. Under employer to show that there was a just or
the four-fold test, the “control test” is the authorized cause for the dismissal and
most important.134 As to how the elements that due process was
in the four-fold test are proven, this court observed.139chanRoblesvirtualLawlibrary
has discussed
that:chanroblesvirtuallawlibrary IV
Whether the Court of Appeals
[t]here is no hard and fast rule designed correctly affirmed the National Labor
to establish the aforesaid elements. Any Relations Commission’s finding that
competent and relevant evidence to prove Arlene was a regular employee
the relationship may be admitted. Article 280 of the Labor Code provides
Identification cards, cash vouchers, social that:chanroblesvirtuallawlibrary
security registration, appointment letters
or employment contracts, payrolls, Art. 280. Regular and casual
organization charts, and personnel lists, employment. The provisions of written
serve as evidence of employee status.135 agreement to the contrary
notwithstanding and regardless of the oral
If the facts of this case vis-à-vis the four- agreement of the parties, an employment
fold test show that an employer-employee shall be deemed to be regular where the
relationship existed, we then determine employee has been engaged to perform
the status of Arlene’s employment, i.e., activities which are usually necessary or
whether she was a regular employee. desirable in the usual business or trade of
Relative to this, we shall analyze Arlene’s the employer, except where the
fixed-term contract and determine employment has been fixed for a specific
17
project or undertaking the completion or educational

termination of which has been determined institutions.153chanRoblesvirtualLawlibrary
at the time of the engagement of the
employee or where the work or services to Distinctions among fixed-term
be performed is seasonal in nature and employees, independent contractors,
the employment is for the duration of the and regular employees
season.
GMA Network, Inc. v. Pabriga154
An employment shall be deemed to be expounded the doctrine on fixed-term
casual if it is not covered by the preceding contracts laid down in Brent in the
paragraph; Provided, That, any employee following
who has rendered at least one year of manner:chanroblesvirtuallawlibrary
service, whether such service is
continuous or broken, shall be considered Cognizant of the possibility of abuse in the
a regular employee with respect to the utilization of fixed-term employment
activity in which he is employed and his contracts, we emphasized in Brent that
employment shall continue while such where from the circumstances it is
activity exist. apparent that the periods have been
imposed to preclude acquisition of tenurial
This provision classifies employees into security by the employee, they should be
regular, project, seasonal, and casual. It struck down as contrary to public policy or
further classifies regular employees into morals. We thus laid down indications or
two kinds: (1) those “engaged to perform criteria under which “term employment”
activities which are usually necessary or cannot be said to be in circumvention of
desirable in the usual business or trade of the law on security of tenure,
the employer”; and (2) casual employees namely:chanroblesvirtuallawlibrary
who have “rendered at least one year of
service, whether such service is 1) The fixed period of employment was
continuous or broken.” knowingly and voluntarily agreed upon by
the parties without any force, duress, or
Another classification of employees, i.e., improper pressure being brought to bear
employees with fixed-term contracts, was upon the employee and absent any other
recognized in Brent School, Inc. v. circumstances vitiating his consent; or
Zamora150 where this court discussed
that:chanroblesvirtuallawlibrary 2) It satisfactorily appears that the
employer and the employee dealt with
Logically, the decisive determinant in the each other on more or less equal terms
term employment should not be the with no moral dominance exercised by the
activities that the employee is called upon former or the latter.
to perform, but the day certain agreed These indications, which must be read
upon by the parties for the together, make the Brent doctrine
commencement and termination of their applicable only in a few special cases
employment relationship, a day certain wherein the employer and employee are
being understood to be “that which must on more or less in equal footing in
necessarily come, although it may not be entering into the contract. The reason for
known when.”151 (Emphasis in the this is evident: when a prospective
original) employee, on account of special skills or
market forces, is in a position to make
This court further discussed that there are demands upon the prospective employer,
employment contracts where “a fixed term such prospective employee needs less
is an essential and natural protection than the ordinary worker.
appurtenance”152 such as overseas Lesser limitations on the parties’ freedom
employment contracts and officers in of contract are thus required for the
17
protection of the employee.155 (Citations that their employer was engaged in hiring
omitted) workers for five (5) months only to
prevent regularization. In the absence of
For as long as the guidelines laid down in these facts, the fixed-term contracts were
Brent are satisfied, this court will upheld as
recognize the validity of the fixed-term valid.160chanRoblesvirtualLawlibrary
contract.
On the other hand, an independent
In Labayog v. M.Y. San Biscuits, Inc.,156 contractor is defined
this court upheld the fixed-term as:chanroblesvirtuallawlibrary
employment of petitioners because from
the time they were hired, they were . . . one who carries on a distinct and
informed that their engagement was for a independent business and undertakes to
specific period. This court stated perform the job, work, or service on its
that:chanroblesvirtuallawlibrary own account and under one’s own
responsibility according to one’s own
[s]imply put, petitioners were not regular manner and method, free from the control
employees. While their employment as and direction of the principal in all matters
mixers, packers and machine operators connected with the performance of the
was necessary and desirable in the usual work except as to the results thereof.161
business of respondent company, they
were employed temporarily only, during In view of the “distinct and independent
periods when there was heightened business” of independent contractors, no
demand for production. Consequently, employer-employee relationship exists
there could have been no illegal dismissal between independent contractors and
when their services were terminated on their principals.
expiration of their contracts. There was
even no need for notice of termination Independent contractors are recognized
because they knew exactly when their under Article 106 of the Labor
contracts would end. Contracts of Code:chanroblesvirtuallawlibrary
employment for a fixed period terminate
on their own at the end of such period. Art. 106. Contractor or subcontractor.
Whenever an employer enters into a
Contracts of employment for a fixed contract with another person for the
period are not unlawful. What is performance of the former’s work, the
objectionable is the practice of some employees of the contractor and of the
scrupulous employers who try to latter’s subcontractor, if any, shall be paid
circumvent the law protecting workers in accordance with the provisions of this
from the capricious termination of Code.
employment.157 (Citation omitted)
....
Caparoso v. Court of Appeals158 upheld the
validity of the fixed-term contract of The Secretary of Labor and Employment
employment. Caparoso and Quindipan may, by appropriate regulations, restrict
were hired as delivery men for three (3) or prohibit the contracting-out of labor to
months. At the end of the third month, protect the rights of workers established
they were hired on a monthly basis. In under this Code. In so prohibiting or
total, they were hired for five (5) months. restricting, he may make appropriate
They filed a complaint for illegal distinctions between labor-only
dismissal.159 This court ruled that there contracting and job contracting as well as
was no evidence indicating that they were differentiations within these types of
pressured into signing the fixed-term contracting and determine who among the
contracts. There was likewise no proof parties involved shall be considered the
18
employer for purposes of this Code, to Jurisprudence has recognized another kind
prevent any violation or circumvention of of independent contractor: individuals with
any provision of this Code. unique skills and talents that set them
apart from ordinary employees. There is
There is “labor-only” contracting where no trilateral relationship in this case
the person supplying workers to an because the independent contractor
employer does not have substantial capital himself or herself performs the work for
or investment in the form of tools, the principal. In other words, the
equipment, machineries, work premises, relationship is bilateral.
among others, and the workers recruited
and placed by such person are performing In Orozco v. Court of Appeals,163
activities which are directly related to the Wilhelmina Orozco was a columnist for the
principal business of such employer. In Philippine Daily Inquirer. This court ruled
such cases, the person or intermediary that she was an independent contractor
shall be considered merely as an agent of because of her “talent, skill, experience,
the employer who shall be responsible to and her unique viewpoint as a feminist
the workers in the same manner and advocate.”164 In addition, the Philippine
extent as if the latter were directly Daily Inquirer did not have the power of
employed by him. control over Orozco, and she worked at
her own
In Department Order No. 18-A, Series of pleasure.165chanRoblesvirtualLawlibrary
2011, of the Department of Labor and
Employment, a contractor is defined as Semblante v. Court of Appeals166 involved
having:chanroblesvirtuallawlibrary a masiador167 and a sentenciador.168 This
court ruled that “petitioners performed
Section 3. . . . their functions as masiador and
sentenciador free from the direction and
.... control of respondents”169 and that the
masiador and sentenciador “relied mainly
(c) . . . an arrangement whereby a on their ‘expertise that is characteristic of
principal agrees to put out or farm out the cockfight gambling.’”170 Hence, no
with a contractor the performance or employer-employee relationship existed.
completion of a specific job, work or
service within a definite or predetermined Bernarte v. Philippine Basketball
period, regardless of whether such job, Association171 involved a basketball
work or service is to be performed or referee. This court ruled that “a referee is
completed within or outside the premises an independent contractor, whose special
of the principal. skills and independent judgment are
required specifically for such position and
This department order also states that cannot possibly be controlled by the hiring
there is a trilateral relationship in party.”172chanRoblesvirtualLawlibrary
legitimate job contracting and
subcontracting arrangements among the In these cases, the workers were found to
principal, contractor, and employees of be independent contractors because of
the contractor. There is no employer- their unique skills and talents and the lack
employee relationship between the of control over the means and methods in
contractor and principal who engages the the performance of their work.
contractor’s services, but there is an
employer-employee relationship between In other words, there are different kinds
the contractor and workers hired to of independent contractors: those
accomplish the work for the engaged in legitimate job contracting and
principal.162chanRoblesvirtualLawlibrary those who have unique skills and talents
that set them apart from ordinary
18
employees. and other relevant circumstances.
Since no employer-employee relationship For example, a prospective employee with

exists between independent contractors a bachelor’s degree cannot be said to be
and their principals, their contracts are on equal footing with a grocery bagger
governed by the Civil Code provisions on with a high school diploma. Employees
contracts and other applicable who qualify for jobs requiring special
laws. chanRoblesvirtualLawlibrary
173
qualifications such as “[having] a Master’s
degree” or “[having] passed the licensure
A contract is defined as “a meeting of exam” are different from employees who
minds between two persons whereby one qualify for jobs that require “[being a]
binds himself, with respect to the other, to high school graduate; with pleasing
give something or to render some personality.” In these situations, it is clear
service.”174 Parties are free to stipulate on that those with special qualifications can
terms and conditions in contracts as long bargain with the employer on equal
as these “are not contrary to law, morals, footing. Thus, the level of protection
good customs, public order, or public afforded to these employees should be
policy.”175 This presupposes that the different.
parties to a contract are on equal footing.
They can bargain on terms and conditions Fuji’s argument that Arlene was an
until they are able to reach an agreement. independent contractor under a fixed-term
contract is contradictory. Employees under
On the other hand, contracts of fixed-term contracts cannot be
employment are different and have a independent contractors because in fixed-
higher level of regulation because they are term contracts, an employer-employee
impressed with public interest. Article relationship exists. The test in this kind of
XIII, Section 3 of the 1987 Constitution contract is not the necessity and
provides full protection to desirability of the employee’s activities,
labor:chanroblesvirtuallawlibrary “but the day certain agreed upon by the
parties for the commencement and
In contracts of employment, the employer termination of the employment
and the employee are not on equal relationship.”179 For regular employees,
footing. Thus, it is subject to regulatory the necessity and desirability of their work
review by the labor tribunals and courts of in the usual course of the employer’s
law. The law serves to equalize the business are the determining factors. On
unequal. The labor force is a special class the other hand, independent contractors
that is constitutionally protected because do not have employer-employee
of the inequality between capital and relationships with their principals.
labor.176 This presupposes that the labor
force is weak. Hence, before the status of employment
can be determined, the existence of an
However, the level of protection to labor employer-employee relationship must be
should vary from case to case; otherwise, established.
the state might appear to be too
paternalistic in affording protection to The four-fold test180 can be used in
labor. As stated in GMA Network, Inc. v. determining whether an employer-
Pabriga, the ruling in Brent applies in employee relationship exists. The
cases where it appears that the employer elements of the four-fold test are the
and employee are on equal footing.177 following: (1) the selection and
engagement of the employee; (2) the
The level of protection to labor must be payment of wages; (3) the power of
determined on the basis of the nature of dismissal; and (4) the power of control,
the work, qualifications of the employee, which is the most important
18
element.181chanRoblesvirtualLawlibrary Arlene was a regular employee

Application of the four-fold test with a fixed-term contract
The Court of Appeals did not err when it The test for determining regular
relied on the ruling in Dumpit-Murillo and employment is whether there is a
affirmed the ruling of the National Labor reasonable connection between the
Relations Commission finding that Arlene employee’s activities and the usual
was a regular employee. Arlene was hired business of the employer. Article 280
by Fuji as a news producer, but there was provides that the nature of work must be
no showing that she was hired because of “necessary or desirable in the usual
unique skills that would distinguish her business or trade of the employer” as the
from ordinary employees. Neither was test for determining regular employment.
there any showing that she had a celebrity As stated in ABS-CBN Broadcasting
status. Her monthly salary amounting to Corporation v.
US$1,900.00 appears to be a substantial Nazareno:204chanRoblesvirtualLawlibrary
sum, especially if compared to her salary
when she was still connected with GMA.199 In determining whether an employment
Indeed, wages may indicate whether one should be considered regular or non-
is an independent contractor. Wages may regular, the applicable test is the
also indicate that an employee is able to reasonable connection between the
bargain with the employer for better pay. particular activity performed by the
However, wages should not be the employee in relation to the usual business
conclusive factor in determining whether or trade of the employer. The standard,
one is an employee or an independent supplied by the law itself, is whether the
contractor. work undertaken is necessary or desirable
in the usual business or trade of the
Fuji had the power to dismiss Arlene, as employer, a fact that can be assessed by
provided for in paragraph 5 of her looking into the nature of the services
professional employment contract.200 Her rendered and its relation to the general
contract also indicated that Fuji had scheme under which the business or trade
control over her work because she was is pursued in the usual course. It is
required to work for eight (8) hours from distinguished from a specific undertaking
Monday to Friday, although on flexible that is divorced from the normal activities
time.201 Sonza was not required to work required in carrying on the particular
for eight (8) hours, while Dumpit-Murillo business or trade.205
had to be in ABC to do both on-air and
off-air tasks. However, there may be a situation where
an employee’s work is necessary but is
On the power to control, Arlene alleged not always desirable in the usual course of
that Fuji gave her instructions on what to business of the employer. In this
report.202 Even the mode of transportation situation, there is no regular employment.
in carrying out her functions was
controlled by Fuji. Fuji is engaged in the business of
Having established that an employer- broadcasting,209 including news
employee relationship existed between programming.210 It is based in Japan211
Fuji and Arlene, the next questions for and has overseas offices to cover
resolution are the following: Did the Court international
of Appeals correctly affirm the National news.212chanRoblesvirtualLawlibrary
Labor Relations Commission that Arlene
had become a regular employee? Was the Based on the record, Fuji’s Manila Bureau
nature of Arlene’s work necessary and Office is a small unit213 and has a few
desirable for Fuji’s usual course of employees.214 As such, Arlene had to do
business? all activities related to news gathering.
18
Although Fuji insists that Arlene was a not negate the finding of illegal dismissal
stringer, it alleges that her designation by Fuji. The manner by which Fuji
was “News informed Arlene that her contract would
Talent/Reporter/Producer.”215chanRoblesvi no longer be renewed is tantamount to
rtualLawlibrary constructive dismissal. To make matters
worse, Arlene was asked to sign a letter of
A news producer “plans and supervises resignation prepared by Fuji.235 The
newscast . . . [and] work[s] with reporters existence of a fixed-term contract should
in the field planning and gathering not mean that there can be no illegal
information. . . .”216 Arlene’s tasks dismissal. Due process must still be
included “[m]onitoring and [g]etting observed in the pre-termination of fixed-
[n]ews [s]tories, [r]eporting interviewing term contracts of employment.
subjects in front of a video camera,” 217
“the timely submission of news and In addition, the Court of Appeals and the
current events reports pertaining to the National Labor Relations Commission
Philippines[,] and traveling [sic] to [Fuji’s] found that Arlene was dismissed because
regional office in Thailand.”218 She also of her health condition. In the non-
had to report for work in Fuji’s office in renewal agreement executed by Fuji and
Manila from Mondays to Fridays, eight (8) Arlene, it is stated
hours per day.219 She had no equipment that:chanroblesvirtuallawlibrary
and had to use the facilities of Fuji to
accomplish her tasks. WHEREAS, the SECOND PARTY is
undergoing chemotherapy which prevents
The Court of Appeals affirmed the finding her from continuing to effectively perform
of the National Labor Relations her functions under the said Contract such
Commission that the successive renewals as the timely submission of news and
of Arlene’s contract indicated the necessity current events reports pertaining to the
and desirability of her work in the usual Philippines and travelling [sic] to the
course of Fuji’s business. Because of this, FIRST PARTY’s regional office in
Arlene had become a regular employee Thailand. 236
(Emphasis supplied)
with the right to security of tenure.
Disease as a ground for termination is
Arlene’s contract indicating a fixed term recognized under Article 284 of the Labor
did not automatically mean that she could Code:chanroblesvirtuallawlibrary
never be a regular employee. This is
precisely what Article 280 seeks to avoid. Art. 284. Disease as ground for
The ruling in Brent remains as the termination. An employer may terminate
exception rather than the general rule. the services of an employee who has been
found to be suffering from any disease
Further, an employee can be a regular and whose continued employment is
employee with a fixed-term contract. The prohibited by law or is prejudicial to his
law does not preclude the possibility that health as well as to the health of his co-
a regular employee may opt to have a employees: Provided, That he is paid
fixed-term contract for valid reasons. This separation pay equivalent to at least one
was recognized in Brent: For as long as it (1) month salary or to one-half (1/2)
was the employee who requested, or month salary for every year of service,
bargained, that the contract have a whichever is greater, a fraction of at least
“definite date of termination,” or that the six (6) months being considered as one
fixed-term contract be freely entered into (1) whole year.
by the employer and the employee, then
the validity of the fixed-term contract will Book VI, Rule 1, Section 8 of the Omnibus
be upheld.230chanRoblesvirtualLawlibrary Rules Implementing the Labor Code
The expiration of Arlene’s contract does provides:chanroblesvirtuallawlibrary
18
agree, her salary was withheld. Thus, the

Sec. 8. Disease as a ground for dismissal. Court of Appeals correctly upheld the
– Where the employee suffers from a finding of the National Labor Relations
disease and his continued employment is Commission that for failure of Fuji to
prohibited by law or prejudicial to his comply with due process, Arlene was
health or to the health of his co- illegally
employees, the employer shall not dismissed.240chanRoblesvirtualLawlibrary
terminate his employment unless there is • Joel N. Montellana Vs. La Consolacion
a certification by a competent public College Manila, Sr. Imelda A. Mora
health authority that the disease is of such and Albert Manalili   G.R. No. 208890.
nature or at such a stage that it cannot be December 8, 2014
cured within a period of six (6) months •
even with proper medical treatment. If the • The Issue Before the Court
disease or ailment can be cured within the •
period, the employer shall not terminate • The primordial issue for the Court’s
the employee but shall ask the employee resolution is whether or not
to take a leave. The employer shall Montallana’s termination from work
reinstate such employee to his former was lawful and justified.cralawred
position immediately upon the restoration
of his normal health. The Court’s Ruling
For dismissal under Article 284 to be valid, The petition is meritorious.

two requirements must be complied with:
(1) the employee’s disease cannot be “Willful disobedience by the employee of
cured within six (6) months and his the lawful orders of his employer or
“continued employment is prohibited by representative in connection with his
law or prejudicial to his health as well as work” is one of the just causes to
to the health of his co-employees”; and terminate an employee under Article 296
(2) certification issued by a competent (a) (formerly Article 282 [a]) of the Labor
public health authority that even with Code.64 In order for this ground to be
proper medical treatment, the disease properly invoked as a just cause for
cannot be cured within six (6) months.237 dismissal, the conduct must be willful
The burden of proving compliance with or intentional, willfulness being
these requisites is on the employer. 238 characterized by a wrongful and
Non-compliance leads to the conclusion perverse mental attitude.65 In Dongon
that the dismissal was v. Rapid Movers and Forwarders Co.,
illegal.239chanRoblesvirtualLawlibrary Inc.,66 “willfulness” was described as
“attended by a wrongful and perverse
There is no evidence showing that Arlene mental attitude rendering the employee’s
was accorded due process. After informing act inconsistent with proper
her employer of her lung cancer, she was subordination.”67chanRoblesvirtualLawlibra
not given the chance to present medical ry
certificates. Fuji immediately concluded
that Arlene could no longer perform her It is well to stress that it is the employer
duties because of chemotherapy. It did who bears the burden of proving, through
not ask her how her condition would affect substantial evidence, that the aforesaid
her work. Neither did it suggest for her to just cause – or any other authorized cause
take a leave, even though she was for that matter – forms the basis of the
entitled to sick leaves. Worse, it did not employee’s dismissal from work.68 Failing
present any certificate from a competent in which, the dismissal should be
public health authority. What Fuji did was adjudged as illegal.
to inform her that her contract would no
longer be renewed, and when she did not In the case at bar, respondents failed to
18
prove, by substantial evidence, that Montallana was able to obtain a copy of

Montallana’s non-compliance with the prosecutor’s March 5, 2010
respondents’ directive to apologize was Resolution, or long after he had already
“willful or intentional.” The Court finds submitted his letter of explanation on June
itself in complete agreement with the 9, 2011.69 Therefore, respondents’
NLRC that the disobedience attributed to assertion that Montallana had lied to them
Montallana could not be justly cannot be given any credence.
characterized as “willful” within the
contemplation of Article 296 of the Labor Besides, even on the assumption that
Code, in the sense above-described. there was willful disobedience, still, the
Court finds the penalty of dismissal too
As culled from the records, aside from the harsh. It bears to stress that not every
administrative complaint filed by Juan case of insubordination or willful
against Montallana for his serious disobedience by an employee reasonably
misconduct, the former also filed a deserves the penalty of dismissal.70 The
criminal complaint for grave oral penalty to be imposed on an erring
defamation for the utterances he made employee must be commensurate with the
arising from the same incident before the gravity of his offense.71 To the Court’s
Manila City Prosecutor’s Office. In the mind, the case of an employee who is
honest belief that issuing a letter of compelled to apologize for a previous
apology would incriminate him in the said infraction but fails to do so is not one
criminal case – and upon the advice of his which would properly warrant his
own lawyer at that – Montallana wrote to termination, absent any proof that the
respondents and voluntarily refusal was made in brazen disrespect of
communicated that he was willing to issue his employer. While there is no question
the required apology, but only had to that teachers are held to a peculiar
defer the same in view of his legal standard of behavior in view of their
predicament. As the Court sees it, the significant role in the rearing of our youth,
tenor of his letters, and the circumstances educational institutions are, in the
under which they were taken, at the very meantime, held against a legal standard
least, exhibited Montallana’s good faith in imposed against all employers, among
dealing with respondents. This, therefore, which, is the reservation of the ultimate
negates the theory that his failure to abide penalty of dismissal for serious infractions
by respondents’ directive to apologize was enumerated as just causes under Article
attended by a “wrong and perverse 296 of the Labor Code. Unfortunately,
mental attitude rendering the employee’s respondents herein failed to prove the
act inconsistent with proper seriousness of Montallana’s omission by
subordination,” which would warrant his the evidentiary benchmark of substantial
termination from employment. evidence. And to add, on a related note,
while La Consolacion’s Administrative
It beckons clarification that respondents’ Affairs Manual72 discloses that acts of
submission of the prosecutor’s March 5, insubordination (particularly, that of
2010 Resolution to show that Juan’s refusing or neglecting to obey the school’s
criminal complaint against Montallana was lawful directive) are dismissible violations,
dismissed way earlier than their June 1, they are only so if imposed as a third
2011 directive to explain is not enough to sanction. In the same vein, records are
show that the latter took a willfully defiant bereft of any showing that Montallana’s
attitude against a lawful order, failure to apologize was being punished as
considering that no other evidence was such.
presented to prove that the said
Resolution had already attained finality. In In fine, since respondents failed to prove,
fact, as pointed out by the NLRC, it was by substantial evidence, that Montallana’s
only on September 11, 2012 that dismissal was based on a just or
18
authorized cause under the Labor Code or

was clearly warranted under La The Court has already delineated the
Consolacion’s Administrative Affairs effectivity of the Crystal Shipping and
Manual, the Court rules that the dismissal Vergara rulings in the 2013 case Kestrel
was illegal. Consequently, the NLRC’s Shipping Co. Inc. v. Munar,29 by
identical ruling, which was erroneously explaining as
reversed by the CA on certiorari, must be follows:chanroblesvirtuallawlibrary
reinstated with the modification, however, Nonetheless, Vergara was promulgated on
in that the order for respondents Mora and October 6, 2008, or more than two (2)
Manalili to pay Montallana backwages73 years from the time Munar filed his
should be deleted. It is a rule that complaint and observance of the principle
personal liability of corporate directors, of prospectivity dictates that Vergara
trustees or officers attaches only when: should not operate to strip Munar of his
(a) they assent to a patently unlawful act cause of action for total and permanent
of the corporation, or when they are guilty disability that had already accrued as a
of bad faith or gross negligence in result of his continued inability to perform
directing its affairs, or when there is a his customary work and the failure of the
conflict of interest resulting in damages to company-designated physician to issue a
the corporation, its stockholders or other final assessment.
persons; (b) they consent to the issuance Thus, based on Kestrel, if the maritime
of watered down stocks or when, having compensation complaint was filed
knowledge of such issuance, do not prior to 6 October 2008, the 120-day
forthwith file with the corporate secretary rule applies; if, on the other hand, the
their written objection; (c) they agree to complaint was filed from 6 October
hold themselves personally and solidarily 2008 onwards, the 240-day rule
liable with the corporation; or (d) they are applies.
made by specific provision of law
personally answerable for their corporate In this case, Montierro filed his Complaint
action.74 None of these circumstances, in on 3 December 2010, which was after the
so far as Mora and Manalili are concerned, promulgation of Vergara on 6 October
were shown to be present in this case; 2008. Hence, it is the 240-day rule that
hence, there is no reason for them to be applies to this case, and not the 120-day
held liable for Montallana’s rule.
backwages.chanrobleslaw Company doctor vs. personal doctor
Vergara also definitively settled the

• Noriel R. Montierro Vs. Rickmers Marine question how a conflict between two
Agency Phils., Inc.   G.R. No. 210634. disability assessments — the assessment
January 14, 2015 of the company-designated physician and
• ISSUES that of the seafarer’s chosen physician —
• should be resolved.33 In that case, the
• The issues to be resolved are the Court held that there is a procedure to be
following: (1) whether it is the followed regarding the determination of
120-day rule or the 240-day rule liability for work-related death, illness or
that should apply to this case; (2) injury in the case of overseas Filipino
whether it is the opinion of the seafarers. The procedure is spelled out in
company doctor or of the personal the 2000 POEA-SEC, the execution of
doctor of the seafarer that should which is a sine qua non requirement in
prevail; and (3) whether Montierro deployments for overseas work.34
is entitled to attorney’s fees.
OUR RULING The procedure is as follows: when a
seafarer sustains a work-related illness or
120 day rule vs. 240 day rule injury while on board the vessel, his
18
fitness for work shall be determined by of one’s cause.38 The rule, however, takes
the company-designated physician. The a turn when it comes to labor cases.
physician has 120 days, or 240 days, if
validly extended, to make the assessment. The established rule in labor law is that
If the physician appointed by the seafarer the withholding of wages need not be
disagrees with the assessment of the coupled with malice or bad faith to
company-designated physician, the warrant the grant of attorney’s fees under
opinion of a third doctor may be agreed Article 111 of the Labor Code.39 All that is
jointly between the employer and the required is that lawful wages be not paid
seafarer, whose decision shall be final and without justification, thus compelling the
binding on them.35 employee to litigate.40
Vergara ruled that the procedure in the The CA thus relied on a wrong
2000 POEA-SEC must be strictly followed; consideration in resolving the issue of
otherwise, if not availed of or followed attorney’s fees. Be that as it may,
strictly by the seafarer, the assessment of Montierro is not entitled to attorney’s fees,
the company-designated physician even if we apply the correct rule to this
stands.36 case.
In this case, Montierro and Rickmers are Montierro, as earlier mentioned, jumped
covered by the provisions of the same the gun when he filed his complaint one
2000 POEA-SEC. It is the law between month before the company-designated
them. Hence, they are bound by the doctor issued the final disability grading.
mechanism for determining liability for a Hence, there was no unlawful withholding
disability benefits claim. Montierro, of benefits to speak of. Precisely because
however, preempted the procedure when Montierro was still under treatment and
he filed on 3 December 2010 a Complaint awaiting the final assessment of the
for permanent disability benefits based on company-designated physician, the
his chosen physician’s assessment, which former’s act was premature.
was made one month before the
company-designated doctor issued the • Rommel B. Daraug Vs. KGJS Fleet
final disability grading on 3 January 2011, Management, Manila, Inc., et al. G.R.
the 213th day of Montierro’s No. 211211. January 14, 2015
treatment. • Petitioner’s Claim for Benefits
• Was Premature
Hence, for failure of Montierro to observe •
the procedure provided by the POEA-SEC, • Actually, petitioner’s filing of his
the assessment of the company doctor claim was premature. The Court
should prevail. has held that a seafarer may have
Attorney’s fees basis to pursue an action for total
and permanent disability benefits,
On the premise that there was no showing if any of the following conditions
of bad faith on the part of the employer, are
forcing Montierro to litigate, the CA present:chanroblesvirtuallawlibrary
dropped the award of attorney’s fees. We •
arrive at the same conclusion by using • (a) The company-designated
another route. physician failed to issue a
declaration as to his fitness to
Indeed, the general rule is that attorney's engage in sea duty or disability
fees may not be awarded where there is even after the lapse of the 120-day
no sufficient showing of bad faith in a period and there is no indication
party's persistence in a case other than an that further medical treatment
erroneous conviction of the righteousness would address his temporary total
18
disability, hence, justify an he remains incapacitated to

extension of the period to 240 perform his usual sea duties after
days; the lapse of said periods.34
• •
• (b) 240 days had lapsed without • Significantly, however, when
any certification issued by the petitioner filed his complaint with
company designated physician; the arbitration office on April 5,
• 2010, he had yet to consult his
• (c) The company-designated own physician, Dr. Jacinto. It
physician declared that he is fit means that, at that time, he was
for sea duty within the 120-day simply armed with: 1] the medical
or 240-day period, as the case findings of the company-
may be, but his physician of designated physician that he was
choice and the doctor chosen fit to work; and 2] his Affidavit
under Section 20-B(3) of the Complaint35 where he made his
POEA-SEC are of a contrary own conclusion that his right leg
opinion; was again fractured because of the
• incident that occurred in the M/V
• (d) The company-designated Ibis Arrow
physician acknowledged that he is Petitioner is not
partially permanently disabled but Entitled to his
other doctors who he consulted, on Monetary Claims
his own and jointly with his
employer, believed that his • In view of the foregoing, petitioner
disability is not only permanent but is not entitled to his monetary
total as well; claims. It should be remembered
• that permanent total disability
• (e) The company-designated means disablement of an employee
physician recognized that he is to earn wages in the same kind of
totally and permanently disabled work, or work of similar nature,
but there is a dispute on the that he was trained for or
disability grading; accustomed to perform, or any
• kind of work which a person of his
• (f) The company-designated mentality and attainment could do.
physician determined that his In disability compensation, it is not
medical condition is not the injury which is compensated,
compensable or work-related under but rather the incapacity to work
the POEA-SEC but his doctor-of- resulting in the impairment of one’s
choice and the third doctor earning capacity.38 As petitioner
selected under Section 20-B(3) of was never actually incapacitated, it
the POEA-SEC found otherwise and would be highly unjust if he would
declared him unfit to work; be awarded the disability benefits
• which the law accords only to the
• (g) The company-designated deserving and utterly unfair to the
physician declared him totally and respondents if they would be made
permanently disabled but the to pay.
employer refuses to pay him the • Unicol Management Services, Inc. Link
corresponding benefits; and Marine Pte. Ltd. and/or Victoriano B.
• Tirol III Vs. Delia Malipot, in behalf of
• (h) The company-designated Glicerio Malipot   G.R. No. 206562.
physician declared him partially January 21, 2015
and permanently disabled within In essence, the main issue for resolution
the 120-day or 240-day period but is whether seaman Glicerio committed
18
suicide during the term of his employment necessary

contract which would exempt petitioners arrangement.25chanRoblesvirtualLa
from paying the death compensation wlibrary
benefits to his beneficiaries. •
the employer is liable to pay the heirs of • The ultimate test of the validity of
the deceased seafarer for death benefits closure or cessation of
once it is established that he died during establishment or undertaking is
the effectivity of his employment contract. that it must be bona fide in
However, the employer may be exempt character. And the burden of
from liability if it can successfully prove proving such falls upon the
that the seaman’s death was caused by an employer.26chanRoblesvirtualLawlib
injury directly attributable to his deliberate rary
or willful act.28 Thus, since petitioners •
were able to substantially prove that • After evaluating the evidence on
seaman Glicerio’s death is directly record, we uphold the factual
attributable to his deliberate act of findings and conclusions of the
hanging himself, his death, therefore, is labor tribunals that petitioner was
not compensable and his heirs not entitled dismissed without just or
to any compensation or benefits. authorized cause, and that the
•  G.R. No. 197011. January 28, 2015 announced cessation of business
• Closure or cessation of business is operations was a subterfuge for
the complete or partial cessation of getting rid of petitioner. While the
the operations and/or shut-down of introduction of additional evidence
the establishment of the employer. before the NLRC is not proscribed,
It is carried out to either stave off the said tribunal was still not
the financial ruin or promote the persuaded by the company closure
business interest of the employer. purportedly averted only by the
Closure of business as an alleged fresh funding procured by
authorized cause for termination of respondent Tan, for the latter claim
employment is governed by Article remained unsubstantiated. The
28323 of the Labor Code, as CA’s finding of serious business
amended. losses is not borne by the evidence
• on record. The financial statements
• If the business closure is due to supposedly bearing the stamp
serious losses or financial reverses, mark of BIR were not signed by an
the employer must present independent auditor. Besides, the
sufficient proof of its actual or non-compliance with the
imminent losses; it must show requirements under Article 283 of
proof that the cessation of or the Labor Code, as amended, gains
withdrawal from business relevance in this case not for the
operations was bona fide in purpose of proving the illegality of
character.24 A written notice to the the company closure or cessation
DOLE thirty days before the of business, which did not
intended date of closure is also materialize, but as an indication of
required, the purpose of which is to bad faith on the part of
inform the employees of the respondents in hastily terminating
specific date of termination or petitioner’s employment. Under the
closure of business operations, and circumstances, the subsequent
which must be served upon each investigation and termination of
and every employee of the petitioner on grounds of
company one month before the dishonesty, loss of confidence and
date of effectivity to give them abandonment of work, clearly
sufficient time to make the appears as an afterthought as it
19
was done only after petitioner had tribunals. The fact of the petitioner’s
filed an illegal dismissal case and pregnancy out of wedlock, without more,
respondents have been summoned is not enough to characterize the
for hearing before the LA. petitioner’s conduct as disgraceful or
immoral. There must be substantial
• Cheryll Santos Leus Vs. St. Scholastica's evidence to establish that pre-marital
College Westgrove and/or Sr. Edna sexual relations and, consequently,
Quiambao, OSB   G.R. No. 187226. pregnancy out of wedlock, are indeed
January 28, 2015 considered disgraceful or immoral.
Cheryll Santos Leus (petitioner) was hired
by St. Scholastica’s College Westgrove The totality of the circumstances
(SSCW), a Catholic educational institution, surrounding the conduct alleged to be
as a non-teaching personnel, engaged in disgraceful or immoral must be
pre-marital sexual relations, got pregnant assessed
out of wedlock, married the father of her against the prevailing norms of
child, and was dismissed by SSCW, in that conduct.
order. The question that has to be
resolved is whether the petitioner’s In Chua-Qua v. Clave,37 the Court
conduct constitutes a ground for her stressed that to constitute immorality, the
dismissal. circumstances of each particular case
Second Issue: Validity of the must be holistically considered and
Petitioner’s Dismissal evaluated in light of the prevailing
norms of conduct and applicable laws.38
The validity of the petitioner’s dismissal Otherwise stated, it is not the totality of
hinges on the determination of whether the circumstances surrounding the
pregnancy out of wedlock by an employee conduct per se that determines whether
of a catholic educational institution is a the same is disgraceful or immoral, but
cause for the termination of her the conduct that is generally accepted by
employment. society as respectable or moral. If the
conduct does not conform to what society
In resolving the foregoing question, the generally views as respectable or moral,
Court will assess the matter from a strictly then the conduct is considered as
neutral and secular point of view – the disgraceful or immoral. Tersely put,
relationship between SSCW as employer substantial evidence must be presented,
and the petitioner as an employee, the which would establish that a particular
causes provided for by law in the conduct, viewed in light of the prevailing
termination of such relationship, and the norms of conduct, is considered
evidence on record. The ground cited for disgraceful or immoral.
the petitioner’s dismissal, i.e., pre-marital
sexual relations and, consequently, Thus, the determination of whether a
pregnancy out of wedlock, will be conduct is disgraceful or immoral involves
assessed as to whether the same a two-step process: first, a consideration
constitutes a valid ground for dismissal of the totality of the circumstances
pursuant to Section 94(e) of the 1992 surrounding the conduct; and second, an
MRPS. assessment of the said circumstances vis-
The labor tribunals’ respective à-vis the prevailing norms of conduct, i.e.,
conclusions that the petitioner’s what the society generally considers moral
pregnancy and respectable.
is a “disgraceful or immoral conduct”
were arrived at arbitrarily. That the petitioner was employed by a
However, the Court finds no substantial Catholic educational institution per se
evidence to support the aforementioned does not absolutely determine whether
conclusion arrived at by the labor her pregnancy out of wedlock is
19
disgraceful or immoral. There is still a conduct is proscribed by the beliefs of one

necessity to determine whether the religion or the other.”
petitioner’s pregnancy out of wedlock is The petitioner’s pregnancy out of
considered disgraceful or immoral in wedlock is not a disgraceful or
accordance with the prevailing norms of immoral
conduct. conduct since she and the father of
Public and secular morality should her
determine the prevailing norms of child have no impediment to marry
conduct, each
not religious morality. other.
However, determining what the prevailing In stark contrast to Santos, the Court
norms of conduct are considered does not find any circumstance in this
disgraceful or immoral is not an easy task. case which would lead the Court to
An individual’s perception of what is moral conclude that the petitioner committed a
or respectable is a confluence of a myriad disgraceful or immoral conduct. It bears
of influences, such as religion, family, stressing that the petitioner and her
social status, and a cacophony of others. boyfriend, at the time they conceived a
child, had no legal impediment to marry.
Accordingly, when the law speaks of Indeed, even prior to her dismissal, the
immoral or, necessarily, disgraceful petitioner married her boyfriend, the
conduct, it pertains to public and secular father of her child. As the Court held in
morality; it refers to those conducts which Radam, there is no law which penalizes an
are proscribed because they are unmarried mother by reason of her sexual
detrimental to conditions upon which conduct or proscribes the consensual
depend the existence and progress of sexual activity between two unmarried
human society. Thus, in Anonymous v. persons; that neither does such situation
Radam,43 an administrative case involving contravene any fundamental state policy
a court utility worker likewise charged enshrined in the Constitution.
with disgraceful and immoral conduct,
applying the doctrines laid down in Admittedly, the petitioner is employed in
Estrada, an educational institution where the
It bears stressing that the right of an teachings and doctrines of the Catholic
employee to security of tenure is Church, including that on pre-marital
protected by the Constitution. sexual relations, is strictly upheld and
Perfunctorily, a regular employee may not taught to the students. That her
be dismissed unless for cause provided indiscretion, which resulted in her
under the Labor Code and other relevant pregnancy out of wedlock, is anathema to
laws, in this case, the 1992 MRPS. As the doctrines of the Catholic Church.
stated above, when the law refers to However, viewed against the prevailing
morality, it necessarily pertains to public norms of conduct, the petitioner’s conduct
and secular morality and not religious cannot be considered as disgraceful or
morality. Thus, the proscription against immoral; such conduct is not denounced
“disgraceful or immoral conduct” under by public and secular morality. It may be
Section 94(e) of the 1992 MRPS, which is an unusual arrangement, but it certainly is
made as a cause for dismissal, must not disgraceful or immoral within the
necessarily refer to public and secular contemplation of the law.
morality. Accordingly, in order for a
conduct to be considered as disgraceful or To stress, pre-marital sexual relations
immoral, it must be “‘detrimental (or between two consenting adults who have
dangerous) to those conditions upon no impediment to marry each other, and,
which depend the existence and progress consequently, conceiving a child out of
of human society’ and not because the wedlock, gauged from a purely public and
19
secular view of morality, does not amount petitioner. Her conduct is not considered
to a disgraceful or immoral conduct under by law as disgraceful or immoral. Further,
Section 94(e) of the 1992 MRPS. the respondents themselves have
There is no substantial evidence to admitted that SSCW, at the time of the
prove that the petitioner’s pregnancy controversy, does not have any policy or
out of rule against an employee who engages in
wedlock caused grave scandal to pre-marital sexual relations and conceives
SSCW a child as a result thereof. There being no
and its students. valid basis in law or even in SSCW’s policy
he Court finds that SSCW failed to adduce and rules, SSCW’s dismissal of the
substantial evidence to prove that the petitioner is despotic and arbitrary and,
petitioner’s indiscretion indeed caused thus, not a valid exercise of management
grave scandal to SSCW and its students. prerogative.
Other than the SSCW’s bare allegation,
the records are bereft of any evidence In sum, the Court finds that the petitioner
that would convincingly prove that the was illegally dismissed as there was no
petitioner’s conduct indeed adversely just cause for the termination of her
affected SSCW’s integrity in teaching the employment. SSCW failed to adduce
moral doctrines, which it stands for. The substantial evidence to establish that the
petitioner is only a non-teaching petitioner’s conduct, i.e., engaging in pre-
personnel; her interaction with SSCW’s marital sexual relations and conceiving a
students is very limited. It is thus quite child out of wedlock, assessed in light of
impossible that her pregnancy out of the prevailing norms of conduct, is
wedlock caused such a grave scandal, as considered disgraceful or immoral. The
claimed by SSCW, as to warrant her labor tribunals gravely abused their
dismissal. discretion in upholding the validity of the
The petitioner’s dismissal is not a petitioner’s dismissal as the charge
valid exercise of SSCW’s management against the petitioner lay not on
prerogative. substantial evidence, but on the bare
The Court has held that “management is allegations of SSCW. In turn, the CA
free to regulate, according to its own committed reversible error in upholding
discretion and judgment, all aspects of the validity of the petitioner’s dismissal,
employment, including hiring, work failing to recognize that the labor tribunals
assignments, working methods, time, gravely abused their discretion in ruling
place and manner of work, processes to for the respondents.
be followed, supervision of workers,
working regulations, transfer of • Ma. Charito C. Gadia, Ernesto M. Penas,
employees, work supervision, lay off of Gemmabelle B. Remo, Lorena S.
workers and discipline, dismissal and Quesea, et al. Vs. Skyke Asia,
recall of workers. The exercise of Inc./Chuck Skykes/Mike
management prerogative, however, is not Hinds/Michael Henderson   G.R. No.
absolute as it must be exercised in good 209499. January 28, 2015
faith and with due regard to the rights of In Omni Hauling Services, Inc. v. Bon, the
labor.” Management cannot exercise its Court extensively discussed how to
prerogative in a cruel, repressive, or determine whether an employee may be
despotic properly deemed project-based or regular,
manner.53chanRoblesvirtualLawlibrary to wit:
SSCW, as employer, undeniably has the A project employee is assigned to a

right to discipline its employees and, if project which begins and ends at
need be, dismiss them if there is a valid determined or determinable times. Unlike
cause to do so. However, as already regular employees who may only be
explained, there is no cause to dismiss the dismissed for just and/or authorized
19
causes under the Labor Code, the services such is co-terminus to the project.” In this
of employees who are hired as “project[- light, the CA correctly ruled that
based] employees” may be lawfully petitioners were indeed project-based
terminated at the completion of the employees, considering that: (a) they
project. were hired to carry out a specific
undertaking, i.e., the Alltel Project; and
According to jurisprudence, the principal (b) the duration and scope of such project
test for determining whether particular were made known to them at the time of
employees are properly characterised as their engagement, i.e., “co-terminus with
“project[- based] employees” as the project.”
distinguished from “regular employees,” is
whether or not the employees were As regards the second requisite, the CA
assigned to carry out a “specific project or correctly stressed that “[t]he law and
undertaking,” the duration (and scope) of jurisprudence dictate that ‘the duration of
which were specified at the time they the undertaking begins and ends at
were engaged for that project. The project determined or determinable times’” while
could either be (1) a particular job or clarifying that “[t]he phrase ‘determinable
undertaking that is within the regular or times’ simply means capable of being
usual business of the employer company, determined or fixed.” In this case, Sykes
but which is distinct and separate, and Asia substantially complied with this
identifiable as such, from the other requisite when it expressly indicated in
undertakings of the company; or (2) a petitioners’ employment contracts that
particular job or undertaking that is not their positions were “co-terminus with the
within the regular business of the project.” To the mind of the Court, this
corporation. In order to safeguard the caveat sufficiently apprised petitioners
rights of workers against the arbitrary use that their security of tenure with Sykes
of the word “project” to prevent Asia would only last as long as the Alltel
employees from attaining a regular status, Project was subsisting. In other words,
employers claiming that their workers are when the Alltel Project was terminated,
project[-based] employees should not petitioners no longer had any project to
only prove that the duration and scope of work on, and hence, Sykes Asia may
the employment was specified at the time validly terminate them from employment.
they were engaged, but also, that there
was indeed a project. In sum, respondents have shown by
substantial evidence that petitioners were
Verily, for an employee to be considered merely project-based employees, and as
project-based, the employer must show such, their services were lawfully
compliance with two (2) requisites, terminated upon the cessation ofthe Alltel
namely that: (a) the employee was Project.
assigned to carry out a specific project or • Veritas Maritime Corporation and/or
undertaking; and (b) the duration and Erickson Marquez   G.R. No. 206285.
scope of which were specified at the time February 4, 2015
they were engaged for such project. • Petitioner’s Claim for Benefits
• Was Premature
In this case, records reveal that Sykes •
Asia adequately informed petitioners of • Actually, Gepanaga’s filing of his
their employment status at the time of claim was premature. The Court
their engagement, as evidenced by the has held that a seafarer may have
latter’s employment contracts which basis to pursue an action for total
similarly provide that they were hired in and permanent disability benefits,
connection with the Alltel Project, and that if any of the following conditions is
their positions were “project-based and as present:chanroblesvirtuallawlibrary

19
• physician declared him totally and

• (a) The company-designated permanently disabled but the
physician failed to issue a employer refuses to pay him the
declaration as to his fitness to corresponding benefits; and
engage in sea duty or disability •
even after the lapse of the 120-day • (h) The company-designated
period and there is no indication physician declared him partially
that further medical treatment and permanently disabled within
would address his temporary total the 120-day or 240-day period but
disability, hence, justify an he remains incapacitated to
extension of the period to 240 perform his usual sea duties after
days; the lapse of said periods.25
• •
• (b) 240 days had lapsed without •In this case, when Gepanaga filed
any certification issued by the his complaint with the arbitration
company designated physician; office on March 25, 2009, he had
• yet to consult his own
• (c) The company-designated physician, Dr. Villa. Indeed, the
physician declared that he is fit Court has observed that when
for sea duty within the 120-day Gepanaga filed his complaint, he
or 240-day period, as the case was armed only with the belief that
may be, but his physician of he had yet to fully recover from his
choice and the doctor chosen injured finger because of the
under Section 20-B(3) of the incident that occurred on board the
POEA-SEC are of a contrary M.V. Melbourne Highway. It was
opinion; only on June 9, 2009, a few days
• before he filed his position paper
• (d) The company-designated on June 15, 2009, that Gepanaga
physician acknowledged that he is sought the services of Dr. Villa.
partially permanently disabled but • Emer Milan, Randy Masangkay, Wilfredo
other doctors who he consulted, on Javier, et al. Vs. National Labor
his own and jointly with his Relations Commission, Solid Mills,
employer, believed that his Inc. and/or Philip Ang   G.R. No.
disability is not only permanent but 202961. February 4, 2015
total as well; • An employer is allowed to withhold
• terminal pay and benefits pending
• (e) The company-designated the employee's return ofits
physician recognized that he is properties.
totally and permanently disabled
but there is a dispute on the I
disability grading;
•
The National Labor Relations
• (f) The company-designated
Commission may preliminarily
physician determined that his
determine issues related to rights
medical condition is not
arising from an employer-employee
compensable or work-related under
relationship
the POEA-SEC but his doctor-of-
choice and the third doctor
selected under Section 20-B(3) of The National Labor Relations Commission
the POEA-SEC found otherwise and has jurisdiction to determine,
declared him unfit to work; preliminarily, the parties’ rights over a
• property, when it is necessary to
• (g) The company-designated determine an issue related to rights or

19
claims arising from an employer-employee II

relationship.
Institution of clearance procedures
Article 217 provides that the Labor has legal bases
Arbiter, in his or her original jurisdiction,
and the National Labor Relations Requiring clearance before the release of
Commission, in its appellate jurisdiction, last payments to the employee is a
may determine issues involving claims standard procedure among employers,
arising from employer- employee whether public or private. Clearance
relations. procedures are instituted to ensure that
the properties, real or personal, belonging
Claims arising from an employer- to the employer but are in the possession
employee relationship are not limited to of the separated employee, are returned
claims by an employee. Employers may to the employer before the employee’s
also have claims against the employee, departure.
which arise from the same relationship.
As a general rule, employers are
This court ruled that since the transfer of prohibited from withholding wages from
ownership of the vehicle to the employee employees. The Labor Code provides:
was connected to his separation from the
employer and arose from the employer- Art. 116. Withholding of wages and
employee relationship of the parties, the kickbacks prohibited. It shall be
employer’s claim fell within the Labor unlawful for any person, directly or
Arbiter’s jurisdiction. indirectly, to withhold any amount from
the wages of a worker or induce him to
As a general rule, therefore, a claim only give up any part of his wages by force,
needs to be sufficiently connected to the stealth, intimidation, threat or by
labor issue raised and must arise from an
employer- employee relationship for the any other means whatsoever without the
labor tribunals to have jurisdiction. worker’s consent.
In this case, respondent Solid Mills claims The Labor Code also prohibits the
that its properties are in petitioners’ elimination or diminution of benefits.
possession by virtue of their status as its Thus:
employees. Respondent Solid Mills allowed
petitioners to use its property as an act of Art. 100. Prohibition against
liberality. Put in other words, it would not elimination or diminution of benefits.
have allowed petitioners to use its Nothing in this Book shall be construed to
property had they not been its employees. eliminate or in any way diminish
The return of its properties in petitioners’ supplements, or other employee benefits
possession by virtue of their status as being enjoyed at the time of promulgation
employees is an issue that must be of this Code.
resolved to determine whether benefits
can be released immediately. The issue
However, our law supports the employers’
raised by the employer is, therefore,
institution of clearance procedures before
connected to petitioners’ claim for benefits
the release of wages. As an exception to
and is sufficiently intertwined with the
the general rule that wages may not be
parties’ employer- employee relationship.
withheld and benefits may not be
Thus, it is properly within the labor
diminished,
tribunals’ jurisdiction.
The Civil Code provides that the employer
is authorized to withhold wages for debts
19
due: right to it. What can be gathered from the

findings of the Labor Arbiter, National
Article 1706. Withholding of the wages, Labor Relations Commission, and the
except for a debt due, shall not be made Court of Appeals is that respondent Solid
by the employer. Mills allowed the use of its property for the
benefit of petitioners as its employees.
“Debt” in this case refers to any obligation Petitioners were merely allowed to
due from the employee to the employer. possess and use it out of respondent Solid
It includes any accountability that the Mills’ liberality. The employer may,
employee may have to the employer. therefore, demand the property at will.
There is no reason to limit its scope to
uniforms and equipment, as petitioners The return of the property’s possession
would argue. became an obligation or liability on the
part of the employees when the employer-
More importantly, respondent Solid Mills employee relationship ceased. Thus,
and NAFLU, the union representing respondent Solid Mills has the right to
petitioners, agreed that the release of withhold petitioners’ wages and benefits
petitioners’ benefits shall be “less because of this existing debt or liability. In
accountabilities.” Solas v. Power and Telephone Supply
Phils., Inc., et al., this court recognized
this right of the employer when it ruled
“Accountability,” in its ordinary sense,
that the employee in that case was not
means obligation or debt. The ordinary
constructively dismissed
meaning of the term “accountability” does
not limit the definition of accountability to
those incurred in the worksite. As long as The law does not sanction a situation
the debt or obligation was incurred by where employees who do not even assert
virtue of the employer-employee any claim over the employer’s property
relationship, generally, it shall be included are allowed to take all the benefits out of
in the employee’s accountabilities that are their employment while they
subject to clearance procedures. simultaneously withhold possession of
their employer’s property for no rightful
reason.
It may be true that not all employees
enjoyed the privilege of staying in
respondent Solid Mills’ property. However, Withholding of payment by the employer
this alone does not imply that this does not mean that the employer may
privilege when enjoyed was not a result of renege on its obligation to pay employees
the employer-employee relationship. their wages, termination payments, and
Those who did avail of the privilege were due benefits. The employees’ benefits are
employees of respondent Solid Mills. also not being reduced. It is only
Petitioners’ possession should, therefore, subjected to the condition that the
be included in the term “accountability.” employees return properties properly
belonging to the employer. This is only
consistent with the equitable principle that
Accountabilities of employees are
“no one shall be unjustly enriched or
personal. They need not be uniform
benefited at the expense of another.”
among all employees in order to be
included in accountabilities incurred by
virtue of an employer-employee For these reasons, we cannot hold that
relationship. petitioners are entitled to interest of their
withheld separation benefits. These
benefits were properly withheld by
Petitioners do not categorically deny
respondent Solid Mills because of their
respondent Solid Mills’ ownership of the
refusal to return its property.
property, and they do not claim superior
19
III did all that was required by law.
Mahilom and Damian are not entitled The preferential treatment given by <;>ur
to the benefits claimed law to labor, however, is not a license for
abuse. It is not a signal to commit acts of
Teodora Mahilom is not entitled to unfairness that will unreasonably infringe
separation benefits. on the property rights of the company.
Both labor and employer have social
Both the National Labor Relations utility, and the law is not so biased that it
Commission and the Court of Appeals does not find a middle ground to give each
found that Teodora Mahilom already their due.
retired long before respondent Solid Mills’
closure. They found that she already Clearly, in this case, it is for the workers
received her retirement benefits. We have to return their housing in exchange for the
no reason to disturb this finding. This release of their benefits. This is what they
court is not a trier of facts. Findings of the agreed upon. It is what is fair in the
National Labor Relations Commission, premises.
especially when affirmed by the Court of • Andy D. Balite, Delfin M. Anzaldo and
Appeals, are binding upon this court. Monaliza Dl. Bihasa Vs. SS Ventures
International, Inc., Sung Sik Lee and
Moreover, Teodora Mahilom’s claim for Evelyn Rayala   G.R. No. 195109.
retirement benefits was not included in February 4, 2015
her complaint filed before the Labor • The Issue Before the Court
Arbiter. Hence, it may not be raised in the • The issue for the Court’s resolution
appeal. is whether or not (a) retirement
pay, and (b) representation,
Similarly, the National Labor Relations transportation, and cellular phone
Commission and the Court of Appeals usage allowances should be
found that Carlito Damian already awarded in favor of Villena.
received his terminal benefits. Hence, he
may no longer claim terminal benefits. A. ON RETIREMENT PAY.
The fact that respondent Solid Mills has Verily, the Court is not unaware of its
not yet demolished Carlito Damian’s house rulings wherein it pronounced that
in SMI Village is not evidence that he did retirement pay and separation pay are not
not receive his benefits. Both the National mutually exclusive (unless there is a
Labor Relations Commission and the Court specific prohibition in the collective
of Appeals found that he executed an bargaining agreement or retirement plan
affidavit stating that he already received against the payment of both benefits);
the benefits. however, with Villena’s entitlement to
Our laws provide for a clear preference for retirement pay not included as an issue in
labor. This is in recognition of the an illegal dismissal case which had
asymmetrical power of those with capital already been finally decided, it is quite
w~en they are left to negotiate with their absurd for Villena to submit a
workers without the standards and “contemporaneous” claim for retirement
protection of law. In cases such as these, pay on the execution phase of these
the collective bargaining unit of workers proceedings. In fine, the plea to include
are able to get more benefits and in retirement pay in the execution of the
exchange, the owners are able to continue final and executory August 31, 2001 CA
with the program of cutting their losses or Decision and March 22, 2007 NLRC
wind down their operations due to serious Resolution, under the phrase “other
business losses. The company in this case benefits,” cannot be granted.

19
B. ON TRANSPORTATION, necessary and desirable in its usual

REPRESENTATION, AND CELLULAR PHONE business or trade thereby qualifying them
USAGE ALLOWANCES. as regular employees,
Meanwhile, on the matter of the claimed Here, respondent, in its position paper,
allowances, it is clear from BATELEC II’s expressly admitted that petitioners were
pleadings and submissions that employed as route helpers in anticipation
representation allowance, transportation of the high volume of work in its plants
allowance, and cellular phone usage and sales offices. As such, respondent’s
allowance are given to the Finance contention that petitioners could not have
Manager/Department Manager as part of attained regular employment status for
their benefits, unlike the separate they merely rendered services for periods
entitlement to retirement pay which may of less than a year cannot be sustained in
be recovered only upon a meritorious view of the Magsalin doctrine previously
subsequent application when the cited. Indeed, the “pernicious practice” of
employee decides to retire. Consequently, engaging employees for a fixed period
these allowances ought to be included in short of the six-month probationary period
the “other benefits pertaining to the of employment, and again, on a day-to-
position of Finance Manager” to which day basis thereafter, mocks the law.
Villena is entitled to and which were
awarded to her under the final and here are two kinds of regular employees,
executory CA Decision and NLRC namely: (1) those who are engaged to
Resolution. perform activities which are usually
necessary or desirable in the usual
With the award of the "other benefits business or trade of the employer; and (2)
pertaining to the position of Finance those who have rendered at least one
Manager" made by the CA in its August year of service, whether continuous or
31, 2001 Decision lapsing into finality, the broken, with respect to the activities in
same had already become immutable and which they are employed. Simply stated,
unalterable; means that they may no regular employees are classified into: (1)
longer be modified in any respect, even if regular employees by nature of work; and
the modification is meant to correct what (2) regular employees by years of service.
is perceived to be an erroneous conclusion The former refers to those employees who
of fact or law. Thus, it was an error on the perform a particular activity which is
part of the CA to still consider, rule upon, necessary or desirable in the usual
and vary the previous CA Ruling, i.e., business or trade of the employer,
August 31, 2001 CA Decision, on the regardless of their length of service; while
entitlement of Villena to the benefits of the latter refers to those employees who
representation, transportation, and have been performing the job, regardless
cellular phone usage allowances. On this of the nature thereof, for at least a year.
score, therefore, the claim ofVillena is
granted. Petitioners, in this case, fall under the first
• Romeo Basan, et al. Vs. Coca-Cola Bottlers kind of regular employee above. As route
Philippines   G.R. Nos. 174365-66. helpers who are engaged in the service of
February 4, 2015 loading and unloading softdrink products
As for the primordial issue in this case, it of respondent company to its various
must be noted that the same has already delivery points, which is necessary or
been resolved in Magsalin v. National desirable in its usual business or trade,
Organization of Working Men, wherein this petitioners are considered as regular
Court has categorically declared that the employees. That they merely rendered
nature of work of route helpers hired by services for periods of less than a year is
Coca Cola Bottlers Philippines, Inc. is of no moment since for as long as they

19
were performing activities necessary to employee, and must pertain to the duties
the business of respondent, they are which he had been engaged to discharge
deemed as regular employees under the
Labor Code, irrespective of the length of In this case, the contents of Captain
their service. Woodward’s e-mails do not establish that
While fixed term employment is not per se Avestruz’s conduct had been willful, or
illegal or against public policy, the criteria characterized by a wrongful and perverse
above must first be established to the attitude.
satisfaction of this Court. Yet, the records
of this case reveal that for years, Similarly, the Court affirms the finding of
petitioners were repeatedly engaged to the CA that Avestruz was not accorded
perform functions necessary to procedural due process, there being no
respondent’s business for fixed periods compliance with the provisions of Section
short of the six-month probationary period 17 of the POEA-SEC as above-cited, which
of employment. If there was really no requires the “two-notice rule.”
intent to circumvent security of tenure, • Onofre V. Montero, et al. Vs. Times
respondent should have made it clear to Transporation Co., Inc., et al. G.R. No.
petitioners that they were being hired only 190828. March 16, 2015
for fixed periods in an agreement freely Settled is the rule that when one is
entered into by the parties. To this Court,
arbitrarily and unjustly deprived of his job
respondent’s act of hiring and re-hiring
or means of livelihood, the action
petitioners for periods short of the legal
instituted to contest the legality of one’s
probationary period evidences its intent to dismissal from employment constitutes, in
thwart petitioner’s security of tenure,
essence, an action predicated upon an
especially in view of an awareness that
injury to the rights of the plaintiff, as
ordinary workers, such as petitioners
contemplated under Article 1146 of the
herein, are never on equal terms with New Civil Code, which must be brought
their employers. It is rather unjustifiable within four years.
to allow respondent to hire and rehire
petitioners on fixed terms, never attaining
The petitioners contend that the period
regular status.
when they filed a labor case on May 14,
• Maersk-Filipinas Crewing, Inc., A.P. Moller
1998 but withdrawn on March 22, 1999
Singapore PTE Limited and Jesus
should be excluded from the computation
Agbayani Vs. Toribio C. Avestruz G.R.
of the four-year prescriptive period for
No. 207010. February 18, 2015
illegal dismissal cases. However, the Court
• Petitioners maintain that Avestruz
had already ruled that the prescriptive
was dismissed on the ground of
period continues even after the withdrawal
insubordination, consisting of his
of the case as though no action has been
“repeated failure to obey his
filed at all. The applicability of Article 1155
superior’s order to maintain
of the Civil Code in labor cases was upheld
cleanliness in the galley of the
in the case of Intercontinental
vessel” as well as his act of
Broadcasting Corporation v. Panganiban
“insulting a superior officer by
where the Court held that “although the
words or deeds.”
commencement of a civil action stops the
running of the statute of prescription or
Insubordination, as a just cause for the limitations, its dismissal or voluntary
dismissal of an employee, necessitates the abandonment by plaintiff leaves the
concurrence of at least two requisites: (1) parties in exactly the same position as
the employee’s assailed conduct must though no action had been commenced at
have been willful, that is, characterized by all.”
a wrongful and perverse attitude; and (2)
the order violated must have been In like manner, while the filing of the
reasonable, lawful, made known to the
20
complaint for illegal dismissal before the Zytron, respondents effectively resigned
LA interrupted the running of the from the latter. Resignation is the
prescriptive period, its voluntary voluntary act of employees who are
withdrawal left the petitioners in exactly compelled by personal reasons to
the same position as though no complaint dissociate themselves from their
had been filed at all. The withdrawal of employment, done with the intention of
their complaint effectively erased the relinquishing an office, accompanied by
tolling of the reglementary period. the act of abandonment.
In this regard, We defer to the findings of
A prudent review of the antecedents of the CA anent A.C. Sicat’s status as a
the claim reveals that it has in fact legitimate job contractor, seeing that it is
prescribed due to the petitioners’ consistent with the rules on job
withdrawal of their labor case docketed as contracting and is sufficiently supported
NLRC RAB-I-01-1007. Hence, while the by the evidence on record.
filing of the said case could have
interrupted the running of the four-year A person is considered engaged in
prescriptive period, the voluntary legitimate job contracting or
withdrawal of the petitioners effectively subcontracting if the following conditions
cancelled the tolling of the prescriptive concur:
period within which to file their illegal
dismissal case, leaving them in exactly the • The contractor or subcontractor
same position as though no labor case had carries on a distinct and
been filed at all. The running of the four- independent business and
year prescriptive period not having been undertakes to perform the job,
interrupted by the filing of NLRC RAB-I- work or service on its own account
01-1007, the petitioners’ cause of action and under its own responsibility
had already prescribed in four years after according to its own manner and
their cessation of employment on October method, and free from the control
26, 1997 and November 24, 1997. and direction of the principal in all
Consequently, when the petitioners filed matters connected with the
their complaint for illegal dismissal, performance of the work except as
separation pay, retirement benefits, and to the results thereof;
damages in 2002, their claim, clearly, had • The contractor or subcontractor
already been barred by prescription. has substantial capital or
• Fonterra Brands Phils., Inc. Vs. Leonardo investment; and
Largado and Teotimo Estrellano G.R. • The agreement between the
No. 205300. March 18, 2015 principal and contractor or
• As correctly held by the Labor subcontractor assures the
Arbiter and the NLRC, the contractual employees entitlement
termination of respondents’ to all labor and occupational safety
employment with Zytron was and health standards, free exercise
brought about by the cessation of of the right to self-organization,
their contracts with the latter. We security of tenure, and social and
give credence to the Labor Arbiter’s welfare benefits.
conclusion that respondents were
the ones who refused to renew On the other hand, contracting is
their contracts with Zytron, and the prohibited when the contractor or
NLRC’s finding that they subcontractor merely recruits, supplies or
themselves acquiesced to their places workers to perform a job, work or
transfer to A.C. Sicat. service for a principal and if any of the
following elements are present, thus:
By refusing to renew their contracts with

20
1. The contractor or subcontractor

does not have substantial capital or
investment which relates to the
job, work or service to be
performed and the employees
recruited, supplied or placed by
such contractor or subcontractor
are performing activities which are
directly related to the main
business of the principal; or
2. The contractor does not exercise
the right to control over the
performance of the work of the
contractual employee.
Hocheng Philippines Corporation Vs. Antonio

M. Farrales G.R. No. 211497. March 18, 2015
Theft committed by an employee against a
person other than his employer, if proven by
substantial evidence, is a cause analogous to
serious misconduct. 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. 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.
But where there is no showing of a clear, valid

and legal cause for termination of employment,
the law considers the case a matter of illegal
dismissal. If doubts exist between the evidence
presented by the employer and that of the
employee, the scales of justice must be tilted in
favor of the latter. The employer must
affirmatively show rationally adequate evidence
that the dismissal was for a justifiable cause.


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1

COMPILATION OF SUPREME COURT DECISIONS

LABOR LAW AND the entire duration of his contract, bears a

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 22

and zealously guarded by our employment contract. Section 32(A) of

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 44

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 55

affidavits, corroborated by the affidavits of Rules.

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 66

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 77

from work. Quite the contrary, the employment is rendered impossible,

utilized to disprove the employment of a supporting the claims of respondent.

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 99

not be so strict about procedural lapses presenting such documents, the

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 1111

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 1212

We rule in favor of petitioners. they are logically vested with the

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 1313

Philippines, Inc. and Keith Elliot convenience, is an entity shielded by a

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 1414

assessed or evaluated by the laid down in the POEA-SEC and/or

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 1616

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 1717

Establishment Termination Report which rules are not necessarily fatal in

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 1919

administrative expense since Sutherland dishonesty have been held to be sufficient

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 2020

an appeal is both mandatory and jurisdictional, one of petitioner's clients. However,

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 2121

Ryndam injuries and (2) whether hence, justify an extension of

(g)The company-designated physician

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 2222

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 2323

Probationary Employment Period permanent.

A probationary employee is one who is on Since it was explicitly provided in the

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 2424

petitioner. probation. Upon the expiration of his

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 2525

tenure. During the said probationary selection and engagement of the

employee relationship. engender a certain degree of hostility, the

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 2727

dishonesty lose their credibility as except to forego his continued

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 2828

To recall, respondents’ demand for the specified

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 2929

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 3131

employee. The question now is whether without justifiable excuse as distinguished

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 3535

to be the “modification” envisioned in the customs and public policy.

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 3636

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 3737

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 3838

Otherwise stated, a dismissed employee pendency of the appeal up to the reversal

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 3939

two different concepts; they are not requires.

Prepared by: ATTY. RESCI ANGELLI RIZADA, RN 4141

the law intended to defeat the •

measurement may be reducible to connotes an exercise of discretion,

the Court actually extended the considered as foreseeable, nor can it be

absolute and shall be resolved in favor of labor.” In

of the plaintiff who is not trade union center or an independent

took part in the ratification; entitled “Pangalan ng Mga Kasapi ng

voters, or failure to submit these on the processing and

Otherwise we would be violating Olsen Cruise Lines Limited   G.R. No.