GROUP 6:

OLIVA, Anna Lorraine; PANGILINAN, Ann Domenique; RAFANAN, Charles Bill; RAMOS, Ayleen

June 2019 Labor Law Rulings of the Supreme Court

R.A. No. 6727 or the Wage Rationalization Act; Doctrine of strained relations. Petitioner argues
that the respondents are not entitled to wage differentials as he is engaged in the service business
employing less than ten (10) employees.In order to be exempted under R.A. No. 6727 or the
Wage Rationalization Act, two elements must concur - first, it must be shown that the
establishment is regularly employing not more than ten (10) workers, and second, that the
establishment had applied for and was granted exemption by the appropriate Regional Board in
accordance with the applicable rules and regulations issued by the Commission. The petitioner
himself admitted that he did not apply for such exemption, thus, it is clear that he cannot claim
benefits under the law.It is undisputed that the respondents are MPRB's employees and are paid
less than the prescribed minimum wage, the petitioner's liability for wage differential cannot be
denied. Jurisprudence also recognizes the doctrine of strained relations as an exception to the
general rule of reinstatement. In which instance, separation pay is accepted as an alternative
when reinstatement is no longer desirable or viable. The doctrine, however, does not
automatically apply nor can be inferred whenever a case for illegal dismissal is filed. Strained
relations between the parties cannot be based on impression alone. It must be proven as a fact
and supported by substantial evidence. There being no allegation, much more evidence to prove
that reinstatement is impossible because of the strained relations of the parties, the NLRC's order
for reinstatement is proper. (Manuel B. Pablico And Master's Pab Resto Bar V. Numeriano B.
Cerro Et. Al., G.R. No. 227200, June 10, 2019)

Employer is liable for disability benefits only when the seafarer suffers from work-related injury
or illness. Pursuant to the 2010 POEA-SEC, the employer is liable for disability benefits only
when the seafarer suffers from a work-related injury or illness during the term of his contract.
Upon finding that the seafarer suffers a work-related injury or illness, the employer is obligated
to refer the former to a company-designated physician, who has the responsibility to arrive at a
definite assessment of the former's fitness or degree of disability within a period of 120 days
from repatriation. This period may be extended up to a maximum of 240 days, if the seafarer
requires further medical treatment, subject to the right of the employer to declare within this
extended period that a permanent partial or total disability already exists. To be conclusive and
to give proper disability benefits to the seafarer, this assessment must be complete and definite;
otherwise, the medical report shall be set aside and the disability grading contained therein shall
be ignored. Failure of the company-designated physician to arrive at a definite assessment of the
seafarer's fitness to work or permanent disability within the prescribed periods and if the
seafarer's medical condition remains unresolved, the law steps in to consider the latter's disability
as total and permanent.In this case, the failure of the company physician to make a final
declaration that petitioner is fit to resume work or the definite degree of his disability, the
characterization of the latter's condition after the lapse of the 120-day period becomes total and
permanent by operation of law. Besides, petitioner's injury persisted despite the company
designatedphysician's declaration of partial disability Grade 8. Thus, applying Article 198 (c) (1)
of the Labor Code, petitioner's disability should be deemed total and permanent. (Danille G.
Ampo-On vs. Reinier Pacific International Shipping, Inc. and/or Neptune Ship Management
Services Pte./Nol Liner (PTE.) Ltd., G.R. No. 240614. June 10, 2019)

Entitlement to disability benefits. Entitlement to disability benefits by seafarers is a matter

governed, not only by the medical findings of the respective physicians of the parties, but, more
importantly, by the applicable Philippine laws and by the contract between the parties. By law,
the material statutory provisions are Articles 191 to 193 of the Labor Code. By contract, the
seafarers and their employers are governed, not only by their mutual agreements, but also by the
provisions of the POEA-SEC which are mandated to be integrated in every seafarer's contract.
(Jan Frederick Pineda De Vera vs. United Philippine Lines, Inc., G.R. No. 223246, June 26,
2019)
 GROUP 6:
OLIVA, Anna Lorraine; PANGILINAN, Ann Domenique; RAFANAN, Charles Bill; RAMOS, Ayleen

Instances where seafarer’s cause of action for total and permanent disability may be considered
to have arisen. Based on this Court's pronouncements in Vergara, it is easily discernible that the
120-day or 240-day period and the obligations the law imposed on the employer are
determinative of when a seafarer's cause of action for total and permanent disability may be
considered to have arisen. Thus, a seafarer may pursue an action for total and permanent
disability benefits if: (a) the company-designated physician failed to issue a declaration as to his
fitness to engage in sea duty or disability even after the lapse of the 120-day period and there is
no indication that further medical treatment would address his temporary total disability, hence,
justify an extension of the period to 240 days; (b) 240 days had lapsed without any certification
being issued by the company-designated physician; (c) the company-designated physician
declared that he is fit for sea duty within the 120-day or 240-day period, as the case may be, but
his physician of choice and the doctor chosen under Section 20- B(3) of the POEA-SEC are of a
contrary opinion; (d) the company-designated physician acknowledged that he is partially
permanently disabled but other doctors who he consulted, on his own and jointly with his
employer, believed that his disability is not only permanent but total as well; (e) the company-
designated physician recognized that he is totally and permanently disabled but there is a dispute
on the disability grading; (f) the company-designated physician determined that his medical
condition is not compensable or work-related under the POEA-SEC but his doctor-of-choice and
the third doctor selected under Section 20-B(3) of the POEA-SEC found otherwise and declared
him unfit to work; (g) the company-designated physician declared him totally and permanently
disabled but the employer refuses to pay him the corresponding benefits; and (h) the company-
designated physician declared him partially and permanently disabled within the 120-day or 240-
day period but he remains incapacitated to perform his usual sea duties after the lapse of the said
periods. (Jan Frederick Pineda De Vera vs. United Philippine Lines, Inc., G.R. No. 223246,
June 26, 2019)

In other words, a seafarer seeking compensation for his disability cannot file his claim before
seeking a second opinion. From the foregoing, it is clear that if the company-designated
physician made an assessment declaring the seafarer fit to work within the applicable period as
prescribed under the POEA-SEC and in relevant laws and jurisprudence, the seafarer may pursue
his claim for disability benefits only after securing a contrary medical opinion from his physician
of choice. In other words, a seafarer seeking compensation for his disability cannot file his claim
before seeking a second opinion. (Jan Frederick Pineda De Vera vs. United Philippine Lines,
Inc., G.R. No. 223246, June 26, 2019)

The referral of the conflicting findings to an independent third doctor is important and crucial to
the claim of the seafarer. If the seafarer fails to signify his intent to submit the disputed
assessment to a third physician, then the company can insist on the disability rating issued by the
company designated physician, even against a contrary opinion by the seafarer's doctor. The duty
to secure the opinion of a third doctor belongs to the employee, who must actively or expressly
request for it. Failure to comply with the requirement of referral to a third-party physician is
tantamount to violation of the terms under the 2010 POEA-SEC, and without a binding third-
party opinion, the findings of the company-designated physician shall prevail over the
assessment made by the seafarer's doctor. Thus, without the referral to a third doctor, there is no
valid challenge to the findings of the company-designated physician. In the absence thereof, the
medical pronouncement of the company-designated physician must be upheld. (Jan Frederick
Pineda De Vera vs. United Philippine Lines, Inc., G.R. No. 223246, June 26, 2019)

Settled is the rule that for an illness to be compensable, it is not necessary that the nature of the
employment be the sole and only reason for the illness suffered by the seafarer. In Nonay v.
Bahia Shipping Services, Inc., Fred Olsen Lines and Mendoza, the Court held that:
Settled is the rule that for an illness to be compensable, it is not necessary that the nature of the
 GROUP 6:
OLIVA, Anna Lorraine; PANGILINAN, Ann Domenique; RAFANAN, Charles Bill; RAMOS, Ayleen

employment be the sole and only reason for the illness suffered by the seafarer. It is sufficient
that there is a reasonable linkage between the disease suffered by the employee and his work to
lead a rational mind to conclude that his work may have contributed to the establishment or, at
the very least, aggravation of any pre-existing condition he might have had. The disputable
presumption that a seafarer's sickness is work-related does not mean that he would only sit idly
while waiting for the respondent to dispute the presumption. What the law requires is for the
seafarer to show a causal connection between the illness and the work for which he was
contracted. Here, Timoteo was shown to have been inevitably exposed to iron dusts, diesel fumes
and other toxic substances because of the nature of his work as a fitter. More than 30 years of
being exposed to these will definitely take a toll on his health. (Jebsen Maritime Inc., vs.
Timoteo Gavina, G.R. No. 199052, June 26, 2019)

Requisites for a seafarer to claim the compensation and benefits under Section 20(A) of the
POEA-SEC. For disability to be compensable under Section 20(A) of the Amended Standard
Terms and Conditions Governing the Overseas Employment of Filipino Seafarers on-Board
Ocean-Going Ships issued on October 26, 2010 (2010 POEA-SEC), two (2) elements must
concur: (1) the injury or illness must be work-related; and (2) the work-related injury or illness
must have existed during the term of the seafarer's employment contract. Relevantly, the 2010
POEA-SEC defines "work-related illness" as "any sickness as a result of an occupational disease
listed under Section 32-A of the Contract with the conditions set therein satisfied." As for those
diseases not listed as occupational diseases, jurisprudence mandates that the same may be
compensated if it is shown that they are work-related and the conditions for compensability are
satisfied. Moreover, Section 20(A)(3) of the POEA-SEC commands that the employee seeking
disability benefits submit himself to post-employment medical examination by a company-
designated physician within three (3) working days from his repatriation. Thus, in situations
where the seafarer seeks to claim the compensation and benefits that Section 20(A) of the
POEA-SEC grants to him, the law requires the seafarer to prove that: (1) he suffered an illness;
(2) he suffered this illness during the term of his employment contract; (3) he complied with the
procedures prescribed under Section 20(A)(3); (4) his illness is one of the enumerated
occupational disease or that his illness or injury is otherwise work-related; and (5) he complied
with the four conditions enumerated under Section 32(A) for an occupational disease or a
disputably-presumed work-related disease to be compensable. (Jose Aspiras Malicdem vs. Asia
Bulk Transport Phils., Inc., Inter-Ocean Company Limited, G.R. No. 224753, June 19, 2019)

The fact that the company provided identification cards and uniforms and the vague affidavit
of the purported employer were sufficient evidence to prove the existence of employer-
employee relationship. Similar to the facts of this case, the Court in Masonic Contractor, Inc. v.
Madjos (Masonic Contractor) ruled that the fact that the company provided identification
cards and uniforms and the vague affidavit of the purported employer were sufficient evidence
to prove the existence of employer-employee relationship. Thus: Petitioners' defense that they
merely contracted the services of respondents through Malibiran fails to persuade us. The facts
of this case show that respondents have been under the employ of MCI as early as 1991. They
were hired not to perform a specific job or undertaking. Instead, they were employed as all-
around laborers doing varied and intermittent jobs, such as those of drivers, sweepers,
gardeners, and even undertakers or tagalibing, until they were arbitrarily terminated by MCI
in 2004. Their wages were paid directly by MCI, as evidenced by the latter's payroll summary,
belying its self-serving and unsupported contention that it paid directly to Malibiran for
respondents' services. Respondents had identification cards or gate passes issued not by
Malibiran, but by MCI, and were required to wear uniforms bearing MCI's emblem or logo when
they reported for work. It is common practice for companies to provide identification cards to
individuals not only as a security measure, but more importantly to identify the bearers thereof
as bona fide employees of the firm or institution that issued them. The provision of company-
issued identification cards and uniforms to respondents, aside from their inclusion in MCI's
summary payroll, indubitably constitutes substantial evidence sufficient to support only one
 GROUP 6:
OLIVA, Anna Lorraine; PANGILINAN, Ann Domenique; RAFANAN, Charles Bill; RAMOS, Ayleen

conclusion: that respondents were indeed employees of MCI. (Arnulfo M. Fernandez vs.
Kalookan Slaughterhouse Incorporated*/Ernesto Cunanan, G.R. No. 225075, June 19, 2019)