For Your Eyes Only

SELECTED DECISIONS OF
ASSOC. JUSTICE RAMON PAUL HERNANDO
SUPREME COURT OF THE PHILIPPINES

LABOR LAW
Prof. Benedict Guirey Kato
AB Philo., LlB
LlM (Magna Cum Laude)
Labor Arbiter
Law Professor, Bar Reviewer
Author
(Survival Notes in Labor Law, Syllabus-Based Reviewer in Labor Law,
Bar QnA in Labor Law, Labor Standards Law: A Remunerative and Protective Law,
Write Better, Score Better)
MCLE Lecturer

Introduction

Approach to the Chairman’s decisions here is not the purely “case digest” type. I have
devised several approaches depending on which style would help reviewees internalize certain
principles. Overall, his decisions are used to update the Bar areas to the extent that they
reiterate, modify or even disturb rulings already cited in my QnA book. It is also best to
correlate them to decisions penned by others towards devising modules for analysis. The
idea is to identify Bar areas and, using warfare language, station surface-to-air missiles to shoot
down questions invading these territories. Those decisions have been integrated into the
entire Bar defense system that I have devised over the years as a Bar reviewer.

Thus:

A
LIBERAL INTERPRETATION RULE

Sec. 3, Rule V, NLRC Rules of Procedure:

Can an employer ask for its liberal interpretation?

Reyes vs Rural Bank of San Rafael (Bulacan) Inc.

G.R. No. 230597, 23 March 2022

The Labor Arbiter scheduled hearings on 4 June 2013 and 19 June 2013. Respondent bank
did not appear at the first hearing but its counsel and representative appeared much earlier and
secured a copy of the amended complaint additionally charging illegal dismissal. Despite prior
 notice, the bank did not again attend the second hearing. At that point, it had already obtained a
copy of the amended complaint and could have intelligently responded thereto sans summons as
its issuance would have been a mere superfluity. From early June to promulgation of judgment
on 24 February 2014, it did not demand to be heard via position paper. The case was eventually
decided against it.

Can the bank demand for liberal interpretation of the NLRC Rules of Procedure so that it
can present evidence on appeal?

Answer

“Preliminarily, the Court wishes to address respondents' argument that there were
several procedural lapses committed by the arbiter in conducting the proceedings.
Respondents repeatedly assert:

Section 3 of the 2011 NLRC Rules of Procedure states that "Within two (2)
days from the receipt of a complaint or amended complaint, the Labor Arbiter shall
issue the required summons, attaching thereto a copy of the complaint or amended
complaint and its annexes, if any. The summons shall specify the date, time and place of the
mandatory conciliation and mediation conference in two (2) settings x x x." Here, there
was no summons sent to any of the private respondents after the filing of the
amended complaint. There was also no mandatory conciliation and mediation
conference in two settings. As the Decision of the Honorable Labor Arbiter states,
"On June 4, 2013, after complainants filed their amended complaint, they filed their
Position Paper." There was no mention of any issuance of summons to the private
respondents and setting of mandatory conciliation and mediation conference.
Further, no copy of the Position Paper was ever sent or received by the private
respondents. (Underscoring in the original)

In citing the 2011 NLRC Rules, respondents intimate that such should have been strictly
followed; that the arbiter must be faulted for not doing so. However, respondents quickly
backtracked and asserted before the NLRC that the rules – the very same one they demand to be
strictly enforced – must be relaxed, obviously when it suited their favor. In the Court's view, this
flip-flopping stand by the respondents betrays fairness in their position.

In any case, respondents in the present case are not entitled to be accorded a liberal
interpretation of the rules; the same being primarily granted for the employee's favor, and not the
employer.”

Constitutional Provisions

“The principles embodied by all prevailing labor rules, legislations, and regulations are
derived from the Constitution, which intensely protects the working individual and deeply
promotes social justice. Article II, Section 18 of the 1987 Constitution provides:

SECTION 18. The State affirms labor as a primary social economic force. It shall
protect the rights of workers and promote their welfare.

Meanwhile, Article XIII, Section 3 state:

 SECTION 3. The State shall afford full protection to labor. local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all.

Lastly, Article 4 of PD 442 or the Labor Code, provides:

Article 4. Construction in favor of labor. - All doubts in the implementation and

interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.

The measures embedded in our legal system which accord specific protection to labor
stems from the reality that normally, the laborer stands on unequal footing as opposed to an
employer. Indeed, the labor force is a special class that is constitutionally protected because of
the inequality between capital and labor. In fact, labor proceedings are so informally and, as
much as possible, amicably conducted and without a real need for counsel, perhaps in
recognition of the sad fact that a common employee does not or have extremely limited means to
secure legal services nor the mettle to endure the extremely antagonizing and adversarial
atmosphere of a formal legal battle. Thus, in the common scenario of an unaided worker, who
does not possess the necessary knowledge to protect his rights, pitted against his employer in a
labor proceeding, We cannot expect the former to be perfectly compliant at all times with every
single twist and turn of legal technicality. The same, however, cannot be said for the latter, who
more often than not, has the capacity to hire the services of a counsel. As an additional aid
therefore, a liberal interpretation of the technical rules of procedure may be allowed if only to
further bridge the gap between an employee and an employer.

Relevant to this is Section 2 (Rule I) of the 2011 NLRC Rules which stipulates:

SECTION 2. CONSTRUCTION. – These Rules shall be liberally construed

to carry out the objectives of the Constitution, the Labor Code of the Philippines
and other relevant legislations, and to assist the parties in obtaining just,
expeditious and inexpensive resolution and settlement of labor disputes.
(Emphasis supplied.)

As can be gleaned above, the 2011 NLRC Rules shall be liberally construed in order to
attain two purposes: to carry out the objectives of the Constitution and relevant labor laws, and
to assist the parties in obtaining a just, expeditious and inexpensive resolution and settlement of
labor disputes. Focusing on the first purpose, We recall that one of the objectives of the
Constitution is to accord special protection to labor. With this, it would therefore be fitting to say
that the rules shall be liberally interpreted in order to accord special protection to labor. Truly,
those who have less in life, should have more in law.

In Vicente v. Employees' Compensation Commission, the Court held:

The court takes this occasion to stress once more its abiding concern for the
welfare of government workers, especially the humble rank and file, whose
patience, industry, and dedication to duty have often gone unheralded, but who, in
spite of very little recognition, plod on dutifully to perform their appointed tasks.
It is for this reason that the sympathy of the law on social security is toward its
beneficiaries, and the law, by its own terms, requires a construction of utmost
liberality in their favor. It is likewise for this reason that the Court disposes of this
case and ends a workingman's struggle for his just dues. (Citation omitted)
 Further, as explained by Prof. Azucena:

In carrying out and interpreting the Labor Code's provisions and its
implementing regulations, the working man's welfare should be the primordial
and paramount consideration. This kind of interpretation gives meaning and
substance to the liberal and compassionate spirit of the law as provided for in
Article 4 of the New Labor Code. The policy is to extend the decree's applicability
to a greater number of employees to enable them to avail of the benefits under the
law, in consonance with the State's avowed policy to give maximum aid and
protection to labor.”

Justice belongs to everyone.

This is not to say however that the rules may never be relaxed in favor of the employer,
and that every labor dispute will be automatically decided in favor of labor, thus:

Protection to labor and resolution of doubts in favor of labor cannot be

pursued to the point of deliberately committing a miscarriage of justice. The right
to obtain justice is enjoyed by all members of society, rich or poor, worker or
manager, alien or citizen. Justice belongs to everyone. It is not to be blinded or
immobilized by the fact of one's being economically underprivileged. x x x

In certain cases, of course, a liberal approach to the rules may be had even if it favors the
employer. Such allowance, however, must be measured against standards stricter than that
imposed against the worker, and only in compelling and justified cases where the employer will
definitely suffer injustice should such liberal interpretation be disallowed. Unfortunately for
respondents, this is not the situation in the present case. “ (Emphasis supplied)

Comments:

1. Previous Bar years involved liberal construction of evidence in favor of the

workingman. In the problems given, the application by the Labor Arbiter/NLRC of the Liberal
Interpretation Rule was put in issue on the ground that the text of Art. 4 of the Labor Code
mentions doubts and ambiguities generated by PD 442 and ORILC provisions only to the
exclusion, allegedly, of all other sources.

2. If ever, this will be the first time in Bar history that a Bar examiner will instruct the
Labor Arbiter or NLRC to disregard its own rules so that he can ask the examinees to expound
on the nature and extent of Art. 4. Expectedly, the question will bear down on the exception, i.e.,
“In certain cases, of course, a liberal approach to the rules may be had even if it favors the employer. Such
allowance, however, must be measured against standards stricter than that imposed against the worker,
and only in compelling and justified cases where the employer will definitely suffer injustice should such
liberal interpretation be disallowed.” In this regard, examinees are reminded that the office of
procedure is to serve the ends of substantial justice. Hence, according to the Supreme Court in
a prior decision (in a 2027 decision, if you can remember!), where its strict application will
defeat instead of promote such end then the rule is to relax it.

3. The quote is lengthy because one has to read these portions:

 Upstairs: “In citing the 2011 NLRC Rules, respondents intimate that such should have been
strictly followed; that the arbiter must be faulted for not doing so. However, respondents quickly
backtracked and asserted before the NLRC that the rules – the very same one they demand to be
strictly enforced – must be relaxed, obviously when it suited their favor. In the Court's view, this
flip-flopping stand by the respondents betrays fairness in their position.”

Downstairs: “In certain cases, of course, a liberal approach to the rules may be had even if it
favors the employer. Such allowance, however, must be measured against standards stricter than
that imposed against the worker, and only in compelling and justified cases where the employer will
definitely suffer injustice should such liberal interpretation be disallowed. Unfortunately for
respondents, this is not the situation in the present case. “

4. Speedy Gonzales of Itogon, Benguet says: One cannot have his kick and eat it two.
Thus, the company cannot spit out Sec. 3, Rule V of the NLRC Rules of Procedure, as amended, on the
Labor Arbiter then eat it again by belatedly submitting evidence.

What is the moral lesson?

None. But quite seriously, if one ventured on paraphrasing the strictures of the Supreme
Court although lacking in practice, he would certainly commit sabotage under Labor Law. What
the Supreme Court said should be reworded in this fashion:

The respondents lay blame on the Labor Arbiter for not strictly observing Sec. 3, Rule V of
the NLRC Rules of Procedure, as amended. But at the same time they insist on its strict
application, they demand favor from its liberal construction. Thus, it is not substantial justice
they seek but over-due-process which no person is entitled to.

5. Examinees are expected to give entry-level answers only. Hence, this should be
respectable enough:

Receipt by the respondents of a copy of the amended complaint excused service of the
summons required by the NLRC rules (2022 Reyes Ruling, J Hernando). Hence, their refusal to
submit their position paper despite being constructively put on notice justified the resolution of
the case based on the record.

Why write (2022 Reyes Ruling, J Hernando)? Because one knows and remembers the case
and writing “Based on jurisprudence…” is an insult to his retentive memory.

B
CREW CLAIMS

Disputable Presumption of Work-Connection

Paglinawan vs DOHLE Philman Agency

G.R. No. 230735, 4 April 2022

Background
 In Romana vs Magsaysay Maritime Corp., G.R. No. 192442, 9 August 2017, the Supreme
Court harmonized its conflicting rulings on the disputable presumption of work-connection by
pointing out that what the presumption affects is the first requisite of compensability only, viz.,
work-connection. The other requisite is effectivity of contract, i.e., the disease developed or was
aggravated (as to exist) during the period of the seafarer’s employment contract. It stressed the
fact that there is a disputable presumption of work-connection in Sec. 20-A of the POEA-SEC
but not of compensability. Therefore, the claimant must still move forward with substantial
evidence to prove compensability by showing that: (1) the seafarer’s work involves the risk
factors of the unlisted disease; (2) he is actually exposed to those risk factors; (3) the period of
his exposure to them is sufficient for him to contract the disease; and (4) he did not contract it
by reason of his notorious negligence (1 2 3 4). In Paglinawan vs DOHLE Philman Agency, G.R.
No. 230735, 4 April 2022, the Bar Chairman required proof of the conditions of
compensability (1 2 3 4) even if Ulcerative Colitis was disputably presumed to be work-
connected.

Earlier in Dorroteo vs Philimare , G.R. No. 184917, 13 March 2017, the Supreme Court
required proof of the clear nexus (connection) between working conditions and Throat Cancer (an
unlisted disease) in order to entitle the seafarer to disability compensation. It is easier to
understand the requirement by imagining a seafarer claiming that he is automatically entitled to
compensation because his unlisted disease is disputably presumed as work-connected; hence,
since his employer failed to overcome the presumption - just as UPL, Inc. failed to overcome
the disputable presumption that Brainstem Cavernous Malformation (an unlisted disease) was
work-connected in Racelis vs UPL, Inc., G.R. No. 198408, 12 November 2014 - then he should be
awarded compensation. But what if his work does not involve the risk factors of Throat Cancer,
e.g., he is a bartender who is not exposed to chemicals and similar carcinogens? Or what if he
may be exposed to chemicals because he works inside the engine room of his assigned vessel but
the period of his exposure is just seven (7) days? Should the disputable presumption be used as
a magic wand that, once waved, would automatically entitle him to compensation? Of course,
common sense will not allow compensation. Thus, the need to prove 1 2 3 4 (Romana Ruling) to
clearly show the compensability of the disability complained of.

The long and short of this is that a disease may be work-connected because either it is
listed under Sec. 32-A of the POEA-SEC or it is disputably presumed to be work-connected and
the presumption is not overcome. However, it does not automatically follow that the disability
or death allegedly resulting from it is compensable. A work-connected disease is one that is
listed as work-connected or disputably presumed to be work-connected. If it causes disability
or death, compensability follows provided the conditions (1 2 3 4) set in the POEA-SEC are
satisfied. Hence, a distinction must be made between conditions of work-connection and conditions
of compensability. The conditions of work-connection are: (a) the disease is a listed disease; or (2) it
is unlisted but disputably presumed to be work-connected and the employer failed to overcome
the presumption. In contrast, the conditions of compensability are: (a) the disease is work-
connected and it developed or was aggravated during the period of the seafarer’s employment
contract; and (b) in addition, the conditions set in the POEA-SEC (1 2 3 4) are satisfied.

The Paglinawan Case: Ulcerative Colitis

Dohle Philman Agency hired Paglinawan as Engine and Deck Checker for its foreign principal.
Upon medical repatriation due to LBM and bloody stool, he was attended to at the Metropolitan
Medical Center, the company-designated physician, which diagnosed him with Ulcerative
Colitis and which certified that his disease was not work-connected because it was not listed.
Relying on the disputable presumption that his disease was work-connected, he demanded for
disability compensation. When his demand was rejected, he filed his money complaint.
Thereafter, he consulted his physician of choice who certified that he was unfit to work as a
seafarer.

In holding that Paglinawan was not entitled to disability compensation, the Supreme Court
noted that he did not satisfy 1 2 3 4. Moreover, at the time he filed his complaint, he had no
cause of action because his medical evidence was a post-complaint medical opinion. Finally, the
Third Physician Rule was not observed.

Application

The other cases decided by the Bar Chairman involve unlisted diseases. Thus:

1. Papillary Cancer: Clear Nexus Established

EMS Crew Management Phils. vs Bauzon

G.R. No. 205385, 26 April 2021

Work: Able Seaman

Cause of Medical Repatriation: Difficulty in swallowing due to severe pain in the
throat.
Opinion of Company-Designated Physician: Initial - Colloid Cystic Goiter;
Final – Residual Thyroid Gland
Opinion of Physician of Choice: Papillary Cancer; total and permanent disability
Opinion of Third Physician: None (not an issue)
Ruling of the Supreme Court: Compensable

“We note that Bauzon, as an Able Seaman on board the vessel, was exposed to harsh sea
weather, chemical irritants, dusts, heat, stress brought about by being away from his family,
long hours of work, and limited and unclean air/oxygen, all of which invariably contributed to
his illness. There was at least a reasonable connection between his job and his contracting the
throat ailment during his employment, which eventually developed into papillary cancer.

Moreover, the duties and responsibilities of an Able Seaman generally require the use of
a variety of chemical substances (e.g., grease, solvents, cleaning agents, de-greasers, paint, etc.).
Our pronouncement in Razonable, Jr. v. Torm Shipping Philippines, Inc. is all too elucidative:
 The medically-repatriated claimant-seafarer in the case of Fil-Pride Shipping
Company, Inc. v. Balasta, wherein the Court also took judicial notice of the
seafarer['s] homesickness and exposure to the perils of the sea, alleged in detail and
proved his specific tasks as an Able Seaman, and that he experienced symptoms of
his illness which can be reasonably linked to the tasks he performed on board the
vessel. Moreover, the Court observed that the employer failed to refute the
seafarer's allegations that "in the performance of his duties as Able Seaman, he
inhaled, was exposed to, and came into direct contact with various injurious and
harmful chemicals, dust, fumes/emissions, and other irritant agents; that he
performed strenuous tasks such as lifting, pulling, pushing and/or moving
equipment and materials on board the ship; that he was constantly exposed to
varying temperatures of extreme hot and cold as the ship crossed ocean
boundaries; that he was exposed as well to harsh weather conditions; that in
most instances, he was required to perform overtime work; and that the work of
an Able Seaman is both physically and mentally stressful" x x x . (Emphasis
supplied; Citations omitted)

Thus, We find that Bauzon sufficiently proved that his illness was work-related, that it
occurred during the term of his contract, and that his ailment is compensable. There was, by all
accounts, a reasonable connection between the nature of his work on board the vessel and the
illness that he came down with. The aggravation of his illness had been duly established by
him.”

Note: Based on Bauzon, one need not be too mechanical about 1 2 3 4, i.e., it is enough
that the totality of the evidence shows the clear nexus between nature of work and disease.
Hence, this part of the decision is important: “There was, by all accounts, a reasonable connection
between the nature of his work on board the vessel and the illness that he came down with. The
aggravation of his illness had been duly established by him.” Notably, the Supreme Court did not
require proof of No. 4, i.e., that Bauzon did not contract his disease by reason of his notorious
negligence. On a practical note, it should be the burden of the employer to prove notorious
negligence.

Possible Questions

1. Do the 1 2 3 4 conditions apply to unlisted diseases?

Answer

Yes. The Bar Chairman cites Jebsen Maritime as follows:

In Jebsen Maritime, Inc. v. Ravena, it was likewise elucidated that there is a need to
satisfactorily show the four (4) conditions under Section 32-A of the 2000 POEA-SEC in order
for the disputably presumed disease resulting in disability to be compensable.

To note, while Section 32-A of the 2000 POEA-SEC refers to conditions for compensability
of an occupational disease and the resulting disability or death, it should be pointed out that the
conditions stated therein should also apply to non-listed illnesses given that: (a) the legal
presumption under Section 20 (B) (4) accorded to the latter is limited only to "work-relatedness";
and (b) for its compensability, a reasonable connection between the nature of work on board the
vessel and the illness contracted or aggravated must be shown. (Emphasis on the original;
citations omitted).

2. What is the effect of re-hiring a seafarer with a pre-existing medical condition

after certifying him fit for sea duty during PEME?

Answer

“Despite the foregoing diagnosis, petitioners rehired him and the company designated
physician gave him a fit-to-work certification. In doing so, petitioners assumed the risk of
liability as to Bauzon's health condition. Thus, in Magat v. Interorient Maritime Enterprises, Inc., We
upheld the following findings of the NLRC therein:

Curiously, both parties failed to present complainant's PEME results with

respect to his last employment on board MT North Star. Nonetheless, since he was
accepted and deployed by respondents, it is safe to say that he passed the PEME
without any finding that he had a pre-existing heart ailment, or that respondents
accepted him despite being aware of his condition. In any case, respondents, in
hiring complainant despite his advanced age and pre-existing hypertension,
assumed the risk of liability for his health. They cannot be allowed to
subsequently evade such liability by claiming that complainant's illness was
discovered only after his employment was terminated.41 (Emphasis supplied).

Moreover, settled is the rule that a worker brings with him possible infirmities in the
course of his employment, and while the employer is not the insurer of the health of the
employees, he takes them as he finds them and assumes the risk of liability.

Therefore, when petitioner EMS Phils. re-hired Bauzon and issued a fit-to-work
certification despite full knowledge of his medical condition, it assumed the risk of any liability
that may arise from said condition.”

3. What is the quantum of proof required in compensation cases?

Answer

“This Court finds that the nature of Bauzon's employment had contributed to the
aggravation of his illness. We reiterate that the nature of his job as an Able Seaman exposed him
to harsh sea weather, chemical irritants, dusts, heat, stress brought about by being away from his
family, and long hours of work, all of which invariably contributed to his illness. Under these
circumstances, there was at least a reasonable connection between his job and his ailment.

The findings of the NLRC on the matter are accurate. "Dietary provisions causing ailment
of various kinds while on board ocean-going or high seas vessels are becoming common to
seafarers. This could be attributed to food that are high on fat and low in fiber that are purchased
on a month long basis and partaken during long voyage". Thus, in Leonis Navigation Co., Inc. v.
Villamater, We pointed out that:

Diets high in fat are believed to predispose humans to colorectal cancer. In

countries with high colorectal cancer rates, the fat intake by the population is much
higher than in countries with low cancer rates. It is believed that the breakdown
 products of fat metabolism lead to the formation of cancer-causing chemicals
(carcinogens). Diets high in vegetables and high-fiber foods may rid the bowel of
these carcinogens and help reduce the risk of cancer.

In view of Bauzon's duties and responsibilities as an Able Seaman, coupled with the
constricted diet among seafarers, We find that his employment contributed to the aggravation
and development of his ailment. In the more recent case of De Leon v. Maunlad Trans, Inc.
wherein this Court granted the petitioner seafarer his disability benefits, We reiterated our
earlier holding that:

[I]t is not required that the employment be the sole factor in the growth,
development or acceleration of the illness to entitle the claimant to the benefits
provided [therefor].

It is enough that the employment had contributed, even to a small degree,

to the development of the disease x x x. (Emphasis supplied)”

4. What is the compensation policy under the POEA-SEC?

Answer

“Lastly, We find it relevant to state that the POEA-SEC is designed primarily for the
protection and benefit of Filipino seamen in the pursuit of their employment on board ocean-
going vessels. Its provisions must, therefore, be construed and applied fairly, reasonably, and
liberally in favor or for the benefit of the seafarers and their dependents. Only then can its
beneficent provisions be fully carried into effect.”

5. Hypothetical: If you were the company lawyer, what defense/s would you
raise?

Answer

The complaint for disability compensation was filed without the conflicting medical opinions
having been referred first to a third physician; hence, the case must be dismissed for non-
compliance with said dispute resolution mechanism. Moreover, the seafarer entered into another
employment contract despite his pre-existing disease which he knew would likely be aggravated
by his working conditions. On this basis, he was notoriously negligent.

2. Myocardial Infarction: 10 Months & 30 Months Late

De Jesus vs Inter-Orient Maritime Enterprises, Inc.

G.R. No. 203478, 23 June 2021

Work: Second Mate

Cause of Medical Repatriation: Severe chest pains. Acute Extensive Myocardial
Infarction
Opinion of Company-Designated Physician: Myocardial Infarction (MI), not work-
related
 Opinion of Physician of Choice: Work-related MI
Opinion of Third Physician: None (no referral)
Ruling of the Supreme Court: Not compensable

“For a disability to be compensable under Section 20 (B) of the 2000 POEA SEC, it must
be the result of a work-related injury or a work-related or work-aggravated illness. The POEA
SEC defines a work-related injury as "injuries resulting in disability or death arising out of and
in the course of employment.” On the other hand, a work-related illness has been defined as
"any sickness resulting in disability or death as a result of an occupational disease listed under
Section 32-A of this contract with the conditions set therein satisfied."

Under the same rule, petitioner is obliged to submit himself to a post employment
medical examination by a company-designated physician within three working days upon his
return, except when he is physically incapacitated to do so, in which case, a written notice to the
agency within the same period is deemed as compliance. Failure to comply with this mandatory
reporting requirement shall result in forfeiture of the right to claim disability benefits. It is
likewise provided that if a doctor appointed by the seafarer disagrees with the assessment, a
third doctor may be agreed jointly between the employer and the seafarer whose decision shall
be final and binding on both parties.

In this case, petitioner submitted himself to a medical examination by the company-

designated doctor a day after his arrival in Manila. In that examination, it was confirmed that he
had Myocardial Infarction and must undergo rehabilitation and continuous medication.
Petitioner then requested for his treatment to be continued in Cebu, his hometown under the
supervision of Inter-Orient's accredited doctors. Evidently, the Medical Report68 issued by Dr.
Donna Delia S. Urlanda (Dr. Urlanda) of YGEIA Medical Clinic declared petitioner's illness as
not work-related. Although petitioner alleged that he did not receive a copy of the said report,
the same was unsubstantiated by evidence. Indeed, he never questioned the findings of Dr.
Urlanda and her recommendation. Thus, at that point, petitioner clearly forfeited his right to
claim any disability benefit.

De Jesus only questioned the company doctor's integrity and the correctness of her
findings when he filed the complaint against respondents before the Arbiter on February 12,
2007, or roughly 10 months after he was examined by the company-designated doctor. While
petitioner allegedly consulted his personal doctors since April 26 2006, the Medical Certificate
issued by Dr. Lim, his own doctor, stating that his illness was work-related, was only issued on
December 5, 2008, or about 30 months after his examination by the company-designated
physician.

This Court's ruling in German Marine Agencies v. National Labor Relations Commission
weighs heavily against petitioner's claim for disability benefits. We have consistently held that
it is the company designated physician who should determine the degree of disability of the
seafarer or his fitness to work, thus:

... In order to claim disability benefits under the Standard Employment

Contract, it is the "company-designated" physician who must proclaim that the
seaman suffered a permanent disability, whether total or partial, due to either
injury or illness, during the term of the latter's employment.... It is a cardinal rule
in the interpretation of contracts that if the terms of a contract are clear and leave
no doubt upon the intention of the contracting parties, the literal meaning of its
stipulation shall control. There is no ambiguity in the wording of the Standard
Employment Contract — the only qualification prescribed for the physician
 entrusted with the task of assessing the seaman's disability is that he be "company-
designated."

The 2000 POEA SEC provides for the company-designated doctor to assess the illness of
the seafarer or his fitness to return to sea duties. In the event the seafarer disagrees with the
assessment of the company-designated physician, he ought to consult his doctor of choice. Here,
instead of consulting his own physician, De Jesus executed a release and quitclaim in favor of
respondents. In executing this document, petitioner thus impliedly admitted the correctness of
the assessment of the company-designated physician, and acknowledged that he could no longer
claim for disability benefits.” (Emphasis supplied)

Note: The failure of the seafarer to establish 1 2 3 4 is evident from these portions of the
decision: (1) “he never questioned the findings of Dr. Urlanda and her recommendation”; (2) “(he)
only questioned the company doctor's integrity and the correctness of her findings when he filed the
complaint against respondents before the Arbiter on February 12, 2007, or roughly 10 months after he was
examined by the company-designated doctor” ; and (3) “the Medical Certificate issued by Dr. Lim, his
own doctor, stating that his illness was work-related, was only issued on December 5, 2008, or about 30
months after his examination by the company-designated physician.” In other words, 1 2 3 4 must be
established with substantial evidence.

3. Chronic Calculus Cholecystitis

Destriza vs Fair Shipping Corp.

G.R. No. 203539, 10 Febuary 2021

Work: Cook
Cause of Medical Repatriation: Gallstones and gall inflammation
Opinion of Company-Designated Physician: Chronic Calculus Cholecystitis
Opinion of Physician of Choice: Same
Opinion of Third Physician: None (undisputed)
Ruling of the Supreme Court: Not compensable

“In the instant case, it is undisputed that Destriza was suffering from Chronic Calculus
Cholecystitis due to development of gallstones. This is a gallbladder inflammation that may
result to gallstones blocking the opening of the gallbladder into the cystic duct or the cystic duct
itself.[75] Since Chronic Calculus Cholecystitis and even contracting of gallstones are not
included in Section 32-A of Memorandum Circular No. 9, Destriza had the burden of
establishing, by substantial evidence, that his illness was work-related or was at least
aggravated by work. In short, he had the burden of showing that he contracted gallstones
because of his work as cook in M/V Cygnus.

In this regard, the Court agrees with the CA that Destriza failed to establish work-
relatedness relative to his illness. The records do not show that the cause of the development of
his gallstones resulting to Chronic Calculus Cholecystitis was his work as cook aboard the
vessel. He merely presented general averments and allegations that the hot temperature and
constant meat or high fat diet aboard the vessel caused or aggravated the development of his
gallstones. The Court stated in Status Maritime Corporation v. Spouses Delalamon:

At the very least, these general statements surmise mere possibilities but not
the probability required by law for disability compensation. Mere possibility will
 not suffice and a claim will still fail if there is only a possibility that the
employment caused or aggravated the disease. Even considering that the
respondents have shown probability, their basis is, nonetheless incompetent for
being uncorroborated. Probability of work-connection must at least be anchored on
credible information and not on self-serving allegations.”

4. Colon Cancer: Not a Seafarer

V People Manpower Phils., Inc. vs Buquid

G.R. No. 222311, 10 February 2021

Work: Deck Crew/Rigger (land-based)

Cause of Medical Repatriation: Stomach pain, mass in colon
Opinion of Company-Designated Physician: Stage 3 Colon Cancer
Opinion of Physician of Choice: Same, permanently unfit for sea duties in any
capacity
Opinion of Third Physician: None
Ruling of the Supreme Court: Not compensable (2 months exposure)

“Considering the definition provided by law and prevailing jurisprudence, Dominador

cannot be considered as a seafarer and is thus, not covered by the provisions of law applicable
to seafarers only.

Article 13(g) of the Labor Code defines a "seaman" as follows:

ART. 13. Definitions. - (a) "Worker" means any member of the labor force, whether
employed or unemployed.

xxxx

(g) "Seaman" means any person employed in a vessel engaged in maritime navigation.

xxxx

It is implied from the above definition that the capability of a vessel to engage
in maritime navigation is crucial in determining whether one can be considered as a "seaman"
(the term used prior to the more gender-neutral "seafarer") under the ambit of our Labor Code.

Part I, Rule II (38) of the 2003 POEA Rules and Regulations Governing the Recruitment
and Employment of Seafarers (2003 POEA Seafarer Rules) defines "seafarer" by expressly
including fishermen, cruise ship personnel and those serving on foreign maritime mobile
offshore and drilling units, to wit:

RULE II
DEFINITION OF TERMS

38. Seafarer - refers to any person who is employed or engaged in any

capacity on board a seagoing ship navigating the foreign seas other than a
 government ship used for military or non-commercial purposes. The definition
shall include fishermen, cruise ship personnel and those serving on foreign
maritime mobile offshore and drilling units. x x x (Underscoring and emphasis
supplied)

While at first glance, the above definition appears to have expanded the definition under
the law, the same is actually not inconsistent with the Labor Code definition. Accordingly, the
definition under the 2003 POEA Seafarer Rules, when read together with Article 13(g) of the
Labor Code, should still mean that the fishermen and cruise ship personnel must be employed
in a vessel engaged in maritime navigation. Otherwise, fishermen employed in river boats or
personnel in cruises meant to traverse inland waters may be considered as "seafarers," which is
obviously divergent from the intent of the law.

More important to note is the inclusion of those employees serving on foreign

maritime mobile offshore and drilling units. While offshore and drilling units are different from
traditional ships, these offshore and drilling units are still within of the term "vessel" used in the
Labor Code. However, pursuant to the law, these vessels must still be engaged in maritime
navigation, which is what the qualifying term "mobile" should be interpreted to mean. Clearly,
the intent was to exclude those employees working in non mobile vessels or fixed structures
from this definition.

The definition in the 2003 POEA Seafarer Rules was reiterated in the 2010 Omnibus Rules
and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as
amended by Republic Act No. 10022 (2010 Omnibus Rules), but the phrase "in the high seas"
was added to qualify the "mobile offshore and drilling units" aforementioned, to wit:

RULE II
DEFINITION OF TERMS

Section 1. Definitions.

xxxx

(ss) Seafarer - refers to any person who is employed or engaged in overseas

employment in any capacity on board a ship other than a government ship used
for military or non-commercial purposes. The definition shall include fishermen,
cruise ship personnel and those serving on mobile offshore and drilling units in the
high seas. x x x (Underscoring supplied)

The above definition further clarifies that the mobile offshore and drilling units must be
located in the "high seas," consistent with the requirement that these mobile offshore and
drilling units must be vessels engaged in maritime navigation.

In the 2016 Revised POEA Rules and Regulations Governing the Recruitment and
Employment of Seafarers (2016 POEA Seafarer Rules), the definition of "seafarer" was
noticeably different from the ones provided in the 2003 POEA Seafarer Rules and 2010 Omnibus
Rules, to wit:

RULE II
DEFINITION OF TERMS
 For purposes of these Rules, the following terms are defined as follows:

xxxx

42. Seafarer - refers to any person who is employed or engaged or works in any
capacity on board a ship. (Underscoring supplied)

Also, the same 2016 POEA Seafarer Rules provided for a definition of what a "ship" is; a
definition evidently absent from the previous 2003 POEA Seafarer Rules and 2010 Omnibus
Rules. Rule II (44) of the 2016 POEA Seafarer Rules reads:

44. Ship - means a ship other than one which navigates exclusively in inland
waters or waters within. or closely adjacent to, sheltered waters or areas where
port regulations apply; (Underscoring supplied)

The new definition under the 2016 POEA Seafarer Rules closely resembles the original
definition found in Article 13(g) of the Labor Code. Fishermen, cruise ship personnel, or mobile
offshore and drilling units were no longer mentioned. What is crucial is that the employee is
employed or engaged or works in any capacity on board a ship engaged in maritime navigation
in accordance with the Labor Code. However, in order to be considered a "ship" for the purpose
of defining a "seafarer," the said "ship" must not navigate exclusively in inland waters or waters
within, or closely adjacent to, sheltered waters or areas where port regulations apply. Again,
this is still consistent with the intent of the law.

It must be emphasized that notwithstanding the evolution of how the POEA defines a
"seafarer," the same should still be read with Article 13(g) of the Labor Code, which contains the
legal definition that may not be expanded or limited by mere administrative rules or
regulations. Indeed, all the definitions mentioned would all point to the fact that in order to be
considered a seaman or seafarer, one would have to be, at the very least, employed in a vessel
engaged in maritime navigation. Thus, it is clear that those employed in non-mobile vessels or
fixed structures, even if the said vessels/structures are located offshore or in the middle of the
sea, cannot be considered as seafarers under the law.

In Agga v. National Labor Relations Commission (Agga), which closely resembles the
circumstances of the instant case on this particular issue, we ruled that employees that have
nothing to do with manning vessels or with sea navigation are land-based workers. The
petitioners in Agga were overseas employees aboard an oil rig and were essentially contending
that they were entitled to the benefits granted by law to both land-based workers and seafarers.
Ruling in the negative, we explained that petitioners therein had nothing to do with manning
vessels or with sea navigation, to wit:

In regard to the sixth issue, the evidence shows that petitioners are land-
based workers and hence, not entitled to benefits appertaining to sea-based
workers. Petitioners have nothing to do with manning vessels or with sea
navigation. Their use of a seaman's book does not detract from the fact that they
are truly land-based employees. Petitioners' plea that we suspend SOS' license for
making them use two (2) passports is off-line. Again, they never prayed for this
relief before the POEA and the NLRC. This Court is the improper venue for the
belated plea. (Underscoring supplied)

As applied in the case, it is evident that Dominador, despite allegedly being a seafarer for
22 years, was not engaged as a seafarer but as a land-based worker in his latest employment
contract with petitioners. Even if we consider the definition under the 2010 POEA Seafarer
Rules, which was the prevailing set of rules during Dominador's employment period with
petitioners, he never presented any evidence that he was aboard any vessel engaged in
maritime navigation, or a mobile offshore rig or drilling unit in the high seas.

Contrary to the allegations of Dominador, "M/V KML Platform" does not exist and has
no basis in the body of evidence presented before us. There is no mention of such a marine
vessel in the employment contract between him and petitioners, nor was there any proof
presented to show that a marine vessel was registered under the said name. The employment
contract simply mentioned that he will be hired as a project employee for the KUMUL Project
and that the work site is located in Papua, New Guinea. To reiterate, aside from Dominador's
bare allegations, there was no mention of any marine vessel or ship that was to be boarded by
him.

In this regard, we take notice of petitioners' allegations that the KUMUL Marine Terminal
Platform is a fixed offshore structure, anchored to the bottom of the seabed. Dominador never
disputed this. In fact, Dominador himself has alleged in his pleadings that the KUMUL Marine
Terminal Platform: "maybe stationary and does not move from to place to place;" and "is
actually a port in the Gulf of Papua New Guinea."57 These allegations bolster the fact that: 1)
Dominador was not aboard any vessel engaged in maritime navigation or mobile offshore or
drilling unit, but a port, which is a fixed structure by nature; and 2) the said port is located in
the Gulf of Papua New Guinea, which only means that it is not located in the high seas.

While we agree with his arguments that the nature of an employee's work is not
dependent on the title or designation as stipulated by the parties, or on the mere allegations of
the parties, the applicable law defines a "seafarer" based not only on the employee's kind of
work, but also on the kind of marine vessel or offshore unit the employee was aboard during
his employment. Stated otherwise, an overseas employee, in order to be considered as a
"seafarer," must not only perform tasks concerning manning marine vessels or marine
navigation, but they must also perform such functions onboard a vessel engaged in maritime
navigation or a mobile offshore rig or drilling unit in the high seas.

Therefore, Dominador was clearly not a seafarer under any of the definitions provided
under law or jurisprudence, during the subject employment period with petitioners, and hence,
is not entitled to any of the benefits reserved for seafarers under the law, such as the permanent
and total disability benefits found in the POEA-SEC.

Since Dominador is not a seafarer, he is not entitled to the permanent and total disability
benefits found in the POEASEC. Even assuming for the sake of argument that Dominador may
be considered as a seafarer, he still failed to prove a reasonable probability that his medical
condition was caused or at least aggravated by his two month stint as deck crew/rigger for the
KUMUL Project.

As extensively discussed earlier, Dominador is a land-based worker and therefore not

under the ambit of the laws and regulations covering seafarers. However, even assuming for
the sake of argument that Dominador is a seafarer, the evidence on record is not enough to
conclude that his medical condition (Stage 3 Colon Cancer) was caused or at least aggravated
during the two months he has worked for petitioners.

Firstly, the medical abstracts of Dr. Peneyra cannot be taken at face value, especially since
the same were issued without personal knowledge of the working conditions experienced by
Dominador during his employment with petitioners, nor was there any showing that the said
medical abstracts were based on medical tests and procedures conducted by Dr. Peneyra on
Dominador. In Coastal Safeway Marine Services Inc. v. Esguerra, we have held that while mere
probability and not ultimate certainty is the litmus test in compensation proceedings, awards of
compensation cannot be based on speculations or presumptions, to wit:

Granted that strict rules of evidence are not applicable in claims for
compensation, and mere probability and not the ultimate degree of certainty is
regarded as the touchstone or test of proof in compensation proceedings, it cannot
be gainsaid that awards of compensation cannot rest in speculations or
presumptions. In the absence of showing of adequate tests and reasonable findings
to support the same, the divergent Impediment Grades assessed by Dr. Vicaldo
and Dr. Saguin cannot be expediently taken at face value. In Magsaysay Maritime
Corporation vs. Velasquez, this Court significantly brushed aside the evidentiary
value of a recommendation made by Dr. Vicaldo which was likewise "based on a
single medical report which outlined the alleged findings and medical history" of
the claimant-seafarer. In Montoya vs. Transmed Manila Corporation, a similar fate
was dealt the same doctor's plain statement of the supposed work-relation/work-
aggravation of a seafarer's ailment which was "not supported by any reason or
proof submitted together with the assessment or in the course of the
arbitration." (Underscoring supplied; citations omitted)

Secondly, Dominador has admitted himself that he was a seafarer for 22 years in a
container vessel, and during those 22 years, he was exposed to various carcinogens as
mentioned in Dr. Peneyra's medical reports. Even assuming for the sake of argument that he
was subjected to similar elements and stressful situations during his employment with
petitioners, we cannot reasonably conclude that his medical condition developed or was
aggravated to such an extent during his relatively short stint as petitioners' employee.

Indeed, the time period of about two (2) months pales in comparison with the 22 years he
previously spent as a seafarer in a container vessel. To stress this point, 22 years is equivalent
264 months, and hence, assuming that Dominador has worked as a seafarer for all those years,
he has only spent roughly 0.0075% (2/266) of his 266-month career (counting his 2-month stint)
working for petitioners.

Lastly, while it can also be admitted that diet is a factor in the development of colon
cancer, it is unreasonable to conclude that two (2) months of alleged bad diet would lead to the
aggravation of Dominador's medical condition, without any evidence of his diet and lifestyle
prior to his employment with petitioners. In this connection, we must also consider that even if
he appeared to be healthy when he passed the PEME and was certified as "fit to work," we take
notice of the fact that cancer, in general, is difficult to detect, especially in its earlier stages. In
fact, records would show that he was initially diagnosed as only having appendicitis when he
complained of stomach pain on March 26, 2012; the colon cancer was only diagnosed later on
after a series of follow-up check-ups and laboratory procedures. Obviously, a mere routine
physical examination is insufficient in discovering Dominador's medical condition. In fine, the
evidence on record is insufficient to prove that Dominador's medical condition is compensable
under the POEA-SEC, which, in any event, is inapplicable to him as he was not a seafarer under
his employment contract with petitioners.

Although we commiserate with Dominador, whose grave medical condition could have
indeed developed throughout the course of his 22-year career as a seafarer, we are constrained
to deny his claim against petitioners for permanent and total benefits under the POEA-SEC, as
 he has failed to prove his entitlement to such under the law. After all, we judge based on the
facts and the law.”

Comments:

1. The long and short of the ruling is that a person covered by the system of
compensation under the POEA-SEC is a Filipino seafarer aboard an ocean-going vessel. Hence,
if he is land-based then he is not a seafarer. On this basis, the protective provisions of the POEA-
SEC on disability compensation do not apply to him.

2. The Chinese say: That which can be accomplished with one need not be accomplished with
so many. Obviously, the Supreme Court did the opposite. It only means that Buquid is a very
important decision for purposes of the Bar examination.

3. In like manner, OFW has a legal meaning, viz., a person engaged in remunerative
activity in a state where he is not a citizen (Sec 3, RA 10022). Hence, an airline cabin crew
leasing an apartment in Hongkong where she resides is an OFW who can file a complaint for
illegal dismissal with the Labor Arbiter. (Lamadrid vs Cathay Pacific Airways Ltd, G.R. No.200658,
23 June 2021, J Hernando).

5. Coronary Heart Disease

Ville vs Maersk-Filipinas Crewing, Inc.

G.R. No. 217879, 1 February 2021

Work: Chief Cook

Cause of Medical Repatriation: Completion of contract
Opinion of Company-Designated Physician: On next PEME, Coronary Heart
Disease, unfit for sea duty.
Opinion of Physician of Choice: None
Opinion of Third Physician: None
Ruling of the Supreme Court: Not compensable

“A "contract between an employer and a seafarer ceases upon its completion, when the
seafarer signs off from the vessel and arrives at the point of hire." Indeed, "the employment of
seafarers and its incidents are governed by the contracts they sign every time they are hired or
re-hired. These contracts have the force of law between the parties as long as their stipulations
are not contrary to law, morals, public order or public policy." Thus, upon Ville's signing off
from the vessel and repatriation on March 1, 2012 due to the completion of his contract, his
employment relationship with the respondents correspondingly ceased. Consequently, no
liability should attach to the respondents for any illness or incident that may have been
acquired or transpire after signing off or expiration of his contract, as in this case.

Even on the assumption that Ville's illness is work-related and that the same was
acquired on-board and during the term of his employment contract, his suit for disability
benefits would still fail due to his non-compliance with the three-day reportorial requirement
upon repatriation.

x x x
 There is no dispute that Ville never reported to his employer that he was suffering from
an ailment while on board Adrian Maersk. Additionally, even upon disembarkation, he did not
inform his employer that he was experiencing any illness or that it was aggravated while on
board the vessel. Significantly, Ville did not submit himself for post-employment medical
examination within three working days after disembarkation. It is settled rule that non-
compliance with the post-employment medical examination requirement is tantamount to a
waiver or forfeiture of any right to claim disability benefits.

Surely, at the time of his disembarkation, he was not incapacitated to inform them of any
health condition that he was experiencing, since he even had the physical and mental capacity
to enter into a new contract as he sought to comply with the PEME requirement of the same.
Similarly, Ville cannot argue that the respondents inadvertently or deliberately prevented him
from undergoing a post-employment medical examination since they were not aware in the first
place that he had an ailment. Besides, it was incumbent upon the seafarer to report to the
employer for a post-employment medical examination within three working days upon
repatriation. Ville's failure to comply to this requirement is fatal to his cause.

Even assuming that Ville acquired an illness while on board, that he informed
respondents, and then underwent a post-employment medical examination within three days
from repatriation, his claim for disability benefits would still fail because he did not secure the
medical opinion of the company-designated physician before consulting his own doctor in
accordance with Section 20 (A) (3) of the 2010 POEA-SEC. His failure to do so bars him from
claiming disability benefits. Without these assessments, his suit for disability benefits was filed
prematurely.

Notably, Ville filed a Complaint 63 on May 3, 2012 even before he consulted his own
physician. In fact, Dr. Tucay issued the certification that Ville had a heart ailment only on
August 28, 2012, or almost four months after he filed the Complaint and almost six months after
he disembarked from the vessel. Aside from the fact that Ville did not detail the causal
relationship of his ailment with his perceived disability or how his work aggravated his
condition, Dr. Tucay also did not clarify how his work at sea contributed to his (Ville's) heart
ailment.

Assuming again that Ville was suffering from an ailment but which was not
appropriately assessed, "[a] number of things could have happened in a span of x x x months.
Petitioner did not allege that he maintained his medications or followed a diet in order to
prevent recurrence or aggravation of his hypertension and coronary artery disease." 64 In the
same way, Dr. Tucay's belated confirmation of Ville's heart disease unfortunately worked
against his claim.

To reiterate, Ville was repatriated not because of any medical issue but due to the
completion of his contract. He did not comply with the post-employment medical examination
three-day reportorial requirement. He also prematurely filed his claim for disability benefits
without any medical opinion from the company-designated physician or his personal doctor.
On this score, he clearly did not follow the mandatory requirements of Section 20 (A) (3) of the
2010 POEA-SEC, even if We were to assume that he suffered an ailment on board Adrian
Maersk.

x x x

Finally, while the provisions in the 2010 POEA-SEC should be liberally construed in
favor of the seafarers, doing so should not unduly burden or force the employers to grant
 disability compensation when it is clearly not warranted, as in this case. Ville completed
his Adrian Maersk contract without ever reporting any medical illness while on board, even
when it was his responsibility to monitor his own health so that the respondents can act
accordingly by medically repatriating him and giving him financial and medical aid.”

6. Major Depression with Psychotic Features: No Clear Nexus

Darroca vs Century Maritime Agencies. Inc.

G.R. No. 234392, 10 November 2021

Work: Able Seaman

Cause of Medical Repatriation: Diagnosed in the US with Major Depression and
Psychomotor Retardation
Opinion of Company-Designated Physician: Not-work related or work-aggravated
since there no elicited conflicts in his
association with his work
environment.
Opinion of Physician of Choice: Major Depression with Psychotic Features; to
undergo continuous psychological and
psychiatric intervention.
Opinion of Third Physician: None
Ruling of the Supreme Court: Not compensable

Theory of Aggravation

The Supreme Court clarifies:

“The legal presumption of work-relatedness must still be read together with the
requirements of compensability under Section 32-A of the 2010 POEA SEC, which provides:

For an occupational disease and the resulting disability or death to be compensable, all of
the following conditions must be satisfied:

1. The seafarer's work must involve the risks described herein;

2. The disease was contracted as a result of the seafarer's exposure to the
described risks;
3. The disease was contracted within a period of exposure and under such other
factors necessary to contract it;
4. There was no notorious negligence on the part of the seafarer.

Thus, for both listed occupational diseases under Section 32 and non-listed illnesses, the
seafarer must sufficiently show by substantial evidence compliance with the conditions for
compensability.

In the case at bar, Darroca failed to sufficiently establish that his illness is work-related
and compensable. It is undisputed that before repatriation, he was diagnosed to be suffering
from major depression and psychomotor retardation. Upon consultation with his physician of
choice back in the Philippines, Darroca was also diagnosed to be suffering from major
 depression with psychotic features. To prove his illness as work-related, it is necessary for
evidence to show his actual duties, the nature of his illness, and other factors that may lead to
the conclusion that his work conditions brought about, or at the very least, increased the risk of
contracting his complained illness. However, aside from his bare statement that he worked as
an able seaman on board MT "Dynasty," records are bereft of any showing what his specific
duties were. Moreover, his general assertion of experiencing "dizziness when he smells the
fumes of chemicals he was working on"[85] is insufficient to conclude that his work brought
about or increased the risk of his depression. Notably, even the medical evaluation by his own
doctor did not mention anything about his duties as a seafarer, or the risks involved thereto.”

Magic Phrases

(a) requirements of compensability

(b) both listed occupational diseases under Section 32 and non-listed illnesses
(c) physician of choice
(d) increased the risk of contracting
(e) general assertion

Magic Sentences

(a) The seafarer’s work must involve the risks described therein.
(b) The disease was contracted as a result of the seafarer’s exposure to the described
risks.
(c) The disease was contracted within the period of exposure and under such other
factors necessary to contract it.
(d) There was no notorious negligence on the part of the seafarer.

Sample Argument

A’s general assertion of work-connection will not suffice. Both listed occupational
diseases under Section 32 and non-listed illnesses are subject to the following
conditions:

1. The seafarer's work must involve the risks described in the POEA-SEC;
2. The disease was contracted as a result of the seafarer's exposure to the
described risks;
3. The disease was contracted within a period of exposure and under such
other factors necessary to contract it;
4. There was no notorious negligence on the part of the seafarer.

The mere opinion of A’s physician of choice does not satisfy the foregoing
requirements of compensability since it fails to support a finding that his working
conditions have increased his risk of contracting Major Depression with Psychotic
Features.

Note:

1. The use of magic phrases and sentences is likely to create the impression that the
examinee is well-versed in the law and that he deserves a passing score. Really, the terms and
sentences used form part of the language of crew claims law. When reading, therefore, one uses
his highlighter to mark terms, phrases and sentences that the examiner expects to see in his
answer.

2. Use of the phrase “have contributed even to a small degree” or “have contributed even in
a small measure”:

Jebsens Maritime, Inc., et al. vs. Eleno Babol

G.R. No.204076; Third Division; December 4, 2013
Justice Jose Catral Mendoza

“Compensability may also be established on the basis of the theory of work aggravation
if by substantial evidence, it can be demonstrated that the working conditions aggravated or at
least contributed in the advancement of the illness.

The argument of the seaman is that high risk dietary foods, to which his meals were
limited, on-board the vessel increased the possibility that the disease was aggravated by his
working conditions. The Court did not agree to this allegation as it was not substantiated by
evidence. Although the Court has recognized as sufficient that work conditions are proven to
have contributed even to a small degree, such must, however, be reasonable, and anchored on
credible information. The seaman must, therefore, prove a fact other than by his mere
allegations.

The Court refused to take judicial notice of seaman’s argument that it is common
knowledge that the food or seafarers are limited to what is served them which consists of salt-
cured food, frozen and processed meat and preserved food. This is in light of the changing
global landscape affecting international maritime labor practices. The Court notes the
acceptance of the minimum standards governing food and catering on board ocean-going
vessels as provided in the 2006 Maritime Labor Convention of which the Philippines and the
flag country of the vessel are signatories.

Although not yet fully implemented, the 2006 MLC merely underscores that food on
board an ocean-going vessel may not necessarily be limited as alleged by the seaman. In this
respect, the company submitted documents showing that fresh and varied provisions were
provided on board. As such, the seaman cannot claim on the basis of the principle of work-
aggravation.”

120-240 Day Rule, Justifiable Extension

Rodriguez vs Philippine Transmarine Carriers

G.R. No. 218311, 11 October 2021

Work: Ordinary Seaman

Cause of Medical Repatriation: Hepatomegaly, L5 Spondylosis with Lumbar
Spondylosis
Opinion of Company-Designated Physician: Antral Gastritis, H Pylori Infection,
Non-specific Hepatic Nodule, L2-S1
Disc Protrusion and incidental
finding of Specific Colitis
Cholecystitis - Grade 8 Disability
 Opinion of Physician of Choice: Multiple Disc Protrusion – Grade 1 Disability
Opinion of Third Physician: None
Ruling of the Supreme Court: Disease is Osteoarthritis, a listed disease, but
Rodriguez is not entitled to total permanent
disability compensation (infra).

6 October 2008

“Prior to October 6, 2008, the prevailing rule then, as enunciated in Crystal Shipping, Inc. v.
Natividad (Crystal Shipping), was that "permanent and total disability consists mainly in the
inability of the seafarer to perform his customary work for more than 120 days." [48] However, on
October 6, 2008, Vergara v. Hammonia Maritime Services, Inc. (Vergara) was promulgated which
modified the ruling in Crystal Shipping such that the doctrine laid down in the latter cannot be
simply applied as a general rule for all cases in all contexts.

In Vergara, We harmonized the abovementioned provisions of the POEA-SEC, Article

192(c)(1) of the Labor Code, and Rule X, Section 2 of the IRR. In said case, We pronounced:

As these provisions operate, the seafarer, upon sign-off from his vessel, must
report to the company-designated physician within three (3) days from arrival for
diagnosis and treatment. For the duration of the treatment but in no case to exceed 120
days, the seaman is on temporary total disability as he is totally unable to work. He
receives his basic wage during this period until he is declared fit to work or his
temporary disability is acknowledged by the company to be permanent, either partially
or totally, as his condition is defined under the POEA Standard Employment Contract
and by applicable Philippine laws. If the 120 days initial period is exceeded and no
such declaration is made because the seafarer requires further medical attention,
then the temporary total disability period may be extended up to a maximum of 240
days, subject to the right of the employer to declare within this period that a
permanent partial or total disability already exists. The seaman may of course also be
declared fit to work at any time if such declaration is justified by his medical condition.
[51]
(Emphasis and underscoring supplied)

Thus, We clarified that "even though the 120-day period for medical evaluation was
exceeded, the seafarers may not automatically claim permanent and total disability because it
was possible to extend the evaluation or treatment period until 240 days."

In Kestrel Shipping Co., Inc. v. Munar, We pointed out that:

This Court's pronouncement in Vergara presented a restraint against the

indiscriminate reliance on Crystal Shipping such that a seafarer is immediately
catapulted into filing a complaint for total and permanent disability benefits after the
expiration of 120 days from the time he signed-off from the vessel to which he was
assigned. Particularly, a seafarer's inability to work and the failure of the company-
designated physician to determine fitness or unfitness to work despite the lapse of
120 days will not automatically bring about a shift in the seafarer's state from total
and temporary to total and permanent, considering that the condition of total and
temporary disability may be extended up to a maximum of 240 days. (Emphasis supplied)

Therefore, the prevailing rule is that, "if the complaint for maritime disability
compensation was filed prior to October 6, 2008, the 120-day rule enunciated in Crystal
Shipping applies. However, if such complaint was filed from October 6, 2008 onwards [such as
 the instant case wherein the Complaint was filed by Rodriguez on February 25, 2013,] the 240-
day rule...as clarified in the case of Vergara applies."

Note: In Rodriguez, the disease was identified by the Supreme Court as Osteoarthritis
which is listed under Sec. 32-A.

Possible Questions:

1. Is Rodriguez entitled to disability compensation? If so how much?

Answer

Yes. In assessing Rodriguez’s disability at Grade 8, the company admitted that

his disease was work-connected because only work-connected diseases are assigned
grades under Sec. 32-A of the POEA-SEC. Moreover, in offering him the
commensurate compensation, it also admitted that his disability was compensable.
Hence, he is entitled to the corresponding compensation for his partial and permanent
disability.

Note: What was disallowed by the Supreme Court was the claim for maximum
disability compensation based on total and permanent disability.

2. Under what conditions can Rodriguez not claim disability compensation?

Answer

Barring the company’s admissions, Rodriguez cannot claim disability

compensation although his disease may be listed if he fails to establish the conditions
of compensability, viz.:

1. his work involves the risks factors of osteoarthritis;

2. his disease was contracted as a result of his exposure to the described
risks;
3. he contracted the disease within a period of exposure and under such
other factors necessary to contract it;
4. There was no notorious negligence on his part.

3. Under what conditions would Rodriguez not be required to avail of the Third
Physician remedy?

Answer

Rodriguez would not be required to avail of the Third Physician remedy under
any of the following conditions:

a. the company-designated physician certified that his disease was not work-
connected;
b. the company-designated physician failed to issue an assessment within
120/240 days;
 c. the company-designated physician issued an assessment within 240 days but
he did not declare the extension of the 120 days before it expired, or the extension was
not justifiable;
d. the company-designated physician issued a timely assessment but it was not
final, categorical and definitive;
e. the company-designated physician issued a timely assessment which was final,
categorical and definitive but he failed to communicate it to Rodriguez.

4. Suppose Rodriguez disclosed his personal doctor’s Grade 1 assessment

resulting in the selection of a third physician who affirmed the Grade 8 assessment of
the company-designated physician, on what grounds can the labor tribunal still rule in
his favor?

Answer

Granting Rodriguez’s medical evidence is more reliable than that of the

company’s, the labor tribunal may still rule in his favor by disregarding the third
medical opinion on any of the following grounds:

(a) evident partiality, as when the third physician was actuated by bias for the
company;
(b) corruption, as when the third physician was paid by the company to affirm
its medical evidence;
(c) lack of basis, as when the third opinion is not supported with necessary
medical test results and it was reached after just a single consultation;
(d) contrary to law and jurisprudence, as when the third opinion is interim.

4. Is the labor tribunal justified in disregarding the third medical opinion on the
ground that it was issued within 240 days from referral but the extension was not
declared before the lapse of 120 days and it was not on justifiable grounds?

Answer

No. The 120/240-Day Rule does not apply to the third physician (Dohle Philman
Manning Agency, Inc., et al. vs Doble, G.R. No. 223730, 4 October 2017).

Cause of Action; Prematurity of Complaint

Mabalot vs Maersk-Filipinas Crewing, Inc.

G.R. No. 224344, 23 September 2021

“The entitlement of a seafarer on overseas employment to disability benefits is governed

by law, the parties' contracts, and the medical findings of the company-designated physician, the
seafarer's physician of choice and the opinion of the third doctor.

Since Mabalot's contract of employment with respondents was executed in 2011, the 2010
Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC)
governs the procedure for his claim of disability benefits. The POEA-SEC provides for the period
when the company-designated physician must issue a final medical assessment. Section 20(A) of
the POEA-SEC reads:

SECTION 20. COMPENSATION AND BENEFITS

A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS.

The liabilities of the employer when the seafarer suffers work-related injury
or illness during the term of his contract are as follows:
x x x

2. x x x However, if after repatriation, the seafarer still requires medical

attention arising from said injury or illness, he shall be so provided at cost to the
employer until such time he is declared fit or the degree of his disability has been
established by the company designated physician.

3. In addition to the above obligation of the employer to provide medical

attention, the seafarer shall also receive sickness allowance from his employer in an
amount equivalent to his basic wage computed from the time he signed off until he
is declared fit to work or the degree of disability has been assessed by the
company-designated physician. The period within which the seafarer shall be
entitled to his sickness allowance shall not exceed 120 days. Payment of the
sickness allowance shall be made on a regular basis, but not less than once a
month.
x x x

For this purpose, the seafarer shall submit himself to a post-employment

medical examination by a company-designated physician within three working
days upon his return except when he is physically incapacitated to do so, in which
case, a written notice to the agency within the same period is deemed as
compliance. In the course of the treatment, the seafarer shall also report regularly
to the company-designated physician specifically on the dates as prescribed by the
company-designated physician and agreed to by the seafarer. Failure of the
seafarer to comply with the mandatory reporting requirement shall result in his
forfeiture of the right to claim the above benefits.

If a doctor appointed by the seafarer disagrees with the assessment, a third

doctor may be agreed jointly between the Employer and the seafarer. The third
doctor's decision shall be final and binding on both parties.

In Jebsens Maritime, Inc. v. Mirasol, the Court summarized the rules governing the
seafarer's claim for disability benefits, as follows:

1. The company-designated physician must issue a final medical assessment

on the seafarer's disability grading within a period of 120 days from the time the
seafarer reported to him;

2. If the company-designated physician, fails to give his assessment within

the period of 120 days, without any justifiable reason, then the seafarer's disability
becomes permanent and total;

3. If the company-designated physician fails to give his assessment within

the period of 120 days with a sufficient justification (e.g., seafarer required further
medical treatment or seafarer was uncooperative), then the period of diagnosis and
 treatment shall be extended to 240 days. The employer has the burden to prove
that the company-designated physician has sufficient justification to extend the
period; and

4. If the company-designated physician still fails to give his assessment

within the extended period of 240 days, then the seafarer's disability becomes
permanent and total, regardless of any justification.

In Scanmar Maritime Services, Inc. v. Hernandez, Jr., the Court went further in enumerating
the instances when the seafarer may already pursue a case for full disability benefits, viz.:

(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.

A final, conclusive, and definite medical assessment must clearly state the seafarer's
fitness to work or his exact disability rating, or whether such illness is work-related, and
without any further condition or treatment. It should no longer require any further action on
the part of the company- designated physician and it is issued by the company-designated
physician after he or she has exhausted all possible treatment options within the periods
allowed by law.

To stress, the assessment to be conclusive must be complete and definite; otherwise, the
 medical report shall be set aside and the disability grading contained therein shall be ignored.
As case law holds, a final and definite disability assessment is necessary in order to truly reflect
the true extent of the sickness or injuries of the seafarer and his or her capacity to resume work
as such.

The law steps in and considers the seafarer's disability as total and permanent when the
company-designated physician fails 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.

Based on the foregoing, the Court finds that the CA did not err in ruling that the NLRC
committed grave abuse of discretion in awarding Mabalot permanent total disability benefits.

Records disclose that the Grade 11 disability rating given by Dr. Alegre on February 2,
2012, or 110 days from Mabalot's repatriation, was merely an interim diagnosis. The Medical
Report clearly states so, thus, it cannot be considered as a definite and final assessment. This is
supported by the fact that Dr. Alegre still advised Mabalot to continue with his physical
therapy, seek consultation with a Rehabilitation Medicine Specialist and report back on
February 10, 2012 for a follow-up check-up.

The failure of Dr. Alegre to issue a complete and definite medical assessment within the
120-day period did not automatically render Mabalot's disability as total and permanent. To
reiterate, the February 2, 2012 Medical Report stated that Mabalot needed to continue physical
therapy and seek consultation with a Rehabilitation Medicine Specialist. Thus, Mabalot
remained in need of medical attention, a sufficient justification for the extension of the 120-day
period to the maximum period of 240 days in order for the company-designated physician to
make a complete assessment of his injury and recommend the appropriate disability rating, if
any.”

Note: “The entitlement of a seafarer on overseas employment to disability benefits is

governed by law, the parties' contracts, and the medical findings of the company-
designated physician, the seafarer's physician of choice and the opinion of the third
doctor.”

Law refers to Arts. 197-198 of the Labor Code under which the 120/240 rule is found;
contracts are the POEA-SEC and applicable CBA; and medical findings refer to the parties’
medical evidence. The issue of whether disability is determined on the basis of number of days
of inability to work or disability grading is resolved this way: Disability must be graded by the
company-designated physician within 120/240 days, subject to the right of the seafarer to seek a
second medical opinion. In the event of conflicting medical opinions, law requires resolution of
the conflict by a third physician.

Third Physician Rule

Idul vs Alster Int’l Shipping Services, Inc

G.R. No. 209907, 23 June 2021

“In this case, the medical reports issued by Dr. Lim and Dr. Chuasuan reveal that Idul
was examined, treated, and rehabilitated for about seven (7) months. Thereafter, Dr. Chuasuan's
assessment of Idul's disability grading was issued on July 6, 2009 or on the 207th day from
 December 11, 2008, and therefore, well within the 240-day period. Clearly, Idul's condition did
not become a permanent total disability just by the mere lapse of the 120-day period, especially
since the extension was necessary for his rehabilitation.

As to the conflicting findings of Dr. Chuasuan on one hand and Dr. Garduce on the other,
the medical findings of Dr. Chuasuan must prevail. Under Section 20 (A) (3) of the 2010 POEA-
SEC, if a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be
agreed jointly between the employer and the seafarer, whose decision shall be final and binding
on both parties.

At this point, it bears stressing that the employee seeking disability benefits carries the
responsibility to secure the opinion of a third doctor.41 In fact, the employee must actively or
expressly request for it. The referral to a third doctor has been recognized by this Court to be a
mandatory procedure. Failure to comply therewith is considered a breach of the POEA-SEC,
and renders the assessment by the company-designated physician binding on the parties.

Considering the foregoing circumstances, Dr. Chuasuan's assessment of a Grade 10

disability, which was a result of months of consultations, examinations, and treatments,
prevails. It certainly bears more weight than the findings of Dr. Garduce who only examined
Idul once and based his medical assessment on the latter's previous medical history.”

Note: The sequence of events should be noted:

1. The Dumadag Sequence

1. The company-designated physician issued his assessment.

2. The physician of choice issued his contrary assessment.
3. Dumadag filed his complaint.
Note: No third physician because the second opinion was not disclosed.

Ruling: Non-disclosure of the second medical opinion before the filing of the
complaint deprived the employer of the opportunity to initiate the selection of a third
physician. Consequently, the second opinion was disregarded. Justice Brion made selection
mandatory despite the use of the term “may” in Sec. 20-A of the POEA-SEC. (Philippine
Hammonia Ship agency vs Eulogio Dumadag, G.R. No. 194362, 26 June 2013).

2. The Cabanban Sequence

1. The company-designated physician issued his assessment.

2. Cabanban filed his complaint.
3. Cabanban ‘s physician of choice issued his contrary assessment.
Note: No third physician.

Ruling: Lack of cause of action because, at the time of the filing of the complaint, the
seafarer had no medical basis yet. (Philman Marine Agency, Inc. vs Armando Cabanban, G.R.
No. 186509, 29 July 2013). The Cabanban Sequence is the same as the San Juan Sequence, infra.

3. The Idul Sequence

 1. Physician of Choice: 16 March 2009 (Total and Permanent)
2. Company-designated Physician: Grade 10
3. Complaint: Filed on 3 June 2009
Note: No third physician.

Ruling:

“The company-designated physician issued medical reports dated February 2,

2009,8 March 9, 2009,9 March 30, 2009,10 June 15, 2009,11 and July 6, 2009. In the medical
report dated July 6, 2009, Dr. Chuasuan gave Idul a Grade 10 disability rating due to
"immobility of ankle joint in abnormal position."

Prior to this, or on March 16, 2009, Idul sought the opinion of his own doctor of choice,
Dr. Venancio P. Garduce Jr. (Dr. Garduce). After a single consultation, Dr. Garduce assessed
Idul to be totally and permanently disabled. Thereafter, Alster Shipping offered to pay Idul the
amount of $10,750.00 as disability benefit in accordance with the Philippine Overseas
Employment Administration Standard Employment Contract (POEA SEC). However, Idul
rejected the offer and insisted that he was entitled to full disability benefits.

On June 3, 2009, Idul filed a complaint for total and permanent disability benefits with
damages before the Department of Labor and Employment (DOLE). During the preliminary
mandatory conference, the parties failed to reach a settlement. In Idul's Position Paper, he
claimed that he was entitled to full disability benefits since the injury he suffered rendered him
incapable of performing his grueling duties as a bosun.”

3-Day Reportorial Requirement

Ville vs Maersk-Filipinas Crewing, Inc.

G.R. No. 217879, 1 February 2021

“There is no dispute that Ville never reported to his employer that he was suffering from
an ailment while on board Adrian Maersk. Additionally, even upon disembarkation, he did not
inform his employer that he was experiencing any illness or that it was aggravated while on
board the vessel. Significantly, Ville did not submit himself for post-employment medical
examination within three working days after disembarkation. It is settled rule that non-
compliance with the post-employment medical examination requirement is tantamount to a
waiver or forfeiture of any right to claim disability benefits.

Surely, at the time of his disembarkation, he was not incapacitated to inform them of any
health condition that he was experiencing, since he even had the physical and mental capacity
to enter into a new contract as he sought to comply with the PEME requirement of the same.
Similarly, Ville cannot argue that the respondents inadvertently or deliberately prevented him
from undergoing a post-employment medical examination since they were not aware in the first
place that he had an ailment. Besides, it was incumbent upon the seafarer to report to the
employer for a post-employment medical examination within three working days upon
repatriation. Ville's failure to comply to this requirement is fatal to his cause.

Even assuming that Ville acquired an illness while on board, that he informed
respondents, and then underwent a post-employment medical examination within three days
from repatriation, his claim for disability benefits would still fail because he did not secure the
 medical opinion of the company-designated physician before consulting his own doctor in
accordance with Section 20 (A) (3) of the 2010 POEA-SEC. His failure to do so bars him from
claiming disability benefits. Without these assessments, his suit for disability benefits was filed
prematurely.

Notably, Ville filed a Complaint 63 on May 3, 2012 even before he consulted his own
physician. In fact, Dr. Tucay issued the certification that Ville had a heart ailment only on
August 28, 2012, or almost four months after he filed the Complaint and almost six months after
he disembarked from the vessel. Aside from the fact that Ville did not detail the causal
relationship of his ailment with his perceived disability or how his work aggravated his
condition, Dr. Tucay also did not clarify how his work at sea contributed to bis (Ville's) heart
ailment.

Assuming again that Ville was suffering from an ailment but which was not
appropriately assessed, "[a] number of things could have happened in a span of x x x months.
Petitioner did not allege that he maintained his medications or followed a diet in order to
prevent recurrence or aggravation of his hypertension and coronary artery disease." In the same
way, Dr. Tucay's belated confirmation of Ville's heart disease unfortunately worked against his
claim.

To reiterate, Ville was repatriated not because of any medical issue but due to the
completion of his contract. He did not comply with the post-employment medical examination
three-day reportorial requirement. He also prematurely filed his claim for disability benefits
without any medical opinion from the company-designated physician or his personal doctor.
On this score, he clearly did not follow the mandatory requirements of Section 20 (A) (3) of the
2010 POEA-SEC, even if We were to assume that he suffered an ailment on board Adrian
Maersk.”

Exceptions:

The requirement to report within three working days from repatriation appears to be
indispensable in character. However, there are some established exceptions to this rule, viz.:

(1) when the seafarer is incapacitated to report to the employer upon his
repatriation; and

(2) when the employer inadvertently or deliberately refused to submit the seafarer
to a post-employment medical examination by a company-designated physician. (Zonio,
Jr. v. 88 Aces Maritime Services, Inc., cited in Ville).

Lack of Cause of Action

Philippine Transmarine Carriers, Inc. vs San Juan

G.R. No. 207511, 5 October 2020

“It is significant to note that when San Juan filed the instant complaint on May 26, 2010,
he was under the belief that he is totally and permanently disabled from rendering work as he
was unable to resume work since his repatriation on February 1, 2010. Notably, the complaint
was also prematurely filed since at that time, San Juan was not yet armed with a medical
certificate from his physician of choice. It was only after the filing of the complaint, or on July 8,
2010, that San Juan sought the opinion of Dr. Pascual, his own physician. It is on the basis of
finding of his physician i.e., that he is "medically unfit to work in any capacity as
seaman,"[48] that San Juan is claiming for permanent total disability benefits.
 The issue thus brought to fore is whether the contrary findings of San Juan's own
physician should be upheld over the fit-to-work certifications issued by PTCI's company-
designated physicians.

Settled is the rule that when a seafarer sustains a work-related illness or injury while on
board the vessel, his fitness or unfitness for work shall be determined by the company-
designated physician, and that "in case of conflicting medical assessments [between the
company-designated physician and the seafarer's own physician], referral to a third doctor
is mandatory; and that in the absence of a third doctor's opinion, it is the medical assessment of
the company-designated physician that should prevail." Relevant to this rule is Section 20(B)(3)
of the 2000 POEA-SEC, which similarly states that "[i]f a doctor appointed by the seafarer
disagrees with the assessment [of the company-designated physician], a third doctor may be
agreed jointly between the Employer and the seafarer. The third doctor's decision shall be final
and binding on both parties."

C
EMPLOYMENT TERMINATION LAW

Preliminaries

These are guideposts in employment termination law:

1. The burden of one to prove the validity of the dismissal complained of by another
requires prior discharge by the complainant of the fact of his dismissal.

2. The complainant’s burden is discharged with proof of the following:

(a) employer-employee relationship, unless admitted;
(b) complete severance of employment tie; and
(c) overt act of dismissal.

Note: There are cases below on employer-employee relationship, complete severance of

employment tie, overt/non-overt acts, and floating status.

3. There is a case on Art. 295 of the Labor Code. This provision is not an employer-
employee relationship test. In fact, it already presumes employment tie. Its function is to
determine when employment is regular for purposes of Art. 294, i.e., regular employees can only
be dismissed for just or authorized causes. Hence, they cannot be validly dismissed on the
ground of inefficiency, expiration of contract or completion of project because these are not listed
causes.

4. Dismissal is of two types, viz., direct dismissal which is upon the instance of the
employer, and constructive dismissal which is upon the initiative of the employee who self-
terminates because continued employment has become impossible already. There are also cases
on these types of dismissal.
 5. Constructive dismissal is a disguised dismissal. It is contradicted by abandonment,
resignation and retirement. There are also cases on self-dissociation.

6. A valid dismissal is one for a just or authorized cause. Compliance with prescribed
pre-termination procedure, or due process, has nothing to do with the validity of a dismissal.
The legal consequence of an employer’s violation of procedural due process is assessment of
nominal damages. There are also cases on nominal damages.

7. A just cause is a listed cause for dismissal which is fault-based (Art. 297). Of the
decisions of Justice Hernando, there are several on loss of trust and confidence and serious
misconduct. On the other hand, there are two cases on authorized cause, viz., redundancy (Art.
298) and disease (Art. 299).

8. The logical consequences of a finding of illegal dismissal are reinstatement and

backwages. There are cases on these reliefs as well, including separation pay in lieu of
reinstatement.

9. In addition to the cases on the foregoing topics, there are cases on labor procedure
and two cases on illegal recruitment. More specifically, there are decisions on labor jurisdiction,
conferment of jurisdiction, acquisition of jurisdiction, exercise of jurisdiction, burden of proof,
and appeals.

Note: In order to prevent unnecessary review of retired notes, some of the decisions of
Justice Hernando are quoted extensively. But those who do not have the patience to go over them
now can go straight to the summaries or comments at the end of the rulings. The long notes
can always be revisited when convenient. At any rate, the very important portions are
underscored. They should be marked with a highlighter to make quick scans before the exam
quicker. Some decisions are repeatedly used to showcase aspects of Labor Law, e.g., X Case is
used thrice to separately highlight employer-employee relationship, due process and
jurisdiction which happen to be the important aspects of the case that any examiner might find
worth asking.

This part is directional; hence, it is tutorial in style.

1
Employer-Employee Relationship

As a question of fact, employer-employee relationship is evidentiary in character. Law

provides its cognitive significance, i.e., legal meaning, and evidence indicates its factual existence
in the affair between two parties. Thus, the following evidentiary matters require attention:

Employment contract, Company ID, Payroll,

Wage, Iteneraries, Deductions, BIR Record.

Gerome B. Ginta-ason vs J.T.A. Packaging Corporation

G.R. N. 244206, 16 March 2022
Employment Contract

“To begin with, We stress that from the lowest tribunal up to this Court, JTA has
consistently denied having employed petitioner. It maintained that petitioner is a stranger and
was never an employee of JTA. Considering such denial, it was incumbent upon petitioner to
prove the fact of his employment with JTA. However, nothing to this effect has been proven by
petitioner. He presented no document setting forth the terms of his employment. In particular,
no contract of employment or written agreement was introduced by petitioner to establish the
true nature of his relationship with JTA. Evident also is the lack of a company identification
card to prove petitioner's employment with JTA. The Court has held that in a business
establishment, an identification card is usually provided not only as a security measure but
mainly to identify the holder thereof as a bona fide employee of the firm that issues it.”

Wages

“To prove the element of payment of wages, petitioner submitted pay slips allegedly
issued by JTA. Significantly, the pay slips presented by petitioner bore no indication
whatsoever as to their source. Absent any clear indication that the amount petitioner was
allegedly receiving came from JTA, We cannot concretely establish payment of wages.
In Valencia v. Classique Vinyl Products Corporation, the Court rejected the pay slips submitted by
the petitioner employee because they did not bear the name of the respondent company. Thus,
We cannot sustain petitioner's argument that the failure to indicate who issued the pay slips
should not be taken against him. Moreover, a perusal of the pay slips submitted by petitioner
would show that he had been receiving compensation as early as February 2014. This clearly
belies petitioner's allegation in his complaint that he was hired by JTA only on December 26,
2014. To Our minds, the wide gap between February 2014 and December 2014 cannot be
dismissed as a trivial inconsistency.”

Dedeductions

“Additionally, there were no deductions from petitioner's supposed salary such as

withholding tax, SSS, Philhealth or Pag-Ibig Fund contributions which are the usual deductions
from employees' salaries. Thus, the alleged pay slips may not be treated as competent evidence
of petitioner's claim that he is JTA's employee. In contrast, the voluminous documentary
evidence adduced by JTA, i.e., alpha list of employees submitted to the BIR for the period of
2014, 2015 and 2016, the years during which petitioner claims to have been been employed by
JTA, the payroll monthly reports as well as the remittances made by JTA of its employees'
monthly contributions to the SSS, Philhealth[43] and Pag-Ibig Fund, which were duly signed by
JTA's authorized representative and stamp received by the concerned government agencies,
indubitably show that petitioner was not among its employees. To reiterate, not even a single
document showed petitioner's name on it.”

Iteneraries

“As to the power of control, petitioner insists that the copies of driver's itinerary issued
by JTA clearly manifest that it exercised control over the means and methods by which
petitioner performed his tasks.

While it is true that the purported driver's itineraries presented by petitioner prescribed
the manner by which his work as a driver is to be carried out, the NLRC pertinently observed
that the said driver's itineraries were not signed by JTA's authorized personnel. In other words,
the said driver's itineraries failed to give details on who specifically dispatched petitioner.
 Moreover, the company name appearing thereon is "J.T.A. Packaging" while the name of
respondent company in its certificate of incorporation is "J.T.A. Packaging Corporation". Too,
the address appearing on the driver's itineraries is different from the actual office address of
respondent JTA as reflected in petitioner's own complaint before the LA.[47] To our minds, the
determination of the identity of the authorized personnel of JTA who actually dispatched
petitioner gains more importance in light of the unexplained discrepancies in the company
name and address appearing on the driver's itineraries. Absent this, it cannot be ascertained
who actually exercised control over petitioner. Thus, We find that the herein driver's itineraries
did not adequately establish the element of control.”

Note: The driver is a delivery driver, not a jeepney driver. If initially hired as a jeepney
driver under a boundary system but because of the phaseout of jeepneys, the owner uses the
jeepney for delivering goods under the foregoing circumstances, i.e., no written employment
contract, no ID, no payslips, no mandatory deductions – but the driver is instructed where to
drive and told how to do his job – the task is to find out if there is novation in the premises. If
none, the employment tie will survive (Villarama vs CA, G.R. No. 165881, 19 April 2006).

Summary:

1. Where employment tie is denied by the respondent, it becomes the burden of the
complainant to establish it with substantial evidence.

2. The following can be presented to prove employer-employee relationship:

(a) Employment contract;

(b) Payslips showing who paid the salary;
(c) Deduction of SSS, Philhealth and Pag-Ibig contributions;
(d) Withholding of tax on salary;
(e) Evidence of pervasive control over means and methods.

ID, COE, Payslips, Time Keepers’ Reports

Pedrito R. Parayday vs Shogun Shipping Co., Inc.

G.R. No. 204555, 6 July 2020

“In proving their employment relationship with Shogun Ships, petitioners presented the
following documentary evidence: (1) photocopy of Parayday's Oceanview ID; (2) photocopy
of Parayday's COE dated February 5, 2001 issued by "Oceanview Shipbuilding Co., Inc."; and
(3) photocopy of handwritten payslips or Time Keeper's Reports.

Significantly, Parayday's Oceanview ID and COE provides no evidentiary value that

petitioners were indeed employees of Shogun Ships. A perusal thereof clearly shows that the
same was issued by Oceanview, and not Shogun Ships. The documents presented do not even
make reference to Shogun Ships. As Shogun Ships has a distinct juridical personality from
Oceanview, as discussed above, the Court is not inclined to conclude that said documents came
from, or were issued by Shogun Ships. Save for herein petitioner Reboso, the ID and COE, at
best, only demonstrate the employment relationship of petitioner Parayday with Oceanview,
which, significantly, ceased in February 2001.

The CA did not also consider the Time Keeper's Reports as one of such proofs that
petitioners were employees of Shogun Ships since the genuineness and due execution of the
said reports were unverifiable.
 We agree. While the reports may show petitioners' inclusion in the employer's payroll
which may serve as a badge of regular employment, we are inclined to agree with the
respondent that these reports were uncorroborated and could have been easily concocted or
fabricated to suit the personal interest and purpose of petitioners. Notably, neither of the
petitioners attested to the genuineness of the document, nor that the same were executed or
signed in their presence. Petitioners did not even disclose the maker of the records, or that the
signature appearing thereon is genuine.”

Stockholders and Directors

Ma. Lea Jane I. Gesolgon vs Cyberone Ph, Inc.

G.R. No. 210741, 14e October 2020

“Based on record, petitioners were requested by respondent Mikrut to become

stockholders and directors of CyberOne PH with each one of them subscribing to one share of
stock. However, petitioners contend that they were hired as employees of CyberOne PH as
shown by the pay slips indicating that CyberOne PH paid them P10,000.00 monthly net of
mandatory deductions. Other than the pay slips presented by petitioners, no other evidence
was submitted to prove their employment by CyberOne PH. Petitioners failed to present any
evidence that they rendered services to CyberOne PH as employees thereof. As correctly
observed by the appellate court:

But as pointed out earlier, other than the payslips mentioned, no other
documents tending to prove their employment with CyberOne PH., Inc., were
submitted by the private respondents. It bears stressing that no employment
contracts, or at least a job offer, was presented by the private respondents to bolster
their claim. True, there is no requirement under the law that the contract of
employment of the kind entered into by an employer and an employee should be
in any particular form. Nevertheless, We emphasize the fact that the private
respondents initially presented as evidence a copy of the Job Offer dated March 3,
2008, which showed that respondent Gesolgon was hired as Remote Customer
Service Representative of CyberOne AU, and not CyberOne PH., Inc.

As to the power of dismissal, the records reveal that petitioners submitted

letters of resignation as directors of CyberOne PH and not as employees thereof.
This fact negates their contention that they were dismissed by CyberOne PH as its
employees. Lastly, the power of control of CyberOne PH over petitioners is not
supported by evidence on record. To reiterate, petitioners failed to prove the
manner by which CyberOne PH alledgedly supervised and controlled their work.
In fact, petitioners failed to mention their functions and duties as employees of
CyberOne PH. They merely relied on their allegations that they were hired and
paid by CyberOne PH without specifying the terms of their employment as well as
the degree of control CyberOne PH had over the means and method by which their
work would be accomplished.”

Waiters (Regular Employees)

Allan Regala vs Manila Hotel Corporation

G.R. No. 204684, 5 October 2020
 Note: This is long. This is a good reviewer on fixed-term employment and service
agreements. One does not have to go back to his old notes if he patiently reads this. There is a
presumption of regular employment. The Decision reads:

x x x

Regala is a regular employee of MHC.

“MHC does not deny that Regala was employed as one of its waiters. It maintains,
however, that Regala was only engaged for a fixed duration or period, and, therefore, the
severance of his employment upon the expiration of the duration or term specified in his Service
Agreements cannot be made as a basis for any claim of illegal or constructive dismissal. The CA,
on its part, gave credence to MHC's assertions and held that "Regala is one of its fixed-term
employees whose contracts with [MHC] were validly entered into and whose displacement each
time said fixed-term employment expired did not result in illegal dismissal."

We disagree.”

Presumption of regularity in favor of Regala

“At the outset, MHC has not categorically denied in its pleadings before the labor
tribunals that Regala was employed by it as early as February 2000. On this point, the records of
the case are bereft of evidence that Regala was duly informed of the nature and status of his
engagement with the hotel. Notably, in the absence of a clear agreement or contract, whether
written or otherwise, which would clearly show that Regala was properly informed of his
employment status with MHC, Regala enjoys the presumption of regular employment in his
favor.”

Regala is performing activities which are

necessary and desirable, if not
indispensable, in the business of MHC.
Moreover, Regala has been working for
MHC for several years since February
2000.

“The employment status of a person is defined and prescribed by law and not by what
the parties say it should be. In this regard, Article 295 of the Labor Code "provides for two
types of regular employees, namely: (a) those who are engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the employer (first category );
and (b) those who have rendered at least one year of service, whether continuous or broken,
with respect to the activity in which they are employed (second category)." While MHC insists
that Regala was engaged under a fixed-term employment agreement, the circumstances and
evidence on record, and provision of law, however, dictate that Regala is its regular employee.

First, Regala is performing activities which are usually necessary or desirable in the
business or trade of MHC. This connection can be determined by considering the nature of the
work performed by Regala and its relation to the nature of the particular business or trade of
MHC in its entirety. Being part of the hotel and food industry, MHC, as a service-oriented
business enterprise, depends largely on its manpower complement to carry out or perform
services relating to food and beverage operations, event planning and hospitality. As such, it is
essential, if at all necessary, that it retains in its employ waiting staff, such as Regala, specifically
tasked to attend to its guests at its various dining establishments.

Notably, the desirability of his functions is bolstered by the fact that MHC retains in its
employ regular staff of waiters charged with like duties or functions as those of Regala's.

Second, the fact alone that Regala was allowed to work for MHC on several occasions for
several years under various Service Agreements is indicative of the regularity and necessity of
his functions to its business. Moreover, it bears to emphasize that MHC has admitted, albeit
implicitly, that it renewed Regala's Service Agreements on various occasions, i.e., during
temporary spikes in the volume of its business since February 2000. Thus, the continuing need
for his services for the past several years is also sufficient evidence of the indispensability of his
duties as waiter to MHC's business. Additionally, Regala has already been working with the
hotel for many years when he was supposedly constructively dismissed from employment on
December 2, 2009.

In any event, it is worth noting that MHC failed to deny that Regala's work as waiter is
necessary and desirable to its business.

The foregoing notwithstanding, the CA ratiocinated that the fact that the nature of
Regala's work is necessary and indispensable to its business did not impair the validity of the
Service Agreements which specifically stipulated that his employment was only for a specific
term or duration.

This Court is aware that there is nothing contradictory between the nature of an
employee's duties and the setting of a definitive period of his or her employment. We have held
in St. Theresa's School of Novalich.es Foundation vs. National Labor Relations Commission that "[i]t
does not necessarily follow that where the duties of the employee consist of activities usually
necessary or desirable in the usual business of the employer, the parties are forbidden from
agreeing on a period of time for the performance of such activities." However, this Court also
held that if it is apparent from the circumstances of the case "that periods have been imposed to
preclude acquisition of tenurial security by the employee," such fixed term contracts are
disregarded for being contrary to law and public policy. Thus, to our mind, while the principle
enunciated by the CA is true, it is accurate only if the same is premised on the finding the the
fixed-term employment agreement entered into between the employer and the employee
complies with the requirements of a valid fixed-term employment arrangement provided for
under the labor laws.”

The Service Agreements and fixed-term

service contracts executed between
MHC and Regala are invalid and are not
true fixed-term employment contracts.

“As proof of Regala's fixed-term employment status, MHC depended heavily on Regala's
Service Agreements covering the periods of his supposed temporary engagement with MHC,
or from March 1, 2010 to March 3, 2010. It then asserted that the Service Agreements entered
into by and between MHC and Regala are valid for the following reasons: (1) the terms thereof
are clear and bereft of ambiguity; (2) the duration or terms of Regala's employment as indicated
in the Service Agreements were determined and made known to him before each engagement;
and (3) the Service Agreements were freely entered into by both parties.
 A fixed-term employment, while not expressly mentioned in the Labor Code, has been
recognized by this Court as a type of employment "embodied in a contract specifying that the
services of the employee shall be engaged only for a definite period, the termination of which
occurs upon the expiration of said period irrespective of the existence of just cause and
regardless of the activity the employee is called upon to perform." Along the same lines, it has
been held that "[t]he fixed-term character of employment essentially refers to the period agreed
upon between the employer and the employee." Accordingly, "the decisive determinant in term
employment should not be the activities that the employee is called upon to perform, but
the day certain agreed upon by the parties for the commencement and termination of their
employment relationship. Specification of the date of termination is significant because an
employee's employment shall cease upon termination date without need of notice.

In other words, a fixed-term employment contract which otherwise fails to specify the
date of effectivity and the date of expiration of an employee's engagement cannot, by virtue of
jurisprudential pronouncement, be regarded as such despite its nomenclature or classification
given by the parties. The employment contract may provide for or describe some other
classification or type of employment depending on the circumstances, but it is not, properly
speaking, a fixed-term employment contract.

The case of Poseidon Fishing v. National Labor Relations Commission is instructive:

Moreover, unlike in the Brent case where the period of the contract was
fixed and clearly stated, note that in the case at bar, the terms of employment of
private respondent as provided in the Kasunduan was not only vague, it also
failed to provide an actual or specific date or period for the contract. As adroitly
observed by the Labor Arbiter:

There is nothing in the contract that says complainant, who happened to be

the captain of said vessel, is a casual, seasonal or a project worker. The date July 1
to 31, 1998 under the heading "Pagdating" had been placed there merely to indicate the
possible date of arrival of the vessel and is not an indication of the status of employment of
the crew of the vessel.

Actually, the exception under Article 280 of the Labor Code in which the
respondents have taken refuge to justify its position docs not apply in the
instant case. The proviso, "Except where the employment has been fixed for a
specific project or undertaking the completion or determination of which has been
determined at the time of the engagement of the employee or where the work or
services to be performed is seasonal in nature and the employment is for the
duration of the season." (Article 280 Labor Code), is inapplicable because the very
contract adduced by respondents is unclear and uncertain. The kasunduan does
not specify the duration that complainant had been hired x x x. (Emphasis and
underscoring supplied.)

Considering the above premises, we find that the three Service Agreements presented by
MHC cannot be regarded as true fixed-term employment contracts. A perusal thereof shows
that the term of Regala's engagement with the hotel merely indicate the dates March 1, 2010,
March 2, 2010, and March 3, 2010 - all of which pertain only to specified effectivity dates of
Regala's engagement as waiter of MHC. The Service Agreements do not, however,
unequivocally specify the periods of their expiration.
 Notably, even the very terms of the Service Agreements purportedly proving Regala's
fixed-term employment status are uncertain, if not altogether evasive of Regala's actual period
of employment with MHC, which, in this case, commenced as early as February 2000. It bears
noting that the Service Agreements furnished by MHC do not even account for Regala's
employment for the previous years, especially at the time of Regala's hiring in February 2000.
On this point, it is incredulous, to say the least, that the hotel merely hired Regala under a fixed-
term agreement since February 2000.

All things considered, the Service Agreements presented by MHC deserves scant
consideration from this Court. Mere presentation thereof does not prove that Regala had been a
mere fixed-term employee. The Court cannot simply rely on the vague provisions of the Service
Agreements as proof of his fixed-term employment status. To do so would erroneously warrant
their enforcement despite their apparent failure to express the term/s of Regala's engagement
as waiter since February 2000.”

The Service Agreements and/or fixed-

term service contracts do not meet the
criteria for valid contracts of
employment with a fixed period.

“Even if this Court gives credence to the Service Agreements, it can be deduced with
certainty from the circumstances of the case that they do not meet the criteria of valid fixed-
term employment contracts.

MHC contends that the Service Agreements, including the fixed-term service contracts,
which Regala was required to sign from time to time were freely entered into by him, that the
terms thereof were determined and made known to Regala at the time of his engagement, and
that there was no showing that he was forced, coerced, or manipulated into signing the
same.73 In the same vein, the CA held in its May 22, 2012 Decision that "an examination of the
employment contracts between the parties shows no indication that [Regala] was forced or
coerced to execute the same.

The foregoing contentions deserve no merit.

While this Court has recognized the validity of fixed-term employment contracts, it has
consistently held that they are the exception rather than the general rule.75 A fixed-term
employment is valid only under certain circumstances. We thus laid down in Brent School, Inc.
v. Zamora parameters or criteria under which a "term employment" cannot be said to be in
circumvention of the law on security of tenure, namely:

1) The fixed period of employment was knowingly and voluntarily agreed

upon by the parties without any force, duress, or improper pressure being brought
to bear upon the employee and absent any other circumstances vitiating his
consent; or

2) It satisfactorily appears that the employer and the employee dealt with
each other on more or less equal terms with no moral dominance exercised by the
former or the latter.

In GMA Network, Inc. v. Pabriga, we held that "[t]hese indications, which must be read
together, make the Brent doctrine applicable only in a few special cases wherein the employer
and employee are more or less in equal footing in entering into the contract." The reason for this
precept is premised on the following principles - "when a prospective employee, on account of
special skills or market forces, is in a position to make demands upon the prospective employer,
such prospective employee needs less protection than the ordinary worker. Lesser limitations
on the parties' freedom of contract are thus required for the protection of the employee."

As to the first guideline, the Service Agreements signed by Regalado not even prove that
he knowingly agreed to be hired by MHC for a fixed-term way back in February 2000. At best,
they only account for Regala's supposed fixed-term status from March 1 to 3, 2009.

It is worth noting at this point that MHC persistently asserted that Regala agreed upon a
fixed-term employment while making reference to his fixed term service contracts.
Concomitantly, it failed to disprove the allegations of Regala that he was made to sign various
fixed-term service contracts prepared by MHC before he can be given work
assignments.80 Indeed, MHC's failure to furnish copies thereof gives rise to the presumption
that their presentation is prejudicial to its cause.

At any rate, the sample fixed-term service contract presented by MHC, including the
Service Agreements of Regala, readily show that they were entirely prepared by its Personnel
Department. On this premise, it appears that the Service Agreements and/or the fixed-term
service contracts are contracts of adhesion whose terms must be strictly construed against its
unilateral crafter, MHC.

A contract of adhesion is one wherein a party, such as MHC in this case, prepares the
stipulations in the contract, and the other party, like Regala, merely affixes his signature or his
"adhesion" thereto. It is an agreement in which the parties bargaining are not on equal footing,
the weaker party's participation being reduced to the alternative 'to take it or leave it.' Clearly,
the Service Agreements and fixed-term service contracts were contracts of adhesion, which
evidently gave Regala no realistic chance to negotiate the terms and conditions of his
employment, or at best, bargain for his job at MHC. Hence, it cannot be gainsaid that Regala
signed the Service Agreements and the fixed-term service contracts willingly and with full
knowledge of their impact.

As to the second guideline, this Court is inclined to believe that Regala can hardly be on
equal terms with MHC insofar as negotiating the terms and conditions of his employment is
concerned. To be clear, a fixed-term employment agreement should result from bona
fide negotiations between the employer and the employee. As such, they must have dealt with
each other on an arm's length basis where neither of the parties have undue ascendancy and
influence over the other. As a waiter, a rank-and-file employee, Regala can hardly stand on
equal terms with MHC. Moreover, no particulars in the Service Agreements or the fixed-term
service contract regarding the terms and conditions of employment indicate that Regala and
MHC were on equal footing in negotiating them. The case of Rowell Industrial Corporation v.
Court of Appeals is instructive on this point:

With regard to the second guideline, this Court agrees with the Court of
Appeals that petitioner RIC and respondent Taripe cannot be said to have dealt
with each other on more or less equal terms with no moral dominance exercised by
the fanner over the latter. As a power press operator, a rank and file employee, he
can hardly be on equal terms with petitioner RIC. As the Court of Appeals said,
almost always, employees agree to any terms of an employment contract just to
get employed considering that it is difficult to find work given their ordinary
qualifications.86 [Citation omitted]
 Considering that the foregoing criteria were not met, the Service Agreements and the
fixed-term service contracts which MHC had Regala execute should be struck down for being
illegal.

In an attempt to convince the Court of the validity of Regala's Service Agreements, MHC
contended that its system of hiring freelance waiters on an informal and temporary basis is a
common practice in the hotel and restaurant industry if only to address the unforeseen rises or
spikes in the volume of business.

We are not persuaded.

The practice of utilizing fixed-term contracts in the industry does not mean that such
contracts, as a matter of course, are valid and compliant with labor laws. Moreover, the rise and
fall of customer demands are presumed in all businesses or commercial industries, more so in
the industry where MHC has been a part of for several years. At this point in time, it would be
incredulous to believe that it cannot yet anticipate business fluctuations to the point that it has
to employ ruses and subterfuges to deny workers from attaining regular employment status.
Indeed, one's employment should not be left entirely to the whims of the employer for at stake
is not only the employee's position or tenure, but also his means of livelihood. In Innodata
Philippines, Inc. v. Quejada-Lopez, we held that:

By their very nature, businesses exist and thrive depending on the continued
patronage of their clients. Thus, to some degree, they are subject to the whims of
clients who may decide to discontinue patronizing their products or services for a
variety of reasons. Being inherent in any enterprise, this entrepreneurial risk may
not be used as an excuse to circumvent labor laws; otherwise, no worker could
ever attain regular employment status.

In sum, Regala attained regular employment status long before he executed the Service
Agreements considering that at the time he signed them in March 2010, he has already been
in the employ of MHC for more than nine (9) years. Moreover, as discussed above, the nature
of Regala's work is necessary and desirable, if not indispensable, in the business in which MHC
is engaged. Undoubtedly, Regala has been a regular employee of the hotel since February 2000.
At any rate, the Service Agreements and/or the fixed-term service contracts which MHC and
Regala executed were only meant to preclude Regala from attaining regular employment status,
and, thus, should be struck down or disregarded for being contrary to law, public policy or
morals.”

Summary:

1. Regala worked for Manila Hotel as a waiter under several fixed-term employment
contracts and service agreements. When he was dissociated, he filed a complaint for illegal
dismissal.

2. The defense of Manilas Hotel was expiration of contract. Before the Supreme Court,
it denied employment tie on the basis of belatedly submitted documents which the Court
rejected. Manila Hotel was told that it could not change its theory (fixed-term employment)
midstream. The inconsistency lies in the fact that a fixed-term employee is an employee whereas
a non-employee is not an employee, of course.
 3. The Supreme Court saw regular employment in the following:

(a) Regala attained regular employment status long before he executed the Service
Agreements considering that at the time he signed them in March 2010, he has already been in
the employ of MHC for more than nine (9) years.

(b) As a waiter, a rank-and-file employee, Regala can hardly stand on equal terms with
MHC.

(c) The sample fixed-term service contract presented by MHC, including the Service
Agreements of Regala, readily show that they were entirely prepared by its Personnel
Department. On this premise, it appears that the Service Agreements and/or the fixed-term
service contracts are contracts of adhesion whose terms must be strictly construed against its
unilateral crafter, MHC.

(d) The three Service Agreements presented by MHC cannot be regarded as true fixed-
term employment contracts. A perusal thereof shows that the term of Regala's engagement with
the hotel merely indicate the dates March 1, 2010, March 2, 2010, and March 3, 2010 - all of which
pertain only to specified effectivity dates of Regala's engagement as waiter of MHC. The Service
Agreements do not, however, unequivocally specify the periods of their expiration.

(e) Regala was allowed to work for MHC on several occasions for several years under
various Service Agreements is indicative of the regularity and necessity of his functions to its
business.

(f) Regala was allowed to work for MHC on several occasions for several years under
various Service Agreements is indicative of the regularity and necessity of his functions to its
business.

(g) In the absence of a clear agreement or contract, whether written or otherwise, which
would clearly show that Regala was properly informed of his employment status with MHC,
Regala enjoys the presumption of regular employment in his favor.

4. Being a regular employee, Regala could not be validly dismissed on the ground of
expiration of contract.

Fitters/Welders (Regular Employees)

Pedrito R. Parayday vs Shogun Shipping Co., Inc.

G.R. No. 204555, 6 July 2020

“By holding that petitioners were employees of Shogun Ships pursuant to their functions
and years of service with it, the Labor Arbiter and the NLRC appeared to have invariably
applied Article 295 (formerly Article 280) of the Labor Code, as amended, which states:

Art. 295 (280). Regular and Casual employment. - The provisions of written
agreement to the contrary notwithstanding and regardless of the oral agreement of
the parties, an employment shall be deemed to be regular where the employee
has been engaged to perform activities which are usually necessary or desirable
 in the usual business or trade of the employer, except where the employment has
been fixed for a specific project or undertaking the completion or termination of
which has been determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature and the
employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the

preceding paragraph: Provided, That any employee who has rendered at least one
year of service, whether such service is continuous or broken, shall be considered a
regular employee with respect to the activity in which he is employed and his
employment shall continue while such activity exists. (Emphasis supplied)

From the foregoing recitals, Article 295 of the Labor Code merely distinguishes between
certain kinds of employees, particularly, regular and casual employees, for purposes of
determining their rights to certain benefits, such as to join or form a union, or to security of
tenure.

Moreover, an employer-employee relationship may cover peripheral or core activities of

the employer's business. Thus, while a worker's task is not directly related, or necessary and
desirable to the business of the employer, this does not mean, however, that no employer-
employee relationship exists between the worker and the employer. Accordingly, the
determination of the existence of an employer-employee relationship is defined by law
according to the facts of each case, regardless of the nature of the activities involved.

Article 295 should, therefore, not be used as a criterion to determine the existence of an
employer-employee relationship. More importantly, the same provision does not apply where
the existence of an employment relationship is in dispute.45 The CA was therefore correct in
applying the four-fold test in determining petitioners' employment status with Shogun Ships.”

Petitioners are regular employees of

Shogun Ships.

"In an illegal dismissal case, the onus probandi rests on the employer to prove that its
dismissal of an employee was for a valid cause. However [as mentioned above], before a case
for illegal dismissal can prosper, an employer employee relationship must first be established."

In this jurisdiction, each party must prove his affirmative allegation. Since petitioners'
case against respondents was premised on the existence of an employment relationship
between them and Shogun Ships, petitioners must prove by their own evidence that such an
employer-employee relationship indeed existed. While it has been held that no particular form
of evidence is required to prove such relationship, or that any competent and relevant evidence
to prove the relationship may be admitted, this Court believes that a finding of such
relationship must still rest on substantial evidence, or "such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion." This is in accordance with the oft-
repeated rule that in labor cases, as in other administrative and quasi-judicial proceedings, the
quantum of proof necessary is substantial evidence.

In proving their employment relationship with Shogun Ships, petitioners presented the
following documentary evidence: (1) photocopy of Parayday's Oceanview ID; (2) photocopy of
Parayday's COE dated February 5, 2001 issued by "Oceanview Shipbuilding Co., Inc."; and (3)
photocopy of handwritten payslips or Time Keeper's Reports.

Significantly, Parayday's Oceanview ID and COE provides no evidentiary value that

petitioners were indeed employees of Shogun Ships. A perusal thereof clearly shows that the
same was issued by Oceanview, and not Shogun Ships. The documents presented do not even
make reference to Shogun Ships. As Shogun Ships has a distinct juridical personality from
Oceanview, as discussed above, the Court is not inclined to conclude that said documents came
from, or were issued by Shogun Ships. Save for herein petitioner Reboso, the ID and COE, at
best, only demonstrate the employment relationship of petitioner Parayday with Oceanview,
which, significantly, ceased in February 2001.

The CA did not also consider the Time Keeper's Reports as one of such proofs that
petitioners were employees of Shogun Ships since the genuineness and due execution of the
said reports were unverifiable.

We agree. While the reports may show petitioners' inclusion in the employer's payroll
which may serve as a badge of regular employment, we are inclined to agree with the
respondent that these reports were uncorroborated and could have been easily concocted or
fabricated to suit the personal interest and purpose of petitioners. Notably, neither of the
petitioners attested to the genuineness of the document, nor that the same were executed or
signed in their presence. Petitioners did not even disclose the maker of the records, or that the
signature appearing thereon is genuine.

In Uichico v. National Labor Relations Commission, this Court held that:

It is true that administrative and quasi-judicial bodies like the NLRC are not
bound by the technical rules of procedure in the adjudication of cases. However,
this procedural rule should not be construed as a license to disregard certain
fundamental evidentiary rules. While the rules of evidence prevailing in the courts
of law or equity are not controlling in proceedings before the NLRC, the evidence
presented before it must at least have a modicum of admissibility for it to be given
some probative value. x x x (Citations omitted)

Even if the records were admissible, they would not suffice to show petitioners'
employment status with Shogun Ships. The reports presented by petitioners made no reference
to Shogun Ships or Oceanview, or to any employer for that matter. These documents do not
even indicate the years during which they were issued to petitioners. As correctly held by the
CA, these reports cannot be considered as sufficient evidence to show that petitioners were
engaged by Shogun Ships since 1996/1997.

Considering the foregoing premises, this Court is constrained to reexamine the facts of
the instant case based on the allegations and sworn statements presented by the parties.

In its Decision, the CA found that petitioners failed to establish their employment
relationship with Shogun Ships.

This Court disagrees.

The application of the four-fold test in this case shows that an employer-employee
relationship did exist between petitioners and Shogun Ships.
 While this Court cannot give credence to petitioners' allegations that they were engaged
by Shogun Ships through Oceanview as early as 1996/1997 for reasons already stated above, it
is worth noting that respondent have not categorically denied that sometime in May 2006,
petitioners were engaged, or at the least, were permitted by herein respondent to work on
repairs on one of the barges of Shogun Ships, M/T Daniela Natividad. Respondent did not also
deny that petitioners worked for Shogun Ships until they were supposedly verbally dismissed
from employment on May 1, 2008. Notably, respondent even admitted that petitioners were
called in to do repairs on the barges of Shogun Ships.

Significantly, respondent have not denied that petitioners were duly compensated for
any work done by them on the barges. Respondent even categorically admitted that Shogun
Ships provided petitioners financial assistance when they were hospitalized from May 11, 2006
until June 6, 2006. Respondent also have not disproved the allegation of petitioners that Shogun
Ships continued to pay petitioners' salaries after they were discharged from hospitalization on
June 7, 2006.

Respondent also have not categorically denied that petitioners were verbally dismissed
on May 1, 2008, as in fact, respondent's allegations, i.e., that petitioners' "work to repair was only
done when there is work available for them. Once the repair was done, petitioners were paid for work
done, and it ends there" corroborated petitioners' claims that cessation of their services was
determined by Shogun Ships.

All told, the fact that the aforesaid allegations of petitioners were not controverted by
herein respondent lends credence to petitioners' assertions that Shogun Ships: (1) engaged them
as its employees; (2) paid their salaries for services rendered; and (3) had ultimate discretion to
dismiss their services after the needed repairs on the barges were carried out. It is worth noting
that Rule 8, Section 11, of the Rules of Court, which supplements the NLRC Rules of Procedure,
provides that allegations which are not specifically denied are deemed admitted.

As regards Shogun Ship's power of control over petitioners, respondent contended that
Shogun Ships did not direct the manner and method in which petitioners do their work. It bears
emphasis, however, that the control test calls merely for the existence of the right to control the
manner of doing the work and not the actual exercise of the right. 60 Thus, in Dy Keh Beng v.
International Labor and Marine Union of the Philippines, this Court held that an employer's power
of control, particularly over personnel working under the employer, is deemed inferred, more
so when said personnel are working at the employer's establishment:

Petitioner contends that the private respondents "did not meet the control test in the light
of the x x x definition of the terms employer and employee, because there was no evidence to
show that petitioner had the right to direct the manner and method of respondent's work."
Moreover, it is argued that petitioner's evidence showed that "Solano worked on a pakiaw
basis" and that he stayed in the establishment only when there was work.

While this Court upholds the control test under which an employer- employee
relationship exists "where the person for whom the services are performed reserves a right to
control not only the end to be achieved but also the means to be used in reaching such end," it
finds no merit with petitioner's arguments as stated above. It should be borne in mind that the
control test calls merely for the existence of the right to control the manner of doing the work,
not the actual exercise of the right. Considering the finding by the Hearing Examiner that the
establishment of Dy Keh Beng is "engaged in the manufacture of baskets known as kaing," it is
natural to expect that those working under Dy would have to observe, among others, Dy's
 requirements of size and quality of the kaing. Some control would necessarily be exercised by
Dy as the making of the kaing would be subject to Dy's specifications. Parenthetically, since the
work on the baskets is done at Dy's establishments, it can be inferred that the proprietor Dy
could easily exercise control on the men he employed.

Clearly, considering that petitioners were working on the barges alongside regular
employees of Shogun Ships and that they were taking orders from its engineers as to the
required specifications on how the barges of Shogun Ships should be repaired, which
respondent herein failed to deny, it may be thus logically inferred that Shogun Ships, to some
degree, exercised control or had the right to control the work of petitioners.”

Regular Employment.

“The regular employment status of a person is defined and prescribed by law and not by
what the parties say it should be. Thus, while respondent was of the belief that rendering
occasional work for Shogun Ships prevented the parties from creating an employment
relationship, much more for petitioners from attaining regular employment status, provision of
law, however, dictates that they were regular employees of Shogun Ships.

First, the records of the case are bereft of evidence that petitioners were duly informed of
the nature and status of their engagement with Shogun Ships. Notably, in the absence of a clear
agreement or contract, whether written or otherwise, which would clearly show that petitioners
were properly informed of their employment status with Shogun Ships, petitioners enjoy the
presumption of regular employment in their favor.

Second, petitioners were performing activities which are usually necessary or desirable in
the business or trade of Shogun Ships. This connection can be determined by considering the
nature of the work performed by petitioners and its relation to the scheme of the particular
business or trade of Shogun Ships in its entirety. As Shogun Ships is engaged in the business of
domestic cargo shipping, it is essential, if at all necessary, that Shogun Ships must continuously
conduct vital repairs for the proper maintenance of its barges. The desirability of petitioners
functions is bolstered by the fact that Shogun Ships itself precisely retained in its employ
regular employees whose duties and responsibilities included, among others, performing
necessary repair and maintenance work on the barges.

Third, irrespective of whether petitioners' duties or functions are usually necessary and
desirable in the usual trade or business of Shogun Ships, the fact alone that petitioners were
allowed to work for it for a period of more than one (1) year, albeit intermittently since May 2006
until they were dismissed from employment on May 1, 2008, was indicative of the regularity
and necessity of welding activities to its business. As such, their employment is deemed to be
regular with respect to such activities and while such activities exist.

Cement Cutters (Regular Employees)

Eduardo G. Jovero vs Rogelio Cerio

G.R. No. 202466, 23 June 2021

“Petitioner supports his argument that respondents are only project employees by
attaching Sigma's Service contracts with PGI it its Memorandum of Appeal filed with the
NLRC. Petitioner cites the case of Cartagenas v. Romago Electric Co., Inc. (Cartegenas) as a similar
 factual milieu, which held that the employees were not permanent or regular employees since
the duration of their employment was coterminous with the projects they were assigned to.
However, Cartagenas is strikingly different from the present case.

In Cartagenas, the employer was able to present documentary exhibits which showed that
the employees were assigned to various projects over a period of time. The documents also
proved that they were temporarily laid off when the project was suspended, and subsequently
rehired once it resumed. In that case, they were able to present the project employment
contracts between the employer and its employees. Contrastingly, Jovero only presented
Sigma's Service Contracts with PGL Nowhere in the contracts did it show that respondents
were parties to such contract. More importantly, it did not prove that respondents were hired
for the projects with PGI.

The case of Olongapo Maintenance Services, Inc. v. Chantengco is more applicable:

The principal test in determining whether an employee is a project employee

is whether he/she is assigned to carry out a "specific project or undertaking," the
duration and scope of which are specified at the time the employee is engaged in
the project, or where the work or service to be performed is seasonal in nature and
the employment is for the duration of the season. A true project employee should
be assigned to a project which begins and ends at determined or determinable
times, and be informed thereof at the time of hiring. In the instant case, the record
is bereft of proof that the respondents' engagement as project employees has been
predetermined, as required by law. We agree with the Court of Appeals that
OMSI did not provide convincing evidence that respondents were informed that
they were to be assigned to a "specific project or undertaking" when OMSI hired
them. Notably, the employment contracts for the specific project signed by the
respondents were never presented. All that OMSI submitted in the proceedings
a quo are the service contracts between OMSI and the MIAA. Clearly, OMSI
utterly failed to establish by substantial evidence that, indeed, respondents were
project employees and their employment was coterminous with the MIAA
contract.45 (Citations omitted; Emphasis ours)

Clearly, the presentation of service contracts between the employer and their client (even
if it shows the duration of the project), in lieu of the employees' individual employment
contracts, does not establish that the latter are project employees. There was no other substantial
evidence offered to prove that respondents were informed at the time of their hiring, that they
were project employees. Moreover, petitioner's failure to file termination reports at the end of
each project was an indication that respondents were regular employees.

In view of all the foregoing, pet1t1oner failed to prove through substantial evidence that
respondents are project employees. It is evident that respondents were illegally dismissed due
to petitioner's failure to comply with the substantive and procedural due process tenets under
the Labor Code.”

Construction Workers (Regular Employees)

ECCA vs Segundino Palle

G.R. No. 201247, 13 July 2020
 “Generally, length of service is a measure to determine whether or not an employee who
was initially hired on a temporary basis has attained the status of a regular employee who is
entitled to security of tenure. However, such measure may not necessarily be applicable in a
construction industry since construction firms cannot guarantee continuous employment of
their workers after the completion stage of a project. 32 In addition, a project employee's work
may or may not be usually necessary or desirable in the usual business or trade of the
employer. Thus, the fact that a project employee's work is usually necessary and desirable in the
business operation of his/her employer does not necessarily impair the validity of the project
employment contract which specifically stipulates a fixed duration of employment.

In Lopez v. Irvine Construction Corp., it was held that "the principal test for determining
whether particular employees are properly characterized as 'project employees[,]' as
distinguished from 'regular employees,' is whether or not the 'project employees' were assigned
to carry out a 'specific project or undertaking,' the duration and scope of which were specified
at the time the employees were engaged for that project."

In the instant case, in order to ascertain whether respondents were project employees,
as claimed by ECCA, it is essential to determine whether notice was given to them that they
were being engaged just for a specific project, which notice must be made at the time of hiring.

We find that ECCA failed to present substantial evidence to show that it informed
respondents of the duration and scope of their work at the time of their hiring. Upon careful
review of the company's respective contracts of employment with respondents, this Court holds
that the employment contracts were lacking in details to prove that respondents had been duly
informed of the duration and scope of their work, and of their status as project employees at the
time of their hiring. The respective contracts of respondents may have been dated at the time of
their issuance, but nowhere did said contracts show as to when respondents supposedly signed
or received the same or were informed of the contents thereof. This gives rise to the distinct
possibility that respondents were not informed of their status as project employees, as well as
the scope and duration of the projects that were assigned to them at the time of their
engagement. Thus, ECCA failed to refute respondents' claim that they worked in new projects
or they were transferred to other existing projects without the benefit of their corresponding
employment contracts.35 Therefore, ECCA failed to persuasively show that respondents herein
were informed at the time of their engagement that their work was only for the duration of the
project.

Moreover, ECCA failed to present other evidence or other written contracts to show
that it informed respondents of the duration and scope of their work. Settled is the rule that
"although the absence of a written contract does not by itself grant regular status to the
employees, it is evidence that they were informed of the duration and scope of their work and
their status as project employees at the start of their engagement. When no other evidence is
offered, the absence of employment contracts raises a serious question of whether the
employees were sufficiently apprised at the start of their employment of their status as project
employees."

In addition, We likewise note that the company did not submit a report with the
DOLE of the termination of respondents' employment every time a project is completed, which
is an indication that the workers were not project employees but regular ones.”

Teacher (Expiration of Contract)

Arlene Palgan vs Holy Name University

 G.R No. 219916, 10 February 2021

“It can be reasonably presumed that when petitioner was engaged for employment, she
and HNU were aware of the fact that the former cannot attain permanency due to her lack of
the minimum academic requirements. Thus, there was no intention for petitioner to be placed
under probation, as she cannot acquire permanency anyway. Rather, the evidence on record
would reveal the intent of the parties to enter into an employment contract for a fixed-term.

Jurisprudence has long recognized the validity of fixed-term employment contracts, as

long as such contracts do not circumvent the employee's right to security of tenure. In Caparoso
v. Court of Appeals, we have reiterated the criteria under which fixed-term employment could
not be said to be in circumvention of the law on security of tenure, to wit:

The Court thus laid down the criteria under which fixed-term employment
could not be said to be in circumvention of the law on security of tenure, thus:

1. The fixed period of employment was knowingly and voluntarily agreed

upon by the parties without any force, duress, or improper pressure being brought
to bear upon the employee and absent any other circumstances vitiating his
consent; or

2. It satisfactorily appears that the employer and the employee dealt with
each other on more or less equal terms with no moral dominance exercised by the
former or the latter.

As applied in this case, the fixed-term contracts presented as evidence

would reveal that the parties intended that their employee-employer relationship
would last only for a specific period. Considering petitioner's part-time status,
even if no written fixed-term contract was presented, judicial notice can be made
upon the fact that teachers' employment contracts are for a specific semester or
term.

With respect to consent, the fixed-term contracts must be presumed to be knowingly and
voluntarily entered into. It is a basic rule that "one who alleges defect or lack of valid consent to
a contract by reason of fraud or undue influence must establish by full, clear and convincing
evidence such specific acts that vitiated a party's consent, otherwise, the latter's presumed
consent to the contract prevails."[48] In this case, petitioner merely alleged that she was a regular
employee and that her being a contractual employee was just a lame reason given by HNU to
terminate her without due process.[49] These self-serving and unsubstantiated allegations are not
the clear and convincing evidence required to overturn the presumption mentioned earlier.
Thus, the fixed-term contracts should be presumed as having been knowingly and voluntarily
entered into by both parties.

For the second requisite of a valid fixed-term contract, petitioner was more or less on
equal footing with HNU. Petitioner, by her own admission, was an honors graduate and has
stellar qualifications. Moreover, she has also admitted that she is an elected public official and
appears to be quite popular, given that she has won as municipal councilor multiple times and
even placed number one in terms of votes garnered. These facts would make apparent that
petitioner is not a mere run-of-the-mill employee, and that she certainly has the capability to be
on equal footing in dealing with her employer when it came to her employment terms.”

More Ratio:
 “We have laid down in Lacuesta the following requisites before a private school teacher
acquires permanent status, namely: 1) The teacher serves full-time; 2) he/she must have
rendered three consecutive years of service; and 3) such service must have been satisfactory. [34]

These requisites find basis in Sections 92 and 93 of the 1992 Manual, which provide:

Section 92. Probationary Period. Subject in all instances to compliance with

Department and school requirements, the probationary period for academic
personnel shall not be more than three (3) consecutive years of satisfactory service
for those in the elementary and secondary levels, six (6) consecutive regular
semesters of satisfactory service for those in the tertiary level, and nine (9)
consecutive trimesters of satisfactory service for those in the tertiary level where
collegiate courses are offered on the trimester basis.

Section 93. Regular or Permanent Status. Those who have served the
probationary period shall be made regular or permanent. Full-time teachers who
have satisfactorily completed their probationary period shall be considered regular
or permanent.

While petitioner has rendered three consecutive years of satisfactory service, she was,
however, not a full-time teacher at the College of Nursing of HNU.

It must be stressed that only a full-time teaching personnel can acquire regular or
permanent status. This rule has been reiterated in a long line of cases, one of which is Herrera-
Manaois v. St. Scholastica's College, where We held:

In the light of the failure of Manaois to satisfy the academic requirements for
the position, she may only be considered as a part-time instructor pursuant to
Section 45 of the 1992 Manual. In turn, as we have enunciated in a line of cases, a
part-time member of the academic personnel cannot acquire permanence of
employment and security of tenure under the Manual of Regulations in relation to
the Labor Code. We thus quote the ruling of this Court in Lacuesta, viz.:

Section 93 of the 1992 Manual of Regulations for Private Schools

provides that full-time teachers who have satisfactorily completed
their probationary period shall be considered regular or permanent.
Moreover, for those teaching in the tertiary level, the probationary
period shall not be more than six consecutive regular semesters of
satisfactory service. The requisites to acquire permanent employment,
or security of tenure, are (1) the teacher is a full-time teacher: (2) the
teacher must have rendered three consecutive years of service: and (3)
such service must have been satisfactory.

As previously held, a part-time teacher cannot acquire permanent

status. Only when one has served as a full-time teacher can he acquire permanent
or regular status. The petitioner was a part-time lecturer before she was appointed
as a full-time instructor on probation. As a part-time lecturer, her employment as
such had ended when her contract expired. Thus, the three semesters she served as
part-time lecturer could not be credited to her in computing the number of years
she has served to qualify her for permanent status. (Underscoring supplied)
 Thus, given that petitioner was not a full-time teaching personnel as will be explained in
detail hereafter, she could not have acquired permanent status no matter the length of her
satisfactory service.”

Petitioner was never

qualified to be a full-time
faculty due to the apparent
lack of the required clinical
experience under the
governing law and its
relevant regulations.

“Section 45 of the 1992 Manual provides the minimum requirements in order for an
academic personnel to be considered as full-time, to wit:

Section 45. Full-time and Part-time Faculty. As a general rule, all private
schools shall employ full-time academic personnel consistent with the levels of
instruction.

Full-time academic personnel are those meeting all the following requirements:

a. Who possess at least the minimum academic qualifications prescribed by

the Department under this Manual for all academic personnel;

b. Who are paid monthly or hourly, based on the regular teaching loads as
provided for in the policies, rules and standards of the Department and the school;

c. Whose total working day of not more than eight hours a day is devoted to
the school;

d. Who have no other remunerative occupation elsewhere requiring regular

hours of work that will conflict with the working hours in the school; and

e. Who are not teaching full-time in any other educational institution.

x x x

All teaching personnel who do not meet the foregoing qualifications are
considered part-time. (Underscoring supplied)

In relation to the minimum academic qualifications required for academic personnel

involved specifically in nursing education, Section 1, Article IV of CHED Memorandum Order
No. 30 Series of 2001 (CMO 30-01) provides:

Section 1. The faculty shall have academic preparation appropriate to

teaching assignment. In addition, she/he must:

a. be a Filipino citizen;
 b. be a current registered nurse in the Philippines;

c. be a holder of Master's degree in their major field and/or allied subjects;

d. have at least three (3) years of clinical practice in the field of specialization;

e. be a member of good standing of the accredited national nursing

association.

In 2009, CHED issued Memorandum No. 14, Series of 2009, which appears to have
lowered the clinical experience requirement from at least three years to at least one year.

The foregoing CHED regulations must be read together with the provisions of RA 9173,
also known as The Philippine Nursing Act of 1991 (1991 Nursing Act). Section 27 of the 1991
Nursing Act expressly provides for the following qualifications of the faculty in nursing
education:

SEC. 27. Qualifications of the Faculty. - A member of the faculty in a college of

nursing teaching professional courses must:

(a) Be a registered nurse in the Philippines;

(b) Have at least one (1) year of clinical practice in a field of specialization;

(c) Be a member of good standing in the accredited professional

organization of nurses; and

(d) Be a holder of a master's degree in nursing, education, or other allied

medical and health sciences conferred by a college or university duly recognized
by the Government of the Republic of the Philippines.

In addition to the aforementioned qualifications, the dean of a college must

have a master's degree in nursing. He/she must have at least five (5) years of
experience in nursing. (Underscoring supplied)

From the foregoing, it is clear that the three-year or one-year clinical practice experience is
a minimum academic requirement to qualify as a faculty member in a college of nursing, and is
therefore, required for one to be considered as a full-time faculty of such.

As applied in this case, and as correctly observed by the CA, petitioner failed to meet the
required minimum clinical practice experience under the law and the relevant regulations.”

Petitioner's experience as
clinical instructor cannot
be considered as "clinical
practice experience" as
there is no substantial
evidence on record that
would prove that
petitioner actually
engaged in activities that
may be considered as
clinical practice within the
ambit of the law.

“Evidence on record would reveal that petitioner was hired by HNU as a "full-time"
clinical instructor assigned at the medical ward from 1994-1997. [37] From 1998-2002, Arlene
worked as a "part-time" faculty member until she was again hired in 2004. [38]

While there is no exact definition of "clinical practice" under the law, its ordinary
meaning can be ascertained through rules of statutory construction. By using clinical as an
adjective to describe practice, it can be reasonably construed to have a meaning narrower in
scope than the more general practice of nursing, the scope of which is defined under Section 27,
Article V of the 1991 Nursing Act:

ARTICLE V
NURSING PRACTICE

Sec. 27. Scope of Nursing. - A person shall be deemed to be practicing nursing

within the meaning of this Act when he, for a fee, salary or other reward or
compensation, singly or in collaboration with another, initiates and performs
nursing services to individuals, families and communities in various stages of
development towards the promotion of health, prevention of illness, restoration of
health, and alleviation of suffering through:

(a) Utilization of the nursing process, including assessment, planning,

implementation and evaluation of nursing care. Nursing care includes, but not
limited to, traditional and innovative approaches in self-executing nursing
techniques and procedures, comfort measures, health teaching and administration
of legal and written prescription for treatment therapies, medication and
hypodermic intramuscular or intravenous injections: Provided, however, That, in
the administration of intravenous injections, special training shall be required
according to protocol established;

(b) Establishment of linkages with community resources and coordination

of the health team;

(c) Motivation of individuals, families and communities; resources and

coordination of services with other members of the health team;

(d) Participation in teaching, guidance and supervision of student in nursing

education programs, including administering nursing services in varied settings
such as hospitals, homes, communities and the like; undertaking consultation
services; and engaging in such other activities that require the utilization of
knowledge and decision-making skill of a registered nurse; and

(e) Undertaking nursing and health manpower development training and

research and soliciting finances therefor, in cooperation with the appropriate
government or private agency: Provided, however, That this provision shall not
apply to nursing students who perform nursing functions under the direct
supervision of qualified faculty.
 "Clinical" as an adjective is defined in the ordinary sense as "relating to the
examination and treatment of patients and their illnesses,"[39] or "to be relating to
the observation and treatment of actual patients as rather than theoretical or
laboratory studies."[40]

Another aspect to consider when defining "clinical practice" is the context in which it was
used under the law. Under the 1991 Nursing Act, clinical practice experience is a requirement to
be a nursing faculty, hence it is apparent that this clinical practice experience, being a requisite
to being hired as a faculty member, refers to something distinct from teaching or any
academical background.

Given the foregoing, we look back to the matter of whether Arlene's experience as a
clinical instructor assigned to a medical ward can be considered as amounting to "clinical
practice." We have reiterated in several cases the rule that "of primordial consideration is not
the nomenclature or title given to the employee, but the nature of his functions." [41] It is not the
job title but the actual work that the employee performs. [42] Thus, actual work performed should
be considered when characterizing work experience as "clinical practice" or otherwise.

While we can presume the same to be purely academical from the nomenclature, it is
entirely possible that petitioner was performing clinical duties concurrently with her teaching
duties, especially since she was assigned at the medical ward. However, since she never alleged
to be performing clinical duties such as treating actual patients or assisting doctors in such
treatment, nor did she present any substantial evidence to prove such, we cannot assume that
she indeed performed clinical duties during her stint as a clinical instructor. Thus, since
petitioner failed to provide substantial evidence, much less clearly describe what kind of work
she rendered as a clinical instructor, we cannot consider such work experience as "clinical
practice."

Being unqualified as a nursing faculty from the start, petitioner cannot possibly be
considered a full-time faculty and thus, could not, even after rendering satisfactory service for
three years, be entitled to permanency.

Therefore, her stint as a clinical instructor from 1994-1997 cannot even be considered as
compliance with the clinical practice experience requirement for the purpose of determining
whether or not she is a full-time faculty when she was employed again as a clinical instructor
from 2004-2007.

2
Complete Severance

There are instances when there may be cessation of work but there is no dismissal to
speak of because the withholding of work is temporary only. One finds four of them under Art.
301 of the Labor Code, viz., temporary suspension of business operations by reason of conduct of
inventory; temporary suspension of business operations by reason of repair of machineries;
rendition of military duty; and rendition of civic duty. Outside Art. 301, there are several more,
viz., preventive suspension, floating status that does not exceed 6 months (for security guards)
or 3 months for members of the workpool of a contractor (D.O. 174). Unless the maximum
period of 30 days were exceeded, a preventive suspension does not completely sever
employment tie.

Floating Status
 Jose dela Torre vs Twinstar Professional Protective Services
G.R. No. 222992, 23 June 2021

“Given the evidence on record, this Court agrees with the findings of the CA and the
NLRC that there no illegal dismissal took place in this case. Petitioner utterly failed that he was
constructively dismissed by Twinstar. Philippine Span Asia Carriers Corporation v. Pelayo reiterated
the standards for ascertaining constructive dismissal as follows:

There is constructive dismissal when an employer's act of clear discrimination,

insensibility or disdain becomes so unbearable on the part of the employee so as to foreclose any
choice on his part except to resign from such employment. It exists where there is involuntary
resignation because of the harsh, hostile and unfavorable conditions set by the employer. We
have held that the standard for constructive dismissal is "whether a reasonable person in the
employee's position would have felt compelled to give up his employment under the
circumstances." (Underscoring supplied)

However, it must be emphasized that "not every inconvenience, disruption, difficulty, or

disadvantage that an employee must endure sustains a finding of constructive dismissal." What
is vital is the weighing of the evidence presented and a consideration of whether, given the
totality of circumstances, the employer acted fairly in exercising a prerogative. Applying the
foregoing standards to this case, petitioner utterly failed to prove that he was constructively
dismissed. He never presented any evidence, aside from his self-serving allegations, that he was
forced to be on floating status for more than six (6) months without being given new assignment
by Twinstar.

In comparison, Twinstar was able to establish that Jose went on absence without leave on
or about January 21, 2011 and that it had subsequently sent several notices to petitiomer,
including the Order to Report for Duty dated June 3, 2011, 2nd Notice to Report for Work dated
June 9, 2011, and Last & Final Order to Report for Duty dated June 22, 2011. Aside from the said
notices, a duty officer of Twinstar vainly tried to contact petitioner by calling him and sending
text messages, and a field inspector of Twinstar attempted to deliver a company letter on June 8,
2011 but petitioner refused to receive the same.

More importantly, as correctly found by the NLRC and affirmed by the CA, petitioner
himself admitted declining the assignment offered to him by the Twinstar within six (6) months
from the time he was placed on floating status in the hearing dated October 18, 2011 before the
LA. Petitioner's flimsy claim that he did not understand the question of the LA and the Minutes
of the said hearing, as both were in the English language, would seem like a desperate attempt to
feign ignorance in order to retract such statements. Petitioner had all the opportunity to request
the LA to translate the question and the Minutes to a language he understood, but he chose not
to. In any case, this Court finds it hard to believe petitioner's allegations as he himself indicated
in his bio-data that English is one of the languages he can speak and write.

Clearly, the totality of circumstances would lead us to conclude that no constructive

dismissal happened in this case. Instead, the circumstances would show the stubborn
unwillingness of petitioner to return to work despite being required by Twinstar to report to
work multiple times within six (6) months from January 21, 2011, even assuming arguendo that he
was indeed placed on floating status. Thus, this Court agrees with the CA and the NLRC that
Twinstar had just cause to terminate Jose's employment. Be this as it may, this Court finds that
Twinstar was remiss in following the due process required by law and that Jose should be
entitled to nominal damages as will be discussed below.”
Preventive Suspension

Philam Homeowners Association, Inc. vs Sylvia De Luna

G.R. No. 209437, 17 March 2021

After submission of the final audit report by Baquiran, PHAI required De Luna and
Bundoc to appear before the investigating committee and to explain the irregularities and
anomalies as well as to account for the total amount misappropriated. PHAI asserted that
despite said opportunity given to De Luna and Bundoc, they still failed to participate and
attend the investigation. Accordingly, on May 23, 2009, PHAI's Board of Directors issued a
Memorandum addressed to De Luna demanding payment of the amount of P757,315.00, and
informing her of her dismissal from service by reason of dishonesty, misappropriation and
malversation of funds.
Labor Arbiter:

Valid because the dismissal was for a just cause and due process was observed.

First, the Arbiter held that respondents' issuance of official and provisional receipts and
not recording them, as well as alteration of official receipts, among others, were irregularities in
the performance of their duties as Office Supervisor and Cashier, resulting to PHAI's loss of
confidence which is one of the just causes under the Labor Code. Since their positions are
imbued with trust and confidence, it is sufficient that there is some basis for the loss of trust and
confidence or that the employer had reasonable ground to believe that the erring employee's
participation rendered him/her unworthy of the trust required by the position.

Second, the Arbiter emphasized that a trial-type hearing is not at all times required as
long as the parties were given the opportunity to be heard, as in the case of De Luna and
Bundoc. The lack thereof does not make the dismissal flawed. Finally, the monetary claims were
likewise denied due to insufficiency of evidence.

NLRC:

It affirmed in toto the findings of the Arbiter that De Luna and Bundoc held positions of
trust and confidence, hence, they are expected to exercise greater fidelity, honesty and integrity
in the performance of their duties. Further, the loss of trust and confidence as just cause for
dismissal should relate to the performance of their duties. The NLRC relied on Baquiran's
Affidavit and Exhibits "1" to "68" which clearly showcased the fraudulent acts and
misappropriation committed by the respondents resulting in PHAI's loss of trust and
confidence in them.

Court of Appeals:

“WHEREFORE, the petition is DENIED. The assailed Resolutions of the

NLRC dated July 26, 2010 and September 30, 2010 are hereby AFFIRMED with
MODIFICATIONS as follows: Philam Homeowners Association, Inc. (PHAI) is
hereby ordered to pay petitioner Sylvia De Luna her corresponding salary,
allowances and other benefits from May 13, 2009 to May 23, 2009 or for a period of
ten (I0) days and to pay petitioner Nenita Bundoc the amount of Thirty Thousand
Pesos (Php30,000.00) as and by way of nominal damages.”
Supreme Court:

“All told, the issues presented before Us are the following: first, whether or not the
appellate court exceeded its appellate jurisdiction by extending its review to the factual matters
of the case; and second, whether or not the appellate court erred in modifying the NLRC Decision
insofar as the award of nominal damages and payment of 10-day salary, allowances and benefits.

The Petition is bereft of merit.

In labor cases, the proper recourse from the adverse decision or final order of the NLRC is
via a special civil action for certiorari under Rule 65 of the Rules of Court to the appellate court on
the ground that the labor tribunal acted with grave abuse of discretion amounting to excess or
lack of jurisdiction. This judicial review presupposes that the NLRC's disposition of the case has
already attained finality, and the appellate court is to ascertain whether it should reverse or
modify the NLRC decision on the aforesaid exclusive ground.

From the CA, the labor suit is elevated to this Court via a petition for review
on certiorari pursuant to Rule 45 of the Rules of Court on pure questions of law; questions of fact
may be entertained and reviewed only in exceptional circumstances. When a labor case is
brought to this Court for final review, We are confronted with a question of law, that is: has the
CA correctly determined whether or not grave abuse of discretion attended the determination
and resolution of the NLRC?

Gabriel v. Petron Corporation instructs:

Specifically, we are limited to:

(1) Ascertaining the correctness of the CA's decision in finding the presence or
absence of grave abuse of discretion. This is done by examining, on the basis of the
parties' presentations, whether the CA correctly determined that at the NLRC
level, all the adduced pieces of evidence were considered; no evidence which
should not have been considered was considered; and the evidence presented
supports the NLRC's findings; and

(2) Deciding other jurisdictional error that attended the CA's interpretation or
application of the law.50 (Emphasis Supplied)

Thus, in resolving PHAI's petition, we must determine whether the CA properly assessed
whether the labor tribunal acted with grave abuse of discretion amounting to lack or in excess of
jurisdiction. In particular, We must resolve whether the appellate court properly modified the
award of nominal damages in favor of Bundoc and ordered the payment of De Luna's 10-day
salary, allowances and other benefits on the basis of its own factual and evidentiary findings of
the case.

After a thorough review of the records, We find that the appellate court acted well within
its prerogatives in modifying the award of nominal damages and ordering payment of De Luna's
10-day salary, allowances and other benefits.
 Factual findings of the
NLRC are accorded
great respect, but the
appellate court is not
precluded from
reviewing evidence
alleged to be
arbitrarily considered
or otherwise
disregarded by the
former.

“PHAI's contention that the appellate court went beyond its jurisdiction when it reviewed
evidentiary matters and the factual findings of the NLRC must fail.

We recognize the expertise and authority of quasi-judicial bodies such as the NLRC in
ascertaining matters specifically delegated to their jurisdiction. Similar to this Court's
appreciation of a trial court's factual findings, the latter being in the best position to observe the
demeanor and conduct of the witnesses, We regard and value the competence of the Labor
Arbiters and the NLRC in resolving labor disputes. The NLRC's conclusions relating to questions
of fact set forth in the case are accorded great weight and respect, and even clothed with finality
and binding on this Court especially if they are supported by sufficient and substantial
evidence.51

The CA, in its judicial review pursuant to Rules 65 of the Revised Rules of Court, is
nonetheless empowered to examine the records and evaluate the pieces of evidence in order to
confirm their materiality and significance, and to disregard the labor tribunal's factual findings
whenever its conclusions were not substantiated by the evidence on record. 52 Contrary to PHAI's
assertion that the CA may only inquire into the factual findings whenever there is a variance
between the findings of the LA and the NLRC, the CA may review evidence alleged to have been
capriciously, whimsically and arbitrarily relied upon or disregarded in the following
instances, viz.:

It is settled that in a special civil action for certiorari under Rule 65, the issues
are limited to errors of jurisdiction or grave abuse of discretion. x x x.

x x x when the factual findings complained of are not supported by the evidence on
record; when it is necessary to prevent a substantial wrong or to do substantial
justice; when the findings of the NLRC contradict those of the LA; and when
necessary to arrive at a just decision of the case. To make this finding, the CA
necessarily has to view the evidence if only to determine if the NLRC ruling had
basis in evidence.53

The appellate court, in order to arrive at a just decision of the case, modified the NLRC's
award of nominal damages in favor of Bundoc whose termination was tainted with procedural
lapses on the part of PHAI, and ordered the payment of De Luna's 10-day salary, which
corresponded to the number of days her preventive suspension exceeded the mandated 30 days.
Hence, the CA was justified and acted well within its appellate jurisdiction in reviewing the facts,
records and evidence of the case.”

When the employer

extended the period of
preventive suspension
beyond 30 days, he is
obliged to pay the wages
and other benefits due to
the employee.

“With respect to the appellate court's order for PHAI to pay De Luna her salary for 10
days in excess of the mandatory 30-day preventive suspension, the controlling provision is
Section 4, Rule XIV, Book V of the Omnibus Rules Implementing the Labor Code, which reads:

SEC. 9. Period of suspension. - No preventive suspension shall last longer than

thirty (30) days. The employer shall thereafter reinstate the worker in his former
or in a substantially equivalent position or the employer may extend the period
of suspension provided that during the period of extension, he pays the wages
and other benefits due to the worker. In such case, the worker shall not be bound
to reimburse the amount paid to him during the extension if the employer decides,
after completion of the hearing, to dismiss the worker. (Emphasis Supplied)

An employee may be preventively suspended while undergoing investigation for an

alleged violation, in order for the investigation to run its course and to avert any possibility
where the employee may cause harm or injury to the employer, its company or to his fellow
employees. When the 30 days expire, the employer should reinstate the employee by actual or
payroll reinstatement.

Also, as explicitly provided under Section 4, Rule XIV, the employer must pay the
corresponding wage of his employee if the preventive suspension had been extended beyond
the 30-day period. In this case, the appellate court found that De Luna's preventive suspension
lasted for 40 days. Even while the dismissal was valid, PHAI should have paid De Luna her
salary for 10 days corresponding to the number of days in excess of the 30-day period of
preventive suspension.

In fine, we hold that the appellate court acted within its jurisdiction in affirming the
NLRC's judgment with modification as to the award of nominal damages in Bundoc's favor,
and payment of De Luna's 10-day salary in excess of the mandated 30 days of preventive
suspension.

To balance the interest of labor and capital, employees who occupy positions imbued
with trust and confidence are reminded that they are expected to observe utmost integrity,
honesty and loyalty in the performance of their duties and responsibilities. On the other hand,
employers, in the exercise of their management prerogative, must strictly comply with the
requirements of due process in imposing disciplinary sanctions and terminating the services of
their employees.”

Intent to
Resign and
Preventive
Suspension

Notably, Lacanaria submitted a letter signifying his intent to resign but withdrew it later on.
Incidentally, the University did not show that he committed acts which could be interpreted as
a surrender of his post as a professor. In line with this, jurisprudence teaches that "the intent to
relinquish must concur with the overt act of relinquishment. The acts of the employee before
and after the alleged resignation must be considered in determining whether the employee
concerned, in fact, intended to terminate his employment."157 Since Lacanaria withdrew his
resignation letter and did not perform acts which would signify his resolve, he cannot be
considered as resigned. Besides, the University chose not to act upon his intent to resign since it
clearly stated that the same would not have any bearing on the outcome of the investigation.

Regardless, the Court notes that Lacanaria was not given any teaching load for the summer
term of SY 2009-2010, as well as the first semester of SY 2010-20ll. Undoubtedly, these terms
cover the duration of the investigation from the time that Flores filed his Complaint before the
University in March 2010 until Lacaneria's termination in June 2010.

With regard to the teaching load, the Faculty Manual states that "[i]t is the sole prerogative of
the UNIVERSITY to determine the load of faculty members. The UNIVERSITY may reduce
loads of any faculty member, whether probationary or permanent, on full time or part time.
However, permanent full time faculty members shall be given priority in the distribution of
teaching assignments."158 In this case, Lacanaria's load was not merely reduced. He was not
given any load at all which the University did not dispute. Curiously, he was not placed under
preventive suspension which could have explained why he was not given any teaching load
during the duration of the investigation of his case. It appears that he was, in essence,
preventively suspended without the appropriate or required notice.

Pursuant to Section 8, Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code,
as amended,159 the employer may place an employee under preventive suspension, "Preventive
suspension is not a penalty but a disciplinary measure to protect life or property of the
employer or the co-workers pending investigation of any alleged infraction committed by the
employee.160 Thus, it is justified only when the employee's continued employment poses a
serious and imminent threat to the employer's or co-workers' life or property. When justified,
the preventively suspended employee is not entitled to the payment of his salaries and benefits
for the period of suspension."161

On one hand, it did not appear that Lacanaria's presence would pose a threat or danger to the
University, its personnel or its students, even if he entered the school's premises. Hence, there
would not have been a need for his preventive suspension. Even so, there was no allegation that
he was barred from entering the premises. On the other hand, though, the University probably
deemed it best not to assign Lacanaria a teaching load so that he would not have any reason to
enter the school premises and to teach, given that his infractions were related to his interactions
with the students. Nevertheless, the University did not issue any document placing him under
preventive suspension. Without a doubt, such official action should have undergone due
process standards. On this score, too, Lacanaria was not afforded proper notice.
 The foregoing observations, then, comprise the procedural due process lapses of the University.
Accordingly, Lacanaria must be compensated on account thereof, notwithstanding the finding
of a just cause for his dismissal.

3
Overt Act

In a direct dismissal, the usual overt act is a termination notice or an overt act of barring
an employee from resuming work. In constructive dismissal, the over acts are the listed grounds
for quitting under Art. 300 of the Labor Code. Where the cessation of work is not by reason of the
employer’s overt act, there is no dismissal. What obtains may be a resignation, abandonment,
desertion of a seaman , or retirement. It is important to know what distinguishes resignation
from constructive dismissal and, of course, between these two and abandonment.

Delisting

Inter-Island Information Systems, Inc. vs CA

G.R. No. 187323, 23 June 2021

“Inter-Island is an internet service provider which hired Ibay on January 20, 2003 as a
technical support in its Network Operations Center (NOC). Into seven (7) months of his
employment, Ibay received Memorandum No. 03-08-08 dated August 20, 2003 issued by a
certain Scott Lam (Lam) informing him of his inclusion in the Q Linux Schedule of Training.
However, in a revised Memorandum No. 03-09-01 dated September 2, 2003 signed by Lam,
Ibay was delisted as one of the trainees. When Ibay discussed his exclusion with Marianne
Rosellon (Rosellon), NOC's Technical Head, Rosellon explained that he was delisted from the
said training due to the expiration of his contract as would be further explained to him by the
Human Resource Department.7

Two days later, Lam talked to Ibay over the phone urging the latter to submit his
resignation letter so that Jesse Tan Ting (Ting), the Human Resource Manager, would not get
angry at him. Lam further said that in exchange for his submission of resignation letter, Inter-
Island would issue a Certificate of Employment which he could use as reference for his
application in other companies. Lam also threatened to block his applications with other
companies should he refuse to resign.

On October 3, 2003, Ting allegedly summoned respondent to his office and told him to
submit his resignation letter. However, when respondent refused, Ting told him "Kung ayaw na
namin sa inyo ay wala kayong magagawa." On October 31, 2003, respondent was allegedly
prevented from entering Inter-Island's premises. Hence, respondent filed a complaint for illegal
dismissal.

On the other hand, Inter-Island alleged that during respondent's tenure in the company,
he incurred several infractions. He was reprimanded for excessive use of company telephone as
per Memorandum dated March 18, 2003. On March 29, 2003, respondent tendered his
resignation which was not accepted by the company. Petitioner further averred that
respondent's work continued to deteriorate until he abandoned his work. Respondent was not
terminated and was, in fact, ordered to return to work.

Labor Arbiter:

“The LA found respondent's assertion of facts to be more credible than petitioner's. The
fact that there was a scheduled training in 2003 which included respondent was fully
substantiated. However, petitioner failed to justify why respondent was delisted from joining
the training. Moreover, although petitioner claimed that it ordered respondent to return to
work, the company had not seen fit to notify respondent of its return-to-work order. Hence, the
LA ruled in favor of respondent and ordered his reinstatement with full backwages.”

NLRC:

“The NLRC ruled that respondent was illegally dismissed. His filing of the complaint
barely seven days after he was allegedly dismissed showed his intention not to sever the
employer-employee relationship. His failure to report to work was justified as he was
prevented from entering Inter-Island's premises. His subsequent filing of a complaint for illegal
dismissal belied any suggestion that he was abandoning his work.

Moreover, respondent's refusal to return to work after the filing of the complaint was
justified. The offer to return to work was belatedly made by petitioner's counsel in the
company's position paper and verbally during the mandatory conference without any written
document signed by any company representative. Also, the offer was premised on the
respondent's alleged abandonment.

The NLRC further ruled that the lack of a notice of termination does not per se prove that
there was no actual dismissal. In this case, respondent was repeatedly asked to submit a letter
of resignation which implied that no notice of termination was ever issued. Petitioner failed to
comply with the substantive and procedural requirements of due process to further refute
respondent's claim for illegal dismissal.”

Court of Appeals:

“Hence, petitioner filed a petition for certiorari before the CA. On April 30, 2008, the
appellate court issued a Resolution directing Ibay to file a comment within ten (10) days from
receipt. However, the Resolution sent to Ibay's counsel was returned unserved.

On June 27, 2008, the CA issued a Resolution 24 directing petitioner to furnish the court
within ten (10) days from notice the present and complete address of both respondent Ibay and
his counsel. However, petitioner Inter Island failed to comply.

Thus, on September 12, 2008, the CA rendered its assailed Resolution dismissing the
petition for failure of petitioner to comply with its June 27, 2008 Resolution pursuant to Section
3, Rule 17 of the Rules of Court.”

Supreme Court:

“The contention that Ibay had applied to work abroad is not supported by evidence on
record. Even if the same is true, Ibay's intent to earn a living during the pendency of the labor
case should not be taken against him. Besides, even if he indeed applied for a new job abroad in
 November 2003, petitioner's illegal dismissal of respondent Ibay and the latter's subsequent
filing of a complaint were fait accompli, having already been accomplished in October 2003 or
way before respondent Ibay's alleged application for work abroad.This cannot erase the fact
that the company illegally dismissed its employee without just and authorized cause and
prevented the latter from entering the company premises.

Further, petitioner's contention that it issued several return-to-work orders is without any
factual basis. Petitioner's allegation that it ordered its worker to return to work during the
mandatory conference on January 12, 2004, as reiterated in its position paper dated February 5,
2004 and in its Rejoinder dated May 12, 2004, were substantially refuted by Ibay who claimed
non-receipt of petitioner's written notice to return to work.

As a final note, the obstinate failure of respondent lbay and his counsel of record before
the LA and the NLRC, Atty. Erro, to comply with the appellate court and this Court's numerous
directives has not escaped Our notice. While it is true that Ibay's cause was ultimately proven to
be meritorious, this fact does not excuse nor justify Ibay's or Atty. Erro's repeated failure to
comply with the orders of the Court. In fact, this case has dragged on for 11 years since the
filing of the petition for certiorari under Rule 65 before this Court in 2009 due to the mere fact
that Atty. Erro could not be located to be served the notices of this Court. Even respondent Ibay
was not found in his address on record during the service of the warrant of arrest for
contempt.”

No Act of Dismissal

Efren Santos, Jr. vs King Chef

G.R. No. 211073, 25 November 2020

“On December 25, 2011, Santos rendered only a half day work without prior
authorization. Salmasan, on the other hand, did not report at all Petitioners claimed that in
view thereof, they were dismissed from employment. They averred that when they tried to
report for work, their chief cook told them that they were already terminated.

Accordingly, petitioners filed their complaint for illegal dismissal, underpayment of

salaries, non-payment of salaries and thirteenth month pay, damages, and attorney's fees.

Respondents denied that petitioners were dismissed from work. They argued that
petitioners violated the December 22, 2011 memorandum informing the employees of King
Chef that no absences would be allowed on December 25, 26, 31 and January 1 unless justified.
After petitioners failed to report for work on December 25, 2011, and returned the following day
merely to get their share in the accrued tips, they allegedly went on absence without leave
(AWOL) for the rest of the Christmas season.

Respondents believed petitioners went on AWOL after they got wind of respondents'
decision to impose disciplinary action against them for their unauthorized absence on
December 25, 2011. Respondents claimed that even before they could impose disciplinary
action on petitioners, the latter already filed a complaint for illegal dismissal against them on
January 2, 2012.

As correctly found by the NLRC:

 In their Position Paper, complainants describe the manner by which they were allegedly
dismissed, as follows:

"x x x Complainant Santos went to work only for half day only on December 25, 2011 so that they
could celebrate Christmas with his family in Pampanga. When he reported to work on December 27,
2011, he was verbally informed by the supervisor and chief cook Joel Aroy not to report to work anymore
because he was already terminated from his employment due to his one day absence. Complainant
Salmasan on his part absented himself on December 25, 2011 to likewise celebrate Christmas with his
family. The following day, he immediately reported back to work and started doing his work assignment.
However, when he was seen by their supervisor and chief cook Joel Aroy, he, same with complainant
Santos was verbally terminated from his employment.

No valid explanation was given to complainants why they were being terminated from
employment. Despite the same, they still tried to report to work and even made follow-ups through
telephone calls. They were banned from entering the premises of King Chef hence on January 20, 2012;
they filed this labor complaint against respondents." (p. 10, Records)

However, when Respondents declared that despite Complainants' absences on December

25, 2011 (half day for Complainant Efren Santos), both Complainants reported on December
26, 2011 merely to collect their share of the tips for the period 11 to 25 December 2011, and
exhibited proof to this claim by the document which Respondents describe as the December
26, 2011 "Sign Up Sheet", Complainants simply kept a silent stance.

By these alone, three (3) facts are established: (1) that both Complainants absented
themselves on December 25, 2011[,] a Christmas Day, without leave, hence, they were on
Absence Without Leave or AWOL on that day; (2) that nevertheless, both came on December
26, 2011 merely to get their share of the period's tips; (3) that it is not true that Complainant
Santos reported for work on December 27, 2011, and Complainant Salmasan reported on
December 26, 2011 to work: as Complainants have not presented any proof to this claim.
(Emphasis supplied)

Even worse, petitioners made untruthful allegations in their pleadings. They claimed that
they filed the complaint for illegal dismissal on January 20, 2012, but the NLRC found that it
was filed earlier, thus:

The correct date Complain[an]t filed their complaint is of interest to Us.

Complainants claim that they filed this case on January 20, 2012 (p. 10, Records),
while Respondents reckon the date as January 2, 2012 (p. 21, Records). Carefully
examining the records, We find Complainants['] claim as at best evasive. The
Minutes of the Single Entry Approach (SENA) is dated January 19, 2012 (p. 4,
Records) with the parties already in attendance. This can only lead to the
conclusion that Complainants had actually gone to NLRC earlier as claimed by
Respondents, that is on January 2, 201[2]. So that by January 19, 2012, the
Respondents had already been notified of Complainants' action, and had appeared
in the conciliation hearing.

This gives credence to the claim of Respondents that then they had no
time yet to discipline Complainants, when the latter filed this case. As noted
above, "the Christmas season" during which complainants incurred their "only
infraction" of having been "absented themselves" x x x started from December 24,
2011 and ended on January 1, 2012.52 (Emphasis supplied)
 Considering the above circumstances and taking them all together, We are inclined to
agree with respondents that before they could even impose disciplinary action upon the
petitioners, they already filed the complaint for illegal dismissal on January 2, 2012, just when
the Christmas season was over.

"Without substantial evidence that petitioners were indeed dismissed, it is futile to

determine the legality or illegality of their supposed dismissal."54 We are thus constrained to
uphold the NLRC's ruling, as affirmed by the CA, that there was no illegal dismissal in this
case.

Be that as it may, respondents are not correct in arguing that there was abandonment on
the part of the petitioners.55 "Abandonment is a matter of intention and cannot lightly be
presumed from certain equivocal acts."56 The employer must prove that first, the employee
"failed to report for work for an unjustifiable reason," and second, the "overt acts showing the
employee's clear intention to sever their ties with their employer."

There was no showing here that petitioners' absences were due to unjustifiable reason, or
that petitioners clearly intended to terminate their employment. It does not suffice that
petitioners pre-empted respondents by filing the complaint for illegal dismissal before
respondents can impose disciplinary action. "The operative act is still the employees' ultimate
act of putting an end to their employment."

"In cases where there is both an absence of illegal dismissal on the part of the employer
and an absence of abandonment on the part of the employees, the remedy is reinstatement but
without backwages."59 However, considering that petitioners do not pray for such relief, "each
party must bear [their] own loss," placing them on equal footing.60 Thus, the NLRC, as affirmed
by the CA, is correct in deleting the award of separation pay to petitioners.

Note: The following are overt acts of dismissal: destruction of time card (Ang vs
NLRC); prolonged floating status; and prolonged preventive suspension. A positional
downgrade even without salary reduction, if entirely baseless and where the employee is
reduced to the status of a necessitous person, is an overt act of constructive dismissal (Orchard
Golf and Country Club vs Francisco, G.R. No. , 18 March 2013). A pull-out notice given a security
guard based on the request of the principal is not a notice of dismissal ( ). Termination of a
service agreement (SA) between an employer and an employee is not termination of their
employment contract ( ).

Resignation vs Constructive Dismissal

Jose Edwin Esico vs Alphaland Corp.

G.R. No. 216716, 17 November 2021

Philweb Corp. hired Esico as a pilot. He was concurrently hired by Alphaland to fly its
CEO Robert Ongpin to his business appointments within and outside the country. Philweb
would continue to pay his increased salaries. On August 22, he received a job offer sheet as pilot
from Alphaland with the level of manager. It offered, among others, a total monthly gross
compensation of Ph115,000.00 including a monthly representation allowance of Ph25,000.00,
subject to liquidation. He signed the job offer sheet believing that it was the compensation
package that he had asked for separately from his work as Risk & Security Management Officer
for Philweb.

Despite the job offer, Esico claimed that he was never paid his salary as stated in the job
offer. He resigned for these reasons: (a) he suffered serious insults and humiliation because of
rumors of his impending termination; (b) he was under a compulsion to commit serious flight
safety risks and his concerns were ignored; and (c) he was precluded from flying respondents
Alphaland's Chairperson. Thereafter, he filed a complaint for constructive dismissal against
Alphaland Corp.

Ruling:

“The last paragraph of Esico's resignation letter conveys his gratitude and appreciation to
AC and Philweb, thus:

The undersigned would like to respectfully express his sincerest gratitude

and appreciation to Alphaland Corp. and PhilWeb Corp. for the job opportunity
given for the past 2 years and 3 months as Corporate Pilot and Risk and Security
Management Officer respectively. Same gratitude and appreciation are also given to
Company executives, superiors and co-workers on both Companies the
undersigned had the chance to work with most especially to all hardworking
Company pilots and aircrew.[80]

From his resignation letter and the evidence threshed out before the labor tribunals and
the CA, we are hard pressed to make a finding that Esico's resignation was involuntary brought
about by unbearable, unreasonable and discriminatory acts of respondents Alphaland. Apart
from the employment contract which is the pith of the issue between the parties, Esico did not
muster the standard of substantial evidence to prove that respondents Alphaland intended his
dismissal. What is fairly apparent is that Esico resigned because he was dissatisfied and
unhappy with respondents Alphaland for the cited reasons in his resignation letter.

First. Undoubtedly, evidenced in the tenor of his July 3, 2012 resignation letter, Esico was
extremely dissatisfied with the compensation package in his employment contract with
respondents' group of companies. Esico's dissatisfaction with his compensation package and the
evident stonewalling of respondents' Alphaland to address his concern thereon were his
motivation for his resignation. However, these motives, absent substantiation of their veracity,
should not bear on respondents Alphaland's supposed acts amounting to constructive
dismissal.

We reiterate the rule in illegal dismissal cases that while the employer bears the burden
of proving that the termination was for a valid or authorized cause, the employee must first
establish by substantial evidence the fact of his dismissal from service. In this case, however,
respondents Alphaland should not be impelled to prove a valid dismissal as they did not
terminate the employment of Esico.

The dissatisfaction of Esico and his claim of constructive dismissal may be related but
these are two different and separate matters. The first can be proven simply by a plain reading
of his resignation letter, the second one is carved by law and must be proven by substantial
evidence.
 Regrettably, Esico was not able to prove his allegations that: (a) he suffered serious
insults and humiliation because of rumors of his impending termination; (b) he was under a
compulsion to commit serious flight safety risks and his concerns were ignored; and (c) he was
precluded from flying respondents Alphaland's Chairperson. For these allegations, Esico
simply narrated what was supposedly relayed to him by a colleague without presenting any
corroborating evidence of his statements.

While we observe that respondents' group of companies were giving Esico the run
around and obliquely addressing his issues such as the expiration of his flight training, the
compensation package for his concurrent designation and flight safety recommendations, there
is nothing on the record that points to respondents Alphaland's overt and positive act to dismiss
him or that they intended his separation from them.

Considering that Esico was not constructively dismissed, he is not entitled to backwages
and separation pay in lieu of reinstatement.

Notwithstanding, we are impelled to look, into what is provided in the employment

contract considering the divergent factual findings of the labor tribunals and the appellate
court. We now tackle the parties' employment contract and the terms and provisions thereof.

Second. Quite apparent to this Court is that respondents Alphaland did not intend to
dismiss Esico whose continued employment with them worked extremely well to their
advantage under an ambiguous employment contract. Hence, their reply to Esico's resignation
letter refuting his claims of maltreatment and demanding reimbursement of costs for the Cessna
flight training.”

Ma. Lea Jane I. Gesolgon vs Cyberone Ph, Inc.

G.R. No. 210741, 14e October 2020

“As to the power of dismissal, the records reveal that petitioners submitted letters of
resignation as directors of CyberOne PH and not as employees thereof. This fact negates their
contention that they were dismissed by CyberOne PH as its employees. Lastly, the power of
control of CyberOne PH over petitioners is not supported by evidence on record. To reiterate,
petitioners failed to prove the manner by which CyberOne PH alledgedly supervised and
controlled their work. In fact, petitioners failed to mention their functions and duties as
employees of CyberOne PH. They merely relied on their allegations that they were hired and
paid by CyberOne PH without specifying the terms of their employment as well as the degree of
control CyberOne PH had over the means and method by which their work would be
accomplished.”

Renato Tacis, et al. vs Shield Security Services, Inc.

G.R. No. 234575, 7 July 2021

In November 2013, SSSI deployed more or less 15 new security guards at Texas
Instruments (TI) and instructed Tacis et al. to train the new recruits for three days.
However, on November 29, 2013, the were informed by Morante that they had been
relieved and terminated from service and that the 15 new hirees would replace them as
per request of TI. Morante then gave them checks representing their "retirement pay"
and advised them that the other benefits due them such as 13th month pay and last
salary would be given upon their return to Manila.

The petitioners objected to their severance arguing that there was no valid ground
for their dismissal as they did not commit any infraction during their employment with
the Company.[11] In order to appease petitioners, Morante made a commitment to
transfer them to Soliman Security Services (Soliman Security), a sister company of SSSI
effective January to February 2014. Morante even made petitioners fill out application
forms for their eventual transfer to Soliman Security

Convinced that they would be absorbed by Soliman Security, Tacis et al.

submitted their respective resignation letters and quitclaims as pre-requisites for their
receipt of their separation pay, 13 th month pay, service incentive leave pay, cash bond,
uniform allowance and last salary.

However, upon inquiry of Tacis as to the status of their transfer to Soliman

Security sometime in January 2014, Morante informed him that there was no vacancy at
Soliman Security. That prompted them to file a complaint for constructive dismissal.

Ruling:

“Constructive dismissal is an involuntary resignation resorted to when continued

employment is rendered impossible, unreasonable or unlikely; or when there is a demotion in
rank and/or a diminution in pay. It exists when there is a clear act of discrimination,
insensibility or disdain by an employer, which makes it unbearable for the employee to
continue his/her employment. In cases of constructive dismissal, the impossibility,
unreasonableness, or unlikelihood of continued employment leaves an employee with no other
viable recourse but to terminate his or her employment.

The test of constructive dismissal is whether a reasonable person in the employee's

position would have felt compelled to give up his position under the circumstances. It is an act
amounting to dismissal but made to appear as if it were not. It must be noted, however, that
bare allegations of constructive dismissal, when uncorroborated by the evidence on record,
cannot be given credence.

In contrast:

Resignation is the formal pronouncement or relinquishment of a position or office. It

is .the voluntary act of an employee who is in a situation where he believes that personal
reasons cannot be sacrificed in favor of the exigency of the service, and he has then no other
choice but to disassociate himself from employment. The intent to relinquish must concur with
the overt act of relinquishment; hence, the acts of the employee before and after the alleged
resignation must be considered in determining whether he in fact intended to terminate his
employment. In illegal dismissal cases, it is a fundamental rule that when an employer
interposes the defense of resignation, on him necessarily rests the burden to prove that the
employee indeed voluntarily resigned.

Guided by the foregoing legal precepts, a judicious review of the facts on record will
show that the Company was able to show petitioners' voluntary resignation. The acts of
petitioners before and after the resignation do not show that undue force was exerted upon
them.

First, petitioners relinquished their positions when they submitted their individual letters
of resignation, which to reiterate, were in their own handwriting. Petitioners admitted having
submitted the said letters, albeit, due to an alleged deceitful machination, but which they utterly
failed to substantiate for lack of substantial documentary or testimonial evidence.

More importantly, there was no indication in their respective resignation letters that they
were unduly influenced or coerced to resign. In fact, the said letters contained words of
gratitude which can hardly come from an employee forced to resign. In Bilbao v. Saudi Arabian
Airlines, the Court found as voluntary the resignation of the complainant, whose clear use of
words of appreciation and gratitude negated the notion that she was forced and coerced to
resign.

Second, petitioners accepted the retirement pay and monetary benefits given them by the
Company and executed a Quitclaim, Release and Waiver therefor, as settlement and waiver of
any cause of action against respondents. The Court has consistently ruled that "a waiver or
quitclaim is a valid and binding agreement between the parties, provided that it constitutes a
credible and reasonable settlement, and that the one accomplishing it has done so voluntarily
and with a full understanding of its import." In this case, the NLRC found the monetary
benefits received by petitioners in

Moreover, there was no showing that the quitclaims were procured by respondents
through fraud or deceit. Neither was there proof that respondents employed force or duress to
compel petitioners to sign the same. Basic is the rule that a mere allegation is not evidence, and
he who alleges has the burden of proving his allegation with the requisite quantum of evidence.
[53]
Absent any extant and clear proof of coercion and deceit allegedly exerted by respondents
upon petitioners that led them into signing the quitclaims, it can be concluded that petitioners
signed the same of their own accord.

Third, the Court finds petitioners' imputation of bad faith or deceit against respondents
untenable.

Bad faith, under the law, does not simply connote bad judgment or negligence. It imports
a dishonest purpose or some moral obliquity and conscious doing of a wrong, or a breach of a
known duty through some motive or interest or ill will that partakes of the nature of fraud.

It must be noted that the burden of proving bad faith rests on the one alleging it since
basic is the principle that good faith is presumed and he who alleges bad faith has the duty to
prove the same. Allegations of bad faith and fraud must be proved by clear and convincing
evidence.

In this case, petitioners insist that respondents misled them into signing their resignation
letters upon the Company's false promise that they would be transferred to Soliman Security.
On the other hand, respondents claim that they gave petitioners the option to either be
separated with full payment of their benefits or to go to Manila for their next assignment.
However, petitioners chose to resign.”

Villola vs United Philippine Lines, Inc.

G.R. No. 230047, 9 October 2019
 UPL employed Villola as its Information Technology (IT) and Communications Manager.
On 31 March 2010, he met with Lising to discuss proposed adjustments to his salary as IT and
Communications Manager. Allegedly, Lising agreed to pay him a monthly salary of PhP
40,000.00 starting April 1, 2010. Both parties later agreed that Villola would be paid a monthly
salary of PhP 20,000.00, and an additional PhP 15,000.00 per month, the cumulative amount
thereof to be released only at the end of the calendar year. Villola's additional salary of PhP
15,000.00 per month, however, remained unpaid until his separation.

On October 11, 2014, UPL released a Memorandum informing UPL employees of the fact
of Villola's termination of employment from UPL effective June 1, 2013. Concomitantly, the same
memorandum directed security personnel to deny Villola entry from the company premises.

UPL claimed that during the first quarter of 2013, it observed that Villola was unable to
implement the CORE despite budget allotment therefor for two years. In this respect, UPL had to
engage the services of HelpDesk. UPL found that HelpDesk was otherwise able to: (a) implement
the CORE; and (b) perform other IT-related services for UPL – key functions of Villola as IT and
Communications Manager. These IT-related services of UPL were thus being performed by both
HelpDesk and Villola himself.

Meanwhile, aside from rendering work for UPL, Villola was also engaged as trainer for a
UPL affiliate for the latter's Anti-Piracy Awareness Program. UPL tolerated Villola's engagement
as trainer, although training classes detracted him from his core duties and responsibilities as IT
and Communications Manager of UPL.

Considering the foregoing premises, Consunji, in a meeting with Villola sometime in May
2013, informed the latter that management may have to declare his position as redundant to
which Villola agreed. This notwithstanding, Consunji inquired from Villola if he is otherwise
interested to work as a consultant for a scanning project covering UPL documents, which would
involve crewing and finance documentation to be utilized by another company, SVI. Considering
that Villola relayed his interest to take on the consultancy work for the said scanning project,
Consunji requested Villola to submit to UPL his quotation for the scanning services for crewing
and finance documentation.

Notably, Consunji and Villola also agreed that instead of terminating Villola's
employment with UPL on the ground of redundancy, he will simply voluntarily cease his
employment with the company. Villola was then instructed by Consunji to formalize his
resignation from UPL by furnishing management his written resignation letter, which, however,
Villola failed to produce despite follow-ups from UPL officers. Significantly, Villola stopped
reporting for work starting June 2013. Villola, however, continued to render part-time work
during the period from June to July 2013 as trainer in the Anti-Piracy Awareness Program of a
UPL affiliate, which were conducted at the company premises of UPL. On June 27, 2013, Villola,
under the name of "DRD Technology Solutions," submitted to Consunji his proposal for the
scanning project. The scanning project, however, did not materialize.

Thereafter, on September 30, 2014, Villola filed against herein respondents a complaint for
illegal dismissal and payment of other money claims as well as claims for moral and exemplary
damages and attorney's fees

Ruling:
 “At the outset, while Villola's resignation letter serves as proof of the latter's formal
relinquishment of his employment with UPL, the absence thereof is not enough to rule out the
conclusion that no resignation ever took place. On the other hand, the contemporaneous and
immediate subsequent acts of Villola after his supposed resignation from UPL should be
considered in determining if there is truth to the contention that he indeed resigned from UPL.

In this case, we agree with the respondents that Villola resigned from his employment and
that he was not dismissed by UPL based on the following factual circumstances:

First, UPL, through Consunji, requested Villola in an e-mail[ dated May 31, 2013 to furnish
to management his resignation letter and his proposal and quotation for its scanning project for
SVI, viz.:

Dear Aseus,

I will need for you to submit a letter of resignation from UPL. Please indicate
effectivity this June 01, 2013.

I will also need your quotation for the scanning services for crewing and finance
documentations.

Also, there would be no encoders anymore. I will ask Rachel if they will still use
Pam in the Support Group.

Thank you,

Regards,
Joey

Notably, Villola did not raise any concerns whatsoever to Consunji or inquired on the
reasons for the latter's request to submit a resignation letter. Consunji, in an email dated June
12, 2013, again made a follow-up request to Villola to submit his resignation letter. Villola, on
his part, turned a blind eye, so to speak, on the said request and directly responded instead to
Consunji's e-mail dated May 31, 2013 as regards the submission of the proposal and quotation
for the scanning project, viz.:

Dear sir,

Currently preparing the proposal and quote for the encoding services. We are just
scoping the work to be done and the various information that needs to be encoded,
scanned and indexed.

Thank you.

Kind regards,
Aseus

In fact, it bears noting that a certain Ms. Rica B. Rufino, an officer of UPL, similarly
followed-up on Villola to furnish to management a copy of his resignation, which, however, fell
on deaf ears.

Second, it is also borne out of the records that UPL ceased paying his salaries after May 31,
2013, as in fact, Villola himself already stopped reporting for work starting June 1, 2013.
 Third, on June 27, 2013, Villola submitted to UPL his proposal for the scanning project. A
perusal of the proposal clearly indicate that the same was furnished to UPL under the name
"DRD Technology Solutions," an entity distinct from UPL, and was jointly prepared by Villola
and a certain Mr. Ding Dulay who appears to be neither an employee nor an individual
affiliated with UPL.

All told, this Court finds that Villola failed to discharge the burden of proof required of
him to establish that respondents indeed took action to dismiss him. If indeed respondents
unceremoniously dismissed Villola from employment as what he claims, he would have, at the
very first opportunity, raised his concerns on Consunji's request for submission of a resignation
letter as early as May 31, 2013, which Villola clearly failed to do in this case. Significantly,
Villola himself, without any directive whatsoever from UPL management, stopped reporting
for work at UPL's company premises starting June 1, 2013. Notably, this fact was not denied by
Villola in his Petition and other allied pleadings.”

Abandonment

Fernando Gososo vs Leyte Lumber Yard

G.R. 205257, 13 January 2021

Company policy prohibited sales representatives from getting items or stocks

from the storage area by themselves. They were to course the orders through authorized
checkers before the items are released. They were also prohibited from leaving their
designated work areas without their superior's consent. Moreover, they were required
to submit their applications for leave days before the intended dates to allow the
management ample time to approve the application and to adjust the workforce and
their workload.

On October 6, 2008, Gososo was on his way to the stock room to follow up on a
customer's urgent order when Yu stopped him. The next day, Yu saw Gososo step out of
the store to check the availability of a ball caster having a customer's specifications in the
storage area.5

Yu required Gososo to produce a letter of apology for the two incidents under
pain of dismissal. Admitting fault, Gososo submitted a letter of apology to Yu on
October 8, 2008.6 He reasoned that he was just doing his job for the company's clients
and that he never intended to neglect his duties or disobey the company policy. Yu
allegedly refused to accept the letter of apology and instructed Gososo to write further
in his letter the words "I am not supposed to approach the checker" and "I promise again
to ask permission from manager before I can go out." 7 On October 9, 2008, Gososo
submitted the revised letter of apology to Yu,8 who told him to come back the next day.

When he returned to work on October 11, 2008, Yu allegedly told Gososo to sign
a prepared document. Gososo declined since the document contained admissions of
offenses that he did not commit. Irked by Gososo's refusal, Yu informed him of his
termination from work. Yu allegedly even threw a pair of scissors at Gososo but missed.
 Aggrieved, Gososo filed on October 13, 2008 a complaint for constructive
dismissal against Leyte Lumber

Ruling:

Constructive Dismissal

“Doctor v. Nii Enterprises (Doctor) defined constructive dismissal, viz.:

Constructive dismissal has often been defined as a "dismissal in disguise" or

"an act amounting to dismissal but made to appear as if it were not." It exists where
there is cessation of work because continued employment is rendered impossible,
unreasonable or unlikely, as an offer involving a demotion in rank and a
diminution in pay. In some cases, while no demotion in rank or diminution in pay
may be attendant, constructive dismissal may still exist when continued
employment has become so unbearable because of acts of clear discrimination,
insensibility or disdain by the employer, that the employee has no choice but to
resign. Under these two definitions, what is essentially lacking is the voluntariness
in the employee's separation from employment.30 (Emphasis supplied.)

Petitioner insists that he was forced to sign a prepared incriminatory letter and then fired
when he refused to do so. This statement does not fit the above legal definition provided
in Doctor. No proof other than petitioner's bare allegations supported this claim. It is settled that
bare allegations deserve no legal credit for being self-serving.

Even if these accusations were adequately corroborated, respondent Yu's rebuke of

petitioner, while overbearing and intimidating, was reasonably incited by the latter's violations
of respondent Leyte Lumber's company practices. It cannot be considered as tantamount to
unequivocal acts of discrimination, insensibility, or disdain as to render petitioner's continued
employment as unbearable.

In fine, the Court finds no working basis to declare that petitioner had been dismissed,
whether legally, illegally, or constructively.”

Abandonment

“At the same time, we find petitioner not guilty of abandonment.

Abandonment requires the concurrence of the following: (1) the employee must have
failed to report for work or must have been absent without valid or justifiable reason; and (2)
there must have been a clear intention to sever the employer-employee relationship manifested
by some overt acts.31 Abandonment is a matter of intention and cannot lightly be presumed
from equivocal acts.32 Absence must be accompanied by overt acts pointing definitely to the fact
that the employee simply does not want to work anymore.33 The burden of proof to show that
there was unjustified refusal to go back to work rests on the employer.

Respondents did not discharge this burden of proof of abandonment. They just surmised
that petitioner had no intent to return to work when he allegedly went on an unapproved leave
of absence on October 11, 2008, of which respondents were also the approving authority. No
attendance sheet of any sort was submitted to substantiate this claim by respondents. Neither
was it shown that respondents actually denied the application for leave and made the
disapproval known to petitioner.

Moreover, while respondents issued the October 13, 2008 Memorandum requiring
petitioner to return to work, records do not disclose whether petitioner was actually furnished
copies of this Memorandum. To claim that petitioner blatantly disregarded respondents' return-
to-work order in their October 13, 2008 Memorandum,36 when petitioner was never shown to
have received a copy of the same, speaks volumes of petitioner's vague intent to abandon his
work and respondents' attempt to tweak facts in their favor.

In any case, mere absence or simple failure to report for work is not abandonment, more
so if the employee was able to lodge his complaint before the labor tribunals with haste. An
immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for
reinstatement,38 is inconsistent with a charge of abandonment. 39 Indeed, employees like
petitioner herein who take steps to protest their alleged dismissal cannot be said to have
abandoned their work.

Where the employee fails to prove the fact of his or her illegal dismissal, and the
employer has also not demonstrated that the employee abandoned his or her work, the case
usually ends with the employee's reinstatement without the payment of backwages. Should
reinstatement be rendered impossible by strained relations of the parties, become unreasonable
with the passage of time since the legal controversy, or otherwise attained impossibility or
impracticability due to the present prevailing circumstances, equity impels the Court to award
the petitioner separation pay equivalent to one-month salary for every year of service,
computed up to the time he stopped working for respondents.

The Court has had occasion to withhold the grant of separation pay where there was no
dismissal, no abandonment, and reinstatement was no longer feasible. 43 In the earlier cases with
factual backgrounds similar hereto, it had been ruled that the parties shall bear their respective
losses and are placed on equal footing.”

PNB vs Manuel Bulatao

G.R. No. 200972, 11 December 2019

On 1 October 1999, Mr. Benjamin Palma Gil (Mr. Palma Gil), then PNB's
President, and a certain Mr. Samit Roy (Mr. Roy), an Indian national, hosted a dinner
meeting for PNB's IT staff to announce the conclusion of a Joint Venture Agreement
(JVA) between PNB and Mr. Roy. At dinner, Mr. Roy announced that not all of the IT
staff would be retained since everyone had to undergo an International Competitive
Test as a prerequisite for absorption. Those who would not be absorbed would be
offered retirement packages instead. Bulatao contended that the conduct of the
International Competitive Test was a ploy to force IT personnel not supportive of the
project to leave the bank. Notably, Bulatao was one of those who objected to the JVA
because of the supposed huge capital exposure on PNB's end. 7

Eventually, Bulatao manifested his intent to retire in a letter 8 dated November

10, 1999 addressed to Mr. Palma Gil. The pertinent portions of the said letter are as
follows:

This is to inform you that I am taking the Bank's offer to retire on 31

December 1999 as announced during your recent meeting with all the IT staff held
at the Skyline Executive Lounge last October 20, 1999.

Kindly appoint my replacement effective today because I am going on an official

leave of absence.

My continued stay is no longer tenable for the following reasons:

• The working environment brought about by the recent decisions by

management makes it difficult for me to be productive.

• I cannot, in conscience, support the decision on the Joint Venture.

Consequently, I cannot endorse this project to my staff for support and acceptance.

While I am responsible for introducing Mr. Umen Bewtra of FI of London, I

had certain expectations which could have made the venture more acceptable. These
are:

• That FI would be our partner in view of their track record of managing the
venture at the Bank of Scotland rather than SciCom, which is based in India and is
more of an IT consulting company.

• That due process would be followed wherein IT Mancom will collectively

evaluate the proposal prior to any decision of higher management, which is what is
currently done to procurement of IT resources or decisions requiring IT Steercom
deliberation.

Further, on several occasions, I sought an appointment with Mr. Samit Roy

to discuss sensitive issues that I verbally brought to his and his partners' attention.
These were:

• 10% charge based on annual IT expenditure. This is a clear conflict of

interest since there is no motivation for the Joint Venture to reduce PNB's annual
costs.

• Elimination of the MIS plan since we already paid Kirchman Corporation

for the Strategic Study.

Furthermore, in compliance to your instructions last September 21, 1999, we

did seek for an appointment with Mr. Roy. However, VP Claro Fernandez and
myself were not able to meet with him although he confirmed a meeting on two
 occasions.

The aforementioned are the reasons for this decision and I hope they explain
clearly why I cannot stay in the employ of the Bank.

xxxx

In closing, I would like to express my gratitude for the privilege of having

worked with this fine banking institution.9

Aware that the Board had not yet acted on his application for retirement, Bulatao
withdrew his application in a Memorandum dated January 25, 2000 addressed to
Feliciano L. Miranda, Jr., then Officer-in-Charge/Chief Executive Officer of PNB.

On January 29, 2000 or four days from the date of his Memorandum, Bulatao
received a call from the SVP of Human Resource Division who informed him not to
report for work in February 2000 as the Board already accepted his "resignation." For
this reason, Bulatao stopped reporting for work. Subsequently, he filed a complaint 13 for
illegal dismissal.

Thereafter, Bulatao received a letter 14 dated March 23, 2000 from Manuel C.
Mendoza, the Executive Vice-President of PNB, informing him that the Board, by virtue
of Resolution No. 38 of January 28, 2000, approved and confirmed the acceptance of his
resignation (given that the Board treated his application for retirement as a resignation).

Meanwhile, the complaint filed by Bulatao with the NLRC was dismissed for
lack of jurisdiction. The NLRC held that since Bulatao was an appointed officer of a
corporation, it was the Regional Trial Court (RTC) which had jurisdiction over the case
in accordance with Republic Act (RA) No. 8799 or the Securities Regulation Code. In
view of this, Bulatao filed a suit for Illegal Termination of Appointment and
Damages15 before the RTC of Parañaque City.

In his testimony, Bulatao averred that PNB erroneously considered his application
for retirement as a resignation.

Ruling:

Doctrine of Promissory Estoppel

“As declared by the appellate court, the situation calls for the application of the doctrine of
promissory estoppel, which is "an exception to the general rule that a promise of future conduct
does not constitute an estoppel. In some jurisdictions, in order to make out a claim of promissory
estoppel, a party bears the burden of establishing the following elements: (1) a promise
reasonably expected to induce action or forbearance; (2) such promise did in fact induce such
action or forbearance[;] and (3) the party suffered detriment as a result." 44 In the case at bench,
Bulatao was constrained to apply for early retirement due to the announcement of its availability
and because of the unfavorable future working conditions he would face after the supposed JVA
with the "Indian" group and the conduct of the International Competitive Test. Consequently,
Bulatao suffered detriment as his application for early retirement was unexpectedly interpreted
as a resignation by the Board and he was subsequently advised not to report for work anymore
notwithstanding the withdrawal of his application for early retirement.

Bulatao withdrew his application for early retirement since Mr. Tan purportedly asked
him to work in a different capacity in the bank. Hence, he manifested such withdrawal through a
Memorandum three days before PNB's Board released Resolution No. 38 accepting his supposed
resignation. In effect, the Board did not have any basis for its resolution since Bulatao already
withdrew his application.
x x x
In view of the attendant circumstances, Bulatao could not be considered as having
abandoned his employment. To establish abandonment, the employer must prove that "first,the
employee must have failed to report for work or must have been absent without valid or
justifiable reason; and second, [that] there must have been a clear intention on the part of the
employee to sever the employer-employee relationship manifested by some overt act."
x x x

In addition, Bulatao categorically withdrew his application to retire as mentioned in his

memorandum which he submitted before the Board "approved" his application to "resign."
Indeed, "[t]here must be a positive and overt act signifying an employee's deliberate intent to
sever his or her employment,"46 which is wanting in this case. There are doubts surrounding his
intent to retire coupled with the fact that he specifically desisted from doing so. Jurisprudence
pronounced that "mere absence from work, even after a notice to return, is insufficient to prove
abandonment."47 In Bulatao's case, there was not even any notice to return to work. Simply put,
the totality of Bulatao's acts, coupled with PNB's inaction, led to the conclusion that he did not
intend to summarily cut his ties with PNB.
x x x
It is also important to note that filing an illegal dismissal case is inconsistent with
abandonment, as in fact, in his complaint with the RTC, Bulatao prayed for reinstatement.
Indeed, "[a]n employee who loses no time in protesting his layoff cannot by any reasoning be
said to have abandoned his work, for it is already a well-settled doctrine that the filing by an
employee of a complaint for illegal dismissal with a prayer for reinstatement is proof enough of
his desire to return to work, thus negating the employer's charge of abandonment." PNB failed to
show that Bulatao had a clear and deliberate intent to sever his employment without any
intention of returning, as it was not able to rebut with sufficient evidence Bulatao's withdrawal of
his application for retirement. Additionally, PNB did not convincingly disprove Bulatao's claim
that the real reason behind his filing for early retirement was his dissatisfaction with the
agreement with the "Indian" group, even if the said agreement did not materialize.

In light of these observations and findings, PNB failed to prove by convincing evidence
that there was just or authorized cause for terminating Bulatao from employment. Moreover,
 jurisprudence states that "[w]hen the evidence of the employer and the employee are in
equipoise, doubts are resolved in favor of labor. This is in line with the policy of the State to
afford greater protection to labor."

Constructive Dismissal

Jose Dela Torre vs Twinstar Professional Protective Services

G.R. No. 222992, 23 June 2021

For complaining to Raffy Tulfo about the underpayment of his salaries, Dela
Torre was placed on floating status for more than six (6) months which prompted him
to file a complaint for illegal dismissal. However, the CA and the NLRC found that
there no illegal dismissal because he utterly failed to show that he was constructively
dismissed by Twinstar.

Ruling:

Philippine Span Asia Carriers Corporation v. Pelayo reiterated the standards for ascertaining
constructive dismissal as follows:

There is constructive dismissal when an employer's act of clear

discrimination, insensibility or disdain becomes so unbearable on the part of the
employee so as to foreclose any choice on his part except to resign from such
employment. It exists where there is involuntary resignation because of the harsh,
hostile and unfavorable conditions set by the employer. We have held that the
standard for constructive dismissal is "whether a reasonable person in the
employee's position would have felt compelled to give up his employment under
the circumstances." (Underscoring supplied)

However, it must be emphasized that "not every inconvenience, disruption, difficulty, or

disadvantage that an employee must endure sustains a finding of constructive dismissal."
What is vital is the weighing of the evidence presented and a consideration of whether, given
the totality of circumstances, the employer acted fairly in exercising a prerogative. [41] Applying
the foregoing standards to this case, petitioner utterly failed to prove that he was constructively
dismissed. He never presented any evidence, aside from his self-serving allegations, that he was
forced to be on floating status for more than six (6) months without being given new
assignment by Twinstar.

In comparison, Twinstar was able to establish that Jose went on absence without leave on
or about January 21, 2011 and that it had subsequently sent several notices to petitiomer,
including the Order to Report for Duty dated June 3, 2011, 2nd Notice to Report for Work dated
June 9, 2011, and Last & Final Order to Report for Duty dated June 22, 2011. Aside from the said
notices, a duty officer of Twinstar vainly tried to contact petitioner by calling him and sending
text messages, and a field inspector of Twinstar attempted to deliver a company letter on June 8,
2011 but petitioner refused to receive the same.[46]

More importantly, as correctly found by the NLRC and affirmed by the CA, petitioner
himself admitted declining the assignment offered to him by the Twinstar within six (6) months
from the time he was placed on floating status in the hearing dated October 18, 2011 before the
LA. Petitioner's flimsy claim that he did not understand the question of the LA and the Minutes
of the said hearing, as both were in the English language, would seem like a desperate attempt
to feign ignorance in order to retract such statements. Petitioner had all the opportunity to
request the LA to translate the question and the Minutes to a language he understood, but he
chose not to. In any case, this Court finds it hard to believe petitioner's allegations as he himself
indicated in his bio-data that English is one of the languages he can speak and write.

Clearly, the totality of circumstances would lead us to conclude that no constructive

dismissal happened in this case. Instead, the circumstances would show the stubborn
unwillingness of petitioner to return to work despite being required by Twinstar to report to
work multiple times within six (6) months from January 21, 2011, even assuming arguendo that
he was indeed placed on floating status. Thus, this Court agrees with the CA and the NLRC that
Twinstar had just cause to terminate Jose's employment. Be this as it may, this Court finds that
Twinstar was remiss in following the due process required by law and that Jose should be
entitled to nominal damages as will be discussed below.”

Italkarat 18, Inc. vs Juraldine Gerasmio

G.R. No. 221411, 28 September 2020

Gerasmio was hired on 1 June 1990. In 1993, he was designated as

Maintenance Head and Tool and Die Maker. He lost his job on 20 November 2008.
Before then, the Officer-In-Charge (OIC)/Manager allegedly informed him in
November 2008 that the company was planning to retrench a substantial number of
workers; that if he opted to retire early, he would be given a sum of P170,000.00;
and that if he would not accept the offer to retire early, he would eventually be
retrenched. As a result, he executed and signed a resignation letter and quitclaim on
20 November 2008. He was then informed to return on 25 November 2008 to get his
check. However, to his dismay, he was told that he would just be paid P26,901.34.
Thus, through his lawyer, he sent a letter demanding payment of the promised
P170,000.00. Since the Company did not respond, he filed a complaint for illegal
dismissal.

The defense was voluntary resignation. Allegedly, Gerasmio took leaves of

absence in order to process his papers for a possible seaman's job.

Ruling:
 In Gan v. Galderma Philippines, Inc., we held that where the employee alleges that he
involuntarily resigned due to circumstances in his employment that are tantamount to
constructive dismissal, the employee must prove his allegations with particularity, to wit:

Since Gan submitted a resignation letter, it is incumbent upon him to prove

with clear, positive, and convincing evidence that his resignation was not
voluntary but was actually a case of constructive dismissal; that it is a product of
coercion or intimidation. He has to prove his allegations with particularity.

Gan could not have been coerced. Coercion exists when there is a reasonable
or well-grounded fear of an imminent evil upon a person or his property or upon
the person or property of his spouse, descendants or ascendants. Neither do the
facts of this case disclose that Gan was intimidated. x x x

x x x

The instances of 'harassment' alleged by Gan are more apparent than real.
Aside from the need to treat his accusations with caution for being self-serving due
to lack of substantial documentary or testimonial evidence to corroborate the same,
the acts of 'harassment,' if true, do not suffice to be considered as 'peculiar
circumstances' material to the execution of the subject resignation letter. (Emphasis
and underscoring supplied)

Based on the foregoing discussion, it is therefore not enough for Juraldine to allege that he
was threatened and thereafter misled to resign in order for the tribunals and courts to rule that
he was constructively dismissed. Juraldine must prove with particularity the alleged acts of
coercion and intimidation which led him to resign. This, Juraldine failed to do.

Furthermore, we observe that the evidence on record show that Juraldine had already
intended to resign in 2008, even earlier than October. The evidence presented by the Company
would show that Juraldine in fact requested for multiple leaves on various occassions, usually for
processing of his papers for work abroad. Juraldine's allegation that the Company was already
considering retrenching its employees during the last quarter of 2008 or earlier, which Juraldine
would want to impress upon this Court to be the catalyst that prompted San Pedro to make the
alleged offer of resignation to Juraldine, would not have made any difference in view of the fact
that Juraldine was already in the process of applying for a job overseas or at the very least,
intending to go abroad.

To summarize, if the fact of dismissal is disputed, it is the complainant who should

substantiate his claim for dismissal and the one burdened with the responsibility of proving that
he was dismissed from employment, whether actually or constructively. Unless the fact of
dismissal is proven, the validity or legality thereof cannot even be an issue. In the present case,
the fact of the matter is that it was Juraldine himself who resigned from his work, as shown by
the resignation letter he submitted and the quitclaim that he acknowledged, and thus, he was
never dismissed by the Company.”

Telus International Philippines, Inc. vs Harvey de Guzman

G.R. No. 202676, 0 December 2019

Acting on the complaint of Flores, Telus issued a Due Process form to De

Guzman on charges of "[i]nsulting or showing discourtesy, disrespect, or arrogance
towards superiors or co-team members [and a]busive behavior language which is
outside the bounds of morality" in violation of Section 2, Disorderly Conduct, Items 60
and 61 of Telus' Code of Conduct. At the same time, D Guzman was placed on
preventive suspension and was directed to submit a written explanation to answer the
charges. De Guzman complied and submitted his written explanation.

Telus conducted an administrative hearing on the matter. Upon termination of

the investigation, it found De Guzman's not liable for the offenses charged and did not
impose any disciplinary sanction on him. Accordingly, his preventive suspension was
lifted and he was fully compensated during the period. Telus, however, decided to
remove De Guzman from his current designation and transfer him to another practice.
It then scheduled him for a profile interview. De Guzman notified his supervisor
that he would not be able to attend the interview. When asked for the reason of his
inability to attend, he failed to give an answer.

Telus once again tried to schedule De Guzman for a profile interview but he
again failed to show up or even acknowledge such scheduled interview. Hence, Telus
sent him a Return to Work Orde . 20 Later on, Telus found out that as early as
September, 15, 2008, De Guzman already filed a complaint for constructive dismissal.
Ruling:

… (T)he series of actions done by Telus manifests that De Guzman was terminated in
disguise and such actions amount to constructive dismissal. We cite with approval the findings
of the appellate court, to wit:

Furthermore, it can easily be discerned that the series of harsh and unfair
acts of the private respondents have made the employment condition of petitioner
uncongenial, averse, and intolerable. First, after finding petitioner not liable for the
offense charged, respondents , did not immediately reinstate petitioner to his
former position. Second, private respondents informed petitioner that he was being
transferred to a new account and directed to report to the Telus' branch office at
Market Market, Global City, Taguig City. However, after a few hours, respondents
asked petitioner to just go home and wait since they needed time to search for his
account. While waiting for the promised new account, petitioner was compelled to
utilize his leave credits. Third, after his leave credits were consumed, private
respondents placed petitioner on a floating status. It bears stressing that after more
than one (1) month from his exoneration and the lifting of the suspension, private
respondents have not assigned petitioner a new account. Finally, respondents
required petitioner to undergo ia profile interview supposedly to determine which
account would he would best fit in. In this connection, while it was stressed that
such profile interview was not a pre-qualification requirement for employment,
petitioner nonetheless received a text message from his manager, respondent
Michael Sy, informing him that he should pass the interview in order to be
endorsed to a new account .

The conclusion is all too clear that Telus fostered a working environment that was
hostile, discriminatory, unreasonable, and inequitable that naturally compelled De Guzman to
give up his employment thereat to avoid the difficulties he had to face just to keep his
employment. The actions of Telus show that De Guzman was actually subsequently penalized
with a much graver consequence than the supposed preventive suspension that he had
 undergone.”

4
Just Causes

Gross and Habitual Neglect of Duty

Willful Disobedience
Loss of Trust and Confidence

Systems and Plan Integrator and Dev’t Corp. vs Michelle Elvi Ballesteros
G.R. No. 217119, 25 April 2022

Serious Misconduct

Colegio San Agustin-Bacolod vs Melinda Montano

G.R. No. 212333, 28 March 2022

Salvacion Lamadrid vs Cathay Pacific Airways Ltd.

G.R. No. 200658, 23 June 2021

Lamadrid and other crew members of Cathay flight CX 139 were caught in
possession of goods after alighting from the aircraft. A plastic bag containing a 1.5 liter
Evian water bottle and a pile of magazines was confiscated from Lamadrid. In a
letter, Cathay requested her to submit a written explanation to show cause why no
disciplinary action should be imposed on her since removal of company property
without authorization was considered a serious misconduct. Lamadrid submitted a
reply-letter denying the allegations against her. She claimed that the Hello magazine
which was confiscated from her was not Cathay's property. As regards the other items,
she claimed that another cabin crew already admitted having taken those items.

In another letter , Cathay once again informed Lamadrid that it received reports
that she was found to have taken a large bottle of Evian water and a pile of magazines
during flight CX 139. She was again requested to explain her side. Consequently,
Lamadrid sent a reply-letter clarifying that she brought and declared the bottle of
Evian water as her own. She denied having committed serious misconduct, and
demanded that the items taken from her be preserved following a fair and transparent
investigation.

On 10 July 2007, Cathay informed Lamadrid of the termination of her services

effective immediately for committing serious misconduct by removing company
property without authorization. According to Cathay, it could no longer repose its
trust and confidence in her considering the seriousness of her violation. Hence, she
filed a complaint for illegal dismissal.

Ruling:

“There is loss of trust and confidence when an employee fraudulently and willfully
committed acts or omission in breach of the trust reposed in her/him by the employer. Two
requisites must be complied with to justify this ground for termination. First, the employee
must be holding a position of trust, and second, the employer shall sufficiently establish the
employee's act that would justify loss of trust and confidence. The act must be characterized as
real wherein the facts that brought about such act were clearly established, and that the
employee committed the same without any justifiable reason.

Cathay has complied with the two aforementioned requisites for loss of trust and
confidence. We have already settled that Lamadrid's position was imbued with trust and
confidence. Likewise, the airline clearly demonstrated that she committed an infraction of
company policy that breached its trust and confidence on her.”
x x x
Lamadrid's infraction was clearly a case of misconduct considering that it is "a
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." 64 It
evidently eroded Cathay's trust and confidence in her.

However, while the weight of evidence points to Lamadrid's infraction of company

policy, We should also consider that this is Lamadrid's first infraction in her 17 years of service
in the airline which involved a mere bottle of water. Concededly, the company laid down the
penalties for violation of its policies; however, the evaluation of an employee's infraction should
be dealt with fairness and reason. Simply put, all surrounding circumstances must be
considered and the penalty must be commensurate to the violation committed by an employee.
Termination of the services of an employee should be the employer's last resort especially when
other disciplinary actions may be imposed, considering the employee's long years of service in
the company, devoting time, effort and invaluable service in line with the employer's goals and
mission, as in Lamadrid's case. Thus, We emphasize the principle of totality of infractions, viz.:

x x x . It is here that totality of infractions may be considered to determine

the imposable sanction for her current infraction. In Merin v. National Labor
Relations Commission, the Court explained the principle of "totality of infractions" in
this wise:

The totality of infractions or the number of violations committed during the

period of employment shall be considered in determining the penalty to be
imposed upon an erring employee. x x x. (Citation Omitted)

During Lamadrid's span of employment, she did not commit any infraction or was ever
sanctioned except in the incident subject of the present controversy. To impose a penalty as
grave as dismissal for a first offense and considering the value of the property allegedly taken
would be too harsh under the circumstances. Therefore, Lamadrid was illegally dismissed from
service.
 In the recent case of Foodbev International v. Ferrer, We held that:

x x x A less severe penalty of suspension should have been imposed

considering that the respondents have been in the service for several years. The
Court also observes that this is the first time in the long years of service that
respondents failed to follow the cleaning procedure. Thus, a more compassionate
penalty of suspension is deemed appropriate.

In Philippine Long Distance Company v. Teves, the Court stressed that while it is the
prerogative of the management to discipline its employees, it should not be
indiscriminate in imposing the ultimate penalty of dismissal as it not only affects
the employee concerned, but also those who depend on his livelihood.

While management has the prerogative to discipline its employees and to

impose appropriate penalties on erring workers, pursuant to company rules and
regulations, however, such management prerogatives must be exercised in good
faith for the advancement of the employer's interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws and
valid agreements. The Court is wont to reiterate that while an employer has its
own interest to protect, and pursuant thereto, it may terminate an employee for a
just cause, such prerogative to dismiss or lay off an employee must be exercised
without abuse of discretion. Its implementation should be tempered with
compassion and understanding. The employer should bear in mind that, in the
execution of said prerogative, what is at stake is not only the employee's position,
but his very livelihood, his very breadbasket.

Dismissal is the ultimate penalty that can be meted to an employee. Even

where a worker has committed an infraction, a penalty less punitive may suffice,
whatever missteps may be committed by labor ought not to be visited with a
consequence so severe. This is not only the laws concern for the workingman.
There is, in addition, his or her family to consider. Unemployment brings untold
hardships and sorrows upon those dependent on the wage-earner. (Emphases in
the original; citations omitted)

As consequences of Lamadrid's illegal dismissal, she is entitled to the payment of full

backwages and separation pay in lieu of reinstatement since the latter is no longer feasible
considering the time that has lapsed and the strained relations between the parties.”

University of the Cordilleras vs Benedicto Lacanaria

G.R. No. 223665, 27 September 2021

Lacanaria was terminated after he was found guilty of having uttered foul,
disparaging and malicious remarks against his student in violation of the law, the
Faculty Manual and Code of Ethics of Professional Teachers. He was previously and
seriously reprimanded twice for uttering green jokes in class.

Ruling:
 “The following instances demonstrated how Lacanaria's misconduct amounted to
something grave and not merely trivial, considering his position as a professor: (a) he
acknowledged that Flores had a persistent cough during the class but shrugged it off; (b) he did
not act when Flores' legs gave out and prevented the other students from helping him; (c) he
dismissed Flores' condition as an act of pretension, showing that he had no intent to ascertain
the well-being of his student; (d) he uttered "maupo ka muna dyan, hindi ka pa naman mamamatay"
which reeked of insensitivity and lack of empathy; (e) he did not immediately allow Flores to go
to the clinic despite prior knowledge of Flores' cough; (f) he replied "tae mo!" when Flores tried
to explain what happened, which showed tastelessness and unprofessionalism; (g) he blamed
Flores for attending his class despite knowing that students would normally opt to attend and
perform in order not to get a failing grade in spite of sickness; (h) he downplayed Flores'
condition in his Answer, stating that the clinic's nurse only gave Flores a tablet and asked him
to go back later since the doctor was unavailable, also notwithstanding the issuance of a
medical certificate by the hospital which properly diagnosed Flores with an illness connected to
his cough; and (i) his comments regarding the video clip exhibited his uncaring attitude and
thoughtlessness even though Flores likely needed medical attention at the time.

Indisputably, the incident was associated with Lacanaria's work as a professor. His
actuations clearly showed him unfit to continue working for the University, considering his
daily interaction with the students. He acted with wrongful intent and not mere error of
judgment since his statements were tainted with mockery and insult. He consciously uttered
those words with full knowledge that he was conversing with a student whom he exercises
authority over. Hence, he failed to display professionalism and decency in dealing with his
students.

The seriousness of Flores' cough or even .his alleged pretension of being severely ill are
not the real issues but the utterance of remarks unbecoming of an educator. It was not proper to
speak to a student in such a manner, especially in a classroom setting or even within the school
grounds where it is clear that Lacanaria was acting in his capacity as a professor. In all angles,
no matter how one looks at it, Lacanaria's statements could not be said as having been uttered
"without malice" or "without wrongful intent" Lacanaria's acts demonstrated that he did not
approve of Flores or the latter's performance, or how the student portrayed himself at the time.
There was a tinge of anger and dissatisfaction in his wordings, which an educated adult like
him should have been able to control when communicating with a student. If he was not
convinced by Flores' reasons, then he (Lacanaria) should have given the student the chance to
explain in private instead of humiliating him in front of the class. Worse, Lacanaria
subsequently offended Flores by uttering unpalatable words by the stairs later that same day.
He was not even incited or prodded to engage in an argument. Thence, he should have known
that there would be repercussions.

Even if the Code of Ethics for Professional Teachers would not apply because Lacanaria
taught in the tertiary level, the fact remains that his actions were inappropriate. The University's
Faculty Manual states that the teachers are required to "treat students with respect and with due
regard to their dignity," and that they should "recognize that, to assure itself of a continuing
adequate enrolment, [the University] must deliver quality, courteous, and dedicated service to
its students." The same manual states that "[f]aculty members should take measures to ensure
the safety and [well-being] of students during class sessions and class-related activities." As
previously explained, Lacanaria did not possess traits exuding the tenets of the University. In
fact, common and basic decorum requires that he acts with respect towards his students or any
other person. Yet, for reasons only known to him, he exhibited the contrary.

Relevantly, the Manual of Regulations for Private Higher Education states that:
 Section 121. Causes of Terminating Employment. In addition to the just
causes enumerated in the Labor Code, the employment of personnel in a higher
education institution, may be terminated for any of the causes as follows:

1) Grave misconduct, such as, but not limited to, giving of grades to a student in a
subject not based solely on scholastic performance; failure to maintain
confidentiality of school records; contracting loans from students or parents; use of
cruel punishment, insubordination;

x x x

10) other causes analogous to the foregoing as may be provided for in the
policies and regulation of the Commission or of the institution, or in a collective
bargaining agreement.129

Lacanaria is a professional, equipped with a higher degree of learning compared to

others. He even received accolades and recognition for his professional achievements. Thus, as
a University professor, he was expected to adhere to a greater standard and exemplify traits
which would not place the school in a damaging light. More importantly, he should be able to
inspire instead of antagonize his students. As aptly explained by Manalo v. Ateneo de Naga
University:

'Every profession is defined by the knowledge, skills, attitude and ethics of

those in the profession.' In purporting one's self as a professional, a person does more
than merely make a statement as to an activity that preoccupies him or her - an
occupation - which may serve as a means for earring a living, that is, a livelihood.
Rather, he or she proclaims or professes to count himself or herself among a select
class of learned, trained, competent, and proficient individuals adhering to an
established and commonly held set of standards:

'Profession' derives from the Latin word 'profiteer,' to profess, which can
also have the connotation of making a formal commitment in the sense of taking a
monastic oath. This root might suggest that a professional is someone who claims
to possess knowledge of something and has a commitment to a particular code or
set of values, both of which are fairly well-accepted characteristics of professions.

Persons claiming themselves to be professionals hold themselves to others

and to society itself as being faithful to benchmarks of quality. Being a professional
is, thus, a matter of credibility and trustworthiness. Accordingly, ethics and values
are as inherent to professions as are training and technical competence. Standards
of integrity can never be divorced from standards of workmanship, technique, and
operation.
x x x
Professionals educate students and open their eyes to what it means to be
lawyers, teachers, doctors, nurses or engineers, not only by theory, but even by the
very examples of their lives. (Citations omitted)

Indeed, "[t]eachers are duly licensed professionals who must not only be competent in the
practice of their noble profession, but must also possess dignity and a reputation with high moral
values." Unfortunately, Lacanaria tell short of this expectation. He even tried to reason his way out
of the mess he created himself, which only made it more apparent that he has a propensity (or a
habit) to speak in a disrespectful manner towards his students, as evidenced by the SCT
Evaluations.”
 JR Hauling Services vs Gavino Solamo, et al.
G.R. No. 214294, 30 September 2020

In the course of their employment with JR Hauling, Solamo and others allegedly
incurred shortages in their deliveries of broilers amounting to Three Hundred and
Seventy One (371) pieces and Three Hundred and Seventy Seven (377) pieces in
February 2011 and March 2011, respectively. Upon further investigation, it was
discovered that they were committing anomalous transactions involving the sale of
excess broilers and crates somewhere in Concepcion, Tarlac as attested to in the
affidavits of Mapue, Pedro, a helper of Mapue, and co-employees Acoba, Leo
Enriquez (Enriquez) and Marville Moratin (Moratin), Hector Fuentes (Fuentes),
Orlando Espares (Espares), and Roberto Sanico (Sanico).

The affidavits of Mapue, Pedro, Fuentes, and Espares also revealed that JR
Hauling incurred shortages in the number of broiler crates totalling Two Hundred and
Thirty Two (232) pieces. The same were purportedly sold by the respondents together
with the excess broilers at Concepcion, Tarlac.

Considering the foregoing circumstances, the assailed dismissal was effected on

the grounds of serious misconduct, and constituted fraud or willful breach of trust and
confidence.

Ruling:

“We have defined misconduct as "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. For serious misconduct to justify dismissal under the law, "(a)
it must be serious, (b) must relate to the performance of the employee's duties; and (c) must
show that the employee has become unfit to continue working for the employer."

In this regard, we opine that respondents' acts constitute Serious Misconduct which
would warrant the supreme penalty of dismissal. Notably, the facts of the case reasonably
establish with certainty: (1) that excess broilers and crates were being illegally sold in Tarlac;
and (2) that respondents were involved in the anomalous transaction.

We agree, likewise, with the petitioners that the unauthorized sale of excess broiler and
broiler crates constitutes an act of dishonesty, a breach of trust and confidence reposed by JR
Hauling upon them.

Loss of trust and confidence as a ground for dismissal of employees covers employees
occupying a position of trust who are proven to have breached the trust and confidence reposed
on them. Moreover, in order to constitute a just cause for dismissal, the act complained of must
be work-related and shows that the employee concerned is unfit to continue working for the
employer. In addition, loss of confidence as a just cause for termination of employment is
premised on the fact that the employee concerned holds a position of responsibility, trust and
confidence or that the employee concerned is entrusted with confidence with respect to delicate
matters, such as the handling or care and protection of the property and assets of the employer.
 The betrayal of this trust is the essence of the offense for which an employee is penalized. 83 In
this regard, it is not the job title but the nature of the work that the employee is duty-bound to
perform which is material in determining whether he holds a position where greater trust is
placed by the employer and from whom greater fidelity to duty is concomitantly expected.

Petitioners, as drivers/helpers, were entrusted with the custody, delivery and

transportation of the broilers and broiler crates, including their proper handling and protection,
in accordance with the directives of JR Hauling and instructions of its clients. To stress,
respondents are performing the core business of JR Hauling. Thus, even on the premise that
respondents were not occupying managerial or supervisory positions, they were, undoubtedly,
holding positions of responsibility. As to respondents' transgressions i.e., the unauthorized sale
of broilers and broiler crates, the same are clearly work-related as they would not have been
able to perpetrate the same were it not for their positions as drivers/helpers of JR Hauling.

In fine, we hold that there is just cause for respondents' dismissal from the service.

Willful Disobedience

Ariel M. Reyes vs Rural Bank of San Rafael (Bulacan), Inc.

G.R. No. 230597, 23 March 2022

“Sometime in 2012, several stockholders of RBSR complained about the

discrepancies in the amounts of the purchase price of stock subscriptions appearing in
the original receipts as against the duplicate copies issued by the bank. The anomaly
involved several millions of pesos collected from stockholders of RBSR which, if not
corrected, will certainly tarnish the image and integrity of the latter.

Acting on this anomaly, RBSR conducted an investigation and confirmed the

irregularities. It was discovered that in the original receipts given to the stockholders,
the stated price of shares ranged from P250.00 to P275.00, but in the duplicate copies
retained by RBSR, only P100.00 was indicated. Moreover, the original receipts were
signed by Flordeliza Cruz, then President of RBSR, while the duplicate copies were
signed either by its then Treasury Head Emilline C. Bognot (Bognot), or Branch
Manager Reynaldo Eusebio, Jr. (Eusebio).

Thus, in compliance with the Manual of Regulations for Banks mandating the
prompt report of anomalies to the Bangko Sentral ng Pilipinas (BSP), RBSR's Board of
Directors approved a Report on Crimes and Losses and directed Reyes – as
Compliance Officer – to certify the same. However, Reyes refused to certify the report,
reasoning that no independent investigation was conducted, and that he cannot
completely validate the same for lack of material data and evidence, and that he was
being pressured to certify the report.

Thereafter, Reyes claimed that instead of furnishing him the hard copies of the
reports and its original attachments to enable him to verify and certify the same, RBSR
issued him two show cause orders and put him on preventive suspension for neglect of
duty. Meanwhile, RBSR contended that several administrative hearings were
scheduled to hear Reyes' side, but all were ignored.
 On March 25, 2013, Reyes, together with Bognot and Eusebio (complainants) –
who were principally accused of theft/misappropriation of funds in connection with
the anomaly – filed a Complaint against respondents for illegal suspension and money
claims. An Amended Complaint was subsequently filed to include illegal dismissal, in
view of their eventual dismissal from work.

Ruling:

In Dongon v. Rapid Movers and Forwarders Co., Inc. this Court held:

For willful disobedience to be a ground, it is required that: ( a) the conduct

of the employee must be willful or intentional and (b) the order the employee
violated must have been reasonable, lawful, made known to the employee, and
must pertain to the duties that he had been engaged to discharge. Willfulness must
be attended by a wrongful and perverse mental attitude rendering the employee's
act inconsistent with proper subordination. In any case, the conduct of the
employee that is a valid ground for dismissal under the Labor Code constitutes
harmful behavior against the business interest or person of his employer. It is
implied that in every act of willful disobedience, the erring employee obtains
undue advantage detrimental to the business interest of the employer.

In the present case, there is no question that Reyes' refusal to certify the Report on Crimes
and Losses was intentional. This is clearly disobedience. However, we find that the same is not
attended by a wrongful and perverse mental attitude which warrants the ultimate penalty of
dismissal.

A review of the findings below will reveal that Reyes refused to certify said report based
on his honest assessment that the report cannot be completely validated for lack of material
data and evidence. Indeed, as found by the CA:

As a consequence, in compliance with the Manual of Regulations for Banks

(MORB) mandating the prompt report of the anomaly to the Bangko Sentral ng
Pilipinas (BSP), the Board of Directors of respondent RBSR approved a Report on
Crimes and Losses describing the manner of the irregularities committed, and
directed petitioner Reyes – as Compliance Officer – to certify the same as part of
the requirement. However, Reyes refused to make the attestation on the
reasoning that no independent investigation was conducted and that he cannot
completely validate the report for lack of material data and evidence. (Citations
omitted.) (Emphasis supplied).

This assertion finds support in Memorandum No. 2013-020 dated February 14, 2013, and
Memorandum No. 2013-022 dated February 22, 2013, both sent by Reyes to no less than the
officers and directors of RBSR. In these Memoranda, Reyes noted several deficiencies in the
report and even made recommendations in order to make the same compliant with BSP
regulations. In the Court's view, this betrays respondents' claim that Reyes was involved in the
theft/misappropriation allegedly committed by Bognot and Eusebio.

Respondents counter Reyes' defense by saying:

 Petitioner Reyes alleged that there was no personal investigation and
judgment independent from the Audit Committee or from the Management, and
that the data and evidence were lacking to satisfy a conclusion for the reporting of
the discrepancy, so he refused to file the Crimes and Losses Report. However, in
Circular No. 587, Series of 2007, x x x Subsection X162.4 (d.2) states that "where a
thorough investigation and evaluation is necessary to complete the report, an
initial report submitted within the deadline may be accepted: Provided that a
complete report is submitted not later than twenty (20) calendar days from
termination of investigation." Thus, his refusal is a gross negligence of his duties
and obligations. Otherwise, he could have submitted an initial report and made
his personal investigation and judgment independent from the Audit Committee or from
the Management and submitted the same within the period mentioned.

The Court recognizes that there is reason for respondents' disappointment, even
infuriation, over Reyes and his actions. Surely, no employer would find pleasure in a
disobedient employee. Be that as it may, imposing the ultimate penalty of dismissal for such
action – which, as already mentioned, obtains justification – and for such single instance, is
simply too harsh and downright unlawful. Besides, what is the penalty for the late submission
of the report? A miniscule monetary fine of P150.00 to P450.00 per day of delay. [54] Of course,
this is not to encourage non-compliance with bank regulations, but is only mentioned to further
highlight the point that the penalty of dismissal imposed upon Reyes was terribly
disproportionate to his alleged infraction.

As a final note, it may be well to reiterate Justice Bellosillo's insightful observation

in Alhambra Industries, Inc. v. National Labor Relations Commission:

TODAY employment is no longer just an ordinary human activity. For most

families the main source of their livelihood, employment has now leveled off with
property rights which no one may be deprived of without due process of law.

Termination of employment is not anymore a mere cessation or severance of

contractual relationship but an economic phenomenon affecting members of the
family. This explains why under the broad principles of social justice the dismissal
of employees is adequately protected by the laws of the state. x x x

Breach of Trust

Evelina E. Belarso vs Quality House, Inc.

G.R. No. 209983, 10 November 2021

During inspection and body frisking of employees at the QHI gate, Belarso's
bag was inspected and found to contain a belt buckle inside. The guard called her
attention but she denied any knowledge of why and how the belt buckle got inside her
bag. Thereafter, an incident report was immediately filed. Belarso received a notice
from QHI placing her under preventive suspension and requiring her to submit a
written explanation within 48 hours from receipt of the notice why she should not be
subjected to disciplinary action in connection with the December 10, 2010 incident
report.

Belarso submitted her written explanation denying all the accusations against
her. She claimed that her bag was placed outside her work station under a table located
beside the door and near the window. The bag was visible to everyone. She stressed
that in her 34-years of service in the company she was fully aware of QHI's policy of
inspecting its employees, their bags and other belongings before leaving the company
premises, so why would she place a belt buckle inside her bag without even wrapping
or concealing it.

Before she could be dismissed for breach of trust based on the result of the
investigation, Belarso filed complaint for illegal dismissal against QHI. In her
complaint, she indicated that she was illegally dismissed by QHI on 13 December
2010.

Ruling:

Jurisprudence provides for two conditions before an employee may be dismissed for
such cause:

First. Breach of trust and confidence must be premised on the fact that the employee
concerned holds a position of trust and confidence, where greater trust is placed by
management and from whom greater fidelity to duty is correspondingly expected. The
essence of the offense for which an employee is penalized is the betrayal of such trust.

In the case of Wesleyan University Phils. v. Reyes, employees vested with trust and
confidence were divided into two classes: (a) the managerial employees; and (b) the fiduciary
rank-and-file employees. As explained by the Court:

To the first class belong the managerial employees or those vested with the
powers or prerogatives to lay down management policies and to hire, transfer,
suspend, lay-off, recall, discharge, assign or discipline employees or effectively
recommend such managerial actions. The second class includes those who in the
normal and routine exercise of their functions regularly handle significant amounts
of money or property. Cashiers, auditors, and property custodians are some of the
employees in the second class.

Second. There must be some basis for the loss of trust and confidence. The
employer must present clear and convincing proof of an actual breach of duty
committed by the employee by establishing the facts and incidents upon which the
loss of confidence in the employee may fairly be made to rest. This means that "the
employer must establish the existence of an act justifying the loss of trust and
confidence." Otherwise, employees will be left at the mercy of their employers.
(Citations omitted; emphasis supplied)

After a careful review of the records, We find the above conditions present.

First, Belarso never denied in her Petition that she held a position of trust and confidence.
Her appointment letter showed that she assumed the position of Raw Materials Supervisor in
1987. As a supervisor, she was responsible for the custody, handling, safekeeping, and releasing
of QHI's raw materials. This brings her within the scope of employees vested with trust and
confidence, i.e., those who in the normal and routine exercise of their functions regularly handle
significant amounts of money or property.
 Second, QHI was able to establish the basis of its loss of trust on Belarso: her violation of
the company rule prohibiting the stealing or attempting to steal company property. Contrary to
Belarso's claim and the LA's ruling that QHI was unable to establish such, the evidence on
record reflects otherwise.”

Comment:

Unless the Bar examiner wants to go evidentiary, the following do not require
undivided attention:

1. “To prove its allegations, QHI presented the following: (1) Incident
Report[44] prepared by the inspecting guard narrating that on December 10, 2010, during routine
inspection, a belt buckle belonging to QHI was found in Belarso's bag; (2)
individual Sinumpaang Salysay of the inspecting guard, another guard, and two other
employees who witnessed the incident; (3) Notice directing Belarso to explain why she should
not be disciplined for attempting to steal company property; (4) Belarso's handwritten
explanation denying the charge; (5) another handwritten letter requesting for a dialogue with
the management; (6) the memorandum[52] of dismissal stating that after the dialogue, QHI found
Belarso's explanation unsatisfactory and thus terminates her services for violation of company
rule and for loss of trust and confidence; (7) a Sinumpaang Salaysay, with supporting documents,
executed by another employee stating that when an inventory was conducted after the incident,
she discovered that there were five missing belt buckles; and (8) a copy of QHI's rules and
regulations[54] prohibiting the stealing or attempting to steal company property.”

2. “Belarso, on the other hand, failed to establish her defense. While she insists that the
belt buckle was planted by her co-employee, she did not provide any reason or explanation to
support such claim. What is more, the said co-employee executed a Sinumpaang Salaysay
denying the accusation and stating that he did not harbor any ill feeling toward Belarso and
that he did not know of any reason why the latter would accuse him of a frame-up.

Further, while Belarso insists that the charge imputed against her defies logic and
common experience, the records show that she had a propensity to violate company rules and
regulations. As shown by the various rule violation memoranda issued against her, Belarso had
committed a total of 19 infractions from 1986 to 2005. Indeed, even her allegation that she
placed her bag under her table making it possible for anyone to put anything in it, constitutes a
violation of company rules. Understandably to prevent incidents of frame-up, all employees
were required to place their belongings in their individual lockers.”

3. “Belarso also assails the affidavits executed by the guards and her co-employees for
being similarly worded and executed on the same day, and for being dated two months after
the incident. However, these do not automatically invalidate the contents of the affidavits.
Being duly notarized, they carry with them the presumption of regularity and authenticity
which may be rebutted only by "strong, complete and conclusive proof." This, Belarso was
unable to present.”

4. “As to the supposed material discrepancy in the inspecting guard's affidavit (i.e., that
the belt buckle was found in Belarso's raincoat, contrary to the incident report, wherein the
same was found inside Belarso's bag covered by a raincoat), said discrepancy is but negligible
and reconcilable. Regardless of whether the belt buckle was covered by the raincoat or was
inside the same, the fact remains that it was found inside her bag during the inspection.
 Belarso finally argues that the penalty is too harsh considering her 34 years of service in
the company. However, length of service is not a bargaining chip that can simply be stacked
against the employer. Under the present circumstances, length of service only aggravates
Belarso's offense. First, she held a position of trust and confidence, overseeing the custody of the
raw materials she tried to steal. As a supervisor, greater trust was placed on her by QHI.
Second, her infraction affected the very essence of loyalty and honesty which all employees owe
to their employers. It was serious, grave, and reflected adversely on her character.

In fine, We find Belarso's dismissal for loss of trust and confidence valid. Indeed, "[w]hile
the State can regulate the right of an employer to select and discharge his or her employees, an
employer cannot be compelled to continue the employment of an employee in whom there has
been a legitimate loss of trust and confidence."

Pacific Royal Basic Foods, Inc. vs Violeta Noche

G.R. No. 202392, 4 October 2021

One can almost perfectly imagine the facts of the case from the ruling of the
Supreme Court. Thus:

The silence of an employee against the allegations of an employer, by its lonesome,

should not disadvantage the former. It remains incumbent upon the employer as the party
making the allegations to demonstrate the truth of the same by presenting substantial evidence.

PRBFI, however, had never really proved with substantial evidence the alleged
involvement of respondents in the contamination of its products. The letter implicating
respondents in the alleged plans to sabotage the PRBFI's operations did not specifically name
respondents as the culprits. Neither did its anonymous writer surface to positively incriminate
them. The process and results of the supposed investigations that PRBFI claims to have
conducted on the contamination incident were unsubstantiated with any written report,
document, or corroborating affidavit on the matter. There was not even any proof that PRBFI's
clients had truly complained of poor product quality or that the PRBFI had actually suffered
financial damage from the incident. These clients were not even identified by petitioner in the
first place. The fact that PRBFI employed coconut parers other than respondents, together with
the timing of the supposed product contamination incident, rings an alarm that respondents
may have truly been singled out by PRBFI for having instituted a prior complaint for non-
regularization.

In all, the Court is left with no basis to verify respondents' detrimental acts to the PRBFI
other than the latter's utterly one-sided statements. As such, PRBFI cannot expect the Court to
believe that respondents were validly dismissed.

The same observations are relevant to the other causes for dismissal that petitioner
attributed to respondents, namely, serious misconduct and gross violation of company policy.
The Court's declaration in PNOC Development Management Corporation v. Gomez is on point:

[Just causes for dismissal require] an underlying act, deed, or conduct from
which a reasonable belief x x x may be inferred. Without it, dismissals undertaken
on mere belief are arbitrary and will be outlawed.[45] (Emphasis supplied.)
 Bare suspicion, like that harbored by PRBFI against respondents, is not a just cause to fire
any employee. The employer need not present proof beyond reasonable doubt or clear and
convincing evidence to justify the dismissal, but bare suspicion that the employee is doing
something detrimental to the interests of the employer is just a hunch, a mere gut feeling that
cannot amount to substantial evidence. A reasonable mind requires reason. Mere allegations are
not legally compelling unless proved.

Likewise, loss of trust and confidence as a ground to dismiss an employee is inapplicable

to herein respondents.

Following Wesleyan University Philippines v. Reyes, two requisites must concur for a valid
termination of employment due to loss of trust and confidence:

[T]he first requisite is that the employee concerned must be one holding a
position of trust and confidence, thus, one who is either: (1) a managerial
employee; or (2) a fiduciary rank-and-file employee, who, in the normal exercise of
his or her functions, regularly handles significant amounts of money or property of
the employer. The second requisite is that the loss of confidence must be based on a
willful breach of trust and founded on clearly established facts.

Petitioner claims that respondents are dismissible for loss of trust and confidence since
the latter's acts were inimical to the former's interest as a company engaged in the delicate
nature of food export industry.

This attempt to squeeze respondents into the mold of managerial and fiduciary rank-
and-file employees must fail.

M+W Zander Philippines, Inc. v. Enriquez differentiates managerial and fiduciary rank-
and-file employees within the purview of dismissals due to loss of trust and confidence, as
follows:

There are two classes of positions of trust: managerial employees and

fiduciary rank-and-file employees.

Managerial employees are defined as those vested with the powers or

prerogatives to lay down management policies and to hire, transfer, suspend, lay-
off, recall, discharge, assign or discipline employees or effectively recommend such
managerial actions. They refer to those whose primary duty consists of the
management of the establishment in which they are employed or of a department
or a subdivision thereof, and to other officers or members of the managerial staff.
Officers and members of the managerial staff perform work directly related to
management policies of their employer and customarily and regularly exercise
discretion and independent judgment.

The second class or fiduciary rank-and-file employees consist of cashiers,

auditors, property custodians, etc., or those who, in the normal exercise of their
functions, regularly handle significant amounts of money or property. These
employees, though rank-and-file, are routinely charged with the care and custody
of the employer's money or property, and are thus classified as occupying
positions of trust and confidence. (Citations omitted.)

Respondents' positions as coconut parers are essential in PRBFI's business of coconut

products, but in no case do they fit the job description of managerial employees and fiduciary
rank-and-file employees. Manual work such as paring coconuts for commercial production is a
task that does not entail being routinely entrusted with the care and custody of money and
property belonging to the company like fiduciary rank-and-file employees. Much less can
coconut parers be considered to be directly involved in the management and policy-making of
their employer as managerial employees.

Indeed, trust is fundamental in every employer-employee relationship. Not all

employees, however, are dismissible on the basis of loss of trust and confidence. Only
managerial employees and fiduciary rank-and-file employees may be terminated from work on
such ground. If PRBFI's theory would be sustained, then all employees shall be inequitably
deemed as holding positions of fiduciary nature. Respondents having occupied ordinary rank-
andfile posts with petitioner, their dismissal on the ground of loss of trust and confidence is
illegal.

In Unilever Philippines, Inc. v. Rivera the Court discusses in brief PRBFI's non-compliance
with the guidelines for procedural due process that must be accorded to employees who are
due for dismissal, viz.:

[T]he following should be considered in terminating the services of

employees:

(1) The first written notice to be served on the employees should contain the
specific causes or grounds for termination against them, and a directive that the
employees are given the opportunity to submit their written explanation within a
reasonable period. "Reasonable opportunity" under the Omnibus Rules means
every kind of assistance that management must accord to the employees to enable
them to prepare adequately for their defense. This should be construed as a period
of at least five (5) calendar days from receipt of the notice to give the employees an
opportunity to study the accusation against them, consult a union official or
lawyer, gather data and evidence, and decide on the defenses they will raise
against the complaint. Moreover, in order to enable the employees to intelligently
prepare their explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for the charge
against the employees. A general description of the charge will not suffice.
Lastly, the notice should specifically mention which company rules, if any, are
violated and/or which among the grounds under Art. 282 is being charged
against the employees.

(2) After serving the first notice, the employers should schedule and
conduct a hearing or conference wherein the employees will be given the
opportunity to: (1) explain and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3) rebut the evidence presented
against them by the management. During the hearing or conference, the employees
are given the chance to defend themselves personally, with the assistance of a
representative or counsel of their choice. Moreover, this conference or hearing
could be used by the parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the employers

shall serve the employees a written notice of termination indicating that: (1) all
circumstances involving the charge against the employees have been considered;
and (2) grounds have been established to justify the severance of their
employment. (Emphasis supplied.)
 While the wordings of the termination letters appear to be in acceptable compliance with
the third requisite, two out of the above three requirements have not been complied with. In
PRBFI's first series of letters for respondents, the latter were informed that they were the
suspected perpetrators of the supposed product contamination. This, however, is a statement
too thin and sweeping to be considered as "a detailed narration of the facts and circumstances
that will serve as basis for the charge against the employees" demanded by law [52] and
jurisprudence. Also again, PRBFI failed to prove with substantial evidence that hearings and
interviews of respondents were actually conducted. The records only confirm the fact that
PRBFI trampled on respondents' rights to procedural due process.

The illegality of respondents' dismissal being established both in substance and

procedure, respondents are entitled to all the consequent backwages and attorney's fees that
they have duly proved before and granted by the Labor Arbiter.

The Court adds L at, following Nacar v. Gallery Frames, these monetary awards shall earn
legal interest at the rate of six percent (6%) per annum from the date of finality of this Decision
until fully paid by PRBFI to respondents.”

Susan Bance vs University of St. Anthony

G.R. No. 202724, 3 February 2021

The Labor Arbiter declared the dismissal as illegal but the NLRC ruled that
the complaints for illegal dismissal had no basis as the complainants, except for Bance,
had voluntarily resigned before the effectivity of the termination of their employment.
In other words, they opted for a voluntary exit instead of being fired. As for Bance, the
criminal charges for estafa filed by the University against her provided ample basis for
her dismissal on grounds of serious misconduct and loss of trust and confidence.
However, the NLRC found that procedural due process was not observed in the
termination of Bance's employment. Thus, it awarded nominal damages in the amount
of P5,000.00.

Bance was the Senior Accounts Officer accused of acts of accommodating into
the University's group enrollment incentive program unqualified beneficiaries,
including children and relatives. She was dismissed for willful breach of trust.

Ruling:

“Hence, Bance's position as Senior Accounts Officer, being supervisory in nature, can be
considered as a position of trust. The investigation conducted by respondents showed that
Bance (with Dimaiwat, Velasco, and Aguirre) participated in the scheme in the incentive
program by enrolling unqualified beneficiaries. Likewise, as confirmed by the CA, Bance
admitted during a conference with Atty. Ortega and other petitioners that her children or
relatives (as the case may be) benefitted from the unauthorized discounts. By her admission,
Bance's act was willful. Such constitutes willful breach of the trust that the University has
reposed on her.

Having been dismissed for a just cause, it follows that Bance is not entitled to backwages
and other money claims arising from an illegal dismissal.”
 San Miguel Corp. vs Rosario Gomez
G.R. No. 200815, 24 August 2020

C2K is a corporation engaged in courier and delivery services. It entered into

business with SMC as the latter's courier. For the first three months, the relationship
between C2K and SMC went smoothly until C2K encountered difficulty in collecting
its service fee from SMC. Eventually, it was found out that C2K's former manager,
Daniel Tamayo (Tamayo), formed another courier services group, Starnec, which had
been using fake C2K receipts and collecting the fees pertaining to C2K. C2K claimed
that it was through Gomez's intervention that Tamayo's group was able to transact
business with SMC.

C2K brought the matter to the attention of SMC, which conducted an

investigation. In line with this, SMC requested C2K's President, Edwin Figuracion
(Figuracion), to execute an affidavit stating their claim. In the said affidavit, Figuracion
mentioned that Gomez had been collecting 25% commission from the total payment
received by C2K. An audit was conducted where it was discovered that Gomez was
allegedly involved in anomalies which caused tremendous losses to SMC.

SMC conducted an administrative investigation and hearing where Gomez was

able to present her evidence and witnesses to disprove the charges against her. After
the investigation, Gomez was found guilty of committing fraud against SMC and of
receiving bribes through commissions in connection with the performance of her
function. On December 20, 2002, SMC issued a Notice of Termination of Services to
Gomez prompting her to file a case for illegal dismissal.

Ruling:
“The Court finds that Gomez indeed occupied a position of trust and confidence, as
defined by law and jurisprudence, since she was entrusted with SMC's property, in particular
its mail matter which included weighing and determining volumes of documents to be shipped.
Thus, she was routinely charged with custody of SMC's mail matter.

In addition, We find that SMC likewise substantially proved the second requisite (i.e.
there must be an act that would justify the loss of trust and confidence). In Cadavas v. Court of
Appeals, We have emphasized that "[l]oss of trust and confidence to be a valid cause for
dismissal must be based on a willful breach of trust and founded on clearly established facts.
Such breach is willful if it is done intentionally, knowingly, and purposely, without justifiable
excuse as distinguished from an act done, carelessly, thoughtlessly, heedlessly or
inadvertently."

In this case, We find that Gomez willfully, intentionally, knowingly, purposely, and
without justifiable excuse disregarded SMC's rules and regulations in the workplace.

This Court notes that it was through Gomez's intervention that Starnec Tamayo's group)
was able to transact business with SMC, wherein Starnec used fake receipts and collected the
fees pertaining to C2K. Gomez, as the used factor in SMC's Mailing Department, should have
known or noticed said fake receipts since she had previously transacted with C2K.”

Lufthansa Technik Philippines, Inc. vs Roberto Cuison

G.R. No. 184452, 12 February 2020
 5
Authorized Causes
Redundancy

Teletech Customer Care Management Philippines, Inc. vs Mario Gerona, Jr.

G.R. No. 219166, 10 November 2021

Teletech's human resource office informed Gerona that he would be transferred

to the Telstra account upon successfully passing the training, assessment and
examination. Teletech gave him a copy of the Transfer Agreement and informed him
that his refusal to take the examinations would result in the termination of his services
on the ground of redundancy. However, Gerona refused to undergo training and take
the examinations under the belief that he was entitled to security of tenure. Thereafter,
Gerona's supervisor issued him a memorandum informing him that the technical
support representatives who declined their transfer to the Te1stra account were no
longer required to log in their system since their respective team leaders would take
care of their attendance instead until the redundancy offer is finalized.

Gerona received a notice informing him of his dismissal due to redundancy

effective 16 December 2009. Through his counsel, he sent a demand letter to Teletech
asserting that there was no redundancy in the company considering that they were
even continuously hiring other technical support representatives. Moreover, as a
regular employee, he should no longer be required to take another examination to
prove his qualifications.
Ruling:

“Redundancy exists when an employee's services are in excess of what is reasonably

demanded by the actual requirements of the business. To successfully invoke a valid dismissal
due to redundancy, there must be: (1) a written notice served on both the employees and the
DOLE at least one month prior to the intended date of termination of employment; (2) payment
of separation pay equivalent to at least one month pay for every year of service; (3) good faith in
abolishing the redundant positions; and (4) fair and reasonable criteria in ascertaining what
positions are to be declared redundant and accordingly abolished. Moreover, the company
must provide substantial proof that the services of the employees are in excess of what is
required of the company.

Teletech claimed that "after a careful study of its business, Teletech and Accenture
officers determined that business was slowing down and that the expected volume of calls for
Teletech's Accenture account would not be met." [39] It alleged that out of the 520 Accenture
technical support representatives, it would only require 439 representatives beginning
November 2009. To support its claim of redundancy, Teletech submitted the following
documents: (1) affidavit of its human capital delivery site manager Joel Go; (2) Gerona's
Employment Contract; (3) FCR scores of the technical support representatives considered to be
bottom performers; (4) FAQ's for Accenture Transition Plans; (5) attendance sheet for meeting
with representatives dated October 30, 2009; (6) Transfer Agreement; (7) Telstra Recruitment
Flowchart; (8) a comparison of the duties of Accenture and Telstra representatives; (9) Notice of
Termination addressed to Gerona;[49] and (10) Termination Report to DOLE.

After careful evaluation of the records, ibis Court finds that the evidence presented by
Teletech fails to convincingly show the alleged decline in Accenture's business and that the
expected volume of calls for its Accenture account would not materialize. In other words,
redundancy was not proven. Other than the bare assertion of human capital delivery site
manager Joel Go, no other evidence was offered to prove the alleged low volume of calls or how
the officers of Accenture and Teletech came to a conclusion that its business was slowing down.

The case of AMA Computer College, Inc. v. Garcia, as cited in SPI Technologies, Inc. v.
Mapua, is instructive:

In the case at bar, ACC attempted to establish its streamlining program by

presenting its new table of organization. ACC also submitted a certification by its
Human Resources Supervisor, Ma. Jazmin Reginaldo, that the functions and duties
of many rank and file employees, including the positions of Garcia and Balla as
Library Aide and Guidance Assistant, respectively, are now being performed by
the supervisory employees. These, however, do not satisfy the requirement of
substantial evidence that a reasonable mind might accept as adequate to support
a conclusion. As they are, they are grossly inadequate and mainly self-
serving. More compelling evidence would have been a comparison of the old and
new staffing patterns, a description of the abolished and newly created positions,
and proof of the set business targets and failure to attain the same which
necessitated the reorganization or streamlining. (Emphasis Ours, citations
omitted)

Based on the foregoing, a company's new table of organization and certification from its
human resources department attesting that the position held by a certain employee is
redundant are insufficient evidence to support a claim of redundancy. Similarly, an alleged
email from a company's client to downsize its manpower will also not suffice if such email was
not presented in evidence.

In the case at hand, Teletech should have presented any document proving the decline in
Accenture's volume of calls for the past months, or affidavits of the Accenture and Teletech
officers who determined that business was slowing down and their basis thereof.
Unfortunately, Teletech only relied heavily on the self-serving affidavit of its human capital
delivery site manager. While Teletech submitted other documents, such pieces of evidence
hardly proved the fact of redundancy.

Teletech also claims that the offer to transfer Gerona to the Telstra account serves as a
badge of good faith. However, this Court cannot subscribe to such assertion when the transfer is
actually prejudicial to the Gerona. A careful review of the Transfer Agreement shows that an
employee who falls to pass the trainings will be dismissed:

1.2. While this new opportunity was given to you in exercise of Management
Prerogative to exhaust means and ways to retain your services with
Teletech, successful passing of the ACE and Product Training are expected. After
having acknowledged and consented in this transfer, you are expected to attend
the scheduled training and nesting period since the same is a MANDATORY
REQUIREMENT for movement. Failure to successfully pass these trainings will be
a justifiable ground for dismissal.[56] (Emphasis Ours)

Gerona was a regular employee, hence, he was entitled to security of tenure. By requiring
him to pass additional trainings and examination as a condition to retain his employment under
the pain of dismissal, Teletech disregarded his right to security of tenure. Teletech's failure to
 prove redundancy, coupled with the imposition of a prejudicial condition to retain
employment, rendered the offer of transfer invalid. In Sumifru Philippines Corporation v. Baya,
citing Peckson v. Robinsons Supermarket Corp., We held that:

[F]or a transfer not to be considered a constructive dismissal, the employer

must be able to show that such transfer is not unreasonable, inconvenient, or
prejudicial to the employee; nor does it involve a demotion in rank or a
diminution of his salaries, privileges and other benefits. Failure of the employer to
overcome this burden of proof, the employee's demotion shall no doubt be
tantamount to unlawful constructive dismissal. (citations omitted)”

Disease

Omanfil International Manpower Dev’t Corp. vs Rolando Mesina

G.R. No. 217169, 4 November 2020

After nine months since he started working in Saudi Arabia as Expediter, Mesina
experienced chest pains. He was confined at a local hospital where his severe chest
pain was diagnosed as a heart disease. He was discharged as his health was regarded
"in good condition". He was again admitted to the same hospital because of chest
pains. His condition eventually improved, but his doctor advised him to immediately
undergo an Angiogram Test in a better equipped hospital. Subsequently, Mesina was
repatriated. Thus, he filed a complaint for illegal dismissal.

Ruling:

“Item 8 of Mesina's employment contract with petitioners provides:

In the event of the Employee being unable to discharge his duties through
accident or illness incurred while working on the project or projects, medical
treatment will be provided free by the employer. If the illness [is prolonged] or is
found to be permanent, the employee will be returned to point of departure at the
employer's expense. It should be noted that the employer will not be responsible
for any medication required for personal injury or illness due to improper behavior
by employee.

On the other hand, an employer may terminate an employee's employment on the

ground of a disease, as provided under Article 284 of the Labor Code:

ARTICLE 299 [284]. Disease as Ground for Termination.- An employer may

terminate the services of an employee who has been found to be suffering from any
disease and whose continued employment is prohibited by law or is prejudicial to
his health as well as to the health of his co-employees: Provided, That he is paid
separation pay equivalent to at least one (1) month salary or to one-half (1/2)
month salary for every year of service, whichever is greater, a fraction of at least six
(6) months being considered as one (1) whole year.

However, Section 8, Rule 1 of the Omnibus Rules Implementing the Labor Code sets out
the requirements in order to validly terminate an employee on the foregoing ground, to wit:
 SECTION 8. Disease as a ground for dismissal. — Where the employee suffers
from a disease and his continued employment is prohibited by law or prejudicial
to his health or to the health of his co-employees, the employer shall not terminate
his employment unless there is a certification by competent public health authority
that the disease is of such nature of at such a stage that it cannot be cured within a
period of six (6) months even with proper medical treatment. If the disease or
ailment can be cured within the period, the employer shall not terminate the
employee but shall ask the employee to take a leave of absence. The employer
shall reinstate such employee to his former position immediately upon the
restoration of his normal health.34

In a bundle of cases, We have held that for a dismissal on the ground of disease to be
considered valid, two requisites must concur: (a) the employee suffers from a disease which
cannot be cured within six months and his/her continued employment is prohibited by law or
prejudicial to his/her health or to the health of his/her co-employees, and (b) a certification to
that effect must be issued by a competent public health authority.

In the instant case, petitioners did not comply with the foregoing requirements to justify
Mesina's termination on the ground of a disease. We note that MAZCO repatriated Mesina to
the Philippines without any showing that he had a prolonged and permanent disease.
Furthermore, Mesina's Medical Reports36 established that he was first confined on February 11,
2006 due to acute retrostemal chest pain and upon his discharge on February 14, 2006, he was
"in good general condition with an advice to [undergo] a percutaneous coronary intervention
(PCI) for further evaluation and management". Similarly, during his second confinement on
February 18, 2006 due to left sided precordial pain on his left shoulder and forearm, his
February 20, 2006 Medical Report indicated that "[t]he patient was admitted in the hospital
under observation with follow up ECG & cardiac enzymes. ECG showed no new changes. The
cardiac enzymes were within normal range. He was given a strong analgesic & the specific
treatment & was discharged on 19.02.06 with an advice for urgent PCI for more evaluation. . . ,"

Thus, when Mesina was repatriated on February 21, 2006, none of his medical records
showed that his ailment was permanent or that he suffered from a disease which could not be
cured within six months and that his continued employment was prohibited by law or
prejudicial to his health or to the health of his co-employees. This is validated by the absence of
the required Certification from a competent public authority certifying to such a health
condition on his part.

The CA therefore properly held that petitioners failed to comply with the provisions of
Mesina's Employment Agreement/Contract, and with the provisions of Article 284 of the Labor
Code and Section 8, Rule I of the Omnibus Rules Implementing the Labor Code. Had they done
so, Mesina's Ischaemic Heart Disease could have been considered as an authorized cause for his
dismissal.38

Petitioners further assert that Mesina could not have acquired his ailment during his 9-
month employment with them. They claim that Item 8 in Mesina's employment contract
excludes his ailment of Ischaemic Heart Disease since it was a congenital one aggravated by an
unhealthy lifestyle and therefore not related to work. It was also not possible for them to
comply with the requirements mandated by law for termination on the ground of disease since
they did not terminate Mesina's employment when he was repatriated on February 21, 2006.
What transpired was that Mesina's temporary repatriation was for the sole purpose of his
medical treatment in the Philippines, even if his illness was not work-related.
 We find the foregoing arguments unmeritorious.

Firstly, this Court finds that the very nature of petitioner's work as an Expediter had
contributed to the aggravation of his illness - if indeed it was pre-existing at the time of his
employment. In De Leon v. Maunlad Trans, Inc. , We have held that "it is not required that the
employment be the sole factor in the growth, development or acceleration of the illness to
entitle the claimant to the benefits provided therefor. It is enough that the employment had
contributed, even to a small degree, to the development of the disease." Moreover, in Wallem
Maritime Services, Inc. v. National Labor Relations Commission, We pointed out that:

Neither is it necessary, in order to recover compensation, that the employee

must have been in perfect condition or health at the time he contracted the disease.
Every workingman brings with him to his employment certain infirmities, and
while the employer is not the insurer of the health of the employees, he takes them
as he finds them and assumes the risk of liability, x x x

Secondly, this Court finds that petitioners failed to substantiate their claim that Mesina
voluntarily returned to the Philippines for medical treatment. If the repatriation was indeed
voluntary on his part, he would not have pursued a case of illegal termination against
petitioners which would cost him time and money. As it is, Mesina's immediate filing of a case
of illegal dismissal negates petitioners' claim that he voluntarily agreed to his repatriation to
seek medical treatment in his home country. Likewise, petitioners failed to establish the fact that
they provided Mesina a re-entry visa to support their argument that they did not dismiss him.
In any case, even the existence of a re-entry visa does not necessarily defeat an illegal dismissal
complaint.

Comment:

1. This contractual provision is attractive; hence, it might be used by the examiner:

Item 8 of Mesina's employment contract with petitioners provides:

In the event of the Employee being unable to discharge his duties through
accident or illness incurred while working on the project or projects, medical treatment
will be provided free by the employer. If the illness [is prolonged] or is found to be
permanent, the employee will be returned to point of departure at the employer's
expense. It should be noted that the employer will not be responsible for any
medication required for personal injury or illness due to improper behavior by
employee.

2. Do not forget the facts, issues and ruling in Mesina.

3. Sample Problem:

Item 8 of Mesina's employment contract as Expediter in Saudi Arabia provided

as follows:
 In the event of the Employee being unable to discharge his duties
through accident or illness incurred while working on the project or
projects, medical treatment will be provided free by the employer. If the
illness [is prolonged] or is found to be permanent, the employee will be
returned to point of departure at the employer's expense. It should be
noted that the employer will not be responsible for any medication
required for personal injury or illness due to improper behavior by
employee.

On the ninth month of his employment, Mesina was confined due to acute
retrostemal chest pain. Upon his discharge, he was found "in good general condition
with an advice to [undergo] a percutaneous coronary intervention (PCI) for further
evaluation and management". He was confined again due to left sided precordial pain
on his left shoulder and forearm. His Medical Report indicated that "[t]he patient was
admitted in the hospital under observation with follow up ECG & cardiac enzymes.
ECG showed no new changes. The cardiac enzymes were within normal range. He was
given a strong analgesic & the specific treatment & was discharged on 19.02.06 with an
advice for urgent PCI for more evaluation. . .”

Due to his medical condition, Mesina was involuntarily repatriated.

(a) Under the foregoing circumstances, what remedy in law is available to

Mesina? Discuss. (2%)

Answer

Mesina was illegally dismissed; hence, he can file a complaint for illegal
dismissal against his foreign employer and his local recruiter, including its corporate
officers, with the Labor Arbiter.

Since the immediate cause of Mesina’s involuntary repatriation was his medical
condition, his foreign employer should have complied with the requisites of a valid
medical termination under Art. 299 of the Labor Code, as re-numbered. Pursuant to said
provision, his dismissal should have been on the faith of a medical certificate issued by
a competent public health authority to the effect that the his disease was of such
nature or at such stage that it was incurable within a period of six (6) months even
with adequate medical attention. This requirement was not complied with because
Mesina was unceremoniously repatriated.

(b) Under the foregoing circumstances, what remedy in law is available to

Mesina? Discuss. (5%)

Answer

Mesina’s remedy is to file a complaint for illegal dismissal.

 Per Item 8 of Mesina's employment contract, he should have been provided
with free medical attention owing to the fact that his illness was work-related.
Absolute proof of work-connection is not required. It suffices that his work has
contributed even in small measure only to the development or aggravation of his
disease. As Expediter, his chest pains were reasonably caused by his work. However,
in violation of its contractual obligation, his foreign employer repatriated him against
his will.

Art. 299 of the Labor Code was violated as well.

The provision, which governs the dismissal of Mesina, requires that a

termination based on disease be upon a medical certification issued by a competent
public health authority to the effect that the employee’s disease is of such nature or at
such stage that it is incurable within a period of six (6) months even with adequate
medical attention. Owing to the immediate repatriation of Mesina, this statutory
requirement could not have been complied with.

(c) Under the foregoing circumstances, what remedy in law is available to

Mesina? Discuss. (8%)

Answer

Mesina’s legal remedy is to file a money complaint under Sec. 7, R.A. 10022
based on illegal repatriation.

A medical termination, as Mesina’s, must be in strict accordance with Art. 299 of

the Labor Code. Hence, it must be based on a medical certification issued by a
competent public health authority stating that the employee’s disease is of such nature
or at such stage that it is incurable with six (6) months even with adequate medical
attention. This requirement was not complied with by Mesina’s foreign employer
which had the contractual obligation under Item 8 of his employment contract to
extend him medical assistance. As Expediter in Saudi Arabia, his working conditions
have certainly contributed, even to a small measure only, to the development or
aggravation of his medical condition. Hence, said contractual duty should have been
discharged in good faith because it had logically attached.

Under Sec. 7, R.A. 10022, Mesina can claim his placement fee plus legal interest,
salaries for the unexpired portion of his pre-terminated contract, damages and
attorney’s fees. He can also recover the cost of his medical management in the
Philippines.

Note: The purpose of this book is not to give information only. More than this, it also
seeks to give mental formation. The difference between the two is better illustrated than
explained as follows:

Information:
Cause of Action: Illegal Dismissal
Remedy: Verified complaint with non-forum shopping certification
 Tribunal: Labor Arbiter
Prescriptive Period: 4 years
Reliefs: Placement fees plus legal interest, salaries for the unexpired
portion of contract, damages and attorney’s fees.

Thus:

Mesina has four (4) years within which to file a complaint for illegal dismissal
with the Labor Arbiter. The same must be verified and accompanied with a non-
forum shopping certification. By way of relief, he can pray for the reimbursement of
his placement fee, plus legal interest; salaries for the unexpired portion of his
contract; damages; and 10 attorney’s fees.

This is information. It is as cold as a woman betrayed by her husband .

Formation:

Three answers to the same question have been formulated. The first is worth 2%, the
second 5% and the third 8%. Formation is teaching the mind not only what to deliver but how to
deliver it. Delivery, in turn, is an art. Does it mean that if the examiner is talkative, the examinee
must be talkative too? Perhaps. But I have always taken the view that the amount of information
to give depends on the percentage assigned to the problem. In addition, one must be quick to
discern what the examiner really wants to read and quicker still to choose the style of delivering
it. If things indicate that he is an academician, e.g., his problem is abnormally hypothetical, the
examinee must measure up to his imaginary academic standards. If something indicates that he
is a labor law practitioner, e.g., his problem is on attorney’s fees, the examinee must drop the 10%
and go for a higher fee (Masmud vs NLRC). Levity aside, it is not information that is always
scored. Truth is, mental discipline is always given a premium.

Since the third question is assigned 8%, the examinee has to be more talkative than when
answering the first. But there is a manner of doing it. The third answer is certainly not the best
ever. Perhaps, the following packaging will inspire more following because of its inviting
simplicity:

Mesina was illegally dismissed. Hence, he can file a complaint for illegal
dismissal with the Labor Arbiter and seek material relief under Sec. 7, R.A. 10022.

As to his charge of illegal dismissal, he can prove that:

1. his involuntary repatriation was in violation of Art. 299 of the Labor Code.
Absent a medical certificate issued by a competent public health authority to the effect
that his disease was of such nature or at such stage that it was incurable within a
period of six (6) months even with adequate medical attention, as required by the
provision, his forced repatriation amounts to an illegal medical termination; and

2. his employer violated its contractual obligation (Item 8) to extend him medical
assistance owing to the work-relatedness of his medical condition. As an Expediter, his
 working conditions in Saudi Arabia have likely contributed even in a small measure
only to the development or aggravation of his disease.

As to material relief, he can pray for an award of placement fees plus legal
interest, plus legal interest; salaries for the unexpired portion of his contract; moral
and exemplary damages; cost of his medical management; and attorney’s fees. Here,
the employer resolved in bad faith to engage in an illegality instead of fulfilling a
contractual duty.

This is the result of formation. It is a little orgasmic.

6
Due Process

Motion for Reconsideration

University of the Cordilleras vs Benedicto Lacanaria

G.R. No. 223665, 27 September 2021

The Charge Sheet with Notice of Investigation charged Lacanaria with serious
misconduct and a violation of the Code of Ethics for Professional Teachers then enumerated the
imposable penalties without however specifying which provisions were violated. Nonetheless,
he was purportedly provided with a copy of his student’s (Flores) Complaint and other
documents which supplemented the details and reason for the charges. Relevantly, the Charge
Sheet did not inform Lacanaria of the date, time and place of the hearing, even if the grievance
procedure of the University required it.

Chapter XI (Faculty Relations), Section 7 of the University's Faculty Manual outlined the
procedure concerning grievances against a member of the faculty, the pertinent provisions of
which were as follows:

SECTION 7. Grievance Procedure where the Penalty is Dismissal from

Employment or Suspension of Seven (7) Days or more. - Any grievance by the
UNIVERSITY against an employee warranting dismissal from employment or
suspension of seven (7) days or more shall be resolved in accordance with the
grievance procedure as follows:

Step 1. (a). The erring employee shall be served with a charge sheet and
notice of investigation. The charge sheet and notice shall: (1) state the place[,] time
and date of the investigation, which shall not be earlier than five (5) days from the
date of receipt thereof by the employee;

x x x

Step 2. The investigation shall be conducted by the Grievance Committee,

which shall submit its findings and recommendations to the President of the
UNIVERSITY within ten (l0) days after the completion of its investigation.

Step 3. Based on the recommendations of the Grievance Committee, the

President shall decide the case of the respondent-employee within ten (10) days
from the date such recommendation is submitted to his office.
 Clearly, the University's own grievance procedure provided that an investigation be
conducted and that the respondent-employee be informed of the particulars of the hearing.
However, Lacanaria did not receive any formal written notice for the March 30, 2010 hearing;
thus, he did not attend the said session. Although the University alleged that a text message
was sent to Lacanaria to notify him of the scheduled hearing, it did not present substantial
proof that he received it. All the same, Lacanaria denied receipt of the text message.

As for the April 7, 2010 hearing, Lacanaria was again not able to attend since he allegedly
received the notice on the same day it was scheduled. Although the University sent the notice
by registered mail on March 31, 2010, there was no guarantee that it would reach Lacanaria
before the hearing, considering the recognized delay in the delivery of registered mails.
Furthermore, the University's grievance procedure dictated that the employee should receive a
notice of the investigation at least five days before the scheduled hearing so that he could
prepare his defense with corresponding evidence. Regrettably, he received the notice late and
not even five days before the hearing, and it did not state that failure to appear would constitute
as a waiver of his right to present his defense or evidence.

Ruling:

“It is settled that "actual hearing or conference is not a condition sine qua non for
procedural due process in labor cases because the provisions of the Labor Code prevail over its
implementing rules." To expound, CMP Federal Security Agency, Inc. v. Reyes, Sr. cites the
Court En Banc's pronouncement in Maula, v. Ximex Delivery Express, Inc., as follows:

x x x The test for the fair procedure guaranteed under Article 277(b) cannot
be whether there has been a formal pre-termination confrontation between the
employer and the employee. The 'ample opportunity to be heard' standard is
neither synonymous nor similar to a formal hearing. To confine the employee's
right to be heard to a solitary form narrows down that right. It deprives him of
other equally effective forms of adducing evidence in his defense. Certainly,
such an exclusivist and absolute interpretation is overly restrictive. The 'very
nature of due process negates any concept of inflexible procedures universally applicable to
every imaginable situation.

The standard for the healing requirement, ample opportunity, is couched in

general language revealing the legislative intent to give some degree of flexibility
or adaptability to meet the peculiarities of a given situation. To confine it to a
single rigid proceeding such as a formal hearing will defeat its spirit.

Significantly, Section 2(d), Rule I of the Implementing Rules of Book VI of

the Labor Code itself provides that the so-called standards of due process
outlined therein shall be observed 'substantially,' not strictly. This is a
recognition that while a formal hearing or conference is ideal, it is not an
absolute, mandatory cr exclusive avenue of due process.

An employee's right to be heard in termination cases under Article 277(b) as

implemented by Section 2(d), Rule I of the Implementing Rules of Book VI of the
Labor Code should be interpreted in broad strokes. It is satisfied not only by a
formal face to face confrontation but by any meaningful opportunity to controvert
the charges against him and to submit evidence in support thereof.

A hearing means that a party should be given a chance to adduce his evidence
 to support his side of the case and that the evidence should be taken into account
in the adjudication of the controversy. 'To be heard' does not mean verbal
argumentation alone inasmuch as one may be heard just as effectively through
written explanations, submissions or pleadings. Therefore, while the phrase
'ample opportunity to be heard' may in fact include an actual hearing, it is not
limited to a formal hearing only. In other words, the existence of an actual, formal
'trial-type' hearing, although preferred, is not absolutely necessary to satisfy the
employee's right to be heard.

x x x

In sum, the following are the guiding principles in connection with the
hearing requirement in dismissal cases:

(a) 'ample opportunity to be heard' means any meaningful

opportunity (verbal or written) given to the employee to answer the
charges against him and submit evidence in support of his defense,
whether in hearing, conference or some other fair, just and reasonable
way.

(b) a formal hearing or conference becomes mandatory only

when requested by the employee in writing or substantial evidentiary
disputes exist or a company role or practice requires it, or when
similar circumstances justify it.

(c) the 'ample opportunity to be heard' standard in the Labor

Code prevails over the 'hearing or conference' requirement in the
implementing rules and regulations. (Emphasis supplied).

In the case at bench, it may be said that Lacanaria was given the opportunity to be heard
since he was able to file his Answer to Flores' Complaint as well as a Motion for
Reconsideration on the decision terminating him from employment. Presumably, too, the
Grievance Committee, although, it was only able to ask clarificatory questions from Flores
(which is a logical consequence since Lacanaria was not able to attend the hearings),
nonetheless considered the affidavits submitted by Flores and his classmates, and even
Lacanaria's Answer. However, it should be emphasized that after receipt of the Notice of
Decision (or Termination), Lacanaria filed a Motion for Reconsideration to ask for a
reinvestigation (which is equivalent to a request for a hearing) so that he can present his side.
This is considering that he was not able to attend the previous hearings as he was not duly
informed of the schedule. While the April 7, 2010 hearing was meant for him to present his side,
Lacanaria unfortunately belatedly received the notice and was not able to prepare or attend at
all. Furthermore, the University's own grievance procedure provides that an investigation
should be conducted anyway.

In the same vein, Lacanaria pointed out that the Report and Recommendation of the
Grievance Committee was undated, Moreover, the Notice of Decision (or Termination) was
signed by the VP for Administration and not the President, even if the University's grievance
procedure states that the President should issue the Notice. A perusal of a copy of the Report
and Recommendation, however, revealed that there is a notation which indicated that the
report was approved, although it is unclear by whom. Since the VP for Administration issued
the Notice of Decision (or Termination), there is reason to believe that she had the authority to
issue the same, especially when the President did not expressly recall or revoke it. Moreover,
when Lacanaria filed his Motion for Reconsideration, that time the President denied it. By doing
so, the President rectified the earlier lapse in the signatory (and appropriate office which should
issue) for the Notice of Decision (or Termination). In other words, the President ratified the
issuance of the said notice by the VP for Administration in behalf of the Office of the President
and the University.

Bitin

Pacific Royal Basic Foods, Inc. vs Violeta Noche

G.R. No. 202392, 4 October 2021

“In Unilever Philippines, Inc. v. Rivera the Court discusses in brief PRBFI's non-compliance
with the guidelines for procedural due process that must be accorded to employees who are
due for dismissal, viz.:

[T]he following should be considered in terminating the services of

employees:

(1) The first written notice to be served on the employees should contain the
specific causes or grounds for termination against them, and a directive that the
employees are given the opportunity to submit their written explanation within a
reasonable period. "Reasonable opportunity" under the Omnibus Rules means
every kind of assistance that management must accord to the employees to enable
them to prepare adequately for their defense. This should be construed as a period
of at least five (5) calendar days from receipt of the notice to give the employees an
opportunity to study the accusation against them, consult a union official or
lawyer, gather data and evidence, and decide on the defenses they will raise
against the complaint. Moreover, in order to enable the employees to intelligently
prepare their explanation and defenses, the notice should contain a detailed
narration of the facts and circumstances that will serve as basis for the charge
against the employees. A general description of the charge will not suffice.
Lastly, the notice should specifically mention which company rules, if any, are
violated and/or which among the grounds under Art. 282 is being charged
against the employees.

(2) After serving the first notice, the employers should schedule and
conduct a hearing or conference wherein the employees will be given the
opportunity to: (1) explain and clarify their defenses to the charge against them; (2)
present evidence in support of their defenses; and (3) rebut the evidence presented
against them by the management. During the hearing or conference, the employees
are given the chance to defend themselves personally, with the assistance of a
representative or counsel of their choice. Moreover, this conference or hearing
could be used by the parties as an opportunity to come to an amicable settlement.

(3) After determining that termination of employment is justified, the

employers shall serve the employees a written notice of termination indicating
 that: (1) all circumstances involving the charge against the employees have been
considered; and (2) grounds have been established to justify the severance of their
employment. (Emphasis supplied.)

While the wordings of the termination letters appear to be in acceptable compliance with
the third requisite, two out of the above three requirements have not been complied with. In
PRBFI's first series of letters for respondents, the latter were informed that they were the
suspected perpetrators of the supposed product contamination. This, however, is a statement
too thin and sweeping to be considered as "a detailed narration of the facts and circumstances
that will serve as basis for the charge against the employees" demanded by law [52] and
jurisprudence. Also again, PRBFI failed to prove with substantial evidence that hearings and
interviews of respondents were actually conducted. The records only confirm the fact that
PRBFI trampled on respondents' rights to procedural due process.

The illegality of respondents' dismissal being established both in substance and

procedure, respondents are entitled to all the consequent backwages and attorney's fees that
they have duly proved before and granted by the Labor Arbiter.

The Court adds L at, following Nacar v. Gallery Frames, these monetary awards shall earn
legal interest at the rate of six percent (6%) per annum from the date of finality of this Decision
until fully paid by PRBFI to respondents.”

Retroactivity of Jaka

Jose del Pilar vs BATELEC II

G.R. No. 160121, 19 February 2020

“Pursuant to Serrano which the appellate court hesitantly applied, complainants were
entitled to separation pay and backwages up to September 13, 2001. However, in the
subsequent cases of Agabon v. National Labor Relations Commission (Agabon) and Jaka Food
Processing Corporation v. Pacot (Jaka) the Court now orders payment of nominal damages for
valid dismissals due to just or authorized cause but not compliant to statutory due process.
In De Jesus v. Aquino, Agabon was applied by the Court retroactively, thus:

Although Agabon, being promulgated only on November 17, 2004, ought to be

prospective, not retroactive, in its operation because its language did not expressly state that it
would also operate retroactively, the Court has already deemed it to be the wise judicial course
to let its abandonment of Serrano be retroactive as its means of giving effect to its recognition of
the unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but not
complying with statutory due process. Under Agabon, the new doctrine is that the failure of the
employer to observe the requirements of due process in favor of the dismissed employee (that
is, the two-written notices rule) should not invalidate or render ineffectual the dismissal for just
or authorized cause. The Agabon Court plainly saw the likelihood of Serrano producing unfair
but far-reaching consequences, such as, but not limited to, encouraging frivolous suits where
even the most notorious violators of company policies would be rewarded by invoking due
process; to having the constitutional policy of providing protection to labor be used as a sword
to oppress the employers; and to compelling the employers to continue employing persons who
 were admittedly guilty of misfeasance or malfeasance and whose continued employment
would be patently inimical to the interest of employers.
Even so, the Agabon Court still deplored the employer's violation of the employee's right
to statutory due process by directing the payment of indemnity in the form of nominal
damages, the amount of which would be addressed to the sound discretion of the labor tribunal
upon taking into account the relevant circumstances. Thus, the Agabon Court designed such
form of damages as a deterrent to employers from committing in the future violations of the
statutory due process rights of employees, and, at the same time, as at the very least a
vindication or recognition of the fundamental right granted to the employees under the Labor
Code and its implementing rules. x x x (Citations omitted)

We see no reason why we should not apply Jaka retroactively in this case too, to wit:

1. First, Jaka extended the application of the Agabon doctrine to dismissals that were
based on authorized causes but have been effected without observance of the notice
requirements. Thus, similar to Agabon, the dismissals under such circumstances will also be
regarded as valid while the employer shall likewise be required to pay an indemnity to the
employee; and

2. Second, Jaka increased the amount of indemnity payable by the employer in cases
where the dismissals are based on authorized causes but have been effected without observance
of the notice requirements. It fixed the amount of indemnity in the mentioned scenario to
P50,000.

Pursuant to Jaka, we direct BATELEC II to pay only indemnity in the amount of

P50,000.00 each to all complainants.”

7
Reliefs
Reinstatement Bars

Philippine National Bank vs Manuel Bulatao

G.R. No. 200972, 11 December 2019

“We note that the CA ordered the reinstatement of Bulatao. It should be emphasized,
however, that although reinstatement is a matter of right, the award of separation pay is an
exception to such rule, as it is awarded in lieu of reinstatement in the following circumstances:
"(a) when reinstatement can no longer be effected in view of the passage of a long period of
time or because of the realities of the situation; (b) reinstatement is inimical to the employer's
interest; (c) reinstatement is no longer feasible; (d) reinstatement does not serve the best
interests of the parties involved; (e) the employer is prejudiced by the workers' continued
employment; (f) facts that make execution unjust or inequitable have supervened; or (g)
strained relations between the employer and employee."

Taking into account the lapse of time as well as the age and capacity to work of Bulatao,
reinstatement is no longer feasible. In fact, Bulatao revealed that he has suffered and is still
suffering from various medical ailments such as stroke, arthritis, gout, cervical spondylosis, and
even had to undergo cancer treatments and heart surgery during the pendency of this case.
 Thus, the grant of separation pay in lieu of reinstatement is more appropriate under the
circumstances.”

Return to Work; Separation Pay

Fernando Gososo vs Leyte Lumber Yard

G.R. 205257, 13 January 2021

“Moreover, while respondents issued the October 13, 2008 Memorandum requiring
petitioner to return to work, records do not disclose whether petitioner was actually furnished
copies of this Memorandum. To claim that petitioner blatantly disregarded respondents' return-
to-work order in their October 13, 2008 Memorandum, when petitioner was never shown to
have received a copy of the same, speaks volumes of petitioner's vague intent to abandon his
work and respondents' attempt to tweak facts in their favor.

In any case, mere absence or simple failure to report for work is not abandonment, more
so if the employee was able to lodge his complaint before the labor tribunals with haste. An
immediate filing of a complaint for illegal dismissal, more so when it includes a prayer for
reinstatement, is inconsistent with a charge of abandonment. Indeed, employees like petitioner
herein who take steps to protest their alleged dismissal cannot be said to have abandoned their
work.

Where the employee fails to prove the fact of his or her illegal dismissal, and the
employer has also not demonstrated that the employee abandoned his or her work, the case
usually ends with the employee's reinstatement without the payment of backwages. Should
reinstatement be rendered impossible by strained relations of the parties, become unreasonable
with the passage of time since the legal controversy, or otherwise attained impossibility or
impracticability due to the present prevailing circumstances, equity impels the Court to award
the petitioner separation pay equivalent to one-month salary for every year of service,
computed up to the time he stopped working for respondents.

The Court has had occasion to withhold the grant of separation pay where there was no
dismissal, no abandonment, and reinstatement was no longer feasible. In the earlier cases with
factual backgrounds similar hereto, it had been ruled that the parties shall bear their respective
losses and are placed on equal footing.

A slew of more recent and analogous cases, however, dictated the trend favoring such
award of separation pay.

In AIP Construction v. Marquina, respondents were initially directed to be reinstated to

their former work. Considering, however, the length of time that had passed and the
impossibility and unreasonableness of an order of reinstatement, the Court instead awarded
them separation pay of one (1)-month salary for every year of service up to the time
respondents stopped working.

A similar directive was issued in Doctor. The Court considered the respondent employers'
own allegations that they had already reduced their workforce and that the petitioning
employees had no more place in the company.

In Dee Jay's Inn and Cafe v. Raneses, it was emphasized that where the employee was
neither found to have been dismissed nor to have abandoned work, the general course of action
 is for the tribunals to dismiss the complaint, direct the employee to return to work, and order
the employer to re-accept the employee. Citing Nightowl Watchman & Security Agency, Inc. v.
Lumahan, if a considerable length of time had already passed, 10 years in the case of Dee Jay's
Inn, and reinstatement of the dismissed employee is rendered impossible, an award of
separation pay is proper in lieu of reinstatement. The separation pay is equivalent to one (1)-
month salary per year of service up to the time the employee stopped working.

Here, petitioner alleged that he had been under the respondents' employ since 1991 but
presented no substantiating proof. His Social Security System Employment History shows that
his employment with respondent Leyte Lumber commenced only on January 1, 1996. For want
of records and evidence, the court reckons the computation of the separation pay only from the
year 1996 until the time petitioner stopped reporting for work in 2008.

The separation pay awarded to petitioner shall be computed as

follows:chanroblesvirtualawlibrary

Number of Workdays per 6 days/week; 24

Month days/month
Daily Wage P220.00/day
Monthly Wage P5280.00/month
Number of Years Employed 12 years
(January1996-October 2008)48

Total Separation Pay P63,360.00

This amount shall bear interest at the rate of six percent (6%) per annum from date of
finality of this Decision until fully paid.”

D
LABOR PROCEDURE
Labor Jurisdiction

Jose Edwin Esico vs Alphaland Corp.

G.R. No. 216716, 17 November 2021

This should be read patiently because it is a good reviewer on labor jurisdiction, in

particular on the Reasonable Causal Connection Rule and Sole Reference to Labor Law Rule which
are favorites in the Bar, e.g., Bar 2010, Bar 2014, Bar 2015, Bar 2016 & Bar 2018.

On 19 July 2012, Esico filed a complaint for illegal dismissal before the Regional
Arbitration Branch of the NLRC, docketed as NCR-07-10970-12. On 2 August 2012,
respondent Alphaland filed a complaint against Esico for alleged wrongful resignation and
damages with the NLRC, separately docketed as NCR-08-11647-12.

The basis of Alphaland’s claim was, o n 3 March 2012, Esico was handed a letter
dated 10 August 2011 which read:

Dear Lt. Col. Esico,

 Further to the terms of your engagement in the position of Pilot for ALPHALAND
DEVELOPMENT, INC. (the "Company") and in consideration of the Company’s
agreement to advance the expenses necessary to send you on ground and night
course training for the Cessna plane, as described in Annex A hereof, you further
undertake to render service to the Company for a minimum period of five (5) years
beginning May 1, 2011. Should you fail to complete this minimum years of service,
you shall reimburse the Company for the expenses spent on your training subject
to proportionate reduction equivalent to five percent (5%) per completed quarter of
actual service.

Kindly confirm you[r] acceptance of this undertaking under the terms set forth
herein by signing on the space provided below and recurring a copy of the letter to
the Company.

Ruling:

“The dust has long settled over the delineation of the jurisdiction of the LA and the
NLRC over money claims arising from employer-employee relations.

San Miguel Corporation v. National Labor Relations Commission (San Miguel Corporation)
illuminates, thus:

The important principle that runs through [Article 217] is that where the
claim to the principal relief sought is to be resolved not by reference to the Labor
Code or other labor relations statute or a collective bargaining agreement but by
the general civil law, the jurisdiction over the dispute belongs to the regular courts
of justice and not to the Labor Arbiter and the NLRC. In such situations,
resolution of the dispute requires expertise, not in labor management relations
nor in wage structures and other terms and conditions of employment, but
rather in the application of the general civil law. Clearly, such claims fall outside
the area of competence or expertise ordinarily ascribed to Labor Arbiters and the
NLRC and the rationale for granting jurisdiction over such claims to these
agencies disappears.
xxxx

Such undertaking, though unilateral in origin, could nonetheless ripen into

an enforceable contractual (facio ut des) obligation on the part of petitioner
Corporation under certain circumstances. Thus, whether or not an enforceable
contract, albeit implied and innominate, had arisen between petitioner Corporation
and private respondent Vega in the circumstances of this case, and if so, whether
or not it had been breached, are preeminently legal questions, questions not to be
resolved by referring to labor legislation and having nothing to do with wages or
other terms and conditions of employment, but rather having recourse to our law
on contracts. (Emphasis supplied)

Portillo v. Lietz (Lietz) adeptly traced the "reasonable causal connection rule" as a
requirement not only in employees' money claims against the employer but is, likewise, a
condition when the claimant is the employer:

In Dai-Chi Electronics Manufacturing Corporation v. Villarama, Jr., which

reiterated the San Miguel ruling and allied jurisprudence, we pronounced that a
non-compete clause, as in the "Goodwill Clause" referred to in the present case,
with a stipulation that a violation thereof makes the employee liable to his former
 employer for liquidated damages, refers to post-employment relations of the
parties.

In Dai-Chi, the trial court dismissed the civil complaint filed by the employer
to recover damages from its employee for the latter's breach of his contractual
obligation. We reversed the ruling of the trial court as we found that the employer
did not ask for any relief under the Labor Code but sought to recover damages
agreed upon in the contract as redress for its employee's breach of contractual
obligation to its "damage and prejudice." We iterated that Article 217, paragraph 4
does not automatically cover all disputes between an employer and its
employee(s). We noted that the cause of action was within the realm of Civil Law,
thus, jurisdiction over the controversy belongs to the regular courts. At bottom, we
considered that the stipulation referred to post-employment relations of the
parties.

That the "Goodwill Clause'" in this case is likewise a post-employment issue

should brook no argument. There is no dispute as to the cessation of Portillo's
employment with Lietz, Inc. She simply claims her unpaid salaries and
commissions, which Lietz, Inc. does not contest. At that juncture, Portillo was no
longer an employee of Lietz, Inc. The "Goodwill Clause" or the "Non-Complete
Clause" is a contractual undertaking effective after the cessation of the employment
relationship between the parties. In accordance with jurisprudence, breach of the
undertaking is a civil law dispute, not a labor law case.

It is clear, therefore, that while Portillo's claim for unpaid salaries is a money
claim that arises out of or in connection with an employer-employee relationship,
Lietz, Inc.'s claim against Portillo for violation of the goodwill clause is a money
claim based on an act done after the cessation of the employment relationship.
And, while the jurisdiction over Portillo's claim is vested in the labor arbiter, the
jurisdiction over Lietz, Inc.’s claim rests on the regular courts.

In this case, the bone of contention between the parties lies in the interpretation of the
employment contract, specifically the clause on the minimum service requirement in
consideration of expenses (advances) for flight trainings. Unarguably, respondents Alphaland
claim payment of actual damages equivalent to the amount they advanced for Esico's flight
training who reneged on his contractual obligation by his premature resignation. Respondents
Alphaland's cause of action, the supposed violation of the right-duty correlative between the
parties, hinges on the enforceability of the contentious clause in the employment contract.
Clearly, respondents' recourse against Esico is based on our law on contracts.

As in San Miguel Corporation and allied jurisprudence, respondents Alphaland's claim

against Esico, albeit arising out of their employer-employee relationships, is not cognizable by
the LA and the NLRC.

Moreover, in determining which tribunal has jurisdiction over a case, we consider not
only the status or relationship of the parties, but more so the nature of the question that is the
subject of controversy.[53]

Here, respondents Alphaland assert that Esico's failure to serve written notice of his
resignation at least a month prior violates Article 300(285)(a) of the Labor Code which makes
him liable to pay for damages.
 Respondents' contention is untenable. There is no pretension that respondents' suit for
"wrongful resignation" claims payment of actual damages, i.e., the amount advanced for Esico's
flight training. This claim for damages, as already demonstrated, arises from Esico's supposed
breach of contract.

Stated differently, respondents Alphaland seek to enforce their rights under the
employment contract considering Esico's failure to comply with his contractual obligation when
he resigned from respondent corporations. The April 19, 2010 letter engaging Esico as pilot
states that in the event of his resignation before completion of the required minimum service,
Esico is obliged to reimburse the costs of his flight trainings pro-rated to the number of years
already served. Failure to comply with either of the alternative obligations [55] resulted in
respondents Alphaland's cause of action against Esico, which suit is cognizable by the regular
courts of law.

The settlement of this dispute between the parties, given the parties' respective claims,
calls to the fore Article 1191 of the Civil Code on a tacit resolutory condition in reciprocal
obligations:

Article 1191. The power to rescind obligations is implied in reciprocal

ones, in case one of the obligors should not comply with what is incumbent
upon him.

The injured party may choose between the fulfillment and the rescission of the obligation,
with the payment of damages in either case. He may also seek rescission, even after he has
chosen fulfillment, if the latter should become impossible.

The court shall decree the rescission claimed, unless there be just cause authorizing the
fixing of a period.

This is understood to be without prejudice to the rights of third persons who have
acquired the thing, in accordance with articles 1385 and 1388 and the Mortgage Law. (Emphasis
supplied)

Quite palpably, in the factual milieu obtaining herein, the labor tribunals do not have
jurisdiction to settle various issues necessitating application of our civil law on obligations and
contracts.

As in Lietz, there is no reasonable causal connection between Esico's money claims

hinging on his supposed constructive dismissal and Alphaland's separate claim before the
NLRC grounded on Esico's alleged "wrongful resignation," which obviously terminated the
employment contract:

There is no causal connection between the petitioner employees' claim for

unpaid wages and the respondent employers' claim for damages for the alleged
"Goodwill Clause" violation. Portillo's claim for unpaid salaries did not have
anything to do with her alleged violation of the employment contract as, in fact,
her separation from employment is not "roofed" in the alleged contractual
violation. She resigned from her employment. She was not dismissed. Portillo's
entitlement to the unpaid salaries is not even contested. Indeed, Lietz, Inc.'s
argument about legal compensation necessarily admits that it owes the money
claimed by Portillo.

The alleged contractual violation did not arise during the existence of the
employer-employee relationship. It was a post-employment matter, a post-
 employment violation. Reminders are apt. That is provided by the fairly recent
case of Yusen Air and Sea Services Phils., Inc. v. Villamor, which harked back to the
previous rulings on the necessity of "reasonable causal connection" between the
tortious damage and the damage arising from the employer-employee
relationship. Yusen proceeded to pronounce that the absence of the connection
results in the absence of jurisdiction of the labor arbiter. Importantly, such absence
of jurisdiction cannot be remedied by raising before the labor tribunal the tortious
damage as a defense. Thus:

When, as here, the cause of action is based on a quasi-delict or tort, which

has no reasonable causal connection with any of the claims provided for in Article
217, jurisdiction over the action is with the regular courts. [Citation omitted]

As it is, petitioner does not ask for any relief under the Labor Code. It merely seeks to
recover damages based on the parties' contract of employment as redress for respondent's
breach thereof. Such cause of action is within the realm of Civil Law, and jurisdiction over the
controversy belongs to the regular courts. More so must this be in the present case, what with
the reality that the stipulation refers to the post-employment relations of the parties.

For sure, a plain and cursory reading of the complaint will readily reveal that the subject
matter is one of claim for damages arising from a breach of contract, which is within, the ambit
of the regular court's jurisdiction. [Citation omitted]

It is basic that jurisdiction over the subject matter is determined upon the allegations
made in the complaint, irrespective of whether or not the plaintiff is entitled to recover upon the
claim asserted therein, which is a matter resolved only after and as a result of a trial. Neither
can jurisdiction of a court be made to depend upon the defenses made by a defendant in his
answer or motion to dismiss. If such were the rule, the question of jurisdiction would depend
almost entirely upon the defendant. (Citations omitted)

On the whole, jurisdiction being set by law and not by the parties, the LA and the NLRC
cannot exercise jurisdiction over respondents Alphaland's complaint just by the mere expedient
of the designation thereof as one for "wrongful resignation with claims of damages" and the
employer-employee relationship between the parties.”

The Supreme Court continues:

“Notwithstanding the foregoing, respondents Alphaland are adamant that the appellate
court did not err in holding that Esico is estopped from assailing the jurisdiction of the LA and
NLRC after belatedly raising the issue and praying for affirmative relief therefrom. In
dismissing Esico's argument of the LA and NLRC's lack of jurisdiction, the CA pronounced
"that the situation in the case at bench falls within the ambit of justifiable cases where estoppel
may be applied." The CA ruled that Esico's prayer for affirmative relief, asking that the
appellate court dismiss respondents' petition for certiorari and affirm the NLRC's April 30, 2013
Decision and January 10, 2014 Resolution, engendered the CA’s jurisdiction by estoppel.
Ultimately, the CA applied our ruling in the old case of Tijam.

The CA further ratiocinated its holding on the doctrine of exhaustion of remedies.

According to the CA, considering that Esico did not object to the consolidation of the parties'
complaints, the labor tribunals should be given the opportunity to settle the money claims
between the parties.
 We are not persuaded.

The general rule is that the issue of jurisdiction may be raised at any stage of the
proceedings, even on appeal, and is not lost by waiver or by estoppel. On several occasions we
have ruled, thus:

The principle of estoppel cannot be invoked to prevent this Court from

taking up the question, which has been apparent on the face of the pleadings since
the start of the litigation before the Labor Arbiter. In the case of Dy v. NLRC, xxx
the Court, citing the case of Calimlim v. Ramirez, reiterated that the decision of a
tribunal not vested with appropriate jurisdiction is null and void. Again, the Court
in Southeast Asian Fisheries Development Center-Aquaculture Department v.
NLRC restated the rule that the invocation of estoppel with respect to the issue of
jurisdiction is unavailing because estoppel does not apply to confer jurisdiction
upon a tribunal that has none over the cause of action. The instant case does not
provide an exception to the said rule.

In Tijam, we carved out an exception to the general rule and laid down the doctrine that
the plea of lack of jurisdiction may no longer be raised for being barred by laches because it was
raised for the first time in a motion to dismiss filed almost 15 years after the questioned ruling
had been rendered.

As our holding in Tijam is merely an exception to the general rule, laches occurring in a
particular case will only bar a litigant from raising the issue of lack of jurisdiction when the
factual milieu obtaining therein is on all fours with Tijam.

Stacked against Tijam, the factual circumstances herein do not equate to laches, i.e., silence
or inaction for an inexplicable length of time. The misstep of Esico in not immediately moving
for the dismissal of NLRC-NCR Case No. 08-11647-12 given respondents' characterization of
their complaint, the LA's subsequent consolidation of the parties' respective complaints, and the
labor tribunals' allowance thereof, will not afford the same labor tribunals proper jurisdiction
over the case.”

Conferment of Jurisdiction

Del Monte Land Transport Bus Co. vs Renante Armenta

G.R. No. 240144, 3 February 2021

“To ensure the protection and welfare of drivers and conductors in the public utility bus
industry, the Department of Labor and Employment (DOLE), in the exercise of its rule-making
power,6 issued Department Order No. 118-12 (DO 118-12) on 13 January 2012 providing for a
fixed and performance compensation scheme in the computation of public utility bus driver's or
conductor's wage. The goal of the issuance was to insure public road transport safety by
improving the working conditions, compensation and competence of bus drivers and
conductors thereby eliminating their risk-taking behavior.

On 12 February 2014, the DOLE, through its Regional Director, issued Labor Standards
Compliance Certificates (LSCC)8 as Bus Transportation to Del Monte Motor Works, Inc.
(DMMWI) for having complied with DO 118-12, other labor laws, rules and regulations. The
certificates of compliance were valid for one (1) year from issuance unless earlier revoked or
cancelled.
 On 28 July 2014, a complaint for underpayment of wages, non payment of holiday pay,
holiday premium, rest day premium, service incentive leave, 13th month pay, and attorney's fees
was filed by drivers and conductors against Del Monte Land Transport Bus, Co., Inc., (DLTB).

DLTB is a domestic corporation established on March 16, 2010 12 with principal office
address at 650 EDSA, Malibay, Pasay City, Metro Manila. It is engaged in the transportation
business and duly registered to operate as a common carrier plying the route of Metro Manila
to Batangas, Laguna, Bicol, and Visayas and vice versa.

Respondents, on the other hand, are drivers and conductors who were hired by DLTB on
various dates from 2010-2013. They averred that since the start of their employment, they have
yet to receive their 13th month pay, holiday pay, five (5) day service incentive leave pay, rest day
pay, overtime pay, and ECOLA.16 They further claimed that their daily salaries were at P337.00,
below the prevailing daily minimum wage of P466.00 at that time in violation of paragraph
(a),17 Section 2, Rule I of DO 118-12.

For its part, DLTB alleged that prior to the implementation of DO 118-12 mandating the
"fixed wage plus commission" scheme, respondents were paid on a purely commission basis.
When DO 118-12 took effect, petitioner asserted that respondents were being paid their salaries
based on the number of hours they actually worked plus commission which is at least 1% of the
gross revenue for passengers and 2.5% of the gross revenue for baggages transported by them.
DLTB thus asserted that respondents' salaries and other monetary benefits were in accordance
with law. In fact, the DOLE issued LSCCs in favor of DMMWI, which owns and operates
DLTB, showing its compliance with the labor standards requirements of the Labor Code and its
Implementing Rules and Guidelines.

In respondents' Reply, they pointed out that the LSCCs were issued to DMMWI and not
to herein petitioner, DLTB. Respondents added that they would not have filed the complaint
for money claims had there been compliance of the mandate of DO 118-12.

In response, DLTB claimed that respondents are not entitled to receive the statutory
minimum wage rates for the National Capital Region (NCR) because they are all assigned in
various operations centers of DLTB located in the South Luzon and Visayas regions at the time
of the institution of the complaint. Moreover, the prevailing minimum wage in the NCR cannot
be invoked by respondents since DLTB 's office in Manila is a mere transit point.

Petitioner DLTB thus raised the issue of jurisdiction. It claimed that the LA does not have
jurisdiction to render judgment or award on the alleged underpayment of wages claimed by the
respondents since it is the DOLE which has jurisdiction over their money claims pursuant to
Article 128 of the Labor Code.

Ruling:

The letter of DO 118-12 could not be any clearer. Section 1 thereof categorically provides
that issues concerning compliance with the minimum wages and wage-related benefits of
public utility bus drivers and conductors is conferred with DOLE-Regional Officer having
jurisdiction over the principal office of the bus owner/operator. Again, jurisdiction over the
subject matter is conferred by law. It is also determined by the averments in the complaint and
the nature of the reliefs being sought.

In the present case, the Regional Director of DOLE-NCR issued several Labor Standard
Compliance Certificates dated February 12, 2014, certifying petitioner's compliance with the
labor standards requirements of the law. Five months after or on July 28, 2014, respondents filed
the instant case before the LA for underpayment of wages and non-payment of other benefits
alleging violation of the requirements of DO 118-12 in their Affidavit-Position Paper. This fact
should have prompted the LA to refer the case to the DOLE as it was evident that the
respondents' money claims are beyond his jurisdiction. In addition, respondents' categorical
statement that they would not have filed the instant case for money claims had there been real
compliance of the mandate of DO 118-12 shows that the claims were the offshoot of the DOLE
Regional Officer's issuance of the certificates of compliance. 61 This constituted a challenge by the
respondents on the certificates of compliance issued by the DOLE Regional Officer relative to
the labor standard requirements under DO 118-12 which should have been lodged before the
DOLE.

Respondents' argument that jurisdiction over their claims is vested with the LA given
that the aggregate amount subject of this case exceeded P5,000.00, fails to persuade.

Article 128 of the Labor Code speaks of the jurisdiction of the DOLE Secretary and his
representatives over labor standards violations based on findings made in the course of
visitation and inspection of the business premises of an employer. Prior to its amendment,
Article 128 was subjected to the provisions of Article 129 putting a limitation on the jurisdiction
of the DOLE or his authorized representative to money claims not exceeding P5,000.00. Thus,
under the old rule, matters involving recovery of wages and other monetary claims and benefits
where the aggregate amount exceeds P5,000.00 fell within the jurisdiction of the LA pursuant to
Articles 129 and 224 of the Labor Code.

The issuance of RA 7730 on June 2, 1994, however, effectively removed the jurisdictional
limitations brought about by the threshold amount found in Articles 129 and 224 of the Labor
Code insofar as the exercise of the visitorial and enforcement powers of the DOLE Secretary are
concerned. As it stands now, the authority under Article 128 may be exercised by the DOLE
regardless of the amount of the award claimed for provided there exists employer-employee
relationship.

This Court notes the different views espousing the proposition that the mode and fora by
which the action has been initiated determine jurisdiction. The issue has been settled in People’s
Broadcasting Service v. Secretary of the Department of Labor and Employment (Peoples Broadcasting
Service), where this Court En Banc pronounced:

There is a view that despite Art. 128 (b) of the Labor Code, as amended by
RA 7730, there is still a threshold amount set by Arts. 129 and 217 of the Labor
Code when money claims are involved, i.e., that if it is for PhP5,000 and below, the
jurisdiction is with the regional director of the DOLE, under Art. 129, and if the
amount involved exceeds PhP5,000, the jurisdiction is with the labor arbiter, under
Art. 217. The view states that despite the wording of Art. 128 (b), this would only
apply in the course of regular inspections undertaken by the DOLE, as
differentiated from cases under Arts. 129 and 217, which originate from
complaints. There are several cases, however, where the Court has ruled that Art.
128 (b) has been amended to expand the powers of the DOLE Secretary and his
duly authorized representatives by RA 7730. In these cases, the Court resolved that
the DOLE had the jurisdiction, despite the amount of the money claims involved.
Furthermore, in these cases, the inspection held by the DOLE regional director was
prompted specifically by a complaint. Therefore, the initiation of a case through a
complaint does not divest the DOLE Secretary or his duly authorized
representative of jurisdiction under Art. 128 (b).
 To recapitulate, if a complaint is brought before the DOLE to give effect to
the labor standards provisions of the Labor Code or other labor legislation, and
there is a finding by the DOLE that there is an existing employer-employee
relationship, the DOLE exercises jurisdiction to the exclusion of the NLRC. If the
DOLE finds that there is no employer-employee relationship, the jurisdiction is
properly with the NLRC. If a complaint is filed with the DOLE, and it is
accompanied by a claim for reinstatement, the jurisdiction is properly with the
Labor Arbiter, under Art. 217 (3) of the Labor Code, which provides that the Labor
Arbiter has original and exclusive jurisdiction over those cases involving wages,
rates of pay, hours of work, and other terms and conditions of employment, if
accompanied by a claim for reinstatement. If a complaint is filed with the NLRC,
and there is still an existing employer-employee relationship, the jurisdiction is
properly with the DOLE. The findings of the DOLE, however, may still be
questioned through a petition for certiorari under Rule 65 of the Rules of Court.
(Emphasis supplied)

Thus, the rules governing jurisdiction on labor standards claims, as set in People's
Broadcasting Service may be summed up as follows:

1. If the claim involves labor standards benefits mandated by the

Labor Code or other labor legislation regardless of the amount prayed
for and provided that there is an existing employer employee
relationship, jurisdiction is with the DOLE regardless of whether the
action was brought about by the filing of a complaint or not.
2. If the claim involves labor standards benefits mandated by the
Labor Code or other labor legislation regardless of the amount prayed
for and there is no existing employer-employee relationship or the claim
is coupled with a prayer for reinstatement, jurisdiction is with the
LA/NLRC.

Undeniably, the issues surrounding the money claims of respondents public utility bus
drivers and conductors, as well as questions pertaining to the Labor Standard Compliance
Certificates dated February 12, 2014 raised in the instant case, are within the purview of the
jurisdiction of the DOLE pursuant to Article 128 and the provisions of DO 118-12. The CA
therefore erred in affirming the LA's assumption of jurisdiction.”

Lamadrid

“We sustain both the Labor Arbiter's and the NLRC's jurisdiction over the illegal
dismissal case of Lamadrid. Article 224 [217] of the Labor Code provides that the Labor Arbiter
has original and exclusive jurisdiction to hear and decide termination disputes involving all
workers. This provision must be read together with Section 10 of RA 8042 as amended by RA
10022, as well as Section 3 of RA 10022. 51

SECTION 2. Section 3, paragraph (a) of Republic Act No. 8042, as amended, is

hereby amended to read as follows:

(a) "Overseas Filipino worker" refers to a person who is to be engaged, is engaged

 or has been engaged in a remunerated activity in a state of which he or she is not a
citizen or on board a vessel navigating the foreign seas other than a government
ship used for military or non-commercial purposes or on an installation located
offshore or on the high seas; to be used interchangeably with migrant worker.

Under the foregoing definition, Lamadrid is considered an Overseas Filipino Worker

(OFW). She had been engaged in a remunerated activity in a state where she is not a citizen.
Cathay's cabin crew are all based in Hong Kong, and in fact Lamadrid resided and leased an
apartment in Hong Kong during her stint with Cathay. As an OFW faced with a termination
dispute, Lamadrid's case may be heard and decided by the Arbiter under Article 224 [217] of
the Labor Code in relation to RA 8042 as amended by RA 10022.”

Acquisition of Jurisdiction

Ma. Lea Jane I. Gesolgon vs Cyberone Ph, Inc.

G.R. No. 210741, 14e October 2020

“Considering the foregoing, We now go back to the issue of whether this Court has
acquired jurisdiction over CyberOne AU.

Sections 12 and 15, Rule 14, of the Rules of Court suppletorily apply:

Sec. 12. Service upon foreign private juridical entity. - When the defendant
is a foreign private juridical entity which has transacted business in the
Philippines, service may be made on its resident agent designated in
accordance with law for that purpose, or, if there be no such agent, on the
government official designated by law to that effect, or on any of its officers or
agents within the Philippines.

x x x
Sec. 15. Extraterritorial service. - When the defendant does not reside
and is not found in the Philippines, and the action affects the personal status
of the plaintiff or relates to, or the subject of which is, property within the
Philippines, in which the defendant has or claims a lien or interest, actual or
contingent, or in which the relief demanded consists, wholly or in part, in
excluding the defendant from any interest therein, or the property of the
defendant has been attached within the Philippines, service may, by leave of
court, be effected out of the Philippines by personal service as under section 6;
or by publication in a newspaper of general circulation in such places and for
such time as the court may order, in which case a copy of the summons and
order of the court shall be sent by registered mail to the last known address of
the defendant, or in any other manner the court may deem sufficient. Any
order granting such leave shall specify a reasonable time, which shall not be
less than sixty (60) days after notice, within which the defendant must
answer.

Applying the foregoing, CyberOne AU, as a non-resident foreign corporation which is not
doing business in the Philippines, may be served with summons by extraterritorial service, to
wit: (1) when the action affects the personal status of the plaintiffs; (2) when the action relates to,
or the subject of which is property, within the Philippines, in which the defendant claims a lien
or an interest, actual or contingent; (3) when the relief demanded in such action consists, wholly
or in part, in excluding the defendant from any interest in property located in the Philippines;
and (4) when the defendant non residents property has been attached within the Philippines. In
these instances, service of summons may be effected by (a) personal service out of the country,
with leave of court; (b) publication, also with leave of court; or (c) any other manner the court
may deem sufficient.

Extraterritorial service of summons applies only where the action is in rem or quasi in
rem but not if an action is in personam as in this case; hence, jurisdiction over CyberOne AU
cannot be acquired unless it voluntarily appears in court. 20 Consequently, without a valid service
of summons and without CyberOne AU voluntarily appearing in court, jurisdiction over
CyberOne AU was not validly acquired. Consequently, no judgment can be issued against it, if
any. Any such judgment will only bind respondents CyberOne PH, Mikrut, and Juson.”

Pedrito R. Parayday vs Shogun Shipping Co., Inc.

G.R. No. 204555, 6 July 2020

“Moreover, it is a well-established rule in labor proceedings that the Labor Arbiter, or this
Court for that matter, cannot acquire jurisdiction over the person of the respondent until he/she
is validly served with summons, or that he/she voluntarily appears in court. 33 In this connection,
this Com1 already ruled in Kukan International Corporation v. Reyes that compliance with the
modes of acquiring jurisdiction over the person of the defendant or respondent cannot be
dispensed with in applying the doctrine of piercing the veil of corporate fiction, thus:

The principle of piercing the veil of corporate fiction, and the resulting
treatment of two related corporations as one and the same juridical person with
respect to a given transaction, is basically applied only to determine established
liability; it is not available to confer on the court a jurisdiction it has not acquired,
in the first place, over a party not impleaded in a case. Elsewise put, a corporation
not impleaded in a suit cannot be subject to the court's process of piercing the
veil of its corporate fiction. In that situation, the court has not acquired
jurisdiction over the corporation and, hence, any proceedings taken against that
corporation and its property would infringe on its right to due process. x x
x (Emphasis supplied, citation omitted)

Moreover, this Court also held that "the doctrine of piercing the veil of corporate entity can
only be raised during a full-blown trial over a cause of action duly commenced involving parties
duly brought under the authority of the court by way of service of summons or what passes as
such service."

Otherwise stated, the above doctrine will only come into play once the court has already
acquired jurisdiction over the corporation. Only then would it be allowed to present evidence for
or against piercing the veil of corporate fiction. Thus, if the Labor Arbiter or the NLRC in this
case have not acquired jurisdiction over the corporation, it would be improper for this Court to
pierce the corporate veil as this would offend the corporation's right to due process. 37 In this case,
it bears noting that Ocean view was never impleaded as a party respondent and was never
validly served with summons. Nor was Oceanview represented by any authorized representative
during the proceedings before the Labor Arbiter or the NLRC. It was merely dragged to the case
by mere reference of its name in petitioners' Sama-Samang Sinumpaang Salaysay.

Accordingly, this Court agrees with the CA that there was no full-blown trial as to the
propriety of applying the said doctrine for the reason that Oceanview was never validly
impleaded as a party respondent in the instant illegal dismissal case. Considering that this Court
has not acquired jurisdiction over Oceanview, precisely because it was not properly impleaded
herein as a party respondent, application of the said doctrine would be unwarranted.”

Eduardo G. Jovero vs Rogelio Cerio

G.R. No. 202466, 23 June 2021

“When a party is represented by counsel of record, service of orders and notices must be
made upon such counsel. As a well-settled rule, such notice to counsel is tantamount to notice to
the client. Similarly, the 2011 NLRC Rules of Procedure (NLRC Rules) governing the issuance
and service of notices and resolutions provides:

Section 4. Service of Notices, Resolutions, Orders and Decisions.- a) Notices and

copies of resolutions or orders, shall be served personally upon the parties by the
bailiff or duly authorized public officer within three (3) days from his/her receipt
thereof or by registered mail or by private courier;

b) In case of decisions and final awards, copies thereof shall be served on

both parties and their counsel or representative by registered mail or by private
courier; Provided that, in cases where a party to a case or his/her counsel on
record personally seeks service of the decision upon inquiry thereon, service to
said party shall be deemed effected as herein provided. Where parties are
numerous, service shall be made on counsel and upon such number of
complainants, as may be practicable and shall be considered substantial
compliance with Article 224 (a) of the Labor Code, as amended. For purposes of
appeal, the period shall be counted from receipt of such decisions, resolutions,
or orders by the counsel or representative of record.

c) The bailiff or officer serving the notice, order, or resolution shall submit
his/her return within two (2) days from date of service thereof, stating legibly in
his/her return his/her name, the names of the persons served and the date of
receipt, which return shall be immediately attached and shall form part of the
records of the case. In case of service by registered mail or by private courier, the
name of the addressee and the date of receipt of the notice, order or resolution
shall be written in the return card or in the proof of service issued by the private
courier. If no service was effected, the reason thereof shall be so stated. 35 (Emphasis
ours)

Considering that the Bailiff Proof of Service and Notice of Judgment/Final Order show
that Jovero's counsel received Labor Arbiter Rivera's Decision on August 21, 2001, and that the
reglementary period indubitably lapsed before he filed his appeal, the CA correctly held that the
 NLRC gravely abused its discretion when it took cognizance of and even granted Jovero's appeal.
Lest we forget, perfection of an appeal in the manner and within the period prescribed by law is
not a mere technicality, but jurisdictional.36 Hence, failure to perfect an appeal as required by the
Rules renders the judgment fmal and executory. 37 The case of Paramount Vinyl Products
Corporation v. National Labor Relations Commission is instructive:

Well-settled rule that the perfection of an appeal within the statutory or

reglementary period is not only mandatory, but jurisdictional. Failure to interpose
a timely appeal (or a motion for reconsideration) renders the assailed decision,
order or award final and executory that deprives the appellate body of any
jurisdiction to alter the final judgment. x x x The rule is 'applicable indiscriminately
to one and all since the rule is grounded on fundamental consideration of public
policy and sound practice that at the risk of occasional error, the judgment of
courts and award of quasi-judicial agencies must become final at some definite
date fixed by law.'

Thus, in Mai Philippines Inc., v. National Labor Relations Commission, We held:

So, too, it was clearly wrong, and in grave abuse of discretion, for the
Commission to fail or refuse to take account of the fact-clearly shown by the record
and to which its attention had repeatedly been drawn -that the appeal taken by
Nolasco from the decision of Arbiter Lasquite of August 2, 1984, dismissing his
complaint, was late, because perfected on September 24, 1984, twelve (12) days
after service on him of notice of the decision on September 12, 1984, the
reglementary period for appeal being fixed by the Labor Code at ten (10) days. No
acceptable reason has been advanced by Nolasco, and none appears upon the
record, to excuse his tardiness in the taking of the appeal. MAl's opposition to the
appeal should have been sustained, and the NLRC should never have taken
cognizance of the appeal. In doing so, and in resolving the appeal adversely to
MAl, it acted so whimsically, capriciously and arbitrarily as to call for this Court's
correcting hand. (Citations omitted)

While this Court is mindful that procedural lapses have been previously disregarded and
appeals filed beyond the reglementary period have been given due course, it necessitates strong
and compelling reasons to do so.42 In the present case, the CA correctly held that the absence of
such exceptional circumstances to justify the belated filing of an appeal with the NLRC rendered
Labor Arbiter Rivera's Decision final and executory.”

Exercise of Jurisdiction (Injunction)

Jose Del Pilar, et al. vs BATELEC III

G.R. No. 160090, 19 February 2020

With respect to the appeal bond, we quote the ratiocination of the NLRC:

First, the putting-up of a cash bond was not required in perfecting the
instituted Appeal, for the order appealed from is not an original decision of the
Labor Arbiter affecting the whole spectrum of the instant case. It is only an order
involving a mere incident, an isolated segment of that entire extent of the case at
bar. It simply concerns a computation aspect of that whole realm. It merely
resolves, at the execution stage of the proceedings, the issue of whether or not the
 benefits, such as medical and dental benefits, Pag-ibig benefits, SSS benefits, sick
leave benefits, vacation benefits, retirement benefits, Phil-Health benefits,
bonus/fourteenth (14th) month pay, rice allowances and uniform allowances
should, aside from the basic pay and regular allowances, be integrated [in] the base
pay for use in computing Complainants-Appellees' separation pay and full
backwages, awarded in the Decision dated 26 May 2000 of the Court of Appeals, as
sustained by the Decision dated June 20, 2001 of the Supreme Court. Otherwise
stated, the law and the NLRC Rules on the matter [do] not require the posting of a
bond in "Orders" of this nature.

The foregoing viewpoint is a liberal construction of Article 223 of the Labor Code requiring
bond in appeals involving monetary awards in view of the presence of controversies
surrounding the computation of Complainant-Appellants monetary awards for separation pay
and full backwages which require resolution on the merits.

As aptly held by the Supreme Court in the case of Manila Mandarin Employees Union v.
NLRC, 264 SCRA 320, 19 November 1996:

At any rate, the Court has invariably ruled that Article 223 of the Labor Code
requiring bond in appeals involving monetary awards, must be liberally construed,
in line with the desired objective of resolving controversies on their merits.
Secondly, granting ex-gratia argumenti that Respondents-Appellants were
required to put up a bond to perfect their Appeal, their failure to do so was a legal
technicality which we could, as we did, ignore to serve the [ends] of substantial
justice.

It bears to stress that if the wrong computation prevails, BATELEC II will pay
Complainants-Appellees the fantastic amount of P20,791,839.00 (their Computation, p. 977,
Records). As a consequence, they will end up becoming the owner of BATELEC II and/or
BATELEC II will close up for the huge amount is far more than its total capitalization. Worse, the
whole number of its employees, as compared to the few number of Complainants-Appellees,
only nine (9) in all, will certainly be economically dislocated. Thus, to prevent unjust enrichment
of Complainants-Appellees at the expense of BATELEC II, the "goose that lays the golden eggs",
and its whole workforce, all due to the unquenchable monetary hunger of Complainants-
Appellees, this Commission has to entertain the instituted Appeal regardless of whether or not
the corresponding appeal bond was posted.

The following provision of Article 221 grants us justification to this urgent assumption of
jurisdiction:

Technical rules not binding and prior resort to amicable settlement. - In any
proceeding before the Commission or any of the Labor Arbiters, the rules of
evidence prevailing in courts of law or equity shall not be controlling and it is the
spirit and intention of this Code that the Commission and its members and the
Labor Arbiters shall use every and all reasonable means to ascertain the facts in
each case speedily and objectively and without regard to technicalities of law or
procedure, all in the interest of due process. In any proceeding before the
Commission or any Labor Arbiter, the parties may be represented by legal counsel
but it shall be the duty of the Chairman, any Presiding Commissioner or
Commissioner or any Labor Arbiter to exercise complete control of the proceedings
at all stages.
 xxxx

Thirdly, the final and executory decision does not fix the exact amount of the awarded
separation pay and full backwages. It leaves the same still to be computed with the right to due
process being afforded to both parties in the process. Since the right amount has not yet been
judicially fixed with finality, it is most unfair that Respondents-Appellants should be required to
post a bond to perfect their appeal questioning, in the exercise of their right to due process.
Complainants-appellees' computation in the fantastic amount of P20,791,837.00, since they do not
yet know the right amount of the bond.27

The foregoing disquisition was affirmed by the CA. However, we do not subscribe to the
NLRC's interpretation of the rule on appeal bond, specifically that which dispenses with the
requirement of an appeal bond if "the order appealed from is not an original decision of the
Labor Arbiter affecting the whole spectrum of the instant case."

In Toyota Alabang, Inc. v. Games, this Court was emphatic in declaring that Article 223 of
the Labor Code and Section 6, Rule VI of the 2011 NLRC Rules of Procedure "do not limit the
appeal bond requirement only to certain kinds of rulings of the [Labor Arbiter]. Rather, these
rules generally state that in case the ruling of the [Labor Arbiter] involves a monetary award, an
employer's appeal may be perfected only upon the posting of a bond. Therefore, absent any
qualifying terms, so long as the decision of the [Labor Arbiter] involves a monetary award, as in
this case, that ruling can only be appealed after the employer posts a bond."

However, we agree that this procedural rule may be relaxed in the interest of substantial
justice. First, the case was already in its execution stage. BATELEC II had already posted an
appeal bond when it appealed the case for the first time on its merit. The purpose of an appeal
bond, which is to ensure, during the period of appeal, against any occurrence that would defeat
or diminish recovery by the aggrieved employees under the judgment if subsequently
affirmed,31 has in fact been satisfied. The winning party was already secured of payment by the
losing party, or in default thereof, by the surety company. Second, at the time when an appeal
was made from the March 22, 2002 NLRC Resolution, the final award, upon which the bond
should be based, has not yet been settled. In the fairly recent case of Sara Lee Philippines, Inc. v.
Macatlang, the Court decreed that the NLRC may dispense with the posting of the bond when the
judgment award is: (1) not stated or (2) based on a patently erroneous computation.

Complainants invoke injunction as the proper remedy from the Order of the Labor Arbiter
on the computation of award to the NLRC.

Article 225(e) of the Labor Code empowers the NLRC "[t]o enjoin or restrain any actual or
threatened commission of any or all prohibited or unlawful acts or to require the performance of
a particular act in any labor dispute which, if not restrained or performed forthwith, may cause
grave or irreparable damage to any party or render ineffectual any decision in favor of such
party," while Sec. 1, Rule X of the 2011 NLRC Rules of Procedure, as amended, pertinently
provides as follows:

Section 1. Injunction in Ordinary Labor Dispute. - A preliminary injunction

or a restraining order may be granted by the Commission through its divisions
pursuant to the provisions of paragraph (e) of Article 218 [now 225] of the Labor
Code, as amended, when it is established on the basis of the sworn allegations in
the petition that the acts complained of, involving or arising from any labor
dispute before the Commission, which, if not restrained or performed forthwith,
 may cause grave or irreparable damage to any party or render ineffectual any
decision in favor of such party.

In Philippine Airlines v. National Labor Relations Commission, the Court expounded on the
NLRC's power to issue an injunction, viz.:

Generally, injunction is a preservative remedy for the protection of one's substantive rights
or interest. It is not a cause of action in itself but merely a provisional remedy, an adjunct to a
main suit. It is resorted to only when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under· any standard of compensation. The application
of the injunctive writ rests upon the existence of an emergency or of a special reason before the
main case be regularly heard. The essential conditions for granting such temporary injunctive
relief are that the complaint alleges facts which appear to be sufficient to constitute a proper basis
for injunction and that on the entire showing from the contending parties, the injunction is
reasonably necessary to protect the legal rights of the plaintiff pending the litigation. Injunction is
also a special equitable relief granted only in cases where there is no plain, adequate and
complete remedy at law.

On the other hand, Article 223 provides that decisions, awards, or orders of the Labor
Arbiter are final and executory unless appealed to the NLRC. The NLRC has exclusive appellate
jurisdiction over all cases decided by labor arbiters as provided in Article 217(b) of the Labor
Code. From the finding of illegal dismissal up to the execution of the monetary award, the
jurisdiction of the NLRC is appellate in nature. "Article 218(e) of the Labor Code does not
provide blanket authority to the NLRC or any of its divisions to issue writs of injunction,
considering that Section 1 of Rule XI of the New Rules of Procedure of the NLRC makes
injunction only an ancillary remedy in ordinary labor disputes."

Moreover, there is no showing of any urgency or irreparable injury which the

complainants might suffer. They are already assured of adequate compensation. "[A]n injunction,
as an extraordinary remedy, is not favored in labor law considering that it generally has not
proved to be an effective means of settling labor disputes. It has been the policy of the State to
encourage the parties to use the non-judicial process of negotiation and compromise, mediation
and arbitration."

Quantum of Proof

JR Hauling Services, et al. vs Gavino Salamo, et al.

G.R. No. 214294, 30 September 2020

“The fact of respondents' dismissal from service is undisputed by the parties. The crux of
the issue therefore lies on whether the supposed transgressions of respondents are supported
by substantial evidence, and whether they are considered just causes for their dismissal.

In this regard, it is a well-established rule that the party-litigant who alleges the existence
of a fact or thing necessary to establish his/her claim has the burden of proving the same by the
amount of evidence required by law, which, in labor proceedings, is substantial evidence, or
"such relevant evidence as a reasonable mind might accept as adequate to support a
conclusion." To be clear, in the hierarchy of evidentiary values, "proof beyond reasonable doubt
is placed at the highest level, followed by clear and convincing evidence, preponderance of
evidence, and substantial evidence, in that order." 46 Thus, in the hierarchy of evidence, it is the
 least demanding. "Corollarily, the ground for the dismissal of an employee does not require
proof beyond reasonable doubt." The quantum of proof required is merely substantial
evidence - which only entails evidence to support a conclusion, "even if other minds, equally
reasonable, might conceivably opine otherwise."49 Accordingly, requiring a quantum of proof
that is over and above substantial evidence is contrary to law. As held in Manila Electric
Company v. National Labor Relations Commission:

And this Court has ruled that the ground for an employer's dismissal of an
employee need be established only by substantial evidence, it not being required
that the former's evidence 'be of such degree as is required in criminal cases, i.e.,
proof beyond reasonable doubt.' It is absolutely of no consequence that the
misconduct with which an employee may be charged also constitutes a criminal
offense: theft, embezzlement, assault on another employee or company officer,
arson, malicious mischief, etc. The proceedings being administrative, the quantum
of proof is governed by the substantial evidence rule and not, as the respondent
Commission seems to imagine, by the rule governing judgments in criminal
actions.

Considering the foregoing recitals, this Court shall first delve into the evidentiary issues
in evaluating the evidence submitted by petitioners.”

Appeals

Pacific Royal Basic Foods, Inc. vs Violeta Noche

G.R. No. 202392, 4 October 2021

“PRBFI further insists that the CA erred in considering its appeal of the Labor Arbiter's
Decision before the NLRC as not perfected for its failure to file a bond. Petitioner asserts the
sufficiency of its payment of a cash bond in the amount of P100,000.00 and its filing of a
Motion to Reduce Bond, in which claimed corporate financial difficulties, simultaneous with its
appeal before the NLRC on May 14, 2008.

The Court still finds no reason to agree with PRBFI on this procedural point.

Appeals of decisions rendered by a labor arbiter that grant a monetary award in favor of
an employee require the aggrieved employer to file a bond. Section 6, Rule VI of the 2011 NLRC
Rules of Procedure, as amended (2011 NLRC Rules), provides the relevant rules, to wit:

SECTION 6. BOND. - In case the decision of the Labor Arbiter or the

Regional Director involves a monetary award, an appeal by the employer may be
perfected only upon the posting of a bond, which shall either be in the form of
cash deposit or surety bond equivalent in the amount to the monetary award,
exclusive of damages and attorney's fees.

x x x x

No motion to reduce bond shall be entertained except on meritorious

grounds, and only upon the posting of a bond in a reasonable amount in relation
to the monetary award.

The mere filing of a motion to reduce bond without complying with the
 requisites of the preceding paragraphs shall not stop the running of the period
to perfect an appeal. (Emphasis supplied.)

The general rule is that appeals by an employer before the NLRC of decisions by a labor
arbiter that involve monetary awards to an employee must be secured by a cash or surety bond
in the full amount of the monetary award. By way of exception, the payment of this full amount
may be excused if the appealing employer files a motion to reduce bond showing meritorious
grounds, and upon posting of a bond in a reasonable amount.

Mcburnie v. Ganzon (Mcburnie) has already set the "reasonable amount" of the provisional
reduced bond at a percentage of 10% of the monetary award, excluding the amount of damages
and attorney's fees, if any. Its ratio was stated in this wise:

To ensure that the provisions of Section 6, Rule VI of the NLRC Rules of

Procedure that give parties the chance to seek a reduction of the appeal bond are
effectively carried out, without however defeating the benefits of the bond
requirement in favor of a winning litigant, all motions to reduce bond that are to
be filed with the NLRC shall be accompanied by the posting of a cash or surety
bond equivalent to 10% of the monetary award that is subject of the appeal, which
shall provisionally be deemed the reasonable amount of the bond in the meantime
that an appellant's motion is pending resolution by the Commission. In conformity
with the NLRC Rules, the monetary award, for the purpose of computing the
necessary appeal bond, shall exclude damages and attorney's fees. Only after the
posting of a bond in the required percentage shall an appellant's period to perfect
an appeal under the NLRC Rules be deemed suspended.

The foregoing shall not be misconstrued to unduly hinder the NLRC's

exercise of its discretion, given that the percentage of bond that is set by this
guideline shall be merely provisional. The NLRC retains its authority and duty
to resolve the motion and determine the final amount of bond that shall be
posted by the appellant, still in accordance with the standards of "meritorious
grounds" and "reasonable amount". Should the NLRC, after considering the
motion's merit, determine that a greater amount or the full amount of the bond
needs to be posted by the appellant, then the party shall comply accordingly. The
appellant shall be given a period of 10 days from notice of the NLRC order within
which to perfect the appeal by posting the required appeal bond. [41] (Citations
omitted and emphasis supplied.)

Mcburnie requires the concurrence of the following conditions before an aggrieved

employer appealing before the NLRC may be allowed to post a bond in a reduced amount:

(1
The employer-appellant files a motion to reduce bond;
)
(2
The motion to reduce bond shall be based on meritorious grounds;
)
(3 The employer-appellant posts the provisional percentage of at least 10% of the
) monetary award, excluding therefrom the award of damages and attorney's fees;
(4
The provisional bond must be posted within the reglementary period for appeal;
)
and
(5
) If the NLRC eventually determines that a greater or the full amount of the bond
 shall be posted, the employer-appellant shall comply accordingly within ten (10)
days from notice of the NLRC order directing the such posting of the increased or
full amount of the bond.

Once these are complied with, the aggrieved employer's appeal of the labor arbiter's
decision before the NLRC shall be deemed perfected. Notably, the requisites laid out
by Mcburnie also presupposes a sixth requirement: the NLRC issues an express ruling on the
appellant's motion to reduce bond.

Records, however, show that PRBFI's Motion to Reduce Bond was never acted upon by
the NLRC. Still, the NLRC resolved petitioner's appeal of the Labor Arbiter's Decision on the
merits and issued its own resolutions thereon. Such final resolutions had been the subject
of certiorari proceedings before the CA, during which petitioner argued for the first time that the
NLRC's inaction on its Motion to Reduce Bond, coupled with its resolution of the case on all its
substantial points, is tantamount to an implied affirmance of the perfection of PRBFI's appeal.

Now lies a quandary in procedure in the disposition of labor cases: for the perfection of
appeals filed by an employer must the NLRC expressly rule on motions to reduce bond, or
would an implied approval of a motion to reduce bond, i.e., the NLRC's disposal of the appeal
by final decision, order, or resolution, suffice as a grant of the appellant-employer's motion to
reduce bond?

Section 6, Rule VI of the 2011 NLRC Rules provides that an appeal may be perfected by
the appellant-employer only by the posting of a bond in the equivalent amount of
the full monetary award granted to the appelleeemployee. The perfection of an appeal in the
manner and within the period set by law is not only mandatory but jurisdictional.
[42]
Consequently, there should be no implied approval of a jurisdictional requirement that
has not been complied with. Otherwise, the ground of lack of jurisdiction becomes a
waivable defect in procedure. Whether the NLRC accepts or rejects the appellant's motion to
reduce bond, the ruling must be unequivocal, and such ruling must be issued before or at the
time the NLRC resolves the appeal by final judgment. Failure to do so shall render the NLRC
liable for grave abuse of discretion for having ruled on an appeal without acquiring jurisdiction
over the same, and the judgment it had issued shall be vacated as null and void.

The CA was correct in granting respondents' Petition for Certiorari and finding grave
abuse of discretion against the NLRC in this wise:

[PRBFI] cannot rely on the mere presumption of regularity in the performance of

official duties in favor of the NLRC when the latter gave due course to its appeal; not
when it is faced with a serious imputation of noncompliance from [respondents].
Considering that the requirements provided under the Labor Code and its Implementing
Rules are mandatory for purposes of perfecting an appeal, the rule on presumption of
regularity cannot apply.

Worse, the NLRC did not resolve the issue. It remained silent on the matter when
[respondents] raised the lack of posting an appeal bond as a defense on appeal. In setting
aside the ruling of the NLRC, this Court is merely exercising prudence in applying the
provisions of the law.”

Allan Regala vs Manila Hotel Corporation

G.R. No. 204684, 5 October 2020
 “In a March 10, 2016 Manifestation of MHC , for the first time, submitted photocopies of
Regala's DTRs covering the period from March 4, 2009 to March 4, 2016, and his Payroll
Journals for the period from January 25, 2009 to February 25, 2016 to the Supreme Court. The
Court rejected the evidence as follows:

“While it admitted that it inadvertently failed to attach the documents to its

April 24, 2013 Comment to Regala's Petition for Review, it requested this Court to
admit the same as part of the records of this case. 45 Petitioner argued that an
examination of the DTRs and Payroll Journals reveals that Regala continuously
report for work in MHC since January 11, 2010, or at the time he filed the instant
complaint for constructive dismissal. In this regard, MHC brings to fore the
following propositions, viz.: (1) there is no dismissal to speak of, let alone one that
is illegal or constructive, as there was no actual severance of employment from
January 11, 2010, the date Regala filed the instant complaint, to date, or at least
until the time the March 10, 2016 Manifestation was filed before this Court, or on
March 31, 2016; and (2) Regala is not entitled to his claim for payment of
backwages as he has been continuously receiving his salaries since January 2009.46

In sum, MHC is requesting this Court to receive belatedly submitted evidence and
consider its new theory that no actual dismissal took place.

This we shall not tolerate.

This Court does not make findings of facts particularly on evidence submitted for the first
time on appeal. It is well settled in this jurisdiction that "[p]oints of law, theories, issues and
arguments not brought to the attention of the lower court x x x need not be considered by a
reviewing court, as they cannot be raised for the first time at that late stage. Basic considerations
of fairness and due process impel this rule."47 In the present case, MHC did not even provide
any justifiable reason why it had failed to present Regala's DTRs and Payroll Journals during
the proceedings held before the LA or the NLRC. It bears noting that the DTRs and Payroll
Journals have been in MHC's possession since January 2009, and yet it was only after more than
seven (7) years therefrom that it presented the same to this Court on appeal for its appreciation.
Not only does the unjustified belated submission of these records make a mockery of this
Court's judicial processes, but this also casts doubt on their credibility, more so when they are
not even newly discovered evidence.

In its attempt to persuade this Court to allow the reception of additional evidence, MHC
cites CMTC International Marketing Corporation v. Bhagis International Trading Corporation (CMTC
International Marketing Corporation). Its reliance, however, on the said case is misplaced as the
factual milieu therein is not on all fours with the case at bench. CMTC International Marketing
Corporation involves, on one hand, the belated filing of the appellant's brief before the trial court.
The case before this Court, on the other hand, underlines the belated submission to it of
evidence and argument of new issues on appeal.

This being the case, MHC's plea that its evidence be admitted in the interest of justice
does not deserve any consideration.

We cannot also allow MHC, at this point of the proceedings, to take an inconsistent
position - that no actual dismissal transpired. To be clear, the hotel had argued before the labor
tribunals that there is no basis to support the claim that Regala was illegally dismissed from
employment as the expiration of the term under his Service Agreements simply caused the
natural cessation of his fixed-term employment with MHC. 49 Contrarily, it now asserts in its
 March 10, 2016 Manifestation that "there was never any severance or break in [Regala's]
employment with the Hotel."

In other words, while MHC earlier argued that Regala's dismissal was valid, it now
posits in a mere Manifestation filed before this Court that no actual dismissal transpired.

This Court cannot simply permit MHC to raise a new issue, take an inconsistent position,
or change its theory on appeal as these would offend the basic rules of fair play, justice and due
process.”

Philam Homeowners Association, Inc. vs De luna

G.R. No. 209437, 17 March 2021

Italkarat 18, Inc. vs Juraldine Gerasmio

G.R. No. 221411, 28 September 2020

“Settled is the rule that allegations in the complaint must be duly proven by competent
evidence and the burden of proof is on the party making the allegation. In an illegal dismissal
case, the onus probandi rests on the employer to prove that its dismissal of an employee was for
a valid cause. However, before a case for illegal dismissal can prosper, an employer-employee
relationship must first be established. In this instance, since it is petitioner here who is claiming
to be an employee of JTA, the burden of proving the existence of an employer-employee
relationship lies upon him. Unfortunately, petitioner failed to discharge this burden.” (See Ginta-
ason, supra).

Evidence on Appeal

Twinstar

“We have explained in Millenium Erectors Corporation v. Magallanes that the rules of
procedure in labor cases may be relaxed in certain instances as they are intended to facilitate the
attainment of justice and not to frustrate it, to wit:

In labor cases, rules of procedure should not be applied in a very rigid and
technical sense. They are merely tools designed to facilitate the attainment of
justice, and where their strict application would result in the frustration rather than
promotion of substantial justice, technicalities must be avoided. Technicalities
should not be permitted to stand in the way of equitably and completely resolving
the rights and obligations of the parties. Where the ends of substantial justice shall
be better served, the application of technical rules of procedure may be relaxed.
(Underscoring supplied)

Indeed, the LA and the NLRC are mandated to use every and all reasonable means to
ascertain the facts in each case speedily and objectively, without regard to technicalities of law
and procedure all in the interest of substantial justice. In this connection, the NLRC is not
precluded from receiving evidence on appeal as technical rules of evidence are not binding in
labor cases.37 As applied in this case, the NLRC, acting within its lawful authority, decided to
admit evidence for the first time during appeal, and the circumstances would show that the said
decision was not made arbitrarily or capriciously. The records would show that Twinstar, to its
prejudice, failed to submit any evidence before the LA and thus, the latter was not able to make
an informed decision on the issues presented before it.

While the alleged negligence of Twinstar and its previous counsels generally does not
excuse the non-submission of its position paper and evidence despite notice, it is within the
prudent discretion of the NLRC to decide on whether or not to admit and consider the evidence
presented before it. Considering the relevance and veracity of the evidence presented by
Twinstar, not to mention the primacy given to substantive justice over procedural technicalities,
this Court is constrained to agree with the CA in affirming the NLRC Decision.”

CERTIORARI

Italkarat 18, Inc. vs Juraldine Gerasmio

G.R. No. 221411, 28 September 2020

“The Company insists that the CA should have dismissed Juraldine's Petition
for Certiorari because the NLRC Decision had already become final and executory. In fact,
according to the Company, an Entry of Judgment was already issued by the NLRC.

Notwithstanding this, jurisprudence is replete with rulings that final and executory
NLRC decisions may be subject of a petition for certiorari. It is precisely this final and executory
nature of NLRC decisions that makes a special civil action of certiorari applicable to such
decisions, considering that appeals from the NLRC to this Court were eliminated.

In St. Martin Funeral Home v. National Labor Relations Commission, we have explained that;

The Court is, therefore, of the considered opinion that ever since appeals
from the NLRC to the Supreme Court were eliminated, the legislative intendment
was that the special civil action of certiorari was and still is the proper vehicle for
judicial review of decisions of the NLRC. The use of the word "appeal" in relation
thereto and in the instances we have noted could have been a lapsus plumae because
appeals by certiorari and the original action for certiorari are both modes of judicial
review addressed to the appellate courts. The important distinction between them,
however, and with which the Court is particularly concerned here is that the
special civil action of certiorari is within the concurrent original jurisdiction of this
Court and the Court of Appeals; whereas to indulge in the assumption that appeals
by certiorari to the Supreme Court are allowed would not subserve, but would
subvert, the intention of Congress as expressed in the sponsorship speech on
Senate Bill No. 1495.

Consequently, we ruled in Panuncillo v. CAP Philippines, Inc. that even if the NLRC
decision has become final and executory, the adverse party is not precluded from availing of the
remedy of certiorari under Rule 65 of the Rules of Court, to wit:

In sum, while under the sixth paragraph of Article 223 of the Labor Code,
the decision of the NLRC becomes final and executory after the lapse of ten
calendar days from receipt thereof by the parties, the adverse party is not
 precluded from assailing it via Petition for Certiorari under Rule 65 before the Court
of Appeals and then to this Court via a Petition for Review under Rule 45. x x x.

Indeed, the doctrine of immutability of judgment is not violated when a party elevates a
matter to the CA which the latter decided in favor of said party.

Parenthetically, petitions for certiorari to the CA are more often than not filed after the
assailed NLRC decisions have already become final and executory. It must be noted that under
Article 229 [223] of the Labor Code, as amended, a decision of the NLRC already becomes final
after ten (10) calendar days from receipt thereof by the parties; on the other hand, the
reglementary period with respect to a petition for certiorari under Rule 65 of the Rules of Court
is sixty (60) days.

Certainly, given that the special civil action for certiorari was filed within the
reglementary period, the CA committed no error and was acting in accordance with the law
when it took cognizance of Juraldine's petition.”

E
ILLEGAL RECRUITMENT

Pp vs Oliver Imperio
G.R. No. 232623, 5 October 2020

The three private complainants got the distinct impression that accused had the ability
to deploy them for employment abroad. To him they paid processing fees upon his
representation that his aunt in the USA was hiring Filipinos. However, he failed to deploy them.
His recruits learned from the NBI which entrapped him that he had no license to recruit.
Consequently, they sued him for illegal recruitment. During trial, the prosecution could not
present receipts to cover the payments made by the complainants because the accused did not
issue them any.

Should the accused be acquitted under the circumstances?

Answer

No. On the contrary, he should be convicted for illegal recruitment in large scale and
imposed the penalty of life imprisonment. The Supreme Court held:

“It bears emphasis at this point that the fact that no receipt was issued by appellant is not
fatal to the prosecution's cause, more so in this case where the respective testimonies of private
complainants clearly narrated appellant's involvement in illegal recruitment activities. The case
of People v. Domingo is instructive, viz.:

That no receipt or document in which appellant acknowledged receipt of money

for the promised jobs was adduced in evidence does not free him of liability. For even if
at the time appellant was promising employment no cash was given to him, he is still
considered as having been engaged in recruitment activities, since Article 13 (b) of the
Labor Code states that the act of recruitment may be for profit or not. It suffices that
appellant promised or offered employment for a fee to the complaining witnesses to
warrant his conviction for illegal recruitment. (Underscoring supplied)
 There is no question at this point that both the RTC and the CA found that appellant had
engaged in illegal recruitment activities. In this regard, we have consistently held that factual
findings of the trial court, especially when the same have been affirmed by the appellate court, as
in this case, are deemed binding and conclusive. This is because "trial courts are in a better
position to decide the question of credibility, having heard the witnesses themselves and having
observed first-hand their demeanor and manner of testifying under grueling examination." While
this Court may revise the factual findings of the RTC on the notion that they were erroneous,
unfounded, unreliable, or conflicted with the findings of fact of the CA, this notion, however, has
not been demonstrated by appellant in the instant case.

x x x

Lastly, it was established that there were at least three (3) victims in this case, namely,
Llave, Concrenio, and Sta. Maria, who all testified before the RTC in support of their respective
complaints. In this regard, the Court is not swayed by appellant's assertion that he did not
promise any kind of overseas employment to Sta. Maria. As found by the RTC and the CA, it
was clearly established that appellant directly dealt with Sta. Maria relative to the latter's
supposed employment abroad, and that appellant even charged him a placement fee to cover
for the expenses of processing his documents.

Based on the foregoing, there is no doubt that appellant is guilty of Illegal Recruitment
in Large Scale, which constitutes economic sabotage under Section 6 of RA 8042.

x x x

Anent the penalty that must be imposed, we note that both the RTC and the CA imposed
the penalty of life imprisonment and a fine of P500,000.00.

Section 7(b) of RA 8042 provides that "the penalty of life imprisonment and a fine of not
less than Five hundred thousand pesos (P500,000.00) nor more than One million pesos
(P1,000,000.00) shall be imposed if Illegal Recruitment constitutes economic sabotage" such as
in the case of Illegal Recruitment in Large Scale. Notably, the same section states that "the
maximum penalty shall be imposed if x x x committed by a non-licensee or non-holder of
authority."

Significantly, RA 10022, which took effect on May 7, 2010, amended the fine under
Section 7(b) of RA 8042 in this wise, viz.:

The penalty of life imprisonment and a fine of not less than Two million pesos
(P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if
illegal recruitment constitutes economic sabotage as defined therein.

Provided, however, That the maximum penalty shall be imposed if x x x

committed by a non-licensee or non-holder of authority.

Considering that the crime charged was committed on January 11, 2012, which is almost
two (2) years after the amendment took effect on May 7, 2010, the penalty as amended by RA
10022 should be, perforce, applied. Moreover, Section 7 of the latter statute provides that the
maximum penalty shall be imposed if committed by a non-licensee or non-holder of authority.

Considering the foregoing premises, the proper penalty to be imposed upon appellant is
life imprisonment and a fine of P5,000,000.00.”
 Pp vs Avelina Manalang
G.R. No. 198015, 20 January 2021

Manalang promised employment for a fee to the three complainants on different dates as
follows: Tura on 16 August 2000; Maranon in November 2020; and Cawas in February 2001.
She issued the latter receipts using the name Tess Robles. Due to failure to deploy, the three
sued her for illegal recruitment. After trial in which the prosecution presented a POEA
certification that Manalang was not a licensee or holder of authority, the RTC convicted her of
illegal recruitment in large scale and 3 counts of estafa.

Does the conviction raise any constitutional issue? Explain.

Answer

Double jeopardy, the constitutional question relevant to the conviction, is a non-issue.

The Supreme Court held: “The elements of estafa by means of deceit, whether committed by
false pretenses or concealment, are the following: (a) there must be a false pretense, fraudulent
act or fraudulent means; (b) such false pretense, fraudulent act or fraudulent means must be
made or executed prior to or simultaneously with the commission of the fraud; (c) the offended
party must have relied on the false pretense, fraudulent act or fraudulent means, that is, he was
induced to part with his money or property because of the false pretense, fraudulent act or
fraudulent means; and (d) as a result thereof, the offended party suffered damage.”

“In the instant case, the elements of deceit and damage are present. We note that the
accused-appellant, without any license or authority to do so, promised private complainants
overseas employment, then required them to undergo training and collected fees or payments
from them, while continually assuring them that they would be deployed abroad, but failed to do
so. Persuaded by these assurances given by Manalang, the private complainants paid their
placement fees, albeit partially. Thus, her representation induced the victims to part with their
money, resulting in damage.[77] This Court also finds that when private complainants paid their
placement fees, Manalang issued receipts using the fictitious name of "Tess Robles". In view of
the foregoing deceitful and illegal acts of Manalang, the private complainants undoubtedly
suffered damage.

Furthermore, this Court finds no reason to disturb the factual findings of the RTC, which
was affirmed by the CA, since these factual findings are supported with the evidence on record.
Settled is the rule that the evaluation of the credibility of a witness is "best left to the trial court
because it has the opportunity to observe the witnesses and their demeanor during the trial."
This Court gives great respect to the findings of trial courts, especially when they are affirmed by
the appellate court.

In view of the foregoing, Manalang is also liable for the crime of Estafa. Jurisprudence is
settled that a person, for the same acts, may be convicted separately for Illegal Recruitment under
RA 8042 (or the Labor Code), and Estafa under Article 315(2)(a) of the RPC.

In estafa, damage is essential, but not in the crime of illegal recruitment. As to the latter, it
is the lack of the necessary license or authority, but not the fact of payment that renders the
recruitment activity as unlawful.”

END