1.
United Doctors Medical Center (UDMC) instead, beginning June 23, 2011, which
MELVIN P. MALLO v. SOUTHEAST ASIAN COLLEGE, INC., ET AL.
G.R. No. 212861, October 14, 2015
DECISION
The Facts
The instant case arose from a complaint6 for, inter alia, unfair labor
practice, illegal dismissal, underpayment of salary/wages, damages, and
attorney's fees filed by Mallo against respondents Southeast Asian College, Inc.
(SACI) and its Executive President/Chief Executive Officer, Edita F. Enatsu
(Enatsu; collectively, respondents) before the NLRC.
Mallo alleged that SACI first hired him as a Probationary Full-Time Faculty
Member of its College of Nursing and Midwifery with the rank of Assistant
Professor C for the Second Semester of School Year (SY) 2007-20088 and,
thereafter, his employment was renewed for the succeeding semesters until the
Summer Semester of SY 2010-2011.10
On June 3 and 8, 2011, Mallo inquired about his teaching load for the First
Semester of SY 2011-2012, but SACI only responded that teaching assignments
for the semester were yet to be given to faculty members. Thereafter, on June
15, 2011, he learned from a co-professor that faculty meetings were conducted
on June 9 and 10, 2011 whereby teaching loads were distributed to the
professors. Upon learning of this development, Mallo went again to SACI to
confront the Dean of the College of Nursing, Dr. Clarita D. Curato (Dr. Curato).
Claiming that he was already a permanent employee of SACI, having been a
professor of SACI for almost four (4) years since his first teaching assignment in
November 2007, Mallo demanded that he be given his corresponding teaching
load. However, Dr. Curato simply retorted that the school was under no
obligation to give him any teaching loads for the semester because he was
merely a contractual employee. As such, Mallo was constrained to file the
instant complaint against respondents.
In their defense, respondents denied dismissing Mallo, maintaining that
as early as April 2011 and as evidenced by Dr. Curato's letter to the Medical
Center Chief II of the National Center for Mental Health (NCMH), SACI already
gave Mallo his teaching load for the First Semester of SY 2011-2012 - as Clinical
Instructor for the College of Nursing's Preceptorship Program, an on-the-job
mentoring and ongoing clinical experience of students under the Nursing
Related Learning Experience (NLRE) curriculum, to be conducted at NCMH.
Unfortunately, Mallo twice failed the qualifying test required for the job. This
notwithstanding, SACI endeavored to give Mallo a teaching load by appointing
him as a Clinical Instructor for Preceptorship Program to be conducted at the
he accepted. However, a day before he was set to start as a Clinical Instructor at
UDMC, Mallo asked for a change in schedule, which was denied as it would
entail a reshuffle of the entire NLRE schedule of the school. On June 23 to 25,
2011, Mallo did not attend his classes at UDMC. This prompted a S ACI official to
contact Mallo if he would report for work the following day, to which the latter
allegedly replied in the negative as his schedule with SACI conflicted with his
new employment. Thereafter, SACI never heard from Mallo again until he filed
the instant case.18chanRoblesvirtualLawlibrary
ISSUE:
whether or not the CA correctly ruled there was no illegal dismissal and that
Mallo abandoned his job.chanRoblesvirtualLawlibrary
HELD:
The petition is partly meritorious.
Here, Mallo insists that respondents illegally dismissed him because the
latter failed to give him any teaching load for the First Semester of SY 2011-
2012. On the other hand, respondents vehemently deny Mallo's claims,
maintaining that they promptly gave him his teaching assignment and that the
latter even initially accepted the same, but such assignment was eventually
turned down due to a conflict in schedule with his new employment in another
school.
In termination cases, the onus of proving that an employee was not dismissed
or, if dismissed, his dismissal was not illegal fully rests on the employer; the
failure to discharge such onus would mean that the dismissal was not justified
and, therefore, illegal.
The records readily show that as early as April 2011, respondents already
assigned Mallo a teaching load for the First Semester of SY 2011-2012 as a
Clinical Instructor for SACI students to be assigned at NCMH, which the latter
accepted. Unfortunately, Mallo failed the qualifying tests at NCMH twice, thus,
virtually disqualifying him from performing his work as SACFs Clinical
Instructor thereat. Despite these developments, respondents were able to
remedy the situation, albeit belatedly, by assigning Mallo as a Clinical Instructor
at UDMC instead, as shown in the Tentative Faculty Loading dated June 24,
2011.44 In view of the foregoing, the Court is inclined to hold that respondents
never dismissed Mallo from his job.
While the Court concurs with the CA that Mallo was not illegally
dismissed, the Court does not agree that he had abandoned his work. The
concept of abandonment in labor law had been thoroughly discussed in Tan
Brothers Corporation of Basilan City v. Escudero:45chanroblesvirtuallawlibrary
 As defined under established jurisprudence, abandonment is the
deliberate and unjustified refusal of an employee to resume his employment. It
constitutes neglect of duty and is a just cause for termination of employment
under paragraph (b) of Article 282 [now Article 29646] of the Labor Code. To
constitute abandonment, however, there must be a clear and deliberate intent
to discontinue one's employment without any intention of returning. In this
regard, two elements must concur: (1) failure to report for work or absence
without valid or justifiable reason; and (2) a clear intention to sever the
employer-employee relationship, with the second element as the more
determinative factor and being manifested by some overt acts. Otherwise
stated, absence must be accompanied by overt acts unerringly pointing to the
fact that the employee simply does not want to work anymore. It has been ruled
that the employer has the burden of proof to show a deliberate and unjustified
refusal of the employee to resume his employment without any intention of
returning.

In this case, records are bereft of any indication that Mallo's absence
from work was deliberate, unjustified, and with a clear intent to sever his
employment relationship with SACI. While respondents claim to have assigned
Mallo as Clinical Instructor at UDMC after failing the qualifying tests at NCMH,
which assignment the latter initially accepted, but eventually declined, there is
no proof that Mallo was informed of such assignment. It bears stressing that a
party alleging a critical fact must support his allegation with substantial
evidence for any decision based on unsubstantiated allegation cannot stand as it
will offend due process.

More importantly, Mallo's filing of a complaint for illegal dismissal,

coupled with his prior acts of actively inquiring about his teaching load, negate
any intention on his part to sever his employment. Indeed, it is simply absurd
for Mallo to provide continuous service to SACI for more than three (3) years in
order to attain a regular status, only to leave his job without any justifiable
reason and, thereafter, file a case in an attempt to recover the same. To
reiterate, abandonment of position is a matter of intention and cannot be lightly
inferred, much less legally presumed, from certain equivocal
acts.50chanroblesvirtuallawlibrary

In sum, since Mallo's was not dismissed and that he never abandoned
his job, it is only proper for him to report back to work and for respondents to
reinstate him to his former position or a substantially-equivalent one in its
stead. In this regard, jurisprudence provides that in instances where there was
neither dismissal by the employer nor abandonment by the employee, the
proper remedy is to reinstate the employee to his former position but without
the award of backwages.
2.
VICENTE C. TATEL v. JLFP INVESTIGATION SECURITY AGENCY, INC., ET AL.
G.R. No. 206942, February 25, 2015
DECISION
PERLAS-BERNABE, J.:
On March 14, 1998, respondent JLFP Investigation Security Agency, Inc. (JLFP),
a business engaged as a security agency, hired Tatel as one of its security
guards.d
Tatel alleged that he was last posted at BaggerWerkenDecloedtEn Zoon
(BaggerWerken) located at the Port Area in Manila.He was required to work
twelve (12) hours everyday from Mondays through Sundays and received only
P12,400.00 as monthly salary.9 On October 14, 2009, Tatel filed a
complaint before the NLRC against JLFP and its officer, respondent Jose Luis F.
Pamintuan11(Pamintuan), as well as SKI Group of Companies (SKI) and its
officer, Joselito Duefias,for underpayment of salaries and wages, non-payment
of other benefits, 13th month pay, and attorney's fees.
On October 24, 2009, Tatel was placed on "floating status"; thus, on May 4,
2010, or after the lapse of six (6) months therefrom, without having been given
any assignments, he filed another complaintagainst JLFP and its officers,
respondent Paolo C. Turno (Turno) and Jose Luis Fabella, for illegal dismissal,
reinstatement, backwages, refund of cash bond deposit amounting to
P25,400.00, attorney's fees, and other money claims (illegal dismissal case)
In their defense, respondents JLFP, Pamintuan, and Turno (respondents) denied
that Tatel was dismissed and averred that they removed the latter from his post
at BaggerWerken on August 24, 2009 because of several infractions he
committed while on duty. Thereafter, he was reassigned at SKI from September
16, 2009 to October 12, 2009, and last posted at IPVG from October 21 to 23,
2009
In his reply,Tatel admitted having received on December 11, 2009 the
November 26, 2009 Memorandum directing him to report back to work for
reassignment. However, when he went to the JLFP office, he was merely advised
to "wait for possible posting." He repeatedly went back to the office for
reassignment, but to no avail. He likewise refuted respondents' claim that he
abandoned his work, insisting that after working for JLFP for more than eleven
(11) years, it was illogical for him to refuse any assignments, more so, to
abandon his work and security of tenure without justifiable reasons
The Issue Before The Court
The sole issue for the Court's resolution is whether or not the CA erred in ruling
that the NLRC gravely abused its discretion in finding Tatel to have been
illegally dismissed.chanroblesvirtuallawlibrary
The Court's Ruling
The petition is meritorious.
At the core of this petition is Tatel's insistence that he was illegally dismissed
when, after he was put on "floating status" on October 24, 2009, respondents no
longer gave him assignments or postings, and the period therefor had lasted for
more than six (6) months. On the other hand, respondents maintained that Tatel
abandoned his work, and that his inconsistent statements before the labor
tribunals regarding his work details rendered his claim of illegal dismissal
suspect.
After a judicious perusal of the records, the Court is convinced that Tatel
was constructively, not actually, dismissed after having been placed on "floating
status" for more than six (6) months, reckoned from October 24, 2009, the day
following his removal from his last assignment with IPVG on October 23, 2009,
and not on August 24, 2009 as erroneously held by the NLRC.
In Superstar Security Agency, Inc. and/or Col. Andrada v. NLRC,59 the Court ruled
that placing an employee on temporary "off-detail" is not equivalent to
dismissal provided that such temporary inactivity should continue only for a
period of six (6) months. In security agency parlance, being placed "off-detail"
or on "floating status" means "waiting to be posted. In Salvaloza v. NLRC,62 the
Court further explained the nature of the "floating status," to
wit:chanRoblesvirtualLawlibrary
Temporary "off-detail" or "floating status" is the period of time when security
guards are in between assignments or when they are made to wait after being
relieved from a previous post until they are transferred to a new one. It takes
place when the security agency's clients decide not to renew their contracts
with the agency, resulting in a situation where the available posts under its
existing contracts are less than the number of guards in its roster. It also
happens in instances where contracts for security services stipulate that the
client may request the agency for the replacement of the guards assigned to it for his employer for more than ten (10) years would just abandon his work and
even for want of cause, such that the replaced security guard may be placed on forego whatever benefits he may be entitled to as a consequence thereof. 68 As
temporary "off-detail" if there are no available posts under the agency's existing such, respondents failed to sufficiently establish a deliberate and unjustified
contracts. During such time, the security guard does not receive any salary or refusal on the part of Tatel to resume his employment, which therefore leads to
any financial assistance provided by law. It does not constitute a dismissal, as the logical conclusion that the latter had no such intention to abandon his work.
the assignments primarily depend on the contracts entered into by the security
agencies with third parties, so long as such status does not continue beyond a Moreover, Tatel refuted respondents' allegation that he did not heed their
reasonable time. When such a "floating status" lasts for more than six (6) directive to return to work following his receipt of the November 26, 2009
months, the employee may be considered to have been constructively Memorandum. The Court finds no compelling reason not to give credence to
dismissed. such rebuff, especially in light of the filing of the instant complaint for illegal
dismissal. An employee who forthwith takes steps to protest his layoff cannot,
as a general rule, be said to have abandoned his work, and the filing of the
Relative thereto, constructive dismissal exists when an act of clear
complaint is proof enough of his desire to return to work, thus negating any
discrimination, insensibility, or disdain, on the part of the employer has become
suggestion of abandonment.69 As the Court sees it, it is simply incongruent for
so unbearable as to leave an employee with no choice but to forego continued
Tatel to refuse any offer of an assignment and thereafter, seek redress by filing a
employment,64 or when there is cessation of work because continued
case for illegal dismissal.
employment is rendered impossible, unreasonable, or unlikely, as an offer
involving a demotion in rank and a diminution in pay.ed
That Tatel made inconsistent statements pertaining to his work details in
the underpayment case and the instant illegal dismissal case does not affect the
In this case, respondents themselves claimed that after having removed Tatel
Court's conclusion that he was constructively dismissed. In his petition, he
from his post at BaggerWerken on August 24, 2009 due to several infractions
explained that he was hired by JLFP in March 1997 but became a regular
committed thereat, they subsequently reassigned him to SKI from September
employee on March 14, 1998.70 In this regard, respondents themselves have
16, 2009 to October 12, 2009 and then to IPVG from October 21 to 23, 2009.
stated that they hired Tatel on March 14, 1998,71 which effectively puts the
Thereafter, and until Tatel filed the instant complaint for illegal dismissal six (6)
issue to rest.
months later, or on May 4, 2010, he was not given any other postings or
assignments. While it may be true that respondents summoned him back to
Similarly, Tatel clarified the discrepancy in his declared salaries, stating
work through the November 26, 2009 Memorandum, which Tatel
acknowledged to have received on December 11, 2009, records are bereft of that P12,400.00 was the amount of his monthly salary, which therefore
translates to P6,200.00 every fifteen (15) days. Such explanation is reasonable
evidence to show that he was given another detail or assignment. As the "off-
and is not far-fetched; hence, the Court accepts the same. Likewise, Tatel
detail" period had already lasted for more than six (6) months, Tatel is therefore
explained that he was constructively dismissed on October 13, 2009, after he
deemed to have been constructively dismissed.
had filed the underpayment case against respondents on October 11, 2009, and
believed that he was actually dismissed on October 24, 2009. On this score, the
In this regard, the Court concurs with the finding of the NLRC that respondents
Court finds that he was constructively dismissed on October 24, 2009, as
failed to establish that Tatel abandoned his work. To constitute abandonment,
adverted to elsewhere, considering that he was still given a last detail at the
two elements must concur: (a) the failure to report for work or absence without
IPVG from October 21 to 23, 2009. In any case, six (6) months have already
valid or justifiable reason, and (b) a clear intention to sever the employer-
lapsed since Tatel was last given any assignment, hence, he is deemed to have
employee relationship, with the second element as the more determinative
already been constructively dismissed when he filed the instant case.
factor and being manifested by some overt acts. Mere absence is not sufficient.
The employer has the burden of proof to show a deliberate and unjustified
refusal of the employee to resume his employment without any intention of
returning.Abandonment is incompatible with constructive dismissal.

The charge of abandonment in this case is belied by the high improbability of

Tatel intentionally abandoning his work, taking into consideration his length of
service and, concomitantly, his security of tenure with JLFP. As the NLRC had
opined, no rational explanation exists as to why an employee who had worked
3.
G.R. No. 220617, January 30, 2017
NESTLE PHILIPPINES, INC., Petitioner, v. BENNY A. PUEDAN, JR., JAYFER D.
LIMBO, BRODNEY N. AVILA, ARTHUR C. AQUINO, RYAN A. MIRANDA,
RONALD R. ALAVE, JOHNNY A. DIMAYA, MARLON B. DELOS REYES,
ANGELITO R. CORDOVA, EDGAR S. BARRUGA, CAMILO B. CORDOVA, JR.,
JEFFRY B. LANGUISAN, EDISON U. VILLAPANDO, JHEIRNEY S. REMOLIN,
MARY LUZ A. MACATALAD,* JENALYN M. GAMUROT, DENNIS G. BAWAG,
RAQUEL A. ABELLERA, AND RICANDRO G. GUATNO, JR., Respondent.
Perlas-Bernabe, J.
Topic: Administrative Due Process
Facts:
On July 6, 2012, the respondents filed a complaint against the petitioner for
illegal dismissal and demanding for separation pay, nominal damages and
attorney’s fees. The respondents alleged that Ocho de Setiembre Inc. (ODSI) and
Nestle Philippines Inc. (NPI) hired them to sell various products of NPI in the
assigned covered area. After sometime, the respondents demanded that they be
considered regular employees of NPI but they were directed to sign contracts of
employment with ODSI instead. However, the respondents refused to comply
with such directives resulting from their dismissal from their position. The
contention of the respondents is that ODSI is a labor-only contractor and, thus,
they should be deemed regular employees of NPI and there was no just or
authorized cause for their dismissal. The ODSI averred that it is a company
engaged in the business of buying, selling, distributing, and marketing of goods
and commodities of every kind and it enters into all kinds of contracts for the
acquisition thereof. According to ODSI the respondents were hired as its
employees to execute the Distributorship Agreement with the NPI.
Unfortunately, the business relationship between the NPI and ODSI turned sour
and eventually NPI downsized its marketing and promotional support from
ODSI and termination of the Distributorship Agreement. Meanwhile, ODSI
argues with the respondents that they were not dismissed but merely on
floating status. However, the NPI did not file any position paper or appear in the
scheduled conferences.
The Labor Arbiter concluded that all the impleaded respondents therein
(i.e. including NPI) should be held liable for the payment of nominal damages
plus attorney’s fees.
The aggrieved respondents appealed to National Labor Relation
Commission (NLRC) and the NLRC reversed and set aside the Labor Arbiter
ruling. The NLRC ordered ODSI and NPI to pay each of the respondents and
entitled to separation pay and to nominal damages. The respondents moved for
a partial reconsideration arguing since it was ODSI that closed down operations
and not the NPI, therefore NPI should reinstate them. However, the NLRC
denied the motion.
Moreover, the NPI was dissatisfied hence filed a petition for certiorari
before the Court of Appeals (CA) which the CA affirmed the NLRC ruling.
Issues:
a.) Whether or not NPI was accorded due process by the tribunals a quo;
b.) Whether or not ODSI is a labor-only contractor of NPI, and
consequently, NPI is respondents’ true employer and, thus, deemed
jointly and severally liable with ODSI for respondents’ monetary claims
Rulings:
a.) Yes. NPI was not denied due process of law as it was afforded the fair
and reasonable opportunity to explain its side by: (i) NPI’s filing of its
motion for reconsideration before the NLRC; (ii) the NLRC’s subsequent
issuance of its Resolution dated August 30, 2013 wherein the tribunal
considered all of NPI’s arguments as contained in its motion; and (iii)
NPI’s subsequent elevation of the case to the CA. In Gonzales v. Civil
Service Commission,46 the Court reiterated the rule that "[a]ny
seeming defect in [the] observance [of due process] is cured by the
filing of a motion for reconsideration," and that "denial of due process
cannot be successfully invoked by a party who [was] afforded the
opportunity to be heard x x x."47 Similarly, in Autencio v. Manara,48 it
was held that defects in procedural due process may be cured when the
party has been afforded the opportunity to appeal or to seek
reconsideration of the action or ruling complained of.
b.) No. The Distributorship Agreement between the Nestle Philippines inc.
(NPI) and Ocho de Setiembre Inc. (ODSI) is not that of a principal and a
contractor, but that of a seller and a buyer/re-seller. Based on the
stipulated in the Distributorship Agreement NPI agreed to sell its
products to ODSI at discounted prices. According to NPI the goods it
manufactures are distributed to the market through various distributor
including ODSI, that in turn, re-sell the same to the designated outlets
through its own employees as the respondents. Therefore, the reselling
activities allegedly performed by the respondents properly pertain to
ODSI only.
In effect, ODSI was not a labor-only contractor of NPI hence the NPI
cannot be deemed the true employer of the respondents. Therefore,
NPI cannot be held jointly and severely liable to ODSI’s monetary
obligation towards the respondents.
4.
GR No. 215551, Aug 17, 2016
JAKERSON G. GARGALLO v. DOHLE SEAFRONT CREWING
Perlas-Bernabe, J.
Topic: Attorney’s Fees
Facts:
On July 20, 2012, petitioner filed a complaint for permanent total disability
benefits against respondents before the National Labor Relations Commission
(NLRC).The complaint stemmed from his claim that: (a) he accidentally fell on
deck while lifting heavy loads of lube oil drum, with his left arm hitting the floor
first, bearing his full body weight; b) he has remained permanently unfit for
further sea service despite major surgery and further treatment by the
company-designated physicians;and (c) his permanent total unfitness to work
was duly certified by his chosen physician whose certification must prevail over
the palpably self-serving and biased assessment of the company-designated
physicians.
For their part, respondents countered that the fit-to-work findings of the
company-designated physicians must prevail over that of petitioner's
independent doctor, considering that: (a) they were the ones who continuously
treated and monitored petitioner's medical condition; and (b) petitioner failed
to comply with the conflict-resolution procedure under the Philippine Overseas
Employment Administration-Standard Employment Contract (POEA-SEC).
Respondents further averred that the filing of the disability claim was
premature since petitioner was still undergoing medical treatment within the
allowable 240-day period at the time the complaint was filed.
The Labor Arbiter (LA)and the NLRC Decision
They gave more credence to the medical report of petitioner's independent
doctor and, thus, granted petitioner's disability claim, and ordered respondents
to jointly and severally pay petitioner his permanent total disability benefits,
albeit at different amounts.
The Court of Appeals Decision
CA disagreed with the conclusions of the LA and the NLRC, and dismissed
petitioner's complaint. IIt ruled that the claim was premature because at the
time the complaint was filed: (a) petitioner was still under medical treatment by
the company-designated physicians; (b) no medical assessment has yet been
issued by the company-designated physicians as to his fitness or disability since
the allowable 240-day treatment period during which he is considered under
temporary total disability has not yet lapsed; and (c) petitioner has not yet
consulted his own doctor, hence, had no sufficient basis to prove his incapacity.
The CA likewise gave more credence to the fit to work assessment of the
company-designated physician who treated and closely monitored petitioner's
condition, over the contrary declaration of petitioner's doctor who attended to
him only once, two (2) months after the filing of the complaint.
In its September 16, 2015 Decision, the Court upheld the CA's dismissal of
petitioner's claim for permanent total disability benefits, but ordered Dohle
Seafront and Dohle Manning, jointly and severally, to pay petitioner the income
benefit arising from his temporary total disability which lasted for 194 days
from his repatriation on March 11, 2012 until his last visit to the company-
designated physician on September 21, 2012 (the date when he was declared fit
to work) plus 10% of the total amount of the income benefit as attorney's fees.
Meanwhile, the Court found no basis hold Padiz solidarity liable with Dohle
Seafront and Dohle Manning for payment of the monetary awards to petitioner,
absent any showing that acted beyond the scope of his authority or with malice.
Dissatisfied, both parties filed their respective motions for reconsideration of
the Court's September 16, 2015 Decision
ISSUE:
Whether or not the award for attorney’s fees must be deleted
Ruling:
Yes. As a rule, the mere fact of having been forced to litigate to protect one's
interest does not amount to a compelling legal reason to justify an award of
attorney's fees in the claimant's favor. Verily, jurisprudence is replete with cases
holding that attorney's fees may be awarded to a claimant who is compelled to
litigate with third persons or incur expenses to protect his interest by reason of
an unjustified act or omission on the part of the party from whom it is sought
only when there is sufficient showing of bad faith on the part of the latter in
refusing to pay.
However, in the case of Montierro v. Rickmers Marine Agency Phils., Inc.
(Montierro), similarly involving a claim for permanent total disability benefits
filed by a seafarer, the Court had pronounced that in labor cases, the
withholding of wages and benefits need not be coupled with malice or bad faith
to warrant the grant of attorney's fees since all that is required is that the
refusal to pay was without justification, thus, compelling the employee to
litigate. Nonetheless, since the complaint in Montierro was filed: (a) when the
petitioner therein was still under treatment; (b) prior to the assessment of the
company-designated physician within the allowable 240-day period; and (c)
without complying with the prescribed conflict-resolution procedure, the Court
declared that there was no unlawful withholding of benefits, rendering the
award of attorney's fees to be improper. Thus, considering that similar
circumstances obtain in the present case, the Court finds it proper to rule in the
same way.

Dispositive Portion:

WHEREFORE, the Court hereby RESOLVES to:

1. PARTLY GRANT petitioner Jakerson G. Gargallo's (petitioner) Motion for

Reconsideration and, hereby, DECLARE respondent Mr. Mayronilo B. Padiz
(Padiz) jointly and severally liable with respondents Dohle Seafront Crewing
(Manila), Inc. (Dohle Seafront) and Dohle Manning Agencies, Inc. (Dohle
Manning), to pay petitioner his income benefit for one hundred ninety-four
(194) days; and

2. PARTLY GRANT the Motion for Partial Reconsideration fi ed by respondents

Dohle Seafront, Dohle Manning, and Padiz, thereby, deleting the award of
attorney's fees equivalent to 10% of the adjudged income benefit in favor of
petitioner.

The rest of the Court's September 16, 2015 Decision stands

 5.
QUANTUM FOODS VS. MARCELINO ESLOYO
(Labor officials are enjoined to use every and reasonable means to ascertain
the facts in each case speedily and objectively, without regard to
technicalities of law or procedure, in the interest of due process.)
Facts:
Petitioner Quantum Foods, Inc. is a domestic corporation engaged in the
distribution and selling of food products nationwide. It hired Esloyo as Major
Accounts Representative and later on promoted to the position of Regional
Sales Manager for Visayas and Mindanao. On the other hand, it hired Magsila as
Key Accounts Representative for the Panay Area.
Quantum decided to reorganize its sales force nationwide following a drastic
drop in its net income, and Magsila was among those retrenched. However,
Magsila’s final pay and other benefits were not release due to alleged discovery
of unauthorized/undocumented deductions, which he purportedly failed to
explain.
Esloyo was terminated from work on the ground of loss of trust and confidence
due to his numerous violations of the company rules and regulations.
Aggrieved, Esloyo and Magsila filed separate complaints for illegal dismissal
with money claims against Quantum. They also impleaded Dole Philippines, Inc.
as party to the case, claiming that said company required them to perform
additional tasks that were necessary and desirable for its operations, and that
Dole, as well as its Executive personnel had created and organized Quantum,
and thus, should be held jointly and solidarily liable with Quantum for
respondent’s claims.
Quantum maintained that respondents’ dismissal were valid, hence, it is not
liable for their money claims. On the other hand, Dole deined any employer-
employee relationship with respondents.
The Labor Arbiter found respondents to have been illegally dismissed and
ordered Quantum to pay respondents a total monetary judgment of
P1,817,856.71 but DOLE was deleted as party to the case, upon a finding that it
has no employer-employee relationship with respondents. Dissatisfied,
Quantum filed its Notice of Appeal and Memorandum of Appeal before the NLRC
accompanied by a Motion to Reduce Bond and a cash bond in the amount of
P400,000 (partial bond).
Before the NLRC could act on the Motion to Reduce Bond, Quantum posted a
surety bond from an accredited insurance company fully covering the monetary
judgment.
The NLRC gave due course to Quantum’s appeal holding that there was
substantial compliance with the bond requirement and held that respondents
were not illegally dismissed.
The Court of Appeals reversed and set aside the NLRC’s ruling and reinstated
the LA’s Decision. It ruled that Quantum’s failure to post the required bond in an
amount equivalent to the monetary judgment impeded the perfection of its
appeal, and rendered the LA’s Decision final and executory. Thus, the NLRC was
bereft of jurisdiction and abused its discretion in entertaining the appeal.
Issue: Whether the appeal bond posted accompanied by a motion to reduce
bond is reasonable in order to suspend the period to perfect an appeal.
Held: YES.
While it has been settled that the posting of a cash or surety bond is
indispensable to the perfection of an appeal in cases involving monetary awards
from the decision of the LA, in several cases, the Court has relaxed this stringent
requirement whenever justified. Thus, the Rules – specifically Section 6, Rule VI
– thereof, allow the reduction of the appeal bond upon a showing of: (a) the
existence of a meritorious ground for reduction, and (b) the posting of a bond in
a reasonable amount in relation to the monetary award.
In Nicol vs. Footjoy Industrial Corp., the Court summarized the guidelines under
which the NLRC must exercise its discretion in considering an appellant’s
motion for reduction of bond in this wise:
“The bond requirement on appeals involving monetary awards has been and
may be relaxed in meritorious cases. These cases include instances in which (1)
there was substantial compliance with the Rules, (2) surrounding facts and
circumstances constitute meritorious grounds to reduce the bond, (3) a liberal
interpretation of the requirement of an appeal bond would serve the desired
objective of resolving controversies on the merits, or (4) the appellants, at the
very least, exhibited their willingness and/or good faith by posting a partial
bond during the reglementary period.
Here, Quantum posted a partial bond in the amount of P400,000, or more than
twenty percent (20%) of the monetary judgment, within the reglementary
period to appeal, together with the Motion to Reduce Bond anchored on its
averred difficulty in raising the amount of the bond and searching for an
insurance company that can cover said amount within the short period of time
to perfect its appeal. Before the NLRC could even act on the Motion to Reduce
Bond, Quantum posted a surety bond from an accredited insurance company
covering fully the judgment award.

As to what constitutes “a reasonable amount of bond” that must accompany the

motion to reduce bond in order to suspend the period to perfect an appeal, the
Court, in McBurnei vs. Ganzon, pronounce:

To reduce 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. ..

Hence, the posting of a P400,000 cash bond equivalent to more than 20% of the
monetary judgment, together with Motion to Reduce Bond within the
reglementary period was sufficient to suspend the period to perfect the appeal.
The posting of the said partial bond coupled with the subsequent posting of a
surety bond in an amount equivalent to the monetary judgment also signified
Quantum’s good faith and willingness to recognize the final outcome of its
appeal.

It should be emphasized that the NLRC has full discretion to grant or deny the
motion to reduce bond, and its ruling will not be disturbed unless tainted with
grave abuse of discretion. Verily, an act of a court of tribunal can only be
considered to be tainted with grave abuse of discretion when such act is done in
a capricious or whimsical exercise of judgment as is equivalent to lack of
jurisdiction, which clearly is not extant with respect to the NLRC’s cognizance of
Quantum’s appeal. Far from having gravely abused its discretion, the NLRC
correctly preferred substantial justice over the rigid and stringent application of
procedural rules.
6.
ANGELITO CASTRO, RAYMUNDO SAURA AND RAMONITO FANUNCION VS.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY AND MANUEL V.
PANGILINAN
(Settled is the rule that the benefits of a CBA extend only to laborers and
employees who are members of the collective bargaining unit.)
Facts
Petitioners were among the ninety-four (94) union officers and members who
were dismissed by respondent PLDT due to their participation in the strike by
the Manggagawa ng KomunikasyonsaPilipinas (MKP), the collective bargaining
agent of all rank and file employees of PLDT. The strike was, thereafter,
declared illegal and the employees' dismissals were adjudged valid in the
Resolution dated February 27, 1998 rendered by the NLRC to which the case
was certified for compulsory arbitration.
During the pendency of the case before the NLRC, the striking employees were
admitted back to work in April 1993 subject to the outcome of the pending case.
The NLRC Resolution was subsequently upheld by the Court in the Resolution
which eventually attained finality and accordingly entered in the Book of
Entries of Judgments. Employees including petitioners were notified of their
termination for cause citing the above Resolutions of the NLRC and the Court.
Aggrieved, they filed separate complaints (which were thereafter consolidated)
for illegal dismissal, money claims and damages against PLDT, averring that in
the intervening time between;
1. their return to work in April 1993 and
2. PLDT voluntarily extended to a number of the 94 employees the benefit
of redundancy/early retirement program, and even promotions to
high-ranking positions notwithstanding that the continuance of their
employment was subject to the outcome of the pending case.
They claimed that the foregoing acts constituted supervening events or
voluntary acts amounting to a waiver/ condonation of the effects of the illegality
of strike which rendered the NLRC and Supreme Court Resolutions moot and
academic.
PLDT denied any condonation/waiver and interposed the defense of res
judicata claiming that the issue of the validity of the employees' dismissals had
already been resolved with finality by the Court.
The parties filed their respective petitions for certiorari before the CA.
Both petitions were dismissed, which was affirmed in the Resolution of
the Court dated January 16, 2006 that became final and executory and
entered in the Book of Entries of Judgments on April 5, 2006.
Meanwhile on March 14, 2001, MKP and PLDT signed a new Collective
Bargaining Agreement (CBA), among others, granting all PLDT employees the
amount of P133,000.00 each in lieu of wage increases during the first year of the
CBA. The CBA was made effective November 9, 2000, the day immediately
following the expiration of the old CBA. The concerned employees filed motions
for execution before the Labor Arbiter seeking payment of salaries and other
benefits granted under the new CBA.
The Ruling of the Labor Arbiter
In the Order dated April 18, 2002, Labor Arbiter Jaime M. Reyno
adjudged the entitlement of the employees to the payment of the
amount of P133,000.00 each granted under the CBA, explaining that the
said benefit accrued on November 9, 2000 prior to the reversal by the
NLRC on December 28, 2000 of the March 15, 2000 Decision of Labor
Arbiter Layawen, and thus, included in the reinstatement aspect of the
latter decision pending appeal. He thereby directed respondents to pay
the concerned employees the said amount or a total of P6,517,000.00
(later reduced to P6,384,000.00).
The Ruling of the NLRC
On appeal, the NLRC sustained the above order in the Resolution1
dated June 21, 2002, holding that the said grant is no different from the
other benefits that were received by petitioners as a consequence of
their reinstatement pending appeal.
Upon the employees' motions, Labor Arbiter Reyno ordered PLDT's bank,
Equitable PCI Bank, Ayala Locsin Branch, to release the garnished amount of
P6,384,000.00 to the Sheriff for deposit with the NLRC cashier, which was
subsequently released to the employees.
The Ruling of the CA
The CA vacated the NLRC Decision and ordered each petitioner to
return the amount of P133,000.00 they received by virtue of the April
18, 2002 Order of Labor Arbiter Reyno. It found that the concerned
employees were no longer employees at the time of the signing of the
CBA on March 14, 2001 notwithstanding that its effectivity was made
retroactive to November 9, 2000. Thus, not being members of the
 bargaining unit, they cannot claim benefits under the CBA.

Issue before the Court

In the instant case, petitioners insist that they are entitled to the payment of the
CBA-imposed P133,000.00 because the CBA became effective on November 9,
2000 prior to the December 28, 2000 NLRC Decision that declared their
dismissal as valid.

Respondents contend that the parties to the CBA came to an agreement on the
terms and conditions thereof only on March 14, 2001. Hence, since the
petitioners were no longer part of the bargaining unit represented by MKP at
that time, they can no longer avail of the benefits under the new CBA.
Accordingly, the grant to them of the CBA-imposed P133,000.00 per employee
is a form of unjust enrichment.

The Court's Ruling

The petition is bereft of merit.

Settled is the rule that the benefits of a CBA extend only to laborers and
employees who are members of the collective bargaining unit.

In the present case, the Court's August 3, 1998 Resolution sustaining

petitioners' dismissal as a consequence of their participation in the illegal strike
became final on January 18, 1999. Accordingly, PLDT informed them of their
termination for cause on the basis of the said Resolution. While they challenged
their dismissals upon a claim that supervening events evincing an intent on the
part of PLDT to waive/condone the effects of the illegal strike had set in which
rendered the final Resolution of the Court moot and academic, the Court, in the
Resolution dated January 16, 2006 in G.R. Nos. 170607-08, ruled out the
presence of supervening events. As such, it is only proper to reckon the
termination of petitioners' employment with PLDT to January 18, 1999.

Consequently, petitioners were no longer employees of PLDT nor members of

the collective bargaining unit represented by MKP when the CBA was signed on
March 14, 2001 or when it became effective on November 9, 2000 and are, thus,
not entitled to avail of the benefits under the new CBA. Accordingly, the Court
finds no reversible error on the part of the CA in directing each of the
petitioners to return the amount of P133,000.00 which they respectively
received from respondents.
7.
. which explicitly states that should the employees be terminated through no
BENSON INDUSTRIES EMPLOYEES UNION-ALU-TUCP v. BENSON INDUSTRIES,
INC.
Doctrine:It is a familiar and fundamental doctrine in labor law that the CBA is
the law between the parties and they are obliged to comply with its
provisions. As in all contracts, the parties in a CBA may establish such
stipulations, clauses, terms and conditions as they may deem convenient
provided these are not contrary to law, morals, good customs, public order or
public policy. Thus, where the CBA is clear and unambiguous, it becomes the
law between the parties and compliance therewith is mandated by the express
policy of the law.
Facts: Benson Industries, Inc. (Benson) is a domestic corporation engaged in the
manufacturing of greencoils with the brand name Lion-Tiger Mosquito Killer.
On February 12, 2008, Benson sent its employees a notice informing them of
their intended termination from employment, to be effected on March 15, 2008
on the ground of closure and/or cessation of business operations.
The Benson Industries Employees Union-ALU-TUCP (Union), filed a notice of
strike, claiming that the company’s supposed closure was merely a ploy to
replace the union members with lower paid workers, and, as a result, increase
its profit at their expense. The strike did not, however, push through due to the
parties’ amicable settlement during the conciliation proceedings before the
National Conciliation and Mediation Board (NCMB).
The union accepted Benson’s payment of separation pay, computed at 15 days
for every year of service, as per the parties’ Memorandum of Agreementdated
April 9, 2008. However the Union proffered a claim for the payment of
additional separation pay at the rate of four (4) days for every year of service.
They invoked Section 1, Article VIII of the existing collective bargaining
agreement (CBA) executed by and between the Union and Benson which states
that "[Benson]shall pay to any employee/laborer who is terminated from the
service without any fault attributable to him, a ‘Separation Pay’ equivalent to
not less than nineteen (19) days’ pay for every year of service based upon the
latest rate of pay of the employee/laborer concerned."
Benson opposed, averring that the separation pay already paid to them was
already more than what the law requires. Reaching an impasse on the conflict,
the parties referred the issue to voluntary arbitration, wherein the validity of
Benson’s closure was brought up as well.
The VA ruled in favour of the Union, and thus, ordered Benson to pay each of
them additional separation benefits. Also the arbitrator ratiocinated that in
computing the amount of separation benefits due to the employees, the basis
should be the provision of the existing CBA between Benson and the Union
fault of their own, they should be awarded separation benefits at the rate of 19
days for every year of service.
Separately, the VA found adequate proof to support Benson’s position that it
was indeed in a state of insolvency, which, therefore, justified its closure and/or
cessation of business operations on the ground of serious business losses
and/or financial reverses.
Nonetheless the CA reversed the decision of VA and deleted the award of
additional separation pay due to the employees. It held that despite the express
provision in the CBA stating that Benson should pay its employees who were
terminated without their fault separation benefits equivalent to at least 19 days’
pay for every year of service, Benson cannot be compelled to do so considering
its current financial status.
Issue: Whether or not the union members are entitled to the additional
separation benefits equivalent to four (4) days of work for every year of service.
Held: Yes. BENSON agreed to and was thus obligated under the CBA to pay its
employees who had been terminated without any fault attributed to them
separation benefits at the rate of 19 days for every year of service.
Benson admitted that it was already saddled with loan from banks as early as
1997 and that it had been unable to service its loan obligations. But it
unqualifiedly and freely agreed to the separation pay provision in the July 1,
2005 to June 30, 2010 CBA, its distressed financial condition notwithstanding.
It is a familiar and fundamental doctrine in labor law that the CBA is the law
between the parties and they are obliged to comply with its provisions. As in all
contracts, the parties in a CBA may establish such stipulations, clauses, terms
and conditions as they may deem convenient provided these are not contrary to
law, morals, good customs, public order or public policy. Thus, where the CBA is
clear and unambiguous, it becomes the law between the parties and compliance
therewith is mandated by the express policy of the law.
Clearly, Benson, with full knowledge of its financial situation, freely and
voluntarily entered into such agreement with the employees. Hence, having
failed to show that the subject CBA provision on separation benefits is contrary
to law, morals, public order or public policy, or that the same can be interpreted
as one with a condition, Benson should pay the employees the additional
separation benefits equivalent to four (4) days of work for every year of service.
8. However the CA reversed the decision of of NLRC upon a finding that there was
no dismissal of petitioner to speak of, whether actual or constructive,
Dimagan v. Dacworks United considering the absence of substantial evidence to prove that his services were,
Doctrine: Constructive dismissal is defined as a quitting because continued in fact, terminated by respondents; or that there was a demotion in rank or a
employment is rendered impossible, unreasonable or unlikely; when there is a diminution of his salaries, benefits and privileges
demotion in rank or a diminution of pay. The test of constructive dismissal is Issue: whether or not there Dimagan was constructively dismissed.
whether a reasonable person in the employee's position would have felt Held: Yes. The reduction in Dimagan’s responsibilities and duties, particularly
compelled to give up his position under the circumstances. It is an act from supervisor to ordinary technician, constituted a demotion in
amounting to dismissal but is made to appear as if it were not. Constructive rank tantamount to constructive dismissal.
dismissal is therefore a dismissal in disguise. The law recognizes and resolves As held in the case of Coca-Cola Bottlers Philippines, Inc. vs. Del Villar, the
this situation in favor of employees in order to protect their rights and interests burden falls upon the company to prove that the employee's assignment from
from the coercive acts of the employer. one position to another was not tantamount to constructive dismissal. In the
case at bar, Dacworks United failed to discharge said burden. In fact, it never
Facts: Dimagan is a stockholder of DACWORKS UNITED, INC., which is engaged even disputed that petitioner was relegated from the position of OIC to
in the business of installing, maintaining and repairing airconditioning systems. supervisor and, subsequently, to an ordinary technician. Clearly it is guilty of
Sometimes in 1997, he started working for the company as Officer- in- Chare constructive dismissal.
(OIC) for mechanical installation with monthly salary of ₱8,000.00. Constructive dismissal is defined as a quitting because continued employment is
In 2002, Dimagan was downgraded from his post as OIC to supervisor. Then, in rendered impossible, unreasonable or unlikely; when there is a demotion in
March of the following year, he was made to work as a mere technician. When rank or a diminution of pay. The test of constructive dismissal is whether a
he vocally expressed his concerns regarding his assignments, one Loida Aquino, reasonable person in the employee's position would have felt compelled to give
who was in charge of servicing/personnel under the direct supervision of up his position under the circumstances. It is an act amounting to dismissal but
Cancino, told him not to report for work anymore. Thereafter, a certain Carlito is made to appear as if it were not. Constructive dismissal is therefore
Diaz, Operations Manager of respondent company, castigated Dimagan for not a dismissal in disguise. The law recognizes and resolves this situation in favor of
following Aquino's instruction to work as a technician. This prompted Dimagan employees in order to protect their rights and interests from the coercive acts of
to file a complaint for illegal dismissal, non-payment of overtime pay, holiday the employer.
pay, service incentive leave and separation pay against Dacworks United.
DacworksUbnited denied that Dimagan was illegally dismissed arguing that,
since April 2003, up to filing of the complaint, the latter never reported for work
and continuously violated the company policy on absence without official leave
(AWOL)
The Labor Arbiter ruled in favour of Dimagan. The Labor Arbiter pointed out
that there was no denial by respondents that they relegated petitioner from the
position of OIC to supervisor and then to ordinary technician. The last
assignment was meant to humiliate him and deprive him of his dignity as
stockholder of the company. Moreover, the immediate filing by petitioner of the
complaint for dismissal negated the defense of abandonment interposed by
respondents.
The NLRC affirmed that there was constructive dismissal. It ratiocinated that he
was not given overtime pay despite the fact that he frequently worked late
nights because he was supposedly a managerial employee. But when
respondents started treating him as a rank-and-file employee by making him
work as a mere technician, such act of "clear discrimination, insensibility or
disdain" became unbearable to Dimagan.
9.
CONTROL TEST
MARIO N. FELICILDA, Petitioner, v. MANCHESTEVE H. UY, Respondent.
G.R. No. 221241, September 14, 2016, PERLAS-BERNABE, J.
Actual supervision is not required for element of control to exist
FACTS:
Felicilda (petitioner) alleged that respondent Manchesteve H. Uy
(respondent) hired him as a truck driver for the latter’s trucking service under
the business name “Gold Pillars Trucking” (GPT).
In connection therewith, Felicilda was issued a company identification
card (ID), assigned in one of GTP’s branches in Manila, and paid on a percentage
basis. On December 9, 2011, Felicilda took a nap at the workstation while
waiting for his truck to be loaded with cargoes, all of which were delivered to
respondent’s clients on schedule.
The next day, or on December 10, 2011, respondent’s helper told
petitioner that his employment was already terminated due to his act of
sleeping while on the job. Claiming that he was dismissed without just cause
and due process, and that his act of taking a nap did not prejudice respondent’s
business, petitioner filed a complaint for illegal dismissal with money claims
against respondent, before the NLRC, docketed as NLRC NCR Case No. 12-
18409-11.
In his defense, respondent denied the existence of an employer-
employee relationship between him and petitioner, considering that petitioner
was: (a) paid merely on a per trip “percentage” basis and was not required to
regularly report for work; (b) free to offer his services to other companies; and
(c) not under respondent’s control with respect to the means and methods by
which he performed his job as a truck driver.
Respondent added that petitioner’s company ID did not indicate that
the latter was his employee, but only served the purpose of informing the GTP’s
clients that the petitioner was one if respondent’s authorized drivers. Finally,
respondent averred that it no longer engaged petitioner’s services due to the
latter’s “serious transgressions and misconduct.”
The Labor Arbiter (LA) ruled in petitioner’s favor and, accordingly,
ordered respondent to pay the aggregate sum of P80, 145.52 representing his
back wages and separation pay.
Finding that petitioner’s service as truck driver was indispensable to
respondent’s business operations, the LA concluded that petitioner was
respondent’s regular employee and, thus, may only be dismissed for just or
authorized cause and with due process. Absent any showing of clear and valid
cause to terminate petitioner’s employment, respondent was, therefore, guilty
of illegal dismissal. Aggrieved, respondent appealed to the NLRC.
The NLRC affirmed the LA ruling. It ruled that an employer-employee
relationship existed between the parties, considering that: (a) respondent
engaged petitioner’s services without the aid of a third party or a manpower
agency; (b) the payment of wages on a percentage basis did not negate such
existence; (c) respondent’s power to dismiss petitioner was inherent in his
selection and engagement of the latter as truck driver; and (d) respondent
exercised control and supervision over petitioner’s work as shown in the
former’s determination of the latter’s delivery areas and schedules. Considering
that respondent failed to show a lawful cause for petitioner’s dismissal, the
NLRC sustained the order of payment of monetary awards in petitioner’s favor.
Respondent moved for reconsideration, but was denied. Undaunted,
respondent filed a petition for certiorari before the CA.
The Ca set aside the NLRC ruling and, instead, dismissed petitioner’s
complaint for illegal dismissal with money claims for lack of merit. Contrary to
the findings of the LA and the NLRC, the CA held that the elements of the
payment of wages and control in determining an employer-employee
relationship were absent, considering that petitioner was not paid wages, but
commissions only, which amounts varied depending on the kind of cargo, length
of trip, and fuel consumption. The CA observed that there was no evidence to
show by which petitioner was to perform his duties. Further, petitioner failed to
refute the claims that: (a) the payment of his commission was dependent on his
efficiency, discipline, and industry, which factors were beyond respondent’s
control; (b) he was not required to regularly report to work and may make
himself available to other companies; and (c) the company ID was merely issued
to him for the purpose of apprising respondent’s clients that he was the
authorized driver. Petitioner moved for reconsideration, but was denied; hence,
the petition.
Issue:
Whether or not there was employer-employee relationship in this case.
Ruling:
YES. The SC found merit in the petition.
 All the four (4) elements are present in this case: First. It is undisputed
that respondent hired petitioner to work as a truck driver for his private
enterprise, GPT.

Second. Petitioner received compensation from respondent for the

services he rendered. Contrary to the findings of the CA, while the wages paid
were determined on a “per trip” or commission basis, it has been constantly
ruled that such does not negate employment relationship.

Article 97 (f) of the Labor Code broadly defines the term “wage” as “ the
remuneration of earnings, however designated, capable of being expressed in
terms of money, whether fixed or ascertained on a time, task, piece, or
commission basis, or other method of calculating the same, which is payable by
an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be
rendered.”

That petitioner was paid on a “per trip” or commission basis is

insignificant as this is merely a method of computing compensation and not a
basis for determining the existence or absence of an employer-employee
relationship.

Third. Respondent’s power to dismiss was inherent in the selection and

engagement of petitioner as truck driver.

Fourth. The presence of the element of control, which is the most

important element to determine the existence or absence of employment
relationship, can be safely deducted from the fact that: (a) respondent owned
the trucks that were assigned to petitioner; (b) the cargoes loaded in the said
trucks were exclusively for respondent’s clients: and (c) the schedule and route
to be followed by petitioner were exclusively determined by respondent.

The latter’s claim that petitioner was permitted to render service to

other companies was not substantiated and there was no showing that he
indeed worked as truck driver for other companies.

Given all these considerations, while petitioner was free to carry out his
duties as truck driver, it cannot be pretended that respondent, nonetheless,
exercised control over the means and methods by which the former was to
accomplish his work.

To reiterate, the power of control refers merely to the existence of the

power. It is not essential for the employer to actually supervise the performance
of duties of the employee, as it is sufficient that the former has a right to wield
the power, as in this case.
 10.
ST. LUKE’S MEDICAL CENTER, INC., Petitioner, v. MARIA THERESA V.
SANCHEZ, Respondent.
G.R. No. 212054, March 11, 2015, PERLAS-BERNABE, J.
Employers have the right to regulate all aspects of employment.
Management prerogative includes disciplinary measures. Willful disobedience
justifies termination.
Facts:
On June 29, 2009,Maria Theresa Sanchez was hired as a Staff Nurse in the
Pediatric Unit of the St. Luke’s Medical Center, Quezon City.
On May 29, 2011, after her shift, she passed through the SLMC
Centralization Entrance/Exit where she was subjected to the standard
inspection procedure. In the course thereof, Security Guard Jaime Manzanade
discovered in her bag a pouch containing medical supplies (10 syringes of
various sizes, 1 Micropore, 1 pack of cotton balls, 1 pc Neoflon, 2 pcs Venofix,
and 4 pcs gloves).
Sanchez asked if she could return the pouch inside the treatment room, but
the guard refused and confiscated the pouch instead. She was brought to the In-
House Security Department (IHSD) where she wrote an incident report and
submitted a handwritten letter of apology. In her letter, she admitted she
intentionally brought out the items despite knowing it is against SLMC’s rules.
SLMC was apprised of the incident and an investigation was conducted.
Asked to explain her side, Sanchez submitted an Incident Report Addendum,
stating that the medical supplies were the excess stocks from the medication
drawers of discharged patients which the staff members save as backup in case
of emergencies. She just failed to return the pouch inside the medication drawer
on the day of the incident.
Sanchez was preventively suspended until the conclusion of the
investigation. A case conference was held, and on July 6, 2011, she was
dismissed for violating SLMC’s Code of Discipline, Sec. 1, Rule 1 on Acts of
Dishonesty (i.e. Robbery, Theft, Pilferage, and Misappropriation of Funds).
Sanchez filed a case for illegal dismissal, arguing 1) she did not intend to
bring the items outside SLMC, 2) she cannot be guilty of pilferage since the
items were neither SLMC not its employees’ property, and 3) SLMC did not file
criminal charges against her.
The Labor Arbiter (LA) held that Sanchez was validly dismissed. The NLRC
reversed the LA, holding that SLMC illegally dismissed Sanchez. The CA affirmed
this decision, hence, this petition by SLMC assailing the NLRC and CA decision.
Issue:
Whether or not Sanchez was illegally dismissed by SLMC.
Ruling:
NO. Sanchez was validly dismissed by SLMC for her willful disregard and
disobedience of the SLMC Code of Discipline. Despite her knowledge of the
prohibition under this code, she knowingly brought out the supplies with her.
SLMC cannot be faulted in construing the taking of the questioned items as an
act of dishonesty (particularly theft or pilferage) considering the intent to gain
may be reasonably presumed from the furtive taking of useful property
appertaining to another. It is immaterial that these supplies were excess stocks
because they should have been turned over to the hospital as a matter of policy.
Employers have the right to regulate all aspect of employment. This
‘management prerogative’, includes the right to prescribe reasonable rules and
regulations necessary or proper for conduct of its business or concern, to
provide certain disciplinary measures to implement said rules, and to assure
that the same would be complied with. Employees, in turn, have the corollary
duty to obey all reasonable rules, orders, and instructions of the employer; and
willfull or intentional disobedience thereto justifies termination of the contract
of service and dismissal of employee. Hence, Sanchez’ willfull disobedience is
just cause for her termination.
It is immaterial that no criminal case was filed because criminal and labor
cases involving an emplyee arising from the same infraction are separate and
distinct proceedings which should not arrest any judgment from one to the
other. What is apparent is that she deliberately disregarded and disobeyed the
rules of discipline that she was requires to observe as a staff nurse and steward
of medical supplies.
11. with. Its purpose is to give the employee some time to prepare for the eventual
loss of his job. The employer has the positive duty to inform each and every
Sangwoo Philippines Inc.(SPI) vs. Sangwoo Philippines Employee Union employees of their impending termination of employment.
(SPEU) To this end, the employer’s act of posting notices to this effect in
Facts: conspicuous areas in the workplace is not enough. As enunciated in the case of
On July 25, 2003, during the Collective Bargaining Agreement Galaxie:
negotiations between SPI and SPEU, the former filed a letter-notice of “xxx The mere posting on the company bulletin board does not meet the
temporary suspension with DOLE due to lack of orders from its buyers. requirement under Article 297 of serving a written notice on the workers. Xxx In
Negotiations on the CBA, however, continued and the parties signed a order to meet the foregoing purpose, service of the written notice must be made
Memorandum of Agreement which provides that in the event of a temporary individually upon each and every employee of the company.”
shutdown, all machineries and raw materials would not be taken out of the SPI An employer which has valid cause for dismissing its employee but
premises. conducts the dismissal with procedural infirmity is liable to pay the employee
On September 15, 2003, SPI ceased operations and thereafter filed two nominal damages in the amount of P30,000 for just causes and P50,000 for
letters with DOLE, and a copy furnished SPEU, for the extension of the authorized cause. However, where the payment of such damages becomes
temporary shutdown. impossible or unjust, modification becomes necessary in order to harmonize the
Meanwhile, on October 15, 2003, SPEU filed a complaint for unfair dispositions with the prevailing circumstances.
labor practice, illegal closure illegal dismissal, damages and attorney’s fees Considering that SPI closed down its operations due to serious business
before the Regional Arbitration of NLRC. losses and that said closure appears to have been done in good faiths, the Court
Subsequently, on February 12, 2004, SPI posted in conspicuous places deems it just to reduce the amount of nominal damages to be awarded to each
within the company premises, notices of its permanent closure and cessation of of the minority employees from P50,000 to P10,000.
business operation, effective March 16, 2004, due to serious economic losses
and financial reverses. The DOLE and SPEU was furnished with a copy of the
permanent closure. Forthwith, SPI offered Separation benefits of ½ moth pay
for every year of service to each of its employees, however, minority of the
employees, refused the offer.
The LA ruled that SPI was not guilty of ULP and observed that it duly
complied with the requirement of furnishing notices of closure to its employees
and DOLE. The NLRC sustained the rule of LA with modification. However, the
CA held that the minority of employees were not entitle to separation pay
because the company’s closure was due to serious business losses. CA,
nevertheless, ordered SPI to pay the minority employees, P15,000 each
representing the amount of financial assistance.
Both parties filed motions for reconsideration, however, were denied.
Hence, this petition.

Issue:
WON SPI complied with the notice requirement of Article 297 (formerly 283) of
the Labor Code.
Ruling:
No.
Article 297 provides that before any employee is terminated due to
closure of business, it must give 1-month prior written notice to the employee
and the DOLE. It is the personal right of the employee to be personally informed
of his proposed dismissal as well as the reasons therefor; and such requirement
of notice is not mere technicality or formality which the employer may dispense
12. It would not be proper to accord such relief in this case since, the
Philippine Airlines, Inc. vs. Alexander Bichara awards of separation pay in lieu of reinstatement were all hinged on the validity
Facts: of the employee’s dismissal. LA Macam exceeded his authority when he ruled on
On October 28, 1968, PAL hired Bichara as a flight attendant. By April this issue and directed PAL to pay Bichara separation pay in lieu of
1971, Bichara voluntarily resigned. On May 15, 1975, he was rehired. On Augus reinstatement. This Court finds that BIchara should instead, be awarded the
1993, Bichara was included in PAL’s Purser Upgrading Program in which he salary differential of a flight purser from a flight steward from the time of his
graduated. illegal demotion up until the time he was retrenched.
As flight purser, he was required to take five check rides for his Unlike LA Macam’s award of separation pay in lieu of reinstatement,
performance evaluation and earn at least 85% rating for each ride. However, the award of salary differential is not dependent on the validity of his
Bichara failed in the two check rides. Consequently Bichara was demoted to the termination, as it is, intrinsically linked to the illegality of Bichara’s demotion.
position of flight steward.
On March 22, 1994, Bichara appealed his demotion to PAL but no action
was taken; hence, he filed a complaint for illegal demotion against PAL before
the NLRC. LA Nora issued a Decision declaring Bichara’s demotion as illegal and
accordingly, ordered PAL to reinstate Bichara to his position as flight purser.
PAL filed an appeal before the NLRC and later before the CA, both which upheld
LA Nora’s finding. PAL no longer appealed to the SC hence the judgment was
rendered final and executory on February 5, 2004.
During the pendency of the illegal demotion case before the CA, PAL
implemented another retrenchment program which resulted in the termination
of BIchara’s employment along with other retrenched flight attendants. This
prompted them to file a sperate complaint for ULP, illegal retrenchment with
claims for reinstatement and payment of salaries, allowances, backwages, and
damages against PAL.
On July 9, 2005, Bichara reached the 60 year-old compulsory
retirement age.
On January 31, 2008, Bichara filed a motion for execution of LA Nora’s
Decision which PAL opposed.
LA Macam granted Bichara’s motion of execution thus directing the
issuance of the writ of execution against PAL. The NLRC reversed and set aside
LA Macam’s order and denied the motion for execution for being Moot and
Academic. The CA however, reversed and set aside the NLRC ruling and found
that LA Macam did not exceeded his authority in ordering the payment of
sepration pay in lieu of reinstatement.
Issue:
WON the CA erred in reversing the NLRC decision thereby awarding Bichara the
payment of separation pay in lieu of reinstatement.
Ruling:
Yes.
The final judgment sought to be executed was confied to be directive
that PAL reinstate Bichara as flight purser in view of his illegal demotion.
Evidently, LA Macam went beyond the terms of LA Nora’s decision when he
directed the writ of execution ordering the payment of separation pay in lieu of
reinstatement.
13.
. Gamboa vs. Maunlad Trans.
FACTS:
Petitioner entered into a nine (9)-month contract of employment as Bosun with
respondent Maunlad Trans, Inc. (MTI), for its principal, Rainbow Maritime
Co.,Ltd, on board the vessel, MV Oriente Shine, a cargo vessel transporting logs
from Canada to several Asian countries. Prior thereto, in 2013, petitioner was
likewise hired by MTI on board MN Global Mermaid, also a cargo vessel.
After undergoing the required pre-employment medical examination (PEME)
where he was declared fit for duty, Gamboa disembarked and joined the vessel
on January 24, 2014 that was then docked at Tokushima, Japan. The
following day, Gamboa assisted in the unloading of raw logs from the vessel, as
well as in the clean-up thereafter of the debris and log residue that were meter-
deep. As Gamboa could not withstand the strong odor of the logs and was
gasping for breath, the latter asked for leave which was granted, and as such,
was excused from the activity. However, the incident already triggered an
asthma attack on Gamboa which initially started as a cough that was later
accompanied by wheezing breath.
On February 4, 2014, during the voyage back to Westminster,
Canada, Gamboa claimed that he slipped and lost his footing while going down
the ship's galley, which caused a writhing pain on the upper leftside of his back.
The ship master, Captain Julius B. Cloa (Captain Cloa), gave him Salonpas for his
back, aswell as medicine for his persistent cough. On February 12, 2014, during
the rigging operation, Gamboa experienced back pain and difficulty in breathing
that prompted Captain Cloa to disembark him for medical consultation at the
Mariner's Clinic, Ltd., in Canada. While the foreign port doctor, Dr. Stanley F.
Karon, tooknote of Gamboa's back pain, it was his diagnosed asthma that
prompted the said doctor to declare him unfit for duty. Thus, on February 15,
2014, Gamboa was medically repatriated and brought to Marine Medical
Services where he was seen by a company-designated physician, Dr. Mylene
Cruz-Balbon, who confirmed his bronchialasthma. Subsequent check-
ups further disclosed that Gamboa was suffering from "DegenerativeChanges,
Thoracolumbar Spine" and was found to have a "metallic foreign body on the
anterior cervical area noted on x-ray," which, as pointed out by the company-
designated physician, was not related to the cause of Gamboa's
repatriation. Gamboa was thereafter referred to orthopedic doctors for
rehabilitation and therapy, and Dr. William Chuasuan, Jr. (Dr. Chuasuan), for
expert evaluation and management. On May 14, 2014, the company-
designated physician, Dr. Karen Frances Hao-Quan, issued a medical report to
respondent Captain Silvino Fajardo (Captain Fajardo) stating that Gamboa still
has occasional asthma attacks that have not been totally controlled despite
three (3) months of maintenance medication. She also noted that Gamboa still
has tenderness and muscle spasm on his left paraspinal muscle. As such,
the company-designated physician gave an interim assessment of "Grade 8 (ort
hopedic) - 2/3 loss of lifting powerand Grade 12 - (pulmonary) slight residual or
disorder. "Likewise, the orthopedic specialist, consistently reported that
Gamboa has not been relieved of his back pain despite rehabilitation, and
further recommended that the latter undergo MRI (Magnetic
Resonance Imaging) of the spine, which she pointed out could be done
only after the removal of the foreign bodies embedded in Gamboa's neck area.
She added that there was a need to control Gamboa's blood pressure and
asthma which prevented them from doing spiral stabilization exercises on him.
Since MTI refused to shoulder the extraction procedure as it was not part of the
cause
for Gamboa'srepatriation, the latter had the procedure done at his expense. Ho
wever, MTI still denied Gamboa's request
for MRI, and instead, issued medical certificates indicating Gamboa's illness as "
Bronchial Asthma;Degenerative Changes, Thoracolumbar Spine, Left
Parathoracic Muscle Strain. "Thus, on June 4, 2014, Gamboa filed a complaint for
non-payment of his sickness allowance, medical expenses,
and rehabilitation fees, against MTI.
The complaint was subsequently amended on June 18, 2014 to include a claim
for permanent total disability benefits pursuant to the IBF JSU/AMOSUP
(IMMAJ) Collective Bargaining Agreement (CBA) for failure of the company-
designated physician to make a final assessment within the mandated 120-
day period, and further impleaded RMCL and Captain Fajardo (respondents) as
parties thereto.
LA ruled for Gamboa. NLRC affirmed. The CA reversed the decision of the LA
and the NLRC on the ground that Gamboa had no cause of action at the time he
filed his complaint given that the May 14, 2014 assessment was not final, and
that he was still undergoing treatment well within the allowable 240- day
treatment period. It likewise found no basis to support Gamboa's claim that he
is entitled to permanent total disability benefits, holding that the latter's
independent physician examined him only once and that the lapse of the 120-
day period did not automatically entitle him thereto.
ISSUE: Whether or not petitioner is entitled to permanent total disability
benefits.
RULING:
Yes. The petitioner is entitled to permanent total disability.
YES. Gamboa was diagnosed by the company physician with "Bronchial Asthma;
Degenerative Changes, Thoracolumbar Spine, Left Parathoracic Muscle Strain
and gave Gamboa an "interim" assessment of Grades 8 and 12 for hisorthopedic
and pulmonary conditions, respectively. From the foregoing medical report,
it can be reasonably inferred that Gamboa's bronchial asthma was deemed a wo
rk-related illness unlike his degenerative changes of the spine (back condition),
which was declared by the specialist to be not work-related in view of the
specialist's observation that it was a pre-existing condition that "could not have
developed during his [22-day] period on board."

Gamboa's bronchial asthma, which is also a listed occupationaldisease,

undeniably progressed while in the performance of his duties and in the
course of his last
employment contract. Respondents' assertion that the said illness also existed p
rior to Gamboa's embarkation, and therefore a pre-existing ailment, was not
substantiated given that no such declaration was made by the company-
designated physician or the attending specialist. Besides, such fact alone does
not detract from the compensability of an illness. In the case at bar, there is no
dispute that the company-designated physician issued an "interim" assessment
on May 14, 2014, or just 88 days from Gamboa's repatriation on February 15,
2014, declaring his disability to be "Grade 8 (orthopedic) - 2/3 loss of lifting
power and Grade 12 - (pulmonary) slight residual or disorder." The gradings
were based on the findings that Gamboa's asthma was"stillnot totally
controlled,"while his back problem"still presents with tenderness and muscle spasm on the
left paraspinal muscle."

Furthermore, the designated physician failed to arrive at a definitive

assessment within the 120-day period or indicate the need for further medical
treatment. Evidently, without the required final medical assessment declaring
Gamboa fit to resume work or the degree of his disability, the characterization
of the latter's condition after the lapse of the 120-day period as total and
permanent ensued in accordance with law, since the ability to return to one's
accustomed work before the applicable periods elapse cannot be shown. Thus,
because of these circumstances, Gamboa should be entitled to permanent total
disability benefits by operation of law.

14.
Slord Development Corp. vs. Noya
FACTS:
Respondent BenerandoNoya was employed on September 9, 2008 as a welder
by petitioner, a domestic corporation engaged in the business of manufacturing
and processing of sardines and other canned goods. Respondent’s employment
was covered by a CBA effective April 14, 2009 to April 15, 2014 between
petitioner and NagkakaisangLakas ng Manggagawa-Katipunan (NLM-
Katipunan), the company’s sole and exclusive bargaining agent for all the
regular rand-and-file employees.
Petitioner claimed that sometime in December 2013, respondent asked several
employees to affix their signatures on a blank sheet of yellow paper for the
purpose of forming a new union, prompting the president of the NLM-
Katipunan to file expulsion proceedings against him for disloyalty.
Subsequently, respondent organized a new union named the
BantayManggagawasa SLORD Development Corporation (BMSDC), which he
registered with the Department of Labor and Employment (DOLE).
In the ensuing investigation, respondent failed to appear and participate at the
schedules hearings before the union. Thus, NLM-Katipunan resolved, with the
ratification of its members, to expel respondent on the ground of disloyalty.
Accordingly, a notice of expulsion was issued by NLM-Katipunan to respondent.
Subsequently, a letter was sent by the union to petitioner, demanding his
termination from employment pursuant to the union security clause of the CBA.
After notifying the respondent of the union’s decision to expel him and showing
him all the documents attached to the union’s demand for his dismissal,
respondent’s employment was terminated
Hence, a complaint filed by respondent for illegal dismissal, unfair labor
practice and illegal deduction against petitioner, asserting that he did not
violate any CBA provision since he validly organized BMSDC during the freedom
period.
The Labor Arbiter dismissed the case for lack of merit.
The NLRC affirmed the decision of the Labor Arbiter.
The CA however, finds that Noya was illegally dismissed.
ISSUE: Whether or not Noya was illegally dismissed.
RULING:
While not explicitly mentioned in the Labor Code, case law recognizes that
dismissal from employment due to the enforcement of the union security clause
in the CBA. A stipulation in the CBA authorizing the dismissal of employees is of
equal import as the statutory provisions on dismissal under the Labor Code,
since a CBA is the law between the company and the union and compliance
therewith is mandated by the express policy to give protection to labor.
Pertinent is Article 259 (formerly 248), paragraph (e) of the Labor Code, which
states that “nothing in this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining agent as a condition
for employment.
“Union security is a generic term which is applied to and comprehends ‘closed
shop’, ‘maintenance of membership’ or any other form of agreement which
imposes upon employees the obligation to acquire or retain union membership
as a condition affecting employment.
This is consistent with the State policy to promote unionism to enable workers
to negotiate with management on an even playing field and with more
persuasiveness than if they were to individually and separately bargain with the
employer.
To validly terminate the employment of an employee through the enforcement
of the union security clause, the following requisites must concur: 1. The union
security clause is applicable, 2. The union is requesting for the enforcement of
the union security provision in the CBA; and 3. There is sufficient evidence to
support the decision of the union to expel the employee from the union.
In this case, the Court finds the confluence of the foregoing requisites,
warranting the termination or respondent’s employment.
It is undisputed that the CBA contains a closed shop agreement and stipulating
that petitioner’s employee must join NLM-Katipunan and remain to be a
member in good standing; otherwise, through a written demand. NLM-
Katipunan can insist the dismissal of an employee.
Further, records show that NLM-Katipunan requested the enforcement of the
union security clause by demanding the dismissal of the respondent from
employment.
Finally, there is sufficient evidence to support the union’s decision to expel
respondent. Particularly, NLM-Katipunan presented to petitioner: a. a written
request stating that respondent went to the house of Elaine Rosel to convince
her to join in forming a union and made her sign on a yellow paper; b. a joint
written statement of by two employees corroborating Rosel’s claim; c. a written
statement of Joselito Gonzales attesting to respondent’s act of soliciting
signatures for the purpose of forming a union.; d. an affidavit of NLM-Katipunan
further corroborating Gonzales’ statement and formally lodging a complaint
against respondent before the union; and e. an application for registration of
BMSDC, showing that respondent formed and organized BMSDC on February 9,
2014.
15. employment, or when there is cessation of work because continued
employment is rendered impossible, unreasonable, or unlikely, as an offer
Vicente Tatel v. JLFP Investigation Security Agency involving a demotion in rank and a diminution in pay.
Facts: In this case, respondents themselves claimed that after having removed
JLFP Investigation Security Agency, Inc. (JLFP) hired Tatel as a security Tatel from his post at BaggerWerken on August 24, 2009 due to several
guard. Tatel alleged that he was last posted at BaggerWerken located at the Port infractions committed thereat, they subsequently reassigned him to SKI from
Area in Manila. He was required to word twelve hours (12) from Monday to September 16, 2009 to October 12, 2009 and then to IPVG from October 21 to
Sundays with P12,400 monthly salary. Tatel later on filed a complaint against 23, 2009. Thereafter, and until Tatel filed the instant complaint for illegal
JLFP and its officer Jose Pamintuan, as well as SKI Group of Companies (SKI) and dismissal six (6) months later, or on May 4, 2010, he was not given any other
its officer Joselito Dueñ as for underpayment of salaries and wages, non- postings or assignments. While it may be true that respondents summoned him
payment of other benefits, 13th month pay, and attorney’s fees. back to work through the November 26, 2009 Memorandum, which Tatel
On October 24, 2009, Tatel was placed on “floating status”; On May, 4, acknowledged to have received on December 11, 2009, records are bereft of
2010, or after the lapse of six months without having been given any evidence to show that he was given another detail or assignment. As the "off-
assignments. He filed another complaint against JLFP and its officers, Paolo detail" period had already lasted for more than six (6) months, Tatel is therefore
Turno and Jose Fabella, for illegal dismissmal, reinstatement, back wages, deemed to have been constructively dismissed.
refund of cash bond deposit amounting to P25,400, attorney’s fees and other
money claims. JLFP, Pamintuan, and Turno denied the allegations of Tatel, they
claimed that the latter was removed from BaggerWerken because of several
infractions he committed on duty. Thereafter, he was assigned at SKI from
September 16, 2009 to October 12, 2009, and last posted at IPVG from October
21 to 23, 2009.
During the pendency of the first case, JLFP sent a Memo to Tatel
directing the latter to report back to work. However, despite the receipt of the
said memorandum, he failed to appear, and he was deemed to have abandoned
his work. Tatel admitted that he received such memo. However, when he went
to the JLFP office, he was merely advised to “wait for possible posting.” He
repeatedly went back to the office for reassignment, but to no avail.
Issue:
Whether or not Tatel was illegally dismissed by JLFP Investigation
Agency.
Held:
Yes. After a judicious perusal of the records, the Court is convinced that
Tatel was constructively, not actually, dismissed after having been placed on
"floating status" for more than six (6) months, reckoned from October 24, 2009,
the day following his removal from his last assignment with IPVG on October
23, 2009.
In Superstar Security Agency, Inc. and/or Col. Andrada v. NLRC, the
Court ruled that placing an employee on temporary "off-detail" is not equivalent
to dismissal provided that such temporary inactivity should continue only for a
period of six (6) months. When such a "floating status" lasts for more than six
(6) months, the employee may be considered to have been constructively
dismissed.
Relative thereto, constructive dismissal exists when an act of clear
discrimination, insensibility, or disdain, on the part of the employer has become
so unbearable as to leave an employee with no choice but to forego continued
16. text and meaning of the foregoing provision, the following elements must
concur: (a) the misconduct must be serious; (b) it must relate to the
Fabricator Philippines, Inc., v. Jeanie Rose Estolas performance of the employee's duties, showing that the employee has become
Facts: unfit to continue working for the employer; and (c) it must have been
Jeanie Estolas alleged that Fabricator Philippines, Inc., hired her as a performed with wrongful intent.
welder. Before break time sometime in 2011, while waiting for a replacement In this case, the tribunals a quo aptly observed that while respondent
part she requested to be installed on the welding machine she was using, indeed committed some sort of misconduct when she engaged in a verbal tussle
Estolas took a seat and rested. At that time, Rosario Banayad passed by and saw with Banayad during work hours and in front of their superior, Abaya, the same
her sitting, then uttered “Ayos ka ha.” The matter was brought to the Team was not serious enough to warrant respondent's dismissal. Neither was it
Leader, Warlito Abaya. While Abaya and Banayad were talking to each other, shown that respondent performed such act of misconduct with wrongful intent
Estolas told the later “Ang kitid ng utakmo[.] [B]akithindimomunaakotinanong nor did the same render her unfit to continue working for petitioner.
kung bakitakonakaupo[?] [B]akithindimomunatinanong kung ano [ang]
nasalikod ng nakitamo?" Banayad retorted, saying, "Matapang ka ha! Matapang
ka!" Estolas replied, "Candy, ikaw pa naman ang nagdadasalaraw-araw,
taposganyan ang ugali mo!"
Abaya directed Estolas to see the President, Victor Lim in his office.
During their meeting, the latter allegedly asked what she would feel if he would
hit her ear, then proceeded to hit her ear. Respondent reasoned out that she did
not hit Banayad's ear and that it was the latter who provoked her. However, Lim
insisted that respondent was rude towards Banayad. Later on, Estolas was
issued a suspension order effective the following day for a period of three (3)
days. A few months later, Lim told Estolas to resign and that his lawyer will see
her. Estolas was again instructed not to report for work until she and Lim have
talked. Sometime after, Lim directed Estolas to sign a paper, which she refused
as it pertains to the promotion of Banayad as Strategy and Control Group-Senior
Assistant 1.
Estolas received a letter from Lim directing her to seek assistance of
lawyer for a hearing. On the said hearing, Estolas was required to sign the
statements of Banayad and other witnesses, which she refused to follow.
Thereafter, Estolas was served a notice of termination, finding her guilty of
serious misconduct. Which prompted Estolas to file a complaint for illegal
dismissal.
Issue:
Whether or not Estolas was illegally dismissed by Fabricator
Philippines.
Held:
Yes. Article 297 [282]. Termination by Employer. — An employer may
terminate an employment for any of the following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful

orders of his employer or representative in connection with his work.
Misconduct is defined as an improper or wrong conduct. 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. To constitute a valid cause for the dismissal within the
17. formal lapse, an excusable neglect, and, hence, not a jurisdictional defect
LEI SHERYLL FERNANDEZ v. BOTICA CLAUDIO and GUADALUPE JOSE warranting the dismissal of an appeal. Instead, the NLRC should require the
G.R. No. 205870, 13 August 2014, Second Division (Perlas-Bernabe, J.) appellant to provide the opposing party copies of the notice of appeal and
memorandum of appeal.
FACTS: Additionally, the NLRC could not be expected to require compliance
Petitioner, Lei Sheryll Fernandez (Fernandez) worked for four (4) years from Fernandez, the appellant, since it was not aware that the opposing party,
at Botica Claudio, a drugstore owned by respondent, Guadalupe Jose (Jose). Jose, was not notified of her appeal. Hence, it cannot be faulted in relying on
However, Fernandez’s employment was terminated on the grounds of taking an Fernandez’s representation that she had sent Jose, through her counsel, a copy
absence without official leave (AWOL), dispensing wrong medicines, allowing of her memorandum of appeal by registered mail.
some clients to buy medicines on credit without her employer’s consent, and The Court also stated that the CA erred in declaring that the failure of
dishonesty among others. As a result, Fernandez filed a complaint for illegal Fernandez to furnish Jose with copies of her notice of appeal and memorandum
dismissal with prayer for the payment of statutory benefits before the NLRC of appeal before the NLRC deprived the latter of her right to due process. What
Regional Arbitration Branch. the law prohibits is absolute absence of the opportunity to be heard, thus, an
The Labor Arbiter (LA) held that while just cause attended Fernandez’s aggrieved party cannot feign denial of due process where he had been afforded
dismissal from work due to her AWOL, the same was nonetheless effected the opportunity to ventilate his side, as Jose was in this case.
without procedural due process. Thus, the LA ordered Jose to pay Fernandez Petition granted.
but denied the latter’s claims for payment of benefits. Dissatisfied with the LA’s
ruling, Fernandez appealed to the National Labor Relations Commission (NLRC)
which granted the appeal thereby reversing the LA’s ruling. NLRC found
Fernandez to have been illegally dismissed by her employer, Jose, without a
valid cause and observance of procedural due process.
In turn, Jose appealed to the Court of Appeals which ruled in her favor
holding that the NLRC gravely abused its discretion in taking cognizance of
Fernandez’s appeal despite the latter’s failure to furnish Jose copies of notice of
appeal and appeal memorandum in violation of Article 223 of Labor Code and
NLRC Rules of Procedure. Due to Fernandez’s failure to comply with the
requirements for the perfection of her appeal, the CA held that Jose was
deprived of her right to due process. Moreover, Fernandez’s appeal of the LA
Decision had never been perfected, thereby rendering NLRC without any
authority to entertain Fernandez’s recourse. The case was then elevated to the
Supreme Court for further resolution.

ISSUE:
Whether or not the CA erred in holding that the NLRC gravely abused
its discretion in giving due course to Fernandez’s appeal

RULING:
Yes.
The Court ruled that the CA erred in ascribing grave abuse of discretion
on the part of the NLRC in taking cognizance of Fernandez’s appeal. Article 223
of the Labor Code and Section 3(a), Rule VI of the then New Rules of Procedure
of the NLRC require the party intending to appeal from the LA’s ruling to furnish
the other party a copy of his memorandum of appeal. The Court also held that
the mere failure to serve the same upon the opposing party does not bar the
NLRC from giving due course to an appeal. Such failure is only treated as a
18.
OKS DESIGNTECH, INC. v. MARY JAYNE L. CACCAM
G.R. No. 211263, 5 August 2015, First Division (Perlas-Bernabe, J.)
FACTS:
Petitioner, OKS DesignTech, Inc. (DesignTech), hired respondent, Mary
Jayne Caccam (Caccam) as an accountant under a contract of employment for a
fixed period. A few days before the expiration of her contract after a year in
service, Caccam received a letter signed by the company manager informing the
status of her contract. As a result, Caccam filed a complaint for illegal dismissal
by virtue of the aforesaid letter. She further claimed that she was a regular
employee as the nature of her work was necessary and desirable in the usual
business of DesignTech. And she was merely imposed a fixed-term employment
with an understanding that her contract would just be renewed upon its
expiration. On the other hand, DesignTech argued that Caccam’s complaint was
a retaliation to the criminal complaint for Qualified Theft and Falsification of
Private Documents that was filed against the latter after having discovered
several unauthorized withdrawals amounting to P500,000.00 from its bank.
They also added that the letter was not actually a termination letter but a mere
notice of the expiration of her employment contract.
The Labor Arbiter (LA) held that Caccam was illegally dismissed and
she attained the status of a regular employee who may be dismissed only for
just or authorized cause. The LA further held that even with the pending
criminal case against Caccam, there was no substantial evidence to support
DesignTech’s claim of loss of trust and confidence, noting that it was not part of
the former’s duty to withdraw money from the company's depository bank, and
that the questioned check transactions were all authorized and signed by the
manager.
On the other hand, the National Labor Relations Commission (NLRC)
posited that even if Caccam’s work was necessary and desirable in the usual
trade or business of DesignTech, and the fact that the period of her employment
extended for more than one year were not decisive indicators for regularity of
employment in a fixed period employment. It further held that in such kind of
employment, no prior notice of termination was required to comply with the
due process requirement.
On appeal, the Court of Appeals set aside NLRC’s decision and
concurred with the LA. The terms and conditions of the first contract and the
second contract negated a fixed-term employment since they state that
respondent's employment may be terminated prior to the expiration thereof for
"just or authorized cause or when the employee fails to meet the reasonable
standards made known to him by the employer." Hence, it concluded that
respondent was a regular employee who had been illegally dismissed.
ISSUE:
Whether the CA erred in ruling that the NLRC gravely abused its
discretion in finding that respondent was not a regular employee and as such,
validly dismissed due to the expiration of her fixed-term contract
RULING:
Yes.
The Court finds that theCA committed reversible error in granting
respondent's certiorari petition since the NLRC did not gravely abuse its
discretion in ruling that respondent was legally dismissed.
An examination of the contracts entered into by respondent reveals
that her employment was clearly limited to a fixed period and did not go beyond
such period. She, however, asserted that she is deemed a regular employee in
view of the nature of her employment as an accountant, an activity that is
necessary and desirable in the usual business or trade of the company. This
notwithstanding, case law dictates that even if an employee is engaged to
perform activities that are necessary or desirable in the usual trade or business
of the employer, the same does not preclude the fixing of employment for a
definite period.
In fact, the Court, in Brent, had already pronounced that the decisive
determinant in fixed-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.
In Mercado v. AMA Computer College-Parañaque City, Inc., the Court
delineated the foundational difference between probationary and fixed-term
employment contracts, to the latter this case clearly falls: The fixed-term
character of employment essentially refers to the period agreed upon between
the employer and the employee; employment exists only for the duration of the
term and ends on its own when the term expires. While employment on
probationary status also refers to a period because of the technical meaning
"probation" carries in Philippine labor law - a maximum period of six months, or
in the academe, a period of three years.
The Court therefore upholds the NLRC's finding that respondent was a
fixed-term employee and not a regular one whose employment may be validly
terminated upon the expiration of her contract. To reiterate, contracts of
employment for a fixed period are not per se unlawful. What is objectionable is
the practice of some unscrupulous employers who try to circumvent the law
protecting the workers from the capricious termination of employment
In fine, having been hired under a valid fixed-period employment
contract, respondent's employment was lawfully terminated upon its expiration
on June 21, 2009 without need of any further notice. Hence, the CA erred in
ascribing grave abuse of discretion on the part of the NLRC which, in fact,
correctly found respondent not to have been illegally dismissed.
Petition granted.
19.
COCA-COLA FEMSA PHILIPPINES V. BACOLOD SALES FORCE UNION
G.R. No. 220605
21 September 2016
FACTS:
Petitioner is a corporation engaged in the manufacture of nonalcoholic
beverages. Sometime in 2001, Cosmos Bottling Corporation (Cosmos) ceded its
sales functions to petitioner which resulted in the integration of a number of
Cosmos's salesmen into petitioner's workforce as route salesmen. The Cosmos
integrees were given salary adjustments that would align with that of
petitioner's own route salesmen. At the time of integration, petitioner's system
of product distribution was by direct selling, but it subsequently adopted the
route-to-market (RTM) system of distribution which led to the abolition of the
route salesman position and its replacement by the account developer (AD)
position. Thus, through an internal selection process, the Cosmos integrees'
positions were eventually designated as Ads.Meanwhile, petitioner hired new
ADs who were, however, subject to a different set of qualifications from the
Cosmos integrees. The newly-hired ADs received a higher basic monthly pay
although, allegedly, occupying the same position, job description, and functions
as that of the Cosmos integrees. Aggrieved by the difference in treatment,
respondent Bacolod Sales Force Union, the recognized collective bargaining
agent of the rank-and-file sales personnel of petitioner, submitted its concerns
to the grievance machinery in accordance with the CBA, demanding, among
others, that the salary rates of the Cosmos integrees be readjusted to equal to
that of the newly-hired ADs' salary rates.For its part, petitioner maintained that
the fixing of hiring rates is a management prerogative, adding that the Cosmos
integrees and the newly hired ADs were not similarly situated due to the
apparent variance in the manner by which they were appointed and hired, as
well as their qualifications, skills, and responsibilities for the position.
RULING:
NO. Arbitration is the reference of a labor dispute to an impartial third person
for determination on the basis of evidence and arguments presented by such
parties who have bound themselves to accept the decision of the arbitrator as
final and binding. However, in view of the nature of their functions, voluntary
arbitrators act in a quasi-judicial capacity; hence, their judgments or final orders
which are declared final by law are not so exempt from judicial review when so
warranted." Any agreement stipulating that 'the decision of the arbitrator shall
be final and unappealable' and 'that no further judicial recourse if either party
disagrees with the whole or any part of the arbitrator's award may be availed
of' cannot be held to preclude in proper cases the power of judicial review
which is inherent in courts."
Case law holds that the proper remedy to reverse or modify a Voluntary
Arbitrator's or a Panel of Voluntary Arbitrators' decision or award is to appeal
the award or decision before the CA under Rule 43 of the Ruleson questions of
fact, of law, mixed questions of fact and law or a mistake of judgment.However,
in several cases, the Court allowed the filing of a petition for certiorari from the
VA's judgment to the CA under Rule 65 of the same Rules, where the VA was
averred to have acted without or in excess of his jurisdiction or with grave
abuse of discretion amounting to lack or excess of jurisdiction.
In this case, petitioner availed of the correct mode of review of the VA Decision
by filing a petition for review with the CA under Rule 43 of the Rules, and in
conformity with prevailing jurisprudence.

The VA declared that, among others, the disparity in the wages of the Cosmos
integrees and the newly-hired ADs was discriminatory for lack of substantial
basis or valid criteria and directed petitioner to realign or readjust the Cosmos
integrees' basic salaries at par with that of the newly-hired Ads. Upon
appeal, the CA denied the petition on the ground that the VA Decision had
attained finality pursuant to Article 5 of the CBA, which explicitly provides that
"[t]he decision of the Arbitration Committee shall be final and binding upon the
COMPANY and the UNION, and the employees and may be enforced in any court
of competent jurisdiction."

ISSUE:
Whether or not the CA correctly held that the VA Decision can no longer be the
subject of its review for having attained finality pursuant to the express
provision under the CBA.

20.
PEPSI-COLA PRODUCTS PHILIPPINES v. MOLON
G.R. No. 175002
18 February 2013
FACTS:
In 1999, Pepsi adopted a company-wide retrenchment program.To commence
with its program, it sent a notice of retrenchment to the DOLE as well as
individual notices to the affected employees informing them of their
termination from work. Subsequently, on July 13, 1999, Pepsi notified the DOLE
of the initial batch of 47 workers to be retrenched. The Pepsi-Cola Employees
Union filed a Notice of Strike before the NCMB due to Pepsi's alleged acts of
union busting/ULP.It claimed that Pepsi's adoption of the retrenchment
program was designed solely to bust their union so that come freedom period,
Pepsi's company union,which was also the incumbent bargaining union at that
time would garner the majority vote to retain its exclusive bargaining
status.Pepsi then filed before the NLRC a petition to declare the strike illegal
with a prayer for the loss of employment status of union leaders and some
union members. On even date, the DOLE Secretary certified the labor dispute to
the NLRC for compulsory arbitration. Eventually, Pepsi and the Union agreed to
settle their labor dispute arising from the company's retrenchment program
and thus, executed the Agreement stipulating that the union will receive 100%
of the separation pay based on the employees' basic salary and the remaining
50% shall be released by Management after the necessary deductions are made
from the concerned employees and the Union undertakes to sign the Quitclaim.
Notwithstanding the foregoing, respondents still filed separate complaints for
illegal dismissal with the NLRC.
The NLRC absolved Pepsi of the charge of union busting/ULP and further
declared the strike as illegal for having been conducted without legal authority
since LEPCEU-ALU was not the certified bargaining agent of the company. It was
also observed that LEPCEU-ALU failed to comply with the 7-day strike vote
notice requirement. However, the NLRC denied Pepsi's prayer to declare loss of
employment status of the union officers and members who participated in the
strike for its failure to sufficiently establish the identity of the culpable union
officers as well as their illegal acts. On appeal, the CA observed that Pepsi could
not have been in good faith when it retrenched the respondents given that they
were chosen because of their union membership with LEPCEU-ALU. In this
accord, it ruled that the subject retrenchment was invalid because there was no
showing that Pepsi employed fair and reasonable criteria in ascertaining who
among its employees would be retrenched.Moreover, the CA held that Pepsi was
guilty of ULP in the form of union busting as its retrenchment scheme only
served to defeat LEPCEU-ALU's right to self-organization.
ISSUES:
1. Whether or not Pepsi committed ULP in the form of union busting; and
2. Whether or not Remandaban was illegally dismissed.
RULING:
1. NO. Under Article 276(c) of the Labor Code, there is union busting
when the existence of the union is threatened by the employer's act of
dismissing the former's officers who have been duly-elected in
accordance with its constitution and by-laws.
On the other hand, the term unfair labor practice refers to that gamut of
offenses defined in the Labor Code which, at their core, violates the
constitutional right of workers and employees to self-organization.
Mindful of their nature, the Court finds it difficult to attribute any act of
union busting or ULP on the part of Pepsi considering that it retrenched
its employees in good faith. As earlier discussed, Pepsi tried to sit-down
with its employees to arrive at mutually beneficial criteria which would
have been adopted for their intended retrenchment. In the same vein,
Pepsi's cooperation during the NCMB-supervised conciliation
conferences can also be gleaned from the records. Furthermore, the
fact that Pepsi's rightsizing program was implemented on a company-
wide basis dilutes respondents' claim that Pepsi's retrenchment
scheme was calculated to stymie its union activities, much less diminish
its constituency. Therefore, absent any perceived threat to LEPCEU-
ALU's existence or a violation of respondents' right to self-organization
as demonstrated by the foregoing actuations Pepsi cannot be said to
have committed union busting or ULP in this case.
2. An illegally dismissed employee is entitled to either reinstatement, if
viable, or separation pay if reinstatement is no longer viable, and
backwages. In certain cases, however, the Court has ordered the
reinstatement of the employee without backwages considering the fact
that (1) the dismissal of the employee would be too harsh a penalty;
and (2) the employer was in good faith in terminating the employee.
For instance, in the case of Cruz v. Minister of Labor and Employment the
Court ruled as follows: “The Court is convinced that petitioner's guilt
was substantially established. Nevertheless, we agree with respondent
Minister's order of reinstating petitioner without backwages instead
of dismissal which may be too drastic. Denial of backwages would
sufficiently penalize her for her infractions. The bank officials acted
in good faith. They should be exempt from the burden of paying
backwages. The good faith of the employer, when clear under the
circumstances, may preclude or diminish recovery of backwages. Only
employees discriminately dismissed are entitled to backpay.

21.
INTEGRATED MICROELECTRONICS, INC., petitioner, vs. ADONIS A.
PIONILLA, respondent.
G.R. No. 200222. August 28, 2013.
case digest by: Caluag, LirahAlorra
In certain cases, however, the Court has carved out an exception to the foregoing
rule and thereby ordered the reinstatement of the employee without backwages
on account of the following: (a) the fact that dismissal of the employee would be
too harsh of a penalty; and (b) that the employer was in good faith in terminating
the employee.
FACTS
Adonis A. Pionilla (Pionilla), respondent, was hired by Integrated
Microelectronics, Inc. (IMI), petitioner, as its production worker on November
14, 1996. Pionilla received a notice from IMI requiring him to explain the
incident which occurred the day before where he was seen escorting a lady to
board the company shuttle bus at the Alabang Terminal. It was reported by the
bus marshall that the lady was wearing a company identification card (ID) ―
which serves as a free pass for shuttle bus passengers ― even if she was just a
job applicant at IMI. In this regard, Pionilla admitted that he lent his ID to the
lady who turned out to be his relative. He further intimated that he risked
lending her his ID to save on their transportation expenses. Nevertheless, he
apologized for his actions.
A Conscience Committee (committee) was subsequently formed to
investigate the matter. During the committee hearing, Pionilla admitted that at
the time of the incident, he had two IDs in his name as he lost his original ID in
November 2004 but was able to secure a temporary ID later. As Pionilla and his
relative were about to board the shuttle bus, they were both holding separate
IDs, both in his name. Based on the foregoing, IMI found Pionilla guilty of
violating Article 6.12 of the Company Rules and Regulations (CRR) which
prohibits the lending of one’s ID since the same is considered a breach of its
security rules and carries the penalty of dismissal. Subsequently, Pionilla
received a letter dated August 16, 2005 informing him of his dismissal from
service. Three days after, he filed a complaint for illegal dismissal with damages
against IMI.
The Labor Arbiter (LA) rendered that Pionilla have been illegal
dismissed by IMI and, as such, ordered the latter to reinstate him to his former
position and to pay him backwages. The LA held that Pionilla was harshly
penalized, observing that the latter did not breach the security of the company
premises since his companion was not able to enter the said premises nor board
the shuttle bus.
On appeal, the National Labor Relations Commission (NLRC) reversed
the LA’s ruling. The NLRC further ruled that Pionilla’s attitude in violating the
CRR could be treated as perverse as bolstered by his failure to surrender his
temporary ID despite locating the original one.
Court of Appeals (CA) granted Pionilla’s petition. It found that while
IMI’s regulations on company IDs were reasonable, the penalty of dismissal was
too harsh and not commensurate to the misdeed committed.
IMI then filed before the Court a petition for review on certiorari which
was denied. The Court found no reversible error on the part of the CA.
Hence, this motion for reconsideration.
ISSUE
Whether or not the award full backwages is proper.
RULING
No, the award of full backwages is not proper.
As a general rule, an illegally dismissed employee is entitled to
reinstatement (or separation pay, if reinstatement is not viable) and payment of
full backwages. In certain cases, however, the Court has carved out an exception
to the foregoing rule and thereby ordered the reinstatement of the employee
without backwages on account of the following: (a) the fact that dismissal of the
employee would be too harsh of a penalty; and (b) that the employer was in
good faith in terminating the employee.
In this case, the Court observes that: (a) the penalty of dismissal was
too harsh of a penalty to be imposed against Pionilla for his infractions; and (b)
IMI was in good faith when it dismissed Pionilla as his dereliction of its policy
on ID usage was honestly perceived to be a threat to the company’s security. In
this respect, since these concurring circumstances trigger the application of the
exception to the rule on backwages as enunciated in the above-cited cases, the
Court finds it proper to accord the same disposition and consequently directs
the deletion of the award of backwages in favor of Pionilla, notwithstanding the
illegality of his dismissal.
WHEREFORE, the motion for reconsideration is PARTLY GRANTED. The
Court’s Resolution dated January 14, 2013 is hereby MODIFIED, directing the
deletion of the award of backwages in favor of respondent Adonis A. Pionilla.
22.
PHILIPPINE PIZZA, INC., Petitioner, v. JENNY PORRAS CAYETANO, RIZALDO
G. AVENIDO, PEE JAY T. GURION, RUMEL A. RECTO, ROGELIO T. SUMBANG,
JR., AND JIMMY J. DELOSO, RESPONDENTS, Respondents.
G.R. No. 230030, August 29, 2018.
case digest by: CALUAG, LirahAlorra
As such, respondents could not have been illegally terminated from work, for they
were placed in a temporary lay-off status when they prematurely filed the
complaints. There being no dismissal to speak of, respondents were thus not
illegally dismissed by CBMI, their actual employer.
FACTS
On various dates, Jenny Porras Cayetano, et al. (respondents) were
hired by Consolidated Building Maintenance, Inc. (CBMI), a job contractor which
provides kitchen, delivery, sanitation, and allied services to Philippine Pizza, Inc.
(PPI)'s Pizza Hut chain of restaurants (Pizza Hut), and were thereafter deployed
to the various branches of the latter. Cayetano and Deloso worked as team
members/service crew, while Avenido, Gurion, Recto, and Sumbang, Jr. served
as delivery riders.
Respondents alleged that they rendered work for Pizza Hut, ranging
from seven (7) to eleven (11) years, hence, they were regular employees of PPI
and not of CBMI. They claimed to have been initially hired by PPI but were
subsequently transferred to CBMI so as to prevent them from attaining their
regular employment status. Despite the said transfer, however, they were still
under the direct supervision of the managers of Pizza Hut and had been using
its tools and machines for work.Thus, respondents, along with several
others, filed separate complaints for Illegal Dismissal against PPI and
CBMI,before the NLRC.
For its part, PPI denied any employer-employee relationship with
respondents, averring that it entered into several Contracts of Services with
CBMI to perform janitorial, bussing, kitchen, table service, cashiering,
warehousing, delivery, and allied services in PPI's favor. It also contended that
respondents were assigned to various branches of Pizza Hut and were
performing tasks in accordance with CBMI's manner and method, free from the
direction and control of PPI.
On the other hand, CBMI admitted that respondents were its
employees, and that it paid their wages and remitted their SSS, PhilHealth,and
Pag-IBIG contributions. It insisted that it is a legitimate job contractor, as it
possesses substantial capital and a Department of Labor and Employment
(DOLE) Certificate of Registration; undertakes a business separate and distinct
from that of PPI based on its Articles of Incorporation; and more importantly,
retained and exercised the right of control over respondents. Moreover, CBMI
explained that it had no choice but to recall, and subsequently, place
respondents in floating status, considering that PPI had reduced its need for
services in some Pizza Hut branches. Lastly, CBMI maintained that before it had
the opportunity to re-assign respondents, the latter already filed their
complaints.
The LA found PPI and CBMI jointly and severally liable for illegal
dismissal. The respondents were regular employees of PPI and not of CBMI, as
they were repeatedly hired to perform work that was usually necessary and
desirable to the main business of PPI. LA also took judicial notice of the case of
PPI vs Matias, which involved a similar complaint for illegal dismissal filed by a
delivery rider of Pizza Hut. In the said case, the Court disregarded the separate
personalities of PPI and CBMI, holding that they were engaged in a prohibited
labor-only contracting arrangement.
The NLRC reversed the decision of the LA. The NLRC also held that
there was no employer-employee relationship between PPI and respondents.
On the contrary, CBMI was the one which ultimately exercised control and
supervision over respondents. NLRC ruled that the principle of stare decisis
could not be applied to the instant case, since Philippine Pizza, Inc.'s case was
resolved through a mere minute resolution, and as such, was bereft of a
complete statement of the facts of the case, as well as the applicable laws and
jurisprudence. It also declared that respondents' floating status did not
constitute dismissal from service, as it was done in the exercise of CBMI's
management prerogative.
Court of Appeals annulled and set aside the NLRC ruling. In holding PPI
and CBMI jointly and severally liable to respondents, the CA applied the
principle of stare decisis, relying on the Court's ruling in Philippine Pizza, Inc.
that CBMI is engaged in prohibited labor-only contracting and thus, PPI is the
principal employer of respondents. Moreover, the CA declared that respondents
were regular employees of PPI, having rendered service for more than a year,
specifically ranging from seven (7) to eleven (11) years.
PPI and CBMI moved for reconsideration which was denied.
Hence, this petition for review on certiorari.
ISSUES
1. Whether or not the reliance on the PPI vs Matias is correct.
2. Whether or not the respondents are illegally dismissed.
RULING
1. NO, the reliance on the PPI vs Matias is not correct.
 The CA's reliance on the Philippine Pizza, Inc.'s minute resolution is, have been illegally terminated from work, for they were placed in a temporary
however, misplaced. Case law instructs that although the Court's dismissal of a lay-off status when they prematurely filed the complaints. There being no
case via a minute resolution constitutes a disposition on the merits, the same dismissal to speak of, respondents were thus not illegally dismissed by CBMI,
could not be treated as a binding precedent to cases involving other persons their actual employer.
who are not parties to the case, or another subject matter that may or may not
have the same parties and issues. In other words, a minute resolution does not WHEREFORE, the petition is GRANTED. The Decision dated March 30,
necessarily bind non-parties to the action even if it amounts to a final action on 2016 and the Resolution dated January 6, 2017 rendered by the Court of Appeals
a case. in CA-G.R. SP No. 136333 are hereby REVERSED and SET ASIDE. Accordingly, the
The NLRC was also correct in holding that CBMI has substantial capital Decision dated January 28, 2014 and the Resolution dated April 30, 2014 of the
and investment. Based on CBMI's 2012 General Information Sheet,49 it has an National Labor Relations Commission in NLRC-NCR Nos. 04-05060-13, 05-06931-
authorized capital stock in the amount of P10,000,000.00 and subscribed capital 13, 05-07363-13, 05-07941-13, and 06-08125-13 are REINSTATED.
stock in the amount of P5,000,000.00, P3,500,000.00 of which had already been
paid-up. Additionally, its audited financial statements50 show that it has
considerable current and non-current assets amounting to P85,518,832.00.
Taken together, CBMI has substantial capital to properly carry out its
obligations with PPI, as well as to sufficiently cover its own operational
expenses.
Lastly, the NLRC correctly found that no employer-employee
relationship exists between PPI and respondents, and that the latter were
employees of CBMI. Records reveal that respondents applied for work with
CBMI and were consequently selected and hired by the latter. They were then
required by CBMI to attend orientations and seminars wherein respondents
were apprised of the working conditions, basic customer service, basic good
grooming, and company rules and regulations. During the course of their
employment, CBMI paid their wages and remitted/paid their SSS, PhilHealth,
and Pag-IBIG contributions. CBMI also exercised the power of discipline and
control over them as discussed in the preceding paragraphs.
From all indications, the Court finds that CBMI is a legitimate job
contractor, and thus, the employer of respondents.

2. NO, the respondents are not illegally dismissed.

As to the issue of illegal dismissal, the Court agrees with the finding of
the NLRC that respondents were not illegally dismissed from work. Records
show that while PPI denied the existence of an employer-employee relationship
with respondents, CBMI actually acknowledged that respondents were its
employees. CBMI likewise presented proof that it duly informed respondents of
their impending lay-off, yet they immediately filed the complaints before it had
the chance to re-deploy them. On the other hand, respondents did not even
refute CBMI's claim that they were informed of its decision to place them in
floating status pending their re-deployment. As such, respondents could not
23. ISSUES:
WON The CA correctly ruled that petitioners failed to comply with the
Bismonte et.al. v. Golden Sunset Resort G.R. No. 229326 filing and service requirements in connection with their appeal to the NLRC.
November 05, 2018 PERLAS-BERNABE, J. HELD:
“Thus, dismissal of appeals purely on technical grounds is frowned upon where the NO, the Court finds enough justification to relax technical rules of
policy of the court is to encourage hearings of appeals on their merits and the procedure in order to afford the litigants the amplest opportunity to properly
rules of procedure ought not to be applied in a very rigid, technical sense; rules of and justly determine their rights and obligations to one another.
procedure are used only to help secure, not override substantial justice. It is a far Although there is a preference of personal service and filing, it is only
better and more prudent course of action for the court to excuse a technical lapse mandatory when practicable. If not, then other modes of service must be
and afford the parties a review of the case on appeal to attain the ends of justice accompanied with a written explanation.
rather than dispose of the case on technicality and cause a grave injustice to the CA correctly pointed out that the appeal of petitioners contained no
parties, giving a false impression of speedy disposal of cases while actually written explanation when it was delivered by mail. However, the NLRC excused
resulting in more delay, if not a miscarriage of justice.” such absence of written explanation and allowed its admission.
FACTS: On the issue of whether the appeal was filed on time, the envelopethat
Petitioners, along with several others, filed several complaintsfor, inter contained petitioners' Notice of Appeal with Appeal Memorandum bears the
alia, illegal dismissal against respondents, asserting that they were dismissed post office stamp with the date of March 31, 2014, which is the tenth day after
without any just or authorized cause and without affording them due process. they received the copy of the LA decision.
Some claimed that they were constructively dismissed when their work In sum, the CA erred in setting aside the NLRC rulings and affirming the
schedule was unjustifiably reduced from six (6) to three (3) working days a LA ruling purely on technical grounds, i.e., that petitioners improperly availed of
week, leading to substantial reduction of income. filing their appeal via registered mail and/or failed to file their appeal on time.
Respondent Golden Sunset Resort and Spa posited that petitioners However, since the appellate court did not tackle the substantial issues of this
were not regular employees but were really seasonal employees due to the case, the Court deems it proper to remand the same to the CA for a resolution on
nature of their work (reducing hours work in rainy seasons) and, in addition, the merits.
were independent contractors, with the freedom in the performance of the
work so long as they accomplish them within the time they were contracted.
They added that they did neither had the power to dismiss nor control over the
performance of their staff.
The Labor Arbiter found no employer-employee relationship between
petitioners and respondents given that the former failed to prove that the latter:
(a) had the power to control petitioners' work performances; and (b) were
interested in the means and methods on how to perform their respective jobs.
The NLRC, on appeal, set aside the LA ruling. Notwithstanding
petitioners’ failure to prove they were illegally and constructively dismissed, the
NLRC ruled that they were entitled to their money claims because it ruled that
they were regular employees (considering petitioners had company issued IDs
stating that they were employees).
On appeal, The CA reinstated the LA decision based on the NLRC having
no jurisdiction. It pointed out that since petitioners received the said LA
Decision on March 21, 2014, they only had ten (10) days therefrom, or until
March 31, 2014, within which to file their appeal to the NLRC, pursuant to
Section 1, Rule VI of the 2011 NLRC Rules of Procedure. However, petitioners'
appeal memorandum shows that the NLRC only received the same on April 2,
2014, and as such, petitioners failed to file their appeal on time. It also pointed
out that the PAO office representing the petitioners were in a close proximity
from the NLRC sub-regional branch.
24. YES. Under Section 10 of R.A. no. 8042, as amended by R.A. no. 10022, it
Augustin International Center Inc. v. Bartolome GR. No. 226578 explicitly provides that the LA has original and exclusive jurisdiction over
January 28, 2019 J. Perlas Bernabe claims arising out of employer-employee relations or by virtue of any law or
FACTS: contract involving Filipino workers for overseas employment. Jurisdiction is
Petitioners Bartolome and Yamat (Petitioners) applied as carpenter conferred by law and cannot be acquired or waived by agreement of the parties.
and tile setter at Augustin International Center, Inc. (AICI) who provides The SC also ruled that what the stipulation contemplates is an amicable
manpower to foreign corporations. They were eventually engaged by Golden settlement and not voluntary arbitration. The therein named third-party was
Arrow Company, Ltd., which had its office in Khartoum, Republic of Sudan. Their tasked merely to participate and not to decide the dispute. Considering that the
contract stated they would render service for not less than 24 months and that parties did not submit the present illegal termination case to the voluntary
all claims and complaints shall “be settled amicably with the participation of the arbitration mechanism, the dispute remained under the exclusive and original
LabourAttache or any authorized representative of the Philippine Embassy jurisdiction of the LA. Hence, the LA’s ruling in this case stands and AICI and Al
nearest the site of employment.” Mamoun are liable for the payment of the unexpired portion of petitioners’
Upon their arrival in Sudan sometime around March and April 2011, contract.
Golden Arrow transferred them to their sister company Al Mamoun Trading and
Investment Company (Al Mamoun), who then terminated them on May 2, 2012,
prompting their return to the Philippines. Upon return they filed a complaint
before the NLRC for illegal dismissal, breach of contract, and payment of the
unexpired portion of their contract.
AICI and Al Mamoun claimed that petitioners abandoned their duties.
The LA decided that petitioners were illegally dismissed and were
unable to prove that they abandoned their duties and that their dismissal was
for a just or authorized cause. AICI and Al Mamoun was ordered to pay P69,000
each, representing their salaries for the unexpired portion of the contract. AICI
and Al Mamoun appealed.
The NLRC affirmed the LA ruling. AICI and Al Mamoun failed to prove
by substantial evidence that petitioners’ termination was valid. AICI and Al
Mamoun filed a petition for certiorari before the CA.
The CA denied the petition. It held that AICI and Al Mamoun failed to
comply with procedural and substantive due process in dismissing the
petitioners. In their Motion for Reconsideration, AICI and Al Mamoun argued for
the first time that they were denied due process because they did not contest
their termination before the LabourAttache or any authorized representative of
the Philippine Embassy nearest the site of employment.
The CA denied the Motion for Reconsideration, explaining that as a rule,
termination disputes must be brought before the LA except when the parties
agree to voluntary arbitration under Article 262[275] of the Labor Code,
provided it is in unequivocal language. Even then, the CA concluded that the
contract’s wording “all disputes” is not sufficient to divest the LA of its
jurisdiction over termination disputes nor does “all claims and complaints”
remove the LA’s jurisdiction to decide whether petitioners were illegally
dismissed.
ISSUES:
WON the LA properly took cognizance of the case and ruled that AICI
and Al Mamoun was liable for petitioners’ illegal dismissal.
HELD:
25.
Telephilippines Inc. v. Jacolbe GR 233999
February 18, 2019 J. Perlas- Bernabe
Facts
Telephilippines (TP) is a corporation engaged in the business of providing
contact center services to its various offshore corporate clients through its
customer service representatives (CSRs). TP hired Jacolbe as a CSR tasked to
resolve customer's questions and issues promptly and efficiently, among others,
in accordance with set performance standards and protocol. Sometime in May
2009, TP assigned Jacolbe to its Priceline account. For TP to properly assess his
work performance, Jacolbe was required to meet the key performance metric
targets of, among others, an Average Handle Time (AHT) of 7.0 minutes or
below. The AHT refers to the average time spent by a CSR with the customer on
the phone. Jacolbe's supervisor, Mr. Philip Charles Go, issued an Incident Report
for failure of Jacolbe to hit the 7-minute AHT goal agreed upon for the week of
January while he was under TP's Performance Improvement Plan (PIP). Records
show that Jacolbe was placed under the PIP after he failed to meet the 7-minute
AHT target in two (2) previous instances.
Subsequently, TP's Human Resources Department (HRD) sent Jacolbe a letter
dated February 13, 2013 (Notice to Explain) informing him of its receipt of the
Incident Report, and further stating that his "work performance for the last 6
months is unsatisfactory due to [his J consistent failure to meet the [AHT] Goal
in spite of being enrolled in [its PIP]," which, if proven true, would constitute as
an offense against its code of conduct warranting the termination of his
employment. The Notice also directed him to explain, in writing, why he should
not be subjected to appropriate corrective action. In compliance with the
directive, Jacolbe submitted letters, explaining that since he was hired in 2007,
he had never intentionally disconnected a call to meet the prescribed AHT mark.
Unsatisfied with his explanations, TP issued Jacolbe a Letter (Notice of
Termination) dismissing him from work for failure to meet account specific
performance metrics or certification requirements under Section V.B.4 of its
Code of Conduct and Zero Tolerance Policy.
Aggrieved, Jacolbe filed a complaint 20 for illegal dismissal and monetary claims
against TP, pointing out that while the Incident Report noted his failure to hit
the 7-minute AHT mark in two (2) instances, TP dismissed him allegedly for
unsatisfactory work performance for the last six (6) months based on the HRD's
Notice to Explain. He argued that if indeed he committed the said infractions,
the same did not constitute serious misconduct warranting his dismissal.
LA Ruling
The LA found Jacolbe to have been illegally dismissed and ordered TP to pay
the latter P319,089.09, representing his backwages, separation pay in lieu of
reinstatement, moral and exemplary damages, as well as attorney's fees.
Accordingly, it held that Jacolbe's failure to meet the AHT target in the two (2)
cited instances cannot be construed to have been done habitually and grossly so
as to warrant the imposition of the penalty of dismissal. Dissatisfied, TP
appealed to the NLRC.
NLRC Ruling
The NLRC reversed and set aside the LA ruling and held Jacolbe's dismissal
valid. Contrary to the LA's findings, the NLRC found that Jacolbe had, in fact,
consistently failed to meet the 7-minute AHT mark, starting from January 2012
up to his dismissal in March 2013, in violation of company-prescribed work
standards. The NLRC noted that under TP's classification of offenses, such
violation is considered gross negligence punishable by termination of
employment on the fourth offense. Aggrieved, Jacolbe sought reconsideration
which the NLRC denied in a Resolution. Thus, he filed a petition for certiorari
before the CA.
CA Ruling
The CA set aside the NLRC ruling, and accordingly, ordered TP to reinstate
Jacolbe or pay him separation pay in lieu thereof, as well as full backwages,
inclusive of allowances, 13th month pay, salary differentials, holiday and rest
day premium pays, as well as service incentive leaves.
Issue
Whether or not the CA correctly set aside the NLRC ruling and accordingly, held
that Jacolbe was illegally dismissed.
Ruling
NO. The Court finds that the NLRC Decision in this case was supported by
substantial evidence and is consistent with law and jurisprudence as to the
issues raised in the petition. Hence, the CA erroneously ascribed grave abuse of
discretion on the part of the NLRC in declaring that Jacolbe was validly
dismissed. Accordingly, the NLRC's ruling must be reinstated. In its petition, TP
maintains that the CA erred in declaring Jacolbe's dismissal invalid,
ratiocinating that the latter had consistently failed to meet the reasonable
company-imposed performance targets, specifically the 7- minute AHT mark,
for sixty-two (62) consecutive weeks despite the opportunities and assistance
extended to him to improve his performance. It argues that Jacolbe's continued
and persistent failure to meet the key performance metrics clearly illustrated
gross inefficiency which is analogous to gross and habitual neglect of duties
justifying his dismissal
A valid dismissal necessitates compliance with both substantive and procedural
due process requirements. Substantive due process mandates that an employee
may be dismissed based only on just or authorized causes under Articles 297,
298, and 299 (formerly Articles 282, 283, and 284) of the Labor Code, as
amended. On the other hand, procedural due process requires the employer to
comply with the requirements of notice and hearing before effecting the
dismissal. In all cases involving termination of employment, the burden of
proving the existence of the above valid causes rests upon the employer. The
quantum of proof required in these cases is substantial evidence as discussed
above.
The Court finds that TP sufficiently observed the standards of procedural due
process in effecting Jacolbe's dismissal. First, TP issued Jacolbe a Notice to
Explain specifying the ground for his possible dismissal, i.e., that his "work
performance for the last 6 months is unsatisfactory due to [his] consistent
failure to meet the [AHT] Goal in spite of being enrolled in [its PIP]," which, if
proven true, would constitute as an offense against its code of conduct
warranting the termination of his employment. The Notice also directed Jacolbe
to explain, in writing, why he should not be subjected to appropriate corrective
action. Second, Jacolbe was able to submit letters explaining his side, albeit he
did not fully address the charge of consistently failing to meet the AHT metric.
Third, a disciplinary conference was held on February 26, 2013 which provided
Jacolbe another opportunity to explain his side. And fourth, TP served a written
Notice of Termination after verifying the violation committed under Section
V.B.4 of its Code of Conduct and Zero Tolerance Policy, i.e., failure to meet
account specific performance metrics or certification requirements.
In fine, the Court finds ample evidence to support the findings of the NLRC that
Jacolbe's dismissal was valid. Accordingly, the CA committed reversible error in
substituting its own judgment with that of the NLRC. While security of tenure is
indeed constitutionally guaranteed, this should not be indiscriminately invoked
to deprive an employer of its management prerogatives and right to shield itself
from incompetence, inefficiency, and disobedience displayed by its employees,
as the Court finds in this case.
26.
Philippine Touristers v. MAS Transit Workers Union GR 201237
September 03, 2014 J. Perlas- Bernabe
Facts
On June 14, 2000, respondent Samahan ng ManggagawasaMas Transit-Anglo-
KMU (the Union) a union organized through the affiliation of certain MTI bus
drivers/conductors with the Alliance of Nationalist and Genuine Labor
Organizations filed a petition for certification election before the Department of
Labor and Employment (DOLE) - National Capital Region (NCR). The DOLE
granted the Union's petition, prompting MTI to file a motion for reconsideration
which was, however, denied.
Earlier, or on September 15, 2000, MTI decided to sell its passenger buses
together with its Certificate of Public Convenience (CPC) issued by the Land
Transportation Franchising and Regulatory Board (LTFRB) to PTI. Records
disclose that the sale of 50 passenger buses together with MTI's CPC was
approved by the LTFRB in a Decision dated December 28, 2000. As such, PTI
was issued a new CPC authorizing it to operate the service on the Baclaran-
Malabon via EDSA route using the passenger buses that were sold.
In light of the foregoing, MTI issued a "Patalastas"dated March 7, 2001 apprising
all of its employees of the sale and transfer of its operations to PTI, and the
former's intention to pay them separation benefits in accordance with law and
based on the resources available. The employees were also advised to apply
anew with PTI should they be interested to transfer. Thereafter, or on March 31,
2001, MTI sent each of the individual respondents a Memorandum informing
them of their termination from work, effective on said date, in line with the
cessation of its business operations caused by the sale of the passenger buses to
the new owners.
Claiming that the sale was intended to frustrate their right to self-organization
and that there was no actual transfer of ownership of the passenger buses as the
stockholders of MTI and PTI are one and the same, the Union, on behalf of its
members (respondents), filed a complaint for illegal dismissal, unfair labor
practice, i.e., illegal lock out, and damages against MTI and/or Tomas Alvarez
(Alvarez), and PTI and Yague (petitioners), before the NLRC.
In their defense, MTI and Alvarez denied that the individual respondents were
illegally dismissed or locked out, contending that the closure of its business
operations was valid and justified. They claimed that the company was forced to
sell its passenger buses to PTI as it was already suffering from serious financial
reverses; and that since there was nothing more to operate, it had no choice but
to cease operations.
LA Ruling
The LA ruled in favor of the respondents, finding MTI and petitioners guilty of
unfair labor practice, i.e., illegal lock out.
The LA held that MTI's closure of business and cessation of operations, allegedly
due to serious financial reverses, were actually made to subvert the right of its
employees to self-organization. In this relation, the LA pointed out that MTI
never disclosed its intent to conduct the said closure during the proceedings for
certification election but only after the refusal of the Union officers and
members to abandon their union, despite threats from its managerial personnel
to do so, under pain of termination.
NLRC Ruling
The NLRC rendered a Decision by dismissing the complaint against petitioners.
The modification was brought about by the NLRC's finding that there were no
factual and legal bases to hold petitioners jointly and severally liable with MTI
as the two corporations are separate and distinct juridical entities with different
stockholders and owners. To this end, it ruled that the individual respondents
were employees of MTI and not PTI, and that the sale of the passenger buses to
PTI was not simulated or fictitious since the deed evidencing said sale was duly
notarized and approved by the LTFRB in a Decision dated December 28, 2000.
Disagreeing with the NLRC, respondents filed a motion for reconsideration
which was, however, denied.
CA Ruling
The CA annulled and set aside the modified ruling of the NLRC finding the latter
to have acted with grave abuse of discretion in applying a liberal interpretation
of the rules on perfection of appeal.
Issue
Whether or not the CA erred in ascribing grave abuse of discretion on the part
of the NLRC when the latter gave due course to petitioners' appeal and
consequently issued a modified Decision absolving petitioner from liability.
Ruling
YES. It is not disputed that petitioners filed an appeal memorandum and
complied with the other requirements for perfecting an appeal, save for the
posting of the full amount equivalent to the monetary award of P12,833,210.00.
Instead, petitioners filed a motion to reduce bond claiming that they were
suffering from liquidity problems and, in support of their claim, submitted PTI's
AFS which showed a deficit in income. Since this claim was not amply
controverted by respondents, and considering further the significance of
petitioners' argument raised in their appeal, i.e., that there exists no employer-
employee relationship between PTI and the individual respondents, on the basis
of which lies their non-liability, the Court deems that the NLRC did not gravely
abuse its discretion in deciding that these circumstances constitute meritorious
grounds for the reduction of the bond.
The absence of grave abuse of discretion in this case is bolstered by the fact that
petitioners' motion to reduce bond was accompanied by a P5,000,000.00 surety
bond which was seasonably posted within the reglementary period to appeal. In
McBurnie v. Ganzon, the Court ruled that, "[f]or purposes of compliance with
[the bond requirement under the 2011 NLRC Rules of Procedure], a motion
shall be accompanied by the posting of a provisional cash or surety bond
equivalent to ten percent (10%) of the monetary award subject of the appeal,
exclusive of damages, and attorney's fees." Seeing no cogent reason to deviate
from the same, the Court deems that the posting of the aforesaid partial bond,
being evidently more than ten percent (10%) of the full judgment award of
P12,833,000.00, already constituted substantial compliance with the governing
rules at the onset.
In this relation, it must be clarified that while the partial bond was initially
tainted with defects, i.e., that it was initially issued in favor of MTI and not PTI,
and that the bonding company, SSSICI, had no authority to transact business in
all courts of the Philippines at that time, these defects had already been cured
by the petitioners' posting of Supersedeas Bond No. SS-B-10150, in the full
amount of P12,833,000.00, issued on November 8, 2004 by the Far Eastern
Surety & Insurance Company, Inc., in timely compliance with the NLRC's
September 30, 2004 Order.
Verily, the subsequent completion of the bond, in addition to the reasons above-
stated, behooves this Court to hold that the NLRC actually had sound bases to
take cognizance of petitioners' appeal. As the Court sees it, the NLRC's
reinstatement of petitioners' appeal in this case was merely impelled by the
doctrine that letter-perfect rules must yield to the broader interest of
substantial justice, as well as the Labor Code's mandate to "use every and all
reasonable means to ascertain the facts in each case speedily and objectively,
without regard to technicalities of law or procedure, all in the interest of due
process." It is important to emphasize that an act of a court or tribunal can only
be considered to be tainted with grave abuse of discretion when such act is
done in a capricious or whimsical exercise of judgment as is equivalent to lack
of jurisdiction, which clearly is not extant with respect to the NLRC's cognizance
of petitioners' appeal before it.
Thus, the CA's ruling granting the certiorari petition on this score must be
reversed and set aside. However, considering that there were other issues
raised in the said petition relating to the substantial merits of the case which
were left undecided,[75] a remand of the case for the CA's resolution of these
substantive issues remains in order, in line with the doctrine of hierarchy of
courts as espoused in the St. Martin Funeral Home v. NLRC ruling.
27
Cagayan Electric Power Light Company Inc. v. CEPALCO Employees Labor
Union Associated Labor Unions Trade
GR 211015, June 20, 2016
Facts:
Respondent is the duly certified bargaining representative of CEPALCO's
regular rank-and-file employees. On the other hand, CEPALCO is a domestic
corporation engaged in electric distribution in Cagayan de Oro and other
municipalities in Misamis Oriental; while CESCO is a business entity engaged in
trading and services. On February 19, 2007, CEPALCO and CESCO (petitioners)
entered into a Contract for Meter Reading Work where CESCO undertook to
perform CEPALCO's meter-reading activities. As a result, several employees
and union members of CEPALCO were relieved, assigned in floating positions,
and replaced with CESCO workers,prompting respondent to file a complaint for
ULP against petitioners.
Respondent alleged that when CEPALCO engaged CESCO to perform its meter-
reading activities, its intention was to evade its responsibilities under the
Collective Bargaining Agreement (CBA) and labor laws, and that it would
ultimately result in the dissipation of respondent's membership in
CEPALCO. Thus, respondent claimed that CEPALCO's act of contracting out
services, which used to be part of the functions of the regular union members, is
violative of Article 259 (c) of the Labor Code, as amended, governing ULP of
employers. It further averred that for engaging in labor-only contracting, the
workers placed by CESCO must be deemed regular rank-and-file employees of
CEPALCO, and that the Contract for Meter Reading Work be declared null and
void. chanrbleslaw
In defense, petitioners averred that CESCO is an independent job contractor and
that the contracting out of the meter-reading services did not interfere with
CEPALCO's regular workers' right to self-organize, denying that none of
respondent's members was put on floating status. Moreover, they argued that
the case is only a labor standards issue, and that respondent is not the proper
party to raise the issue regarding the status of CESCO's employees and, hence,
cannot seek that the latter be declared as CEPALCO's regular employees.
The Labor Arbiter (LA) dismissed the complaint for lack of merit. The LA found
that petitioners have shown by substantial evidence that CESCO carries on an
independent business of contracting services, in this case for CEPALCO's meter-
reading work, and that CESCO has an authorized capital stock of
P100,000,000.00, as well as equipment and materials necessary to carry out its
business. As an independent contractor, CESCO is the statutory employer of the
workers it supplied to CEPALCO pursuant to their contract. Thus, there is no
factual basis to say that CEPALCO committed ULP as there can be no splitting or
erosion of the existing rank-and-file bargaining unit that negates interference
with the exercise of CEPALCO workers' right to self-organize.
On appeal by respondent, the National Labor Relations Commission (NLRC)
affirmed the LA's ruling in toto, finding that the evidence proffered by
respondent proved inadequate in establishing that the service contract
amounted to the interference of the right of the union members to self-
organization and collective bargaining. Respondent's motion for
reconsideration awas denied hence, it filed a petition for certiorari before the
Court of Appeals (CA).
The CA partially granted respondent's certiorari petition and reversed and set
aside the assailed NLRC issuances.
Preliminarily, the CA found that CESCO was engaged in labor-only contracting in
view of the following circumstances: (a) there was absolutely no evidence to
show that CESCO exercised control over its workers, as it was CEPALCO that
established the working procedure and methods, supervised CESCO's workers,
and evaluated them; (b) there is no substantial evidence to show that CESCO
had substantial capitalization as it only had a paid-up capital of P51,000.00 as of
May 30, 1984, and there was nothing on CESCO's list of machineries and
equipment that could have been used for the performance of the meter-reading
activities contracted out to it; and (c) the workers of CESCO performed activities
that are directly related to CEPALCO's main line of business. Moreover, while
CESCO presented a Certificate of Registration with the Department of Labor and
Employment, the CA held that it was not a conclusive evidence of CESCO's status
as an independent contractor. Consequently, the workers hired by CESCO
pursuant to the service contract for the meter-reading activities were declared
regular employees of CEPALCO.chanrobleslaw
However, the CA found no substantial evidence that CEPALCO was engaged in
ULP, there being no showing that when it contracted out the meter-reading
activities to CESCO, CEPALCO was motivated by ill will, bad faith or malice, or
that it was aimed at interfering with its employees' right to self-
organize.51chanrobleslaw
Petitioners' motion for reconsideration was denied hence, the present petition.
Issue:
1. Whether or not the union has legal standing to demand regularization
for the employees of the contractor
 2. Whether or not there is a labor only contracting
Held:
The petitions are partly meritorious.
Labor-only contracting is an arrangement where the contractor, who does not
have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, supplies workers to an employer
and the workers recruited are performing activities which are directly related
to the principal business of such employer.
"Substantial capital or investment" refers to capital stocks and subscribed
capitalization in the case of corporations, tools, equipment, implements,
machineries and work premises, actually and directly used by the contractor or
subcontractor in the performance or completion of the job, work or service
contracted out.
The "right to control" shall refer to the right reserved to the person for whom
the services of the contractual workers are performed, to determine not only
the end to be achieved, but also the manner and means to be used in reaching
that end.
Labor-only contracting is considered as a form of ULP when the same is devised
by the employer to "interfere with, restrain or coerce employees in the exercise
of their rights to self-organization. Article 259 (c) of the Labor Code, as
amended, which enumerates certain prohibited activities constitutive of ULP,
provides that Unfair Labor Practices of Employers is unlawful where an
employer commits contract out services or functions being performed by union
members when such will interfere with, restrain or coerce employees in the
exercise of their rights to self-organization.
The Court agrees with the CA that CEPALCO was engaged in labor-only
contracting as the subject contracts with CESCO fit the criteria provided for in
Section 5 of DO 18-02 prohibiting labor-only contracting. In the case at bar,
petitioners failed to show that CESCO has substantial capital or investment
which relates to the job, work or service to be performed. There is no available
document to show CESCO's authorized capital stock at the time of
the contracting out of CEPALCO's meter-reading activities to CESCO on February
19, 2007. As it is, the increases in its authorized capital stock and paid-up
capital were only made after November 26, 2008, hence, are only relevant with
regard to the time CEPALCO contracted out its warehousing works to CESCO on
January 5, 2010. Since the amount of CESCO's authorized capital stock at the
time CEPALCO contracted out its meter-reading activities was not shown, the
Court has no means of determining whether it had substantial capital at the
time the contract therefor was entered into. Furthermore, the list of CESCO's
office equipment, furniture and fixtures, and vehicles offered in evidence by
petitioners does not satisfy the requirement that they could have been used in
the performance of the specific work contracted out, i.e., meter-reading service.
As the CA aptly pointed out, the tools and equipment utilized by CESCO in the
meter-reading activities are owned by CEPALCO, emphasizing the fact that
CESCO has no basic equipment to carry out the service contracted out by
CEPALCO.
More significantly, records are devoid of evidence to prove that the work
undertaken in furtherance of the meter-reading contract was made under the
sole control and supervision of CESCO. Instead, as notedby the CA, it was
CEPALCO that established the working procedure and methods and supervised
CESCO's workers in their tasks.
The foregoing findings notwithstanding, the Court, similar to the CA and the
labor tribunals, finds that CEPALCO's contracting arrangements with CESCO did
not amount to ULP. This is because respondent was not able to present any
evidence to show that such arrangements violated CEPALCO's workers' right to
self-organization, which, as above-mentioned, constitutes the core of ULP.
Records do not show that this finding was further appealed by
respondent. Thus, the complaints filed by respondent should be dismissed with
finality.
SC also observes that while respondent did ask for the nullification of the
subject contracts between petitioners, and even sought that the employees
provided by CESCO to CEPALCO be declared as the latter's own employees,
petitioners correctly argue that respondent is not a real party-in-interest and
hence, had no legal standing insofar as these matters are concerned.
WHEREFORE, the petitions are PARTLY GRANTED. The portions of the
Decisions and Resolutions of the Court of Appeals (CA) in CA-G.R. SP No. 03169-
MIN and CA-G.R. SP No. 04296-MIN declaring that the workers hired by CESCO,
pursuant to the contracts subject of these cases, are regular employees of
CEPALCO, and that the latter is responsible to said workers in the same manner
and extent as if those workers were directly employed by CEPALCO are
hereby DELETED. The rest of the CA Decisions stand.
28.
Montallana v. La Consolacion College Manila
GR 208890, December 8, 2014
Facts:
Montallana was a faculty member of La Consolacion's College of Arts and
Sciences.[
On January 16, 2009, Mrs. Nerissa D. Del Fierro-Juan (Juan), the Assistant Dean
of the College of Arts and Sciences and the immediate superior of Montallana,
filed a formal administrative complaint with La Consolacion against Montallana,
charging him of: (a) oral defamation (or slander); (b) disorderly conduct in the
school premises; and (c) discourteous/indecent behavior or using profane or
obscene language in addressing co-employees, superiors, or anybody within the
school premises.
After due investigation, La Consolacion's fact-finding committee found
Montallana guilty of serious misconduct in making derogatory and insulting
remarks about his superior, aggravated by the fact that he made such remarks
in a loud voice so that Juan would hear them.While noting that the foregoing
may be considered as a just cause for Montallana's termination, the committee
observed that it was his first offense and stressed on the reformative and
redemptive facets of the case. In fine, Montallana was only meted the penalty of
suspension without pay for a period of two (2) months and directed him to
submit a written public apology to Juan in a tenor satisfactory to her and La
Consolacion's Human Resource Department (HRD).
Montallana sought reconsideration of his suspension and explained that a
written public apology was inappropriate at that time in view of the pendency
of a criminal complaintfor grave oral defamation filed by Juan against him
before the City Prosecutor's Office. He mentioned that his issuance of a written
public apology while the criminal case was being heard might incriminate
himself, adding too that it was his lawyer who advised him to invoke his right
against self-incrimination.
The request having been denied by La Consolacion's President, , Montallana
filed a complaint for illegal suspension and unfair labor practice, with prayer for
payment of salaries during the period of suspension, and moral and exemplary
damages against respondents La Consolacion and Mora before the NLRC
The Labor Arbiter (LA) ruled in favor of Montallana, holding that his actions did
not constitute serious misconduct.Hence, Montallana's suspension from
employment was declared illegal and respondents La Consolacion and Mora
were ordered to pay Montallana the amount of P48,000.00 as his salary during
the period of suspension.
On Appeal, the NLRC disagreedwith the findings of the LA and found
Montallana'sacts to be constitutive of serious misconduct and against the rule of
honor and decency expected of any teacher.While it found sufficient basis to
impose the penalty of termination, the NLRC nonetheless sustained the two (2)-
month suspension in deference to the school's prerogative to discipline its
employees.Montallana moved for reconsiderationbut was denied by the NLRC.
Montallana no longer elevated the matter to the CA and the NLRC's decision
became final and executory on February 28, 2011.
Thereafter, on June 1, 2011, La Consolacion, through its HRD Director,
respondent Albert D. Manalili (Manalili), directed Montallana to explain in
writing why he should not be dismissed for failure to submit his written public
apology which formed part of the disciplinary sanction that was sustained with
finality by the NLRC.
In a letterdated June 9, 2011, Montallana begged for La Consolacion's
indulgence, explaining that he had no intention of defying the directive to
submit a written public apology and that his inability to comply therewith was,
to reiterate, only in view of the pendency of the criminal case against him. He,
nonetheless, expressed his willingness to comply with the directive once the
said case was resolved with finality. Finding Montallana's written explanation
unsatisfactory, Manalili terminated him from work on June 13, 2011.
Asserting that his dismissal for failure to submit a written public apology was
unjustified and was, in fact, connected to his position as an officer of La
Consolacion's newly formed and recognized Union, Montallana filed a
complaint for illegal dismissal with money claims against respondents La
Consolacion, Mora, and Manalili.
In respondents' defense,they contended that since the directive to apologize
was part of the penalty imposed on Montallana, his refusal and/or failure to
comply merited further sanctions.They denied having dismissed Montallana for
his union activities, pointing out that even the Union President agreed to his
suspension for his misbehavior.]
The LA dismissed Montallana's complaint, holding that his refusal to apologize
in light of his chosen profession as a teacher and La Consolacion's right to
maintain a certain standard of behavior among its faculty, who serve as models
for its students was tantamount to serious misconduct and, hence, warranted
his termination.
On Appeal, the NLRC reversed and set aside the LA's verdict, and thus, ordered
respondents to reinstate Montallana and to pay him backwages from the time
he was illegally dismissed up to his reinstatement.
This prompted the filing of a petition for certioraribefore the CA. The CA gave
due course to respondents' petition and eventually reversed and set aside the
NLRC's Decision. It found that Montallana deliberately refused to obey the
directive of the respondents to apologize and that the pendency of the criminal
case against him was not sufficient justification to excuse him from compliance.
It observed that the said directive was an integral part of his punishment for
serious misconduct, which had already been sustained with finality by the NLRC
in the illegal suspension case.Further, the CA agreed with the LA that La
Consolacion, as an educational institution, has the right to maintain and expect a
certain standard of behavior from its faculty, as they serve as role models for its
students.All told, the CA was satisfied that Montallana's employment was
terminated for a just and legal cause.
Issue:
Whether or not Montallana's termination from work was lawful and justified.
Held:
The petition is meritorious.
"Willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work" is one of the just causes to
terminate an employee under Article 296 (a) (formerly Article 282 [a]) of the
Labor Code. In order for this ground to be properly invoked as a just cause for
dismissal, the conduct must be willful or intentional, willfulness being
characterized by a wrongful and perverse mental attitude.
to apologize was attended by a "wrong and perverse mental attitude rendering
the employee's act inconsistent with proper subordination," which would
warrant his termination from employment.
Besides, even on the assumption that there was willful disobedience, still, the
Court finds the penalty of dismissal too harsh. In the same vein, records are
bereft of any showing that Montallana's failure to apologize was being punished
as such.
In fine, since respondents failed to prove, by substantial evidence, that
Montallana's dismissal was based on a just or authorized cause under the Labor
Code or was clearly warranted under La Consolacion's Administrative Affairs
Manual, the Court rules that the dismissal was illegal.
WHEREFORE, the petition is GRANTED. The Decision dated May 31, 2013 and
the Resolution dated August 30, 2013 of the Court of Appeals in CA-G.R. SP No.
127988 are hereby REVERSED and SET ASIDE. Accordingly, the Decision dated
July 31, 2012 and the Resolution dated October 16, 2012 of the National Labor
Relations Commission in NLRC LAC No. 02-000556-12, declaring petitioner Joel
N. Montallana (Montallana) to have been illegally dismissed,
are REINSTATED with the MODIFICATION deleting the order for respondents
Sr. Imelda A. Mora and Albert D. Manalili to pay Montallana his backwages.

In the case at bar, respondents failed to prove, by substantial evidence, that

Montallana's non-compliance with respondents' directive to apologize was
"willful or intentional." The Court finds itself in complete agreement with the
NLRC that the disobedience attributed to Montallana could not be justly
characterized as "willful" within the contemplation of Article 296 of the Labor
Code, in the sense above-described.

As culled from the records, Juan also filed a criminal complaint for grave oral
defamation for the utterances he made arising from the same incident before
the Manila City Prosecutor's Office. In the honest belief that issuing a letter of
apology would incriminate him in the said criminal case and upon the advice of
his own lawyer at that Montallana wrote to respondents and voluntarily
communicated that he was willing to issue the required apology, but only had to
defer the same in view of his legal predicament. As the Court sees it, the tenor of
his letters, and the circumstances under which they were taken, at the very
least, exhibited Montallana's good faith in dealing with respondents. This,
therefore, negates the theory that his failure to abide by respondents' directive
29.
LIBERAL INTERPRETATION OF THE LAW
WILLIAM GO QUE CONSTRUCTION AND/OR WILLIAM GO
QUE, Petitioner, v. COURT OF APPEALS AND DANNY SINGSON, RODOLFO
PASAQUI,1 LENDO LOMINIQUI,AND JUN ANDALES, Respondents.
G.R. No. 191699, April 19, 2016
DECISION
PERLAS-BERNABE, J.:
Facts
Private respondents filed complaints for illegal dismissal against
petitioner William Go Que Construction and/or William Go Que (petitioner)
before the National Labor Relations Commission (NLRC), National Capital
Region-North Sector Arbitration Branch, claiming that they were hired as
steelmen on various dates, and were regular employees of petitioner until
their illegal dismissal on June 3, 2006. Moreover, they alleged that petitioner
failed to pay their monetary benefits, such as service incentive leave pay, holiday
pay, and 13th month pay.
For his part, petitioner averred that private respondents were hired as
project employees, and were informed of the specific period or phase of
construction wherein their services were needed. Sometime in May 2006,
petitioner learned that some workers were getting excess and cutting unused
steel bars, and selling them to junk shops, prompting him to announce that he
will bring the matter to the proper authorities. Thereafter, private respondents
no longer reported for work, and were identified by the other workers as the
thieves.
Meanwhile, petitioner filed a complaint for theft against private
respondents and a certain Jimmy Dulman before the Office of the City Prosecutor,
Quezon City. After preliminary investigation, the investigating prosecutor
found probable cause against themand filed the corresponding
Information before the Regional Trial Court of Quezon City.
The LA Ruling
In a Decision, the Labor Arbiter (LA) found petitioner to have illegally
dismissed private respondents, and declared them to be regular employees
entitled to reinstatement to their former positions without loss of seniority rights
and backwages.
The LA rejected petitioner's claim that private respondents were contractual or
project employees, considering that petitioner: (a) failed to present any written
contract duly signed by private respondents containing details such as the work or
service to be rendered, the place of work, the wage rate, and the term or
duration of employment; (b)continuously employed private respondents to
perform the same tasks for a period of two (2) to eight (8) years; and (c)failed to
comply with the mandatory requirement of submitting termination reports to the
appropriate Department of Labor and Employment (DOLE).
The LA likewise rejected petitioner's claim that private respondents
have abandoned their jobs in the absence of written notice requiring them to
explain why they should not be dismissed on the ground of abandonment. On
the other hand, the LA denied private respondents' monetary claims for lack of
factual basis.16
The NLRC Ruling
In a Decision (December 8, 2008 Decision), the NLRC reversed and set
aside the LA ruling, holding that private respondents were validly dismissed
as they stole from petitioner. It noted the Resolution of the Quezon City
Prosecutor's Office finding probable cause for theft against the private
respondents and that the latter abandoned their employment after they were
identified by their former co-workers as the thieves. However, considering
petitioner's failure to accord them procedural due process, the NLRC
ordered him to pay each of the private respondents the amount of
P5,000.00 as nominal damages.
Dissatisfied, private respondents moved for reconsideration, 3 which the NLRC
denied in a Resolutiondated March 31, 2009, prompting them to elevate their
case to the CA via a petition for
The CA Proceedings
In a Resolution, the CA granted private respondents' motion
but noted that the Affidavit of Service and the Verification/Certification of Non-
Forum Shopping30 contained a defective jurat. Thus, private respondents were
directed to cure the defects within five (5) days from notice.
 the CA required private respondents anew to submit a
Verification/Certification of Non-Forum Shopping with a properly
accomplished jurat indicating competent evidence of their identities.
CA held that the photocopies of the IDs submitted by Singson, Pasaqui,
and Lominiqui, as well as their Joint-Affidavit 45 attesting to the identity of
Andales who was unable to submit his ID, served as competent evidence of
private respondents' identities and cured the defect in the Affidavit of Service,
and Verification/Certification of Non-Forum Shopping. Without giving due
course to the petition, the CA directed petitioner to submit his Comment within
ten (10) days from receipt of the Resolution, and private respondents to file
their Reply within five (5) days from receipt of the said Comment.
Unperturbed, petitioner moved for reconsideration, which the CA
denied in a Resolution48 dated February 5, 2010; hence, the instant petition.
ISSUE:
The issue for the Court's resolution is whether or not the CA acted with grave
abuse of discretion in refusing to dismiss the petition for certiorari before
it on the ground of non-compliance with the requirements of verification
and certification against forum shopping.
HELD:
The petition is meritorious.
The instant controversy revolves on whether or not the CA gravely abused its
discretion in holding that private respondents substantially complied with the
requirements of a valid verification and certification against forum shopping.
Section 4, Rule 7 of the Rules of Civil Procedure states that "[a] pleading
is verified by an affidavit that the affiant has read the pleading and that the
allegations therein are true and correct of his personal knowledge or based on
authentic records." "A pleading required to be verified which x xx lacks a proper
verification, shall be treated as an unsigned pleading."
On the other hand, Section 5, Rule 7 of the Rules of Civil Procedure provides that
"[t]he plaintiff or principal party shall certify under oath in the complaint or
other initiatory pleading asserting a claim for relief, or in a sworn certification
annexed thereto and simultaneously filed therewith: (a) that he has not
theretofore commenced any action or filed any claim involving the same issues
in any court, tribunal or quasi-judicial agency and, to the best of his knowledge,
no such other action or claim is pending therein; (b) if there is such other
pending action or claim, a complete statement of the present status thereof; and
(c) if he should thereafter learn that the same or similar action or claim has
been filed or is pending, he shall report that fact within five (5) days therefrom
to the court wherein his aforesaid complaint or initiatory pleading has been
filed." "Failure to comply with the foregoing requirements shall not be
curable by mere amendment of the complaint or other initiatory pleading
but shall be cause for the dismissal of the case without prejudice, unless
otherwise provided x xx."
In this case, it is undisputed that the Verification/Certification against Forum
Shopping attached to the petition for certiorari in CA-G.R. SP No. 109427 was
not accompanied with a valid affidavit/properly certified under oath. This was
because the jurat thereof was defective in that it did not indicate the pertinent
details regarding the affiants' (i.e., private respondents) competent evidence of
identities.
Evidently, not being documents of identification issued by an official
agency, the photocopies of the IDs 64of private respondents Singson,
Pasaqui, and Lominiqui from La Vista Association, Inc., R.O. Barra Builders
& Electrical Services, and St. Charbel Executive Village, respectively, do not
constitute competent evidence of their identities under Section 12 (a),
Rule II of the 2004 Rules on Notarial Practice.
In the same vein, their Joint-Affidavit identifying Andales and
assuring the CA that he was a party-litigant is not competent evidence of
Andales's identity under Section 12 (b), Rule II of the same rules,
considering that they (i.e., Singson, Pasaqui, and Lominiqui) themselves are
privy to the instrument, i.e., the Verification/Certification of Non-Forum
Shopping, in which Andales's participation is sought to be proven. To note,
it cannot be presumed that an affiant is personally known to the notary
public; the jurat must contain a statement to that effect.
Tellingly, the notarial certificate of the Verification/Certification of
Non-Forum Shoppingattached to private respondents' petition before the CA did
not state whether they presented competent evidence of their identities, or that
they were personally known to the notary public, and, thus, runs afoul of the
requirements of verification and certification against forum shopping
under Section 1,68 Rule 65, in relation to Section 3, 69 Rule 46, of the Rules
of Court.
In Fernandez v. Villegas70 (Fernandez), the Court pronounced that non-
compliance with the verification requirement or a defect therein "does not
necessarily render the pleading fatally defective. The court may order its
submission or correction or act on the pleading if the attending circumstances are
such that strict compliance with the Rule may be dispensed with in order that the
ends of justice may be served thereby." "Verification is deemed substantially the rule; it cannot be made without any valid reasons underpinning the
complied with when one who has ample knowledge to swear to the truth said course of action. To merit liberality, the one seeking such treatment must
of the allegations in the complaint or petition signs the verification, and show reasonable cause justifying its non-compliance with the Rules, and must
when matters alleged in the petition have been made in good faith or are establish that the outright dismissal of the petition would defeat the
true and correct." administration of substantial justice. Procedural rules must, at all times, be
Here, there was no substantial compliance with the verification followed, save for instances when a litigant must be rescued from an injustice
requirement as it cannot be ascertained that any of the private respondents far graver than the degree of his carelessness in not complying with the
actually swore to the truth of the allegations in the petition for certiorari in CA- prescribed procedure. The limited exception does not obtain in this case.ch
G.R. SP No. 109427 given the lack of competent evidence of any of their
identities. Because of this, the fact that even one of the private respondents
swore that the allegations in the pleading are true and correct of his knowledge
and belief is shrouded in doubt.
For the same reason, neither was there substantial compliance with the
certification against forum shopping requirement. In Fernandez, the Court
explained that "non-compliance therewith or a defect therein, unlike in
verification, is generally not curable by its subsequent submission or
correction thereof, unless there is a need to relax the Rule on the ground
of 'substantial compliance' or presence of'special circumstances or
compelling reasons.'" Here, the CA did not mention - nor does there exist - any
perceivable special circumstance or compelling reason which justifies the rules'
relaxation. At all events, it is uncertain if any of the private respondents certified
under oath that no similar action has been filed or is pending in another forum.
Case law states that "[v]erification is required to secure an assurance
that the allegations in the petition have been made in good faith or are true and
correct, and not merely speculative."
On the other hand, "[t]he certification against forum shopping is
required based on the principle that a party-litigant should not be allowed to
pursue simultaneous remedies in different fora."
The important purposes behind these requirements cannot be
simply brushed aside absent any sustainable explanation justifying their
relaxation. In this case, proper justification is especially called for in light of the
serious allegations of forgery as to the signatures of the remaining private
respondents, i.e., Lominiqui and Andales. Thus, by simply treating the
insufficient submissions before it as compliance with its Resolution dated
August 13, 2009 requiring anew the submission of a proper
verification/certification against forum shopping, the CA patently and grossly
ignored settled procedural rules and, hence, gravely abused its discretion.
All things considered, the proper course of action was for it to dismiss the
petition.

As a final word, it is well to stress that "procedural rules are not to be

disdained as mere technicalities that may be ignored at will to suit the
convenience of a party, x xx. Justice has to be administered according to the
Rules in order to obviate arbitrariness, caprice, or whimsicality."Resort to the
liberal application of procedural rules remains the exception rather than
30.
LOSS OF TRUST AND CONFIDENCE
VISAYAN ELECTRIC COMPANY EMPLOYEES UNION-ALU-TUCP AND
CASMERO MAHILUM, Petitioners, v. VISAYAN ELECTRIC COMPANY, INC.
(VECO), Respondent.
G.R. No. 205575, July 22, 2015
DECISION
PERLAS-BERNABE, J.:
FACTS:
Respondent Visayan Electric Company, Inc. (VECO) is a corporation
engaged in the supply and distribution of electricity in Cebu City and its
neighboring cities, municipalities, and barangays.
The Union is the exclusive bargaining agent of VECO's rank-and-file employees,
and Mahilum was the Union's president from October 2007 until his
termination from employment on October 28, 2010.darclaw
It was claimed that, before Mahilum was elected as union officer, he
was transferred from VECO's Public Relations Section to its Administrative
Services Section without any specific work.When he was elected as union
secretary, he was transferred to the Line ServicesDepartment as its Customer
Service Representative. At the time of his election as union president, VECO
management allegedly: (a)terminated active union members without going
through the grievance machinery procedure prescribed under the Collective
Bargaining Agreement (CBA); (b)refused to implement the profit-sharing scheme
provided under the same CBA; (c)took back the motorbikes issued to active union
members; and (d)revised the electricity privilege granted to VECO's employees.
Thus, on May 1, 2009, union members marched on the streets of
Cebu City to protest VECO's refusal to comply with the political and
economic provisions of the CBA. Mahilum and other union officers were
interviewed by the media, and they handed out a document containing their
grievances against VECO, the gist of which came out in local newspapers.
Following said incident, Mahilum was allegedly demoted as warehouse staff
to isolate him and restrict his movements.Other union officers were
transferred to positions that will keep them away from the general union
membership.
On May 8, 2009, Mahilum was issued a Notice to Explain why he
should not be terminated from service due to loss of trust and confidence,
as well as in violating the Company Code of Discipline, for causing the publication
of what VECO deemed as a libelous article. The other union officers likewise
received similar notices for them to explain their actions, which they justified as
merely an expression of their collective sentiments against the treatment of
VECO's management towards them.
The union officers were notified of the administrative
investigation to be conducted relative to the charges against them. Prior to
the said investigation, the Union filed on May 18, 2009, a Notice of Strike with the
National Conciliation and Mediation Board (NCMB) against VECO, which
facilitated a series of conferences that yielded a Memorandum of
Agreement (MOA) signed by the parties on August 7, 2009.The parties
likewise put to rest the critical issue of electricity privilege and agreed
before the NCMB on a conversion rate of said privilege to basic pay. Moreover,
the administrative investigation on the alleged libelous publication was deferred
until after the CBA renegotiation.
However, even before the conclusion of the CBA renegotiation, several
complaints for libel were filed against Mahilum and the other union officers by
VECO's Executive Vice President and Chief Operating Officer Jaime Jose Y.
Aboitiz.The administrative hearing on the charges against Mahilum resumed
with due notice to the latter, but he protested the same, referring to it as "moro-
moro" or "kangaroo" and insisting that the investigation should follow the
grievance machinery procedure under the CBA. Nonetheless, VECO's
management carried on with its investigation and, on the basis of the
findings thereof, issued a noticeterminating Mahilum from employment.
The NLRC Ruling
After submission of the respective position papers of both parties, the NLRC
dismissed the charge of unfair labor practice against VECO for lack of merit, and
declaring Mahilum's dismissal from employment as legal.
The NLRC found VECO to have acted within the bounds of law when it
administratively investigated the suspended or terminated employees and union
officers/members, instead of subjecting their respective cases to the grievance
machinery procedure provided in the CBA. In resolving apparently conflicting
provisions in the CBA, the NLRC applied the specific provision found in Section
13 of Article XIV that:
disciplinary actions shall be governed by the rules and regulations promulgated
by the company. Since the administrative investigations conducted by VECO
were found to have complied with procedural due process requirements, there
was no unfair labor practice to speak of.
On the matter of Mahilum's dismissal and the filing of criminal cases
against the union officers, the NLRC found no substantial evidence to prove
the imputation of union busting. Similarly unsubstantiated were the
allegations of fraud and deceit in hiring and contracting out services for
functions performed by union members, and declaring certain positions
confidential and transferring union members to other positions without prior
discussions, thereby allegedly interfering with their right to self-organization
and reducing union membership.
Finally, the NLRC ruled that Mahilum was terminated for a just and
valid cause under Article 282 (c) of the Labor Code, i.e., fraud or willful
breach of trust by the employee of the trust reposed in him by his employer or duly
authorized representative, when he, together with some other union officers,
caused the publication of a document which was deemed to have dishonored
and blackened the memory of former corporate officer Luis Alfonso Y. Aboitiz,
besmirched VECO's name and reputation, and exposed the latter to public
hatred, 9ontempt, and ridicule. R
Aggrieved, petitioners filed a motion for reconsiderationfrom the foregoing
NLRC Decision, which was denied in a Resolution
On October 18, 2011, petitioners elevated their case to the CA
on certiorari petition imputing grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the NLRC.
CA issued a Resolutiondirecting petitioners to show cause why
the certiorari petition should not be dismissed for having been filed "one day
behind the reglementary period." Atty. Jonas V. Asis (Atty. Asis) from the Seno
Mendoza & Associates Law Offices filed in behalf of petitioners a
Manifestation/Explanation49 claiming that "there was unintended
error/mistake in the computation of the period," and that there was no
prejudice caused to VECO by the "unintended one-day late filing of the
petition."e
The CA Ruling
petitioners had filed a Manifestation that they had terminated the services of
Atty. Asis and the Seno Mendoza & Associates as their counsel in this case, and
have contracted the services of Atty. Remigio D. Saladero, Jr. (Atty. Saladero) as
their new counsel. Consequently, the CA deemed as not filed the
Manifestation/Explanation filed by Atty. Asis, and dismissed
the certiorari petition for failure of Atty. Saladero to comply with the
Resolution
ISSUE:
Whether or not the CA erred in dismissing the certiorari petition on account of
the one-day delay in its filing despite the serious errors committed by the NLRC
in absolving VECO from the charge of unfair labor practice and illegal
dismissal of Mahilum.
HELD:
The petition is not impressed with merit. Under Section 4, Rule 65 of the
1997 Rules of Civil Procedure, certiorari should be filed "not later than sixty
(60) days from notice of the judgment, order or resolution" sought to be
assailed. The provisions on reglementary periods are strictly applied,
indispensable as they are to the prevention of needless delays, and are necessary
to the orderly and speedy discharge of judicial business. The timeliness of filing a
pleading is a jurisdictional caveat that even this Court cannot trifle with.
The Union admittedly received on August 18, 2011 the NLRC's July 29, 2011
Resolution, which denied their motion for reconsideration of the NLRC's June
30, 2011 Decision. Therefore, the 60-day period within which to file a petition
for certiorari ended on October 17, 2011. But the certiorari petition was filed
one day after, or on October 18, 2011. Thus, petitioners' failure to file said
petition within the required 60-day period rendered the NLRC's Decision
and Resolution impervious to any attack through a Rule 65 petition
for certiorari, and no court can exercise jurisdiction to review the same.
edarclaw
Petitioners adamantly insist, however, that the "one-day delay occasioned by an
honest mistake in the computation of dates should have been overlooked by the CA
in favor of substantial justice.” Their former counsel, Atty. Asis, allegedly thought
in good faith that the month of August has thirty (30) days, and that sixty (60)
days from August 18, 2011 is October 18, 2011.
The Court is not convinced.
First. The fact that the delay in the filing of the petition for certiorari was only
one day is not a legal justification for non-compliance with the rule requiring
that it be filed not later than sixty (60) days from notice of the assailed
judgment, order or resolution. The Court cannot subscribe to the theory that the
ends of justice would be better subserved by allowing a petition
for certiorari filed only one-day late. When the law fixes sixty (60) days, it cannot
be taken to mean also sixty-one (61) days, as the Court had previously declared
in this wise: [W]hen the law fixes thirty days [or sixty days as in the present
case], we cannot take it to mean also thirty-one days. If that deadline could be
stretched to thirty-one days in one case, what would prevent its being further
stretched to thirty-two days in another case, and so on, step by step, until
the original line is forgotten or buried in the growing confusion resulting
from the alterations? That is intolerable. We cannot fix a period with the
solemnity of a statute and disregard it like a joke. If law is founded on reason,
whim and fancy should play no part in its application.
Second. While it is always in the power of the Court to suspend its own rules, or
to except a particular case from its operation, the liberality with which equity
jurisdiction is exercised must always be anchored on the basic consideration
that the same must be warranted by the circumstances obtaining in the
case.63 However, there is no showing herein of any exceptional circumstance
that may rationalize a digression from the rule on timeliness of petitions.
ISSUE ON LOSS AND TRUST OF CONFINECE:
Delving now into the merits of Mahilum's dismissal, the Court holds
that the two requisites for a valid dismissal from employment have been met,
namely: (1) it must be for a just or authorized cause; and (2) the employee
must be afforded due process.e
VECO anchored its termination of Mahilum on Article 282 (c) of the Labor Code
and Articles 5.1 and 4.471of VECO's Company Code of Discipline, which read as
follows:L
Art. 282. Termination By Employer. - An employer may terminate an
employment for any of the following causes:
(c) fraud or willful breach of trust by the employee of the trust reposed in him
by his employer or duly authorized representative;
VECO found the following "Press Release",whichMahilum, together with
other union officers, caused to be published, as libelous for dishonoring and
blackening the memory of then corporate officer Luis Alfonso Y. Aboitiz, as well
as for maliciously impeaching and besmirching the company's name and
reputation
The Court has consistently held that "x xx loss of trust and confidence
must be based on willful breach of the trust reposed in the employee by his
employer. 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. Moreover, it must be based on
substantial evidence and not on the employer's whims or caprices or
suspicions[,] otherwise, the employee would eternally remain at the mercy of
the employer. x xx. And, in order to constitute a just cause for dismissal, the act
complained of must be work-related and show that the employee concerned is
unfit to continue working for the employer. In addition, loss of confidence x xx 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
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." Darc
Mahilum's attempt to rationalize his act as part of his "moral, legal or
social duty x xx to make known his legitimate perception" against VECO does
not, in any way, detract from the indubitable fact that he intentionally, knowingly,
and purposely caused the aforequoted "disparaging publication." Neither can he
hide behind the claim that the press release was simply "an expression of a valid
grievance." As the NLRC aptly pointed out, "(i)nstead of him and the rest of
the union officers bringing their sentiments and/or grievances against the
management to the proper forum, they intentionally, knowingly and
purposefully breached their employer's trust, by issuing x xx derogatory
statements and causing their publication,apparently, to incite public
condemnation against the latter." It bears noting that, while petitioners harp
on the refusal of VECO to follow the grievance machinery procedure under the
CBA, they conveniently forgot that they themselves shunned the very procedure
to which they now hang by a thread.
Moreover, the Court is unmoved by Mahilum's insistence that there
was nothing in his position which called for management's trust and
confidence in him. The NLRC, whose findings of facts and conclusions are
generally accorded not only great weight and respect but even with finality,
correctly held that, as Customer Service Representative, Mahilum occupied
a position of responsibility especially in dealing with VECO's clients. His
duties and responsibilities included: (1) accepting pertinent documents and
processing electrical service applications; (2) verifying authenticity of documents
submitted; (3) interviewing customer-applicant on applications, complaints, and
requests; (4) preparing job assignment of service inspectors; (5) filing all service
orders of inspectors; (6) assessing and accepting bill deposits; (7) preparing
and facilitating signing of Metered Service Contract; (8) issuing service order for
meter-related activities; (9) verifying existing account of customer-applicant
and approving account clearances; (10) accepting payment of bills from
customer-applicant for account clearances; and (11) processing payment
arrangements of customers.80 His performance was measured according to how
he: (1) handled customers' transactions; (2) made decisions in processing
customers' applications and payment arrangements; and (3) maintained
posture at all times in handling customers' transactions even wi.th angry
customers.
 It is clear from the foregoing that Mahilum was not an ordinary rank
and-file employee. His job entailed the observance of proper company
procedures relating to processing and determination of electrical service
applications culminating in the signing of service contracts, which constitutes the
very lifeblood of VECO's existence. He was further entrusted with handling the
accounts of customers and accepting payments from them. Not only that, it was
his duty to address customer complaints and requests. Being a frontliner of
VECO, with the most consistent and direct interaction with customers,
Mahilum's job involved a high degree of responsibility requiring a
substantial amount of trust and confidence on the part of his
employer, i.e., VECO.
However, with the derogatory statements issued by Mahilum that were
intended to incite, not just public condemnation of VECO, but antagonism and
obstruction against rate increases in electricity that it may be allowed, by law, to
fix, there can be no dispute that VECO, indeed, had lost its trust and confidence in
Mahilum and his ability to perform his tasks with utmost efficiency and loyalty
expected of an employee entrusted to handle customers and funds. Settled is the
rule that an employer cannot be compelled to retain an employee who is
guilty of acts inimical to the interests of the employer. A company has the
right to dismiss its employee if only as a measure of self-protection.
Thus, Mahilum was terminated for a just and valid cause.
Moreover, as declared by the NLRC, VECO complied with the procedural due
process requirements of furnishing Mahilum with two written notices before
the termination of employment can be effected. On May 8, 2009, Mahilum was
apprised of the particular acts for which his termination was sought; and, after
due investigation, he was given a Notice of Decision 84 on October 28, 2010
informing him of his dismissal from service.
The fact that Mahilum served the company for a considerable period of
time will not help his cause. It is well to emphasize that the longer an employee
stays in the service of the company, the greater is his responsibility for
knowledge and compliance with the norms of conduct and the code of discipline
in the company.
As a final word, while it is the state's responsibility to afford protection
to labor, this policy should not be used as an instrument to oppress
management and capital. In resolving disputes between labor and capital,
fairness and justice should always prevail. Social justice does not mandate that
every dispute should be automatically decided in favor of labor. Justice is to be
granted to the deserving and dispensed in the light of the established facts and
the applicable law and doctrine.r
WHEREFORE, the instant petition is hereby DENIED.

SO ORDERED.
31
Mergers of Corporation
Sumifru Corporation v. Baya
Facts: Baya alleged that he had been employed by AMSFC since February 5,
1985, and from then on, worked his way to a supervisory rank on September 1,
1997. As a supervisor, Baya joined the union of supervisors, and eventually,
formed AMS Kapalong Agrarian Reform Beneficiaries Multipurpose Cooperative
(AMSKARBEMCO), the basic agrarian reform organization of the regular
employees of AMSFC. In June 1999, Baya was reassigned to a series of
supervisory positions in AMSFC's sister company, DFC, where he also became a
member of the latter's supervisory union while at the same time, remaining
active at AMSKARBEMCO. Later on and upon AMSKARBEMCO's petition before
the Department of Agrarian Reform (DAR), some 220 hectares of AMSFC's 513-
hectare banana plantation were covered by the Comprehensive Agrarian
Reform Law. Eventually, said portion was transferred to AMSFC's regular
employees as Agrarian Reform Beneficiaries (ARBs), including Baya. Thereafter,
the ARBs explored a possible agribusiness venture agreement with AMSFC, but
the talks broke down, prompting the Provincial Agrarian Reform Officer to
terminate negotiations and, consequently, give AMSKARBEMCO freedom to
enter into similar agreement with other parties. In October 2001, the ARBs held
a referendum in order to choose as to which group between AMSKARBEMCO or
SAFFPAI, an association of pro-company beneficiaries, they wanted to belong
280 went to AMSKARBEMCO while 85 joined SAFFPAI.
When AMSFC learned that AMSKARBEMCO entered into an export agreement
with another company, it summoned AMSKARBEMCO officers, including Baya,
to lash out at them and even threatened them that the ARBs' takeover of the
lands would not push through. Thereafter, Baya was again summoned, this time
by a DFC manager, who told the former that he would be putting himself in a
"difficult situation" if he will not shift his loyalty to SAFFPAI; this
notwithstanding, Baya politely refused to betray his cooperative. A few days
later, Baya received a letter stating that his secondment with DFC has ended,
thus, ordering his return to AMSFC. However, upon Baya's return to AMSFC on
August 30, 2002, he was informed that there were no supervisory positions
available; thus, he was assigned to different rank-and-file positions instead.
On September 20, 2002, Baya's written request to be restored to a supervisory
position was denied, prompting him to file the instant complaint. On even date,
the DAR went to the farms of AMSFC to effect the ARBs' takeover of their
awarded lands.The following day, all the members of AMSKARBEMCO were no
longer allowed to work for AMSFC "as they have been replaced by newly hired
contract workers"; on the other hand, the SAFFPAI members were still allowed
to do so.
In their defense, AMSFC and DFC maintained that they did not
illegally/constructively dismiss Baya, considering that his termination from
employment was the direct result of the ARBs' takeover of AMSFC's banana
plantation through the government's agrarian reform program. They even
shifted the blame to Baya himself, arguing that he was the one who formed
AMSKARBEMCO and, eventually, caused the ARBs' aforesaid takeover.
The LA ruled in favor of Baya.
The NLRC reversed and set aside the LA ruling.
The CA set aside the NLRC ruling and reinstated that of the LA with
modification.
Issue: Whether or not Sumifru should be held solidarily liable with AMSFC's for
Baya's monetary awards.
Ruling: YES.
Section 80 of the Corporation Code of the Philippines clearly states that one of
the effects of a merger is that the surviving company shall inherit not only the
assets, but also the liabilities of the corporation it merged with.In this case, it is
worthy to stress that both AMSFC and DFC are guilty of acts constitutive of
constructive dismissal performed against Baya. As such, they should be deemed
as solidarily liable for the monetary awards in favor of Baya. Meanwhile,
Sumifru, as the surviving entity in its merger with DFC, must be held
answerable for the latter's liabilities, including its solidary liability with AMSFC
arising herein. Verily, jurisprudence states that "in the merger of two existing
corporations, one of the corporations survives and continues the business,
while the other is dissolved and all its rights, properties and liabilities are
acquired by the surviving corporation,"as in this case.
Therefore, Sumifru's contention that it should only be held liable for the period
when Baya stayed with DFC as it only merged with the latter and not with
AMSFC is untenable.
32.

Money Claims Burden of Proof

Jolo's Kiddie Carts/Fun4Kids/Marlou B. Cabili v. Caballa and Baustista

Facts: Respondents, Caballa and Baustista, and Colisao alleged that petitioners
hired them as staff members in the latter's business. Caballa and Bautista were
assigned to man petitioners' stalls in SM Bacoor and SM Rosario in Cavite,
respectively, while Colisao was assigned in several SM branches, the most
recent of which was in SM North EDSA. They were paid a daily salary that
reached ₱330.00 for a six (6)-day work week from 9:45 in the morning until
9:00 o'clock in the evening. They claimed that they were never paid the
monetary value of their unused service incentive leaves, 13th month pay,
overtime pay, and premium pay for work during holidays; and that when
petitioners found out that they inquired from the Department of Labor and
Employment about the prevailing minimum wage rates, they were prohibited
from reporting to their work assignment without any justification.

Petitioners’ denied dismissing respondents and Colisao, and maintained that

they were the ones who abandoned their work.They likewise maintained that
they paid respondents and Colisao their wages and other benefits in accordance
with the law and that their money claims were bereft of factual and legal bases.

Issue: Whether or not employer has the burden of proof in money claims.

Ruling: Yes.

The burden of proving payment of monetary claims rests on the employer, the
rationale being that the pertinent personnel files, payrolls, records, remittances
and other similar documents - which will show that overtime, differentials,
service incentive leave and other claims of workers have been paid - are not in
the possession of the worker but in the custody and absolute control of the
employer."
33.
ARMANDO N. PUNCIA v. TOYOTA SHAW
GR No. 214399 June 28, 2016
FACTS:
Petitioner Puncia worked as a messenger/collector for Toyota for respondent
Toyota Shaw since 2004. he was appointed as a marketing professional on
March 2, 2011 and was tasked to sell seven (7) vehicles as a monthly quota. He
however, failed to comply and sold only one vehicle for the month of July and
none for August.
Toyota was prompted to send Puncia a Notice to Explain. In reply, Puncia stated
that as a trainee, he was only required to sell three (3) vehicles per month; that
the month of May has always been a lean month; and that he was able to sell
four (4) vehicles in the month of September. Thereafter, a hearing was
conducted but Puncia failed to appear despite notice.
On October 18, 2011, Toyota sent Puncia a Notice of Termination, dismissing
him on the ground of insubordination for his failure to attend the scheduled
hearing and justify his absence. This prompted Puncia to file a complaint for
illegal dismissal with prayer for reinstatement and payment of backwages,
unfair labor practice, damages, and attorney's fees against Toyota and its
officers. He allege, among others, that he was terminated on the ground of
insubordination and not due to his failure to meet his quota.
In its defense, Toyota denied the harassment charges and claimed that there
was a valid cause to dismiss Puncia, considering his failure to comply with the
company's strict requirements on sales quota. It likewise stated that Puncia has
consistently violated the company rules on attendance and timekeeping as
several disciplinary actions were already issued against him.
LA, NLRC and CA Ruling
LA dismissed Puncia's complaint for lack of merit, but nevertheless, ordered
Toyota to pay Puncia his money claims consisting of his earned commissions,
13th month pay for 2011, sick leave, and vacation leave benefits. The LA found
that Puncia was dismissed not because of his involvement in the labor union,
but was terminated for a just cause due to his inefficiency brought about by his
numerous violations of the company rules on attendance from 2006 to 2010
and his failure to meet the required monthly quota. This notwithstanding, the
LA found Puncia entitled to his money claims, considering that Toyota failed to
deny or rebut his entitlement thereto.
NLRC reversed the LA ruling and, accordingly, declared Puncia to have been
illegally dismissed by Toyota, thus, entitling him to reinstatement and
backwages. The NLRC found that Toyota illegally dismissed Puncia from
employment as there were no valid grounds to justify his termination.
Moreover, the NLRC observed that Toyota failed to comply with the due process
requirements as: first, the written notice served on the employee did not
categorically indicate the specific ground for dismissal sufficient to have given
Puncia a reasonable opportunity to explain his side; and second,Puncia's
dismissal was not based on the same grounds cited in the Notice to Explain,
since the ground indicated was Puncia's failure to meet the sales quota, which is
different from the ground stated in the Notice of Termination, which is his
unjustified absence during the scheduled hearing.
On November 29, 2013, CA-Eleventh Division dismissed Puncia’s motion on
procedural grounds. Meanwhile, in a Resolution dated July 22, 2014, the CA-
Eleventh Division reconsidered its dismissal of Puncia’s petition for Certiorari,
and accordingly, reinstated the same and ordered Toyota to file its comment
thereto.
ISSUE:
Whether or not Toyota duly observed due process before dismissing Puncia
from his employment
RULING: No.
It is settled that "for a dismissal to be valid, the rule is that the employer must
comply with both substantive and procedural due process requirements.
Substantive due process requires that the dismissal must be pursuant to either
a just or an authorized cause under Articles 297, 298 or 299 (formerly Articles
282, 283, and 284) of the Labor Code. Procedural due process, on the other
hand, mandates that the employer must observe the twin requirements of
notice and hearing before a dismissal can be effected."
Anent the issue of procedural due process, Section 2 (I), Rule XXIII, Book V of
the Omnibus Rules Implementing the Labor Code[71]provides for the required
standard of procedural due process accorded to employees who stand to be
terminated from work, to wit:
Section 2. Standards of due process; requirements of notice. - In all cases of
termination of employment, the following standards of due process shall
be substantially observed:
I. For termination of employment based on just causes as defined in
Article 282 [now Article 297] of the Labor Code:
 (a) A written notice served on the employee specifying the
ground or grounds for termination, and giving to said
employee reasonable opportunity within which to explain his
side;
(b) A hearing or conference during which the employee
concerned, with the assistance of counsel if the employee so
desires, is given opportunity to respond to the charge,
present his evidence, or rebut the evidence presented against
him; and
(c) A written notice of termination served on the employee
indicating that upon due consideration of all the
circumstances, grounds have been established to justify his
termination.

In this case, at first glance it seemed like Toyota afforded Puncia procedural due
process, considering that: (a) Puncia was given a Notice to Explain; (b) Toyota
scheduled a hearing on October 17, 2011 regarding the charge stated in the
Notice to Explain; (c) on the date of the hearing, Puncia was able to submit a
letter addressed to Toyota's vehicle sales manager explaining his side, albeit he
failed to attend said hearing; and (d) Toyota served a written Notice of
Termination informing Puncia of his dismissal from work. However, a closer
look at the records reveals that in the Notice to Explain, Puncia was being made
to explain why no disciplinary action should be imposed upon him for
repeatedly failing to reach his monthly sales quota, which act, as already
adverted to earlier, constitutes gross inefficiency. On the other hand, a reading
of the Notice of Termination shows that Puncia was dismissed not for the
ground stated in the Notice to Explain, but for gross insubordination on account
of his non-appearance in the scheduled October 17, 2011 hearing without
justifiable reason. In other words, while Toyota afforded Puncia the opportunity
to refute the charge of gross inefficiency against him, the latter was completely
deprived of the same when he was dismissed for gross insubordination - a
completely different ground from what was stated in the Notice to Explain. As
such, Puncia's right to procedural due process was violated.

Hence, considering that Toyota had dismissed Puncia for a just cause, albeit
failed to comply with the proper procedural requirements, the former should
pay the latter nominal damages in the amount of P30,000.00 in accordance with
recent jurisprudence.
34.
35
Philsynergy Maritime Inc. et.al v. ColumbanoPagunsanGallano
Facts:
Respondent was employed by petitioner Philsynergy Maritime, Inc.
(Philsynergy), for and in behalf of petitioner Trimurti Shipmanagement Ltd. as
Master (or Ship Master) on board the vessel M.V. Pearl Halo under a six (6)-
month employment contract, with a basic monthly salary of US$1,847.00,
among others, and covered by a CBA. After undergoing the required pre-
employment medical examination (PEME) where the company-designated
physician declared him fit for sea duty, respondent, who was then 62 years old,
boarded the vessel.
On October 10, 2012, at around 10:00 in the evening and while in the
performance of his duties, respondent felt a sudden numbness on the left side of
his body and noticed that his speech was slurred. He was immediately provided
first aid and his condition allegedly improved after taking an Isordil tablet
which respondent had personally brought to the vessel. On the next day, his
symptoms recurred, but which did not improve despite taking another dose of
Isordil. Thus, respondent was brought to a local hospital in Poro, New
Caledonia, where he was confined for eleven (11) days and underwent physical
therapy. His CT scan revealed "middle cerebral artery deep right infarct without
associated hemorrhagic alteration," while his MRI (magnetic resonance
imaging) showed "ischemic cerebrovascular accident stroke ischemique, right
middle deep lobe."
As a result, respondent was repatriated on for further medical treatment and
referred to a company-designated physician, who diagnosed him to be suffering
from "Cerebrovascular Infarct Middle Cerebral Artery, Right and Hypertension."
The foregoing illnesses were declared by the company-designated physician to
be not work-related, ratiocinating that the risk factors for cerebrovascular
infarct (brain stroke or cerebrovascular accident [CVA]) were hypertension,
Diabetes Mellitus, smoking, lifestyle, dyslipidemia, family history, age and sex,
while the cause for hypertension was multifactorial in origin which included
"genetic predisposition, poor lifestyle, high salt intake, smoking, Diabetes
Mellitus, age and increased sympathetic activity."
After series of follow-up check-ups, the company-designated physician, in a
Medical Report, noted that respondent's treadmill stress test already showed
normal results and his blood pressure controlled. In addition, the company-
designated physician opined that his cardiovascular condition has stabilized,
but nonetheless advised him to continue home exercises/rehabilitation and
medication. Thus, respondent was directed to undergo a repeat laboratory
examination in time for his next follow-up session.
Meanwhile, the company-designated Cardiologist, explicated that the medicine
(Isordil) brought by respondent on board the vessel is a medication used to
treat patients with angina (chest pain), and that while the latter denied taking
any maintenance medications, the Cardiologist opined that possession of the
same suggests that "he may be experiencing some symptoms for which he was
given that medications previously."
On the other hand, claiming that his physical condition did not improve after
having suffered a brain stroke on board M.V. Pearl Halo while in the
performance of his duties, and that more than 120 days had lapsed from the
time he was repatriated, respondent sought for the payment of total disability
benefits from petitioners, which the latter refused. Thus, respondent filed a
complaint for total permanent disability benefits, sickness allowance, damages,
and attorney's fees against petitioners and Philsynergy's President, Capt.
Reynold L. Torres, before the NLRC.
Petitioners denied respondent's claim for disability benefits, averring in the
main that the latter fraudulently concealed a previously diagnosed medical
condition for which he was prescribed medication (Isordil), and which he failed
to disclose during his PEME; hence, he was disqualified to receive any
compensation and benefits provided under Section 20 (E) of the 2010
Philippine Overseas Employment Administration Standard Employment
Contract (2010 POEA-SEC).
They likewise contended that even on the assumption that there was no
concealment, petitioners were not liable under the CBA since respondent's
disability did not result from an accident, adding too that his illnesses,
Cerebrovascular Infarct Middle Cerebral Artery, Right and Hypertension, were
declared by the company-designated physician as not work-related, and
therefore, not compensable. Moreover, they averred that his claim for
reimbursement of medical expenses had already been paid.
Respondent sought the opinion of an independent physician, Dr. Efren R.
Vicaldo, a Cardiologist from the Philippine Heart Center, who, in a Medical
Certificate, declared his illnesses, hypertensive cardiovascular disease and
cerebrovascular disease, to be work aggravated/related, and assessed his health
and resulting disability as Impediment Grade VII (41.80%), on the justification
that respondent was required maintenance medication to control his
hypertension and to prevent future cardiovascular complications, as well as
change in his lifestyle. Thus, the independent physician declared him unfit to
resume work as seaman in any capacity.
Labor Arbiter’s Ruling:
The Labor Arbiter (LA) ruled in favor of respondent. The LA held that the
provision of the CBA on disability benefits that was incorporated in
respondent's employment contract was inapplicable since it covered only those
disabilities resulting from accidental injury. It likewise ruled that respondent's
diagnosed hypertension was work-related since it is listed as an occupational
disease under Section 32-B of the 2010 POEA-SEC, and that it was not capable of
partial disability assessment. Thus, the LA awarded respondent total disability
benefits notwithstanding the Grade VII impediment rating given by
respondent's independent physician, pointing out that the latter has also
declared the former unfit to resume work as a seafarer in any capacity.
NLRC’s Ruling:
NLRC affirmed the LA ruling. It ruled that his possession of Isordil did not ipso
facto mean that he was hypertensive and under medical maintenance, and that
even if respondent's hypertension pre-existed his employment, such would not
bar him from claiming disability compensation as he was clearly asymptomatic
of any cerebrovascular events before he boarded the vessel and that its
symptoms only manifested at the time he was subjected to the strains of work
and while in the performance of his duties. it pointed out that the CBA
contemplates all kinds of accident or unforeseen events that cause physical
harm or injury to the body, and that the illness suffered by respondent was an
unforeseen event that physically injured the brain.
CA Ruling:
The CA found no grave abuse of discretion on the part of the NLRC in awarding
total and permanent disability benefits in favor of respondent pursuant to the
CBA. The CA agreed that respondent's brain stroke was
work-aggravated/related which rendered him incapacitated to work.
Issue:
Whether or not the CA erred in upholding the NLRC's findings that respondent
is entitled to total and permanent disability benefits under the CBA.
Held:
It is settled that the entitlement of a seafarer on overseas employment to
disability benefits is governed by law, by the parties' contracts, and by the
medical findings. By law, the relevant statutory provisions are Articles 197 to
199 (formerly Articles 191 to 193) of the Labor Code in relation to Section 2 (a),
Rule X of the Amended Rules on Employee Compensation (AREC). By contract,
the material contracts are the POEA-SEC, the parties' Collective Bargaining
Agreement, if any, and the employment agreement between the seafarer and the
employer. In this case, respondent executed his employment contract with
petitioners during the effectivity of the 2010 POEA-SEC; hence, its provisions
are applicable and should govern their relations.
Section 20 (A) of the 2010 POEA-SEC provides that a seafarer shall be entitled
to compensation if he suffers from a work-related injury or illness during the
term of his contract. A work-related illness is defined as "any sickness as a
result of an occupational disease listed under Section 32-A of this Contract with
the conditions set therein satisfied."
SECTION 32-A. OCCUPATIONAL DISEASES
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; and
4 There was no notorious negligence on the part of the seafarer.
During the term of his contract and while in the performance of his duties as a
Ship Master, respondent undeniably suffered from brain stroke, a CVA, and
hypertension – both of which are found listed under Section 32-A, and
therefore, deemed work-related.
The Court clarifies that respondent's disability benefits should be awarded
pursuant to the provisions of the 2010 POEA-SEC, and not the CBA as held by
the NLRC and the CA. To be entitled to compensation in accordance with
Appendix 3 (Compensation Payments) of the CBA, a seafarer must suffer an
injury as a result of an accident, which is defined in jurisprudence as "an
unintended and unforeseen injurious occurrence; something that does not
occur in the usual course of events or that could not be reasonably anticipated;
an unforeseen and injurious occurrence not attributable to mistake, negligence,
neglect or misconduct. Accident is that which happens by chance or fortuitously,
without intention and design, and which is unexpected, unusual and
unforeseen."Here, respondent was suffering from an occupational disease;
hence, it cannot be said that respondent figured into an accident. Accordingly,
respondent is entitled to the total disability compensation under the 2010
POEA-SEC in the amount of US$60,000.00. Nevertheless, the CA correctly
granted the award of attorney's fees equivalent to ten percent (10%) of the
award, as the same is in accord with law and jurisprudence.
36
Deocariza v. Fleet Management Services Philippines
Facts:
Melchor BarcenasDeocarizawas initially hired in 2010 as Chief Officer by Fleet
Management Services Philippines., Inc., for and in behalf of its principal, Modern
Asia Shipping Corporation (collectively, respondents) on board the vessel, M.V.
Morning Carina, a car and motor carrier ship. On June 15, 2011, he was re-hired
by respondents for the same position under a six-month contract with a basic
monthly salary of US$1,350.00, exclusive of overtime pay and other benefits,
and covered by a Collective Bargaining Agreement (CBA). His duties entailed the
supervision in the loading and unloading of vehicles in the vessel. After
undergoing the required pre-employment medical examination (PEME), where
the company-designated physician declared him fit for sea duty, petitioner
boarded the vessel on July 19, 2011.
In the course of his employment, Deocariza complained of bruises on both
thighs, rashes on his neck, delayed healing of abrasion wound on his left
forearm, fever, sore throat, and loss of appetite. Thus, he was brought to the
SeacareMaritime Medical Center Pte., Ltd. (Seacare Maritime) in Singapore,
where he was noted to have "decreased hemoglobin, total white cell count and
platelet count on complete blood count" for which reason he was declared a
"high-risk patient with mechanical heart valves." Petitioner was thereafter
confined at the Parkway East Hospital's Intensive Care Unit in Singapore with
the following diagnosis: “to Consider Autoimmune Disease, Hypoplastic Anemia,
Viral induced Pantocytopenia and Acute Leukemia." He was medically
repatriated and was referred to a company-designated physician at the
Metropolitan Medical Center (MMC) who diagnosed him to be suffering from
"Aplastic Anemia."
In the Medical Report, the company-designated physician explained that the
cause of Aplastic Anemia is usually "idiopathic (unknown case)," and that the
specialist opined that "exposure to benzene and its compound derivatives may
predispose to development of such condition." Hence, the company-designated
physician expressed that the work-relatedness of petitioner's illness would
depend on his exposure to such factors. However, the company-designated
physician informed respondents that the petitioner no longer appeared at his
next scheduled follow-up session.
Meanwhile, claiming that his illness rendered him incapacitated to resume work
as a seafarer for more than 240 days, petitioner filed a complaintagainst
respondents, together with their President, respondent A.B.F. Gaviola, and
Treasurer/Director/Finance Manager, respondent Ma. Corazon D. Cruz, for the
payment of total and permanent disability benefits in accordance with the CBA,
in the amount of US$148,500.00, moral and exemplary damages, and attorney's
fees, before the NLRC. In support, petitioner presented among others, a
letter signed by Atty. German N. Pascua, Jr. (Atty. Pascua), National Vice
President and Chief Legal Counsel of the Philippine Seafarers' Union-ALU-TUCP-
ITF PSU-ITF, who pointed out that petitioner's illness is considered an
occupational disease.
In their defense, respondents countered that petitioner was disqualified from
claiming disability benefits as the latter knowingly concealed and failed to
disclose during his PEME that he had "mechanical heart valves" or artificial
heart valves that rendered him a "high-risk" worker, a vital information that
would have been considered in hiring him.
They added that the cause of his illness was not work-related, claiming that
while the cars loaded in the vessel contained gasoline which is said to have
benzene elements, the cars' engines were nonetheless always "OFF" during the
voyage and turned "ON" only during the loading and unloading of the vehicles in
the vessel; as such, petitioner could not have accumulated benzene elements in
his body given that the vessel was equipped with many big exhaust fans that
drive away the toxic fumes.Lastly, they contended that since petitioner
concealed his true health condition, his other money claims were without basis
and thus, moved for the dismissal of the complaint.
Labor Arbiter’s Ruling:
LA dismissed the complaint for failure of petitioner to establish that his illness
was work-related. The LA ruled that it was improbable for petitioner to be
poisoned by benzene, considering that the cars' engines were turned on during
loading and unloading only, and that such short period of exposure could not
have immediately caused petitioner's illness, adding too that petitioner was
provided with safety gears to prevent infusion of benzene into his body.LA held
that the issue of concealment was immaterial since it was not relevant to
petitioner’s illness.
NLRC’s Ruling:
NLRC agreed with the findings of the LA that Deocariza was not able to
discharge the burden of proving that his non-listed illness was work-related,
and that the same occurred during the term of his employment. It pointed out
that petitioner fraudulently concealed his artificial heart that disqualified him
from claiming disability benefits under the 2010 Philippine Overseas
Employment Administration-Standard Employment Contract (POEA-SEC) and
the CBA.
CA Ruling:
CA found no grave abuse of discretion on the part of the NLRC in sustaining the
finding that petitioner is not entitled to disability benefits as the latter failed to
prove by substantial evidence that his illness was work-related, and that he
acquired the same during the term of his last employment contract. It likewise
agreed that petitioner was barred from claiming disability benefits under
Section 20 (A) of the 2010 POEA-SEC, considering his failure to disclose his
artificial heart during his PEME which constitutes misrepresentation or
concealment.
Issue:
Whether or not the CA correctly held that petitioner is not entitled to total and
permanent disability benefits.
Held:
It is settled that the entitlement of a seafarer on overseas employment to
disability benefits is governed by law, by the parties' contracts, and by the
medical findings. By law, the relevant statutory provisions are Articles 197 to
199(formerly Articles 191 to 193) of the Labor Codein relation to Section 2 (a),
Rule Xof the Amended Rules on Employee Compensation. By contract, the
material contracts are the POEA-SEC, which is deemed incorporated in every
seafarer's employment contract and considered to be the minimum
requirements acceptable to the government, the parties' Collective Bargaining
Agreement, if any, and the employment agreement between the seafarer and
employer. In this case, petitioner executed his employment contract with
respondents during the effectivity of the 2010 POEA-SEC; hence, its provisions
are applicable and should govern their relations.
Pursuant to Section 20 (A) of the 2010 POEA-SEC, the employer is liable for
disability benefits when the seafarer suffers from a work-related injury or
illness during the term of his contract. Section 20 (A) of the 2010 POEA-SEC
provides that a seafarer shall be entitled to compensation if he suffers from a
work-related injury or illness during the term of his contract. A work-related
illness is defined as "any sickness as a result of an occupational disease listed
under Section 32-A of this Contract with the conditions therein satisfied."
In this case, petitioner was medically repatriated and diagnosed by the
company-designated physician to be suffering from "Aplastic Anemia." In
denying petitioner's disability claims, respondents argued that his illness was
not a listed disease under Section 32-A of the 2010 POEA-SEC, adding too that
the former was not able to present substantial evidence to prove the work-
relation of the illness.
Contrary to the claim of respondents, petitioner's illness is an occupational
disease listed under Sub-Item Number 7 of Section 32-A of the 2010 POEA-SEC,
which provides:
7. Ionizing radiation disease, inflammation, ulceration or malignant disease of
the skin or subcutaneous tissues of the bones or leukemia, or anemia of the
aplastic type due to x-rays, ionizing particle, radium or other radioactive
substances
a. Acute radiation syndrome
b. Chronic radiation syndrome
c. Glass Blower's cataract (Emphasis supplied)
Having sufficiently established by substantial evidence the reasonable link
between the nature of petitioner's work as Chief Officer and the illness
contracted during his last employment with no showing that he was notoriously
negligent in the exercise of his functions, the latter's ailment, as well as the
resulting disability, is a compensable work-related illness under Section 32-A of
the 2010 POEA-SEC.
In this regard, Section 20 (E) thereof mandates the seafarer to disclose all his
pre-existing illnesses or conditions in his PEME; failing in which shall disqualify
him from receiving disability compensation.
A seafarer who knowingly conceals a pre-existing illness or condition in
the PEME shall be liable for misrepresentation and shall be disqualified
from any compensation and benefits. This is likewise a just cause for
termination of employment and imposition of appropriate
administrative sanctions.
The Court, however, finds the findings of the NLRC anchored on pure
speculation. At the outset, it bears to point out that Section 20 (E) of the 2010
POEA-SEC speaks of an instance where an employer is absolved from liability
when a seafarer suffers a work-related injury or illness on account of the latter's
willful concealment or misrepresentation of a pre-existing condition or illness.
Thus, the burden is on the employer to prove such concealment of a pre-existing
illness or condition on the part of the seafarer to be discharged from any
liability. In this regard, an illness shall be considered as pre-existing if prior to
the processing of the POEA contract, any of the following conditions is present,
namely: (a) the advice of a medical doctor on treatment was given for such
continuing illness or condition; or (b) the seafarer had been diagnosed and has
knowledge of such illness or condition but failed to disclose the same during the
PEME, and such cannot be diagnosed during the PEME.
Records show that aside from the company-designated physician's diagnosis of
Aplastic Anemia, a rare and serious condition wherein there is a reduction in
the production of both red and white blood cells from the bone marrow in
humans,petitioner was also declared by a foreign doctor at Seacare Maritime in
Singapore to have "mechanical heart valves." While the company-designated
physician confirmed petitioner's Aplastic Anemia in the 2nd Medical
Report after having undertaken a bone marrow aspiration biopsy, the said
report failed to confirm the latter's mechanized heart valves. In fact, there is
nothing in the records to support such declaration given that mechanized heart
valves are implanted in patients with valvular heart disease.
37
ARIEL P. HORLADOR v. PHILIPPINE TRANSMARINE CARRIERS, INC.,
MARINE* SHIPMANAGEMENT LTD., AND CAPTAIN MARLON L. MALANAO
G.R. No. 236576, September 05, 2018
FACTS:
On April 18, 2012, respondent Philippine Transmarine Carriers, Inc. (PTCI) on
behalf of its foreign principal, respondent Marine Ship management Ltd.
(Marine), hiredpetitioner as a Chief Cook on board the vessel PRAIA for a period
of eight (8) months starting from his deployment on June 19, 2012.On January
3, 2013 and while on board the vessel, petitioner, while carrying provisions,
suddenly felt a severe pain on his waist, abdomen, and down to his left scrotum,
persistence of pain prompted him to be airlifted to a hospital in Belgium where
he was diagnosed with "infection with the need to rule out Epididymitis and
Prostatitis”. Petitioner was repatriated and upon arrival in the Philippines,
claimed he reported to PTCI and asked for referral for further treatment, but
was ignored. He sought treatment at Molino Doctors Hospital and was
diagnosed with a hernia.Petitioner consulted two other physicians who
similarly concluded that his illness permanently and totally prohibited him from
further working as a seaman due to his "Chronic prostatitis."Thus, he filed for
permanent and total disability benefits against PTCI, Marine, and respondent
Captain Marlon L. Malanao (crewing manager) who averred that petitioner is
not entitled to permanent and total disability benefits, contending that
petitioner: (a) was not medically repatriated as his discharge from the vessel
was due to contract completion; (b) failed to comply with the mandatory post-
deployment medical examination; and (c) failed to prove his allegation that he
had contracted and was diagnosed with hernia.
Labor Tribunals' Ruling:
Labor Arbiter (LA) dismissed petitioner's complaint for lack of merit.
NLRC reversed and set aside the LA's ruling, and accordingly, ordered
respondents to pay petitioner permanent and total disability benefits in the
amount of US$60,000.00 or its peso equivalent and ten percent (10%) thereof
as attorney's fees.The NLRC found that: (a) petitioner was medically
repatriated; (b) after medical repatriation, he tried reporting to PTCI for post-
employment medical examination, but was ignored; and (c) petitioner's
disability was indeed work-related and diagnosed to be permanent and total,
and thus, compensable.
Respondents moved for reconsideration,but were denied. Dissatisfied, they filed
a petition for certioraribefore the CA.
CA Ruling:
CA affirmed the NLRC ruling, with modification deleting the award of attorney's
fees.The CA found it appropriate to delete the award of attorney's fees for the
NLRC's failure to present the factual bases therefore.
Both parties moved for reconsideration, which were, however, denied, hence
this petition assailing the aforesaid deletion of attorney's fees.
ISSUE:
Whether or not the CA correctly deleted the award of attorney's fees in
petitioner's favor.
HELD:
No. There are two (2) commonly accepted concepts of attorney's fees - the
ordinary and extraordinary. In its ordinary concept, an attorney's fee is the
reasonable compensation paid to a lawyer by his client for the legal services the
former renders; compensation is paid for the cost and/or results of legal
services per agreement or as may be assessed. In its extraordinary concept,
attorney's fees are deemed indemnity for damages ordered by the court to be
paid by the losing party to the winning party. The instances when these may be
awarded are enumerated in Article 2208 of the Civil Code and is payable not to
the lawyer but to the client, unless the client and his lawyer have agreed that
the award shall accrue to the lawyer as additional or part of
compensation.Particularly, Article 2208 of the Civil Code reads:
Article 2208. In the absence of stipulation, attorney's fees and
expenses of litigation, other than judicial costs, cannot be recovered,
except:
(1) When exemplary damages are awarded;
(2) When the defendant's act or omission has compelled the
plaintiff to litigate with third persons or to incur expenses to
protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the
plaintiff;
(5) Where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiffs plainly valid, just and demandable
claim;
(6) In actions for legal support;
 (7) In actions for the recovery of wages of household helpers, laborers
and skilled workers;

(8) In actions for indemnity under workmen's compensation and

employer's liability laws;

(9) In a separate civil action to recover civil liability arising from a

crime;

(10) When at least double judicial costs are awarded;

(11) In any other case where the court deems it just and equitable that
attorney's fees and expenses of litigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must be

reasonable. (Emphases and underscoring supplied)

In labor cases involving employees’ wages and other benefits, the Court has
consistently held that when the concerned employee is entitled to the
wages/benefits prayed for, he/she is also entitled to attorney's fees amounting
to ten percent (10%) of the total monetary award due him/her.

In this case, suffice it to say that the CA erred in deleting the award of attorney's
fees, considering that petitioner was found to be entitled to permanent and total
disability benefits and was forced to litigate to protect his valid claim. Thus the
reinstatement of such award is in order.
38.
TOYOTA PASIG, INC. V. VILMA S. DE PERALTA
G.R. No. 213488, November 07, 2016
FACTS:
The instant case stemmed from a complaint for illegal dismissal, illegal
deduction, unpaid commission, annual profit sharing, damages, and attorney's
fees filed by respondent against petitioner and/or Severino C. Lim, Jnalyn P.
Lim, Jason Ian Yap, Jorge Tuason, Marissa Operañ a, and Arturo P. Lopez (Lim, et
al.) before the NLRC. Essentially, respondent alleged that petitioner initially
hired her as a cashier in March 1997 and worked her way up to the position of
Insurance Sales Executive (ISE). However, things turned sour when her
husband, Romulo "Romper" De Peralta, also petitioner's employee and the
President of the Toyota Shaw-Pasig Workers Union - Automotive Industry
Workers Alliance (TSPWU-AIWA), organized a collective bargaining unit
through a certification election. According to respondent, petitioner suddenly
dismissed from service the officials/directors of TSPWU-AIWA, including her
husband.
She was accused of "having committed various acts" relative to the processing
of insurance of three (3) units as "outside transactions" and claiming
commissions therefor, instead of considering the said transactions as "new
business accounts" under the dealership's marketing department and was
preventively suspended because of such charge. On February 3, 2012,
respondent received a Notice of Termination. In their defense, petitioner and
Lim, et al. maintained that respondent was dismissed from service for just cause
and with due process. They explained that respondent was charged and proven
to have committed acts of dishonesty and falsification. They further averred that
respondent's claims for commissions, tax rebates, and other benefits were
unfounded and without documentation and validation.
LA Ruling
LA dismissed the complaint for lack of merit. It found that respondent herself
admitted through her letter explanation to the Notice to Explain that she indeed
processed the insurance of units from petitioner's own dealership, and as a
result, received commissions which were rightly attributable to the dealership's
marketing department not being "outside transactions.”
NLRC Ruling
NLRC affirmed the LA ruling with modification finding petitioner liable to
respondent. The NLRC agreed with the LA's finding that respondent's act
justified her termination from employment. As such, respondent is not entitled
to back wages, separation pay, damages, and attorney's fees. However, with
regard to respondent's other monetary claims, the NLRC held petitioner liable
for the same as it failed to present documents showing that respondent is not
entitled to said claims, as per her computation.
The CA Ruling
CA dismissed the consolidated petitions and, accordingly, affirmed the NLRC
ruling in Toto.
ISSUE:
whether or not CA erred in awarding respondent her monetary claims as they
do not partake of unpaid wages/salaries, as well as the labor standard benefits
of employees provided by law.
HELD:
No, the petition is without merit.
Section 97 (f) of the Labor Code reads:
(f) "Wage" paid to any employee shall mean the remuneration of
earnings, however designated, capable of being expressed in
terms of money, whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of calculating the same,
which is payable by an employer to an employee under a written or
unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and
reasonable value, as determined by the Secretary of Labor and
Employment, of board, lodging, or other facilities customarily furnished
by the employer to the employee. "Fair and reasonable value" shall not
include any profit to the employer, or to any person affiliated with the
employer. (Emphasis and underscoring supplied)
In Iran v. NLRC, 352 Phil. 261 (1998), the Court thoroughly explained:
This definition explicitly includes commissions as part of wages. While
commissions are, indeed, incentives or forms of encouragement to
inspire employees to put a little more industry on the jobs particularly
assigned to them, still these commissions are direct remunerations for
services rendered. In fact, commissions have been defined as the
recompense, compensation or reward of an agent, salesman, executor,
trustee, receiver, factor, broker or bailee, when the same is calculated
as a percentage on the amount of his transactions or on the profit to the
principal. The nature of the work of a salesman and the reason for such
type of remuneration for services rendered demonstrate clearly that
commissions are part of a salesman’s wage or salary.
In this case, respondent’s monetary claims, such as commissions, tax rebates for
achieved monthly targets, and success share/profit sharing, are given to her as
incentives or forms of encouragement in order for her to put extra effort in
performing her duties as an ISE. Clearly, such claims fall within the ambit of the
general term “commissions” which in turn, fall within the definition of wages
pursuant to prevailing law and jurisprudence. Thus, respondent’s allegation of
nonpayment of such monetary benefits places the burden on the employer, i.e.,
petitioner, to prove with a reasonable degree of certainty that it paid said
benefits and that the employee, i.e., respondent, actually received such payment
or that the employee was not entitled thereto.

The Court's pronouncement in Heirs of Ridad v. Gregorio Araneta University

Foundation41 is instructive on this matter, to wit:

Well-settled is the rule that once the employee has set out with
particularity in his complaint, position paper, affidavits and other
documents the labor standard benefits he is entitled to, and which he
alleged that the employer failed to pay him, it becomes the employer's
burden to prove that it has paid these money claims. One who pleads
payment has the burden of proving it, and even where the employees
must allege non-payment, the general rule is that the burden rests on
the employer to prove payment, rather than on the employees to prove
non-payment. The reason for the rule is that the pertinent personnel
files, payrolls, records, remittances, and other similar documents which
will show that overtime, differentials, service incentive leave, and other
claims of the worker have been paid - are not in the possession of the
worker but in the custody and absolute control of the employer. 42
(Emphasis and underscoring supplied)

In this case, petitioner simply dismissed respondent's claims for being purely
self-serving and unfounded, without even presenting any tinge of proof showing
that respondent was already paid of such benefits or that she was not entitled
thereto. In fact, during the proceedings before the LA, petitioner was even given
the opportunity to submit pertinent company records to rebut respondent's
claims but opted not to do so, thus, constraining the LA to direct respondent to
submit her own computations.43 It is well-settled that the failure of employers to
submit the necessary documents that are in their possession gives rise to the
presumption that the presentation thereof is prejudicial to its cause.
39. respondent, maintaining that it could not appoint respondent to a regular and
permanent position as she has yet to complete the probationary period of six
G.R. No. 224319, November 20, 2017 (6) consecutive semesters, as laid down in the MORPHE, as well as in the 2009
DLSAU Personnel Handbook. In this regard, petitioner pointed out that
DE LA SALLE ARANETA UNIVERSITY, INC., Petitioner, respondent's appointments all throughout her probationary employment were
v. DR. ELOISA G. MAGDURULANG, Respondent. on a fixed-term basis, which she voluntarily and freely accepted.As such, it is
within the university's prerogative to re-hire her or not at the end of such
contracts.
Facts:
The Labor Arbiter's (LA) Ruling
Respondent Dr. Eloisa G. Magdurulang alleged that petitioner initially hired her
as a part-time faculty member for the latter's College of Business for the second
The LA dismissed the complaint for lack of merit. The LA found that since the
semester of SY 2007-2008 (November 5, 2007-March 18, 2008), as well as the
respondent has not held a full time academic teaching position for a period of
summer semester of 2008 (March 31, 2008-May 13, 2008).For the second
six (6) consecutive semesters or nine (9) straight trimesters, she is not eligible
semester of SY 2008-2009 (October 13, 2008-May 31, 2009), she was then
for permanent appointment. Moreover, considering that respondent's
appointed as a full-time faculty member/BSBA Program Coordinator, with such
employment contracts were on a fixed-term basis, her services may be subject
designation being renewed for the first and second semesters of SY 2009-2010
to termination.
(June 1, 2009-May 31, 2010). During the pendency of respondent's contract for
SY 2009-2010, the University's Acting Assistant Dean recommended to the
Aggrieved, respondent appealed to the NLRC.
University President that respondent be already accorded a permanent status,
effective the second semester of SY 2009-2010. The University President ended
The NLRC Ruling
up not extending a permanent appointment to respondent, pursuant to Section
117 of the Manual of Regulations for Private Higher Education (MORPHE) which
NLRC reversed and set aside the LA ruling, and accordingly, declared
provides that "[t]he probationary employment of academic teaching personnel
respondent to have been constructively dismissed. Consequently, it ordered
shall not be more than a period of six (6) consecutive semesters or nine (9)
petitioner to reinstate her to the position of Associate Professor with full
consecutive trimesters of satisfactory service, as the case may be." Thus, the
backwages.
University President instead issued a reappointment to respondent as full-time
faculty member/BSBA Program Coordinator for the first and second semesters
The NLRC held that petitioner's act of voluntary shortening respondent's
of SY 2010-2011 (June 1, 2010-May 31, 2011), with a re-classified ranking of
probationary period effectively accorded the latter the status of a regular
Assistant Professor 4 and on contractual basis.
employee.
As a result, respondent wrote a letter to the University President, asking
clarification as to why: (a) her rank was changed from Associate Professor 2 to
Petitioner moved for reconsideration, which was denied and filed a petition
Assistant Professor 4 in her reappointment for SY 2010-2011, resulting in
for certiorari before the CA.
diminution of salaries and benefits; and (b) she was not extended a permanent
appointment despite the favorable recommendation from the Acting Assistant
The CA Ruling
Dean.
CA modified the NLRC ruling, deleting respondent's reinstatement.
The respondent then filed the instant complaint,claiming that despite her re-
appointment for SY 2010-2011, she was no longer given any teaching load and CA held that respondent has no vested right to a permanent appointment since
that her academic administrative position as BSBA Program Coordinator was she had not completed the pre-requisite six (6) consecutive semesters
likewise discontinued. Respondent also insisted that she had already attained necessary to be eligible for the same.
the status of a regular employee since she has been teaching for about three (3)
years beginning in 2007. Nonetheless, as a probationary employee, respondent still enjoys a limited
security of tenure, and therefore, cannot be terminated except for just or
Petitioner countered that it neither constructively nor actually dismissed
authorized causes, or if she fails to qualify in accordance with the reasonable
standards set by petitioner. As respondent was not given any teaching load for
SY 2010-2011 and her services as BSBA Program Coordinator were
discontinued without any justifiable reason, she was deemed to have been
constructively dismissed. As such, respondent is entitled to receive the benefits
appurtenant to the remainder of her probationary period, namely, both
semesters of SY 2010-2011 and the first semester of SY 2011-2012.
Undaunted, petitioner moved for reconsideration, but the same was denied;
hence, this petition.
ISSUE
Whether or not the CA correctly ruled that the respondent is a probationary
employee who also enjoys a limited security of tenure, and therefore, cannot be
terminated except for just or authorized causes before the expiration of the
term.
SUPREME COURT RULING
Yes. The court held that the respondent, as a probationary employee, still enjoys
limited security of tenure during the period of her probation-that is, she cannot
be terminated except for just or authorized causes, or if she fails to qualify in
accordance with reasonable standards prescribed by the employer.Hence, the
petitioner's unjustified acts of depriving her of teaching loads, as well as her
functions as BSBA Program Coordinator during the pendency of her
appointment for both semesters of SY 2010-2011, constitute constructive
dismissal, for which it should be made liable to respondent for the latter's
benefits appurtenant thereto.
The law has provided that the probationary period of employment of academic
personnel such as professors, instructors, and teachers - including the
determination as to whether they have attained regular or permanent status -
shall not be governed by the Labor Code but by the standards established by the
Department of Education and the Commission on Higher Education, as the case
may be.
The rule relative to private higher education institutions is likewise reiterated
in Sections 117 and 118 of the MORPHE:
Section 117. Probationary Period. - An academic teaching personnel who does
not possess the minimum academic qualifications prescribed under Sections 35
and 36 of this Manual shall be considered as part-time employee, and therefore
cannot avail of the status and privileges of a probationary employment. A part-
time employee cannot acquire regular permanent status, and hence, may be
terminated when a qualified teacher becomes available.
The probationary employment of academic teaching personnel shall not be
more than a period of six (6) consecutive semesters or nine (9) consecutive
trimesters of satisfactory service, as the case may be.
Section 118. Regular or Permanent Status. - A full-time academic teaching
personnel who has satisfactorily completed his/her probationary employment,
and who possesses the minimum qualifications required by the Commission
and the institution, shall acquire a regular or permanent status if she/she is re-
hired or re-appointed immediately after the end of his/her probationary
employment. However, a regular or permanent academic teaching personnel
who requests a teaching load equivalent to a part-time load, shall be considered
resigned, and hence, may forfeit his/her regular or permanent status at the
discretion of the management of the higher education institution and shall
thereby be covered by a term contract employment.
Thus, for an academic personnel to acquire a regular and permanent
employment status, it is required that: (a) he is considered a full-time
employee; (b) he has completed the required probationary period; and (c) his
service must have been satisfactory.
However, it must be emphasized that mere completion of the probationary
period does not, ipso facto, make the employee a permanent employee of the
educational institution, as he could only qualify as such upon fulfilling the
reasonable standards for permanent employment as faculty member. Thus, at
the end of the probation period, the decision to re-hire a probationary
employee, and thus, vest upon him a regular and permanent status, belongs to
the educational institution as the employer alone. Otherwise stated, upon the
expiration of their contract of employment, academic personnel on probation
cannot automatically claim security of tenure and compel their employers to
renew their employment contracts which would then transform them into
regular and permanent employees. Hence, the CA correctly declared that
respondent failed to acquire a regular and permanent status.
40.
ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D.
FEIST, MARIA OLIVIA T. YABUTMISA, TERESITA C. BERNARDO, AND ALLAN
G. ALMAZAR, Petitioners,
vs.
PEARLIE ANN F. ALCARAZ, Respondent.
Facts
On June 27, 2004, Abbott caused the publication in a major broadsheet
newspaper of its need for a Regulatory Affairs Manager, indicating therein the
job description for as well as the duties and responsibilities attendant to the
aforesaid position; this prompted Alcaraz to submit her application to Abbott on
October 4, 2004;
In Abbott’s December 7, 2004 offer sheet, it was stated that Alcaraz was to be
employed on a probationary status;
On February 12, 2005, Alcaraz signed an employment contract which
specifically stated, inter alia, that she was to be placed on probation for a period
of six (6) months beginning February 15, 2005 to August 14, 2005;
On the day Alcaraz accepted Abbott’s employment offer, Bernardo sent her
copies of Abbott’s organizational structure and her job description through e-
mail;
Alcaraz was made to undergo a pre-employment orientation where Almazar
informed her that she had to implement Abbott’s Code of Conduct and office
policies on human resources and finance and that she would be reporting
directly to Walsh;
Alcaraz was also required to undergo a training program as part of her
orientation;
Alcaraz received copies of Abbott’s Code of Conduct and Performance Modules
from Misa who explained to her the procedure for evaluating the performance
of probationary employees; she was further notified that Abbott had only one
evaluation system for all of its employees
During the course of her employment, Alcaraz noticed that some of the staff had
disciplinary problems. Thus, she would reprimand them for their
unprofessional behavior such as non-observance of the dress code,
moonlighting, and disrespect of Abbott officers. However, Alcaraz’s method of
management was considered by Walsh to be "too strict.
On April 12, 2005, Alcaraz received an e-mail from Misa requesting immediate
action on the staff’s performance evaluation as their probationary periods were
about to end. This Alcaraz eventually submitted.
On May 16, 2005, Alcaraz was called to a meeting with Walsh and Terrible
where she was informed that she failed to meet the regularization standards for
the position of Regulatory Affairs Manager.
On May 23, 2005, The employers personally handed to Alcaraz a letter stating
that her services had been terminated effective May 19, 2005.The letter detailed
the reasons for Alcaraz’s termination – particularly, that Alcaraz: (a) did not
manage her time effectively; (b) failed to gain the trust of her staff and to build
an effective rapport with them; (c) failed to train her staff effectively; and (d)
was not able to obtain the knowledge and ability to make sound judgments on
case processing and article review which were necessary for the proper
performance of her duties. On May 27, 2005, Alcaraz received another copy of
the said termination letter via registered mail.
Alcaraz felt that she was unjustly terminated from her employment and thus,
filed a complaint for illegal dismissal and damages against Abbott and its
officers. She claimed that she should have already been considered as a regular
and not a probationary employee given Abbott’s failure to inform her of the
reasonable standards for her regularization upon her engagement as required
under Article 295of the Labor Code. In this relation, she contended that while
her employment contract stated that she was to be engaged on a probationary
status, the same did not indicate the standards on which her regularization
would be based
Alcaraz also alleges that the individual petitioners acted in bad faith with regard
to the supposed crude manner by which her probationary employment was
terminated and thus, should be held liable together with Abbott
On the contrary, petitioners maintained that Alcaraz was validly terminated
from her probationary employment given her failure to satisfy the prescribed
standards for her regularization which were made known to her at the time of
her engagement.
The LA Ruling
The LA dismissed Alcaraz’s complaint for lack of merit.
The LA rejected Alcaraz’s argument that she was not informed of the reasonable
standards to qualify as a regular employee considering her admissions that she
was briefed by Almazar on her work during her pre-employment orientation
meeting and that she received copies of Abbott’s Code of Conduct and
Performance Modules which were used for evaluating all types of Abbott
employees.As Alcaraz was unable to meet the standards set by Abbott as per her
performance evaluation, the LA ruled that the termination of her probationary
employment was justified.
Displeased with the LA’s ruling, Alcaraz filed an appeal with the National Labor
Relations Commission (NLRC).
The NLRC Ruling
The NLRC reversed the findings of the LA and ruled that there was no evidence
showing that Alcaraz had been apprised of her probationary status and the
requirements which she should have complied with in order to be a regular
employee. It held that Alcaraz’s receipt of her job description and Abbott’s Code
of Conduct and Performance Modules was not equivalent to her being actually
informed of the performance standards upon which she should have been
evaluated on.37 It further observed that Abbott did not comply with its own
standard operating procedure in evaluating probationary employees. The NLRC
was also not convinced that Alcaraz was terminated for a valid cause given that
petitioners’ allegation of Alcaraz’s "poor performance" remained
unsubstantiated.39
The CA Ruling
The CA ruled that the NLRC was correct in its Decision.
ISSUE
1. Whether or not Alcaraz was well-appraised by the employer’s
expectations and her failure to perform such would give Abbott a valid
cause to terminate her probationary employment.
2. Whether or not Alcaraz was validly terminated from her employment.
SC RULING
1. Yes. Alcaraz was well-aware that her regularization would depend on her
ability and capacity to fulfill the requirements of her position as Regulatory
Affairs Manager and that her failure to perform such would give Abbott a valid
cause to terminate her probationary employment.
A probationary employee, like a regular employee, enjoys security of tenure.
However, in cases of probationary employment, aside from just or authorized
causes of termination, an additional ground is provided under Article 295 of the
Labor Code, i.e., the probationary employee may also be terminated for failure
to qualify as a regular employee in accordance with the reasonable standards
made known by the employer to the employee at the time of the engagement.
Thus, the services of an employee who has been engaged on probationary basis
may be terminated for any of the following: (a) a just or (b) an authorized cause;
and (c) when he fails to qualify as a regular employee in accordance with
reasonable standards prescribed by the employer. (d) In all cases of
probationary employment, the employer shall make known to the employee the
standards under which he will qualify as a regular employee at the time of his
engagement. Where no standards are made known to the employee at that time,
he shall be deemed a regular employee.
In other words, the employer is made to comply with two (2) requirements
when dealing with a probationary employee: first, the employer must
communicate the regularization standards to the probationary employee; and
second, the employer must make such communication at the time of the
probationary employee’s engagement. If the employer fails to comply with
either, the employee is deemed as a regular and not a probationary employee.
In this case, it is apparent that Abbott failed to follow the above-stated
procedure in evaluating Alcaraz. For one, there lies a hiatus of evidence that a
signed copy of Alcaraz’s PPSE form was submitted to the HRD. It was not even
shown that a PPSE form was completed to formally assess her performance.
Neither was the performance evaluation discussed with her during the third
and fifth months of her employment. Nor did Abbott come up with the
necessary Performance Improvement Plan to properly gauge Alcaraz’s
2. No.
It was explained that if the dismissal is based on a just cause under Article 282
of the Labor Code (now Article 296) but the employer failed to comply with the
notice requirement.
Anent the proper amount of damages to be awarded, the Court observes that
Alcaraz’s dismissal proceeded from her failure to comply with the standards
required for her regularization. As such, it is undeniable that the dismissal
process was, in effect, initiated by an act imputable to the employee, akin to
dismissals due to just causes under Article 296 of the Labor Code. Therefore, the
Court deems it appropriate to fix the amount of nominal damages at the amount
of ₱30,000.00
41
DIONISIO DACLES VS. MILLENIUM ERECTORS CORPORATION AND/OR
RAGAS TIU
FACTS:
Respondent Millenium Erectors Corporation (MEC) is a domestic corporation
engaged in the construction business. In 2010, petitioner instituted a complaint
for illegal dismissal with money claims against MEC and its owner/manager,
respondent Ragas Tiu (respondents), before the NLRC, National Capital Region.
Petitioner claimed that he was hired by respondents as a mason in 1998. On
June 7, 2010, while he was working on a project in Malakas Street, Quezon City
(QC), he was advised by respondent’s officer, Mr. Bongon, to move to another
project in Robinson’s Cubao, QC. However, upon arrival at the site, he was
instructed to return to his former job site and, thereafter, was given a run-
around for the two (2) succeeding days. When he requested to be given a post
or assigned to a new project, he was told by the paymaster not to report for
work anymore, prompting him to file the illegal dismissal complaint, with
claims for service incentive leave (SIL) pay, overtime pay, holiday pay, 13 th
month pay, rest day and premium pay, and salary differentials.
Respondents denied having illegally dismissed petitioner, claiming that he was
a mere project employee whose contract expired on June 4, 2010 upon the
completion of his masonry work assignment in the Residential & Commercial
Building Project (RCB Malakas Project) along East Avenue, QC. They further
denied having employed petitioner since 1998 because it was only organized
and started business operations in February 2000. They averred that petitioner
applied and was hired as a mason on October 8, 2009 and assigned to the
Newport Entertainment and Commercial Center Project in Pasay City (NECC
Project), which was completed on March 3, 2010. Petitioner’s termination from
both projects was then duly reported to the Department of Labor and
Employment (DOLE) Makati/Pasay Field Office.
The LA dismissed the illegal dismissal complaint, finding that petitioner is a
project employee given that: (a) the employment contracts between MEC and
petitioner show that the latter, although repeatedly rehired, was engaged in
particular projects and for specific periods; (b) the periods of employment were
determinable with a known beginning and termination; and (c) the DOLE was
notified of petitioner’s termination at the end of each project. Consequently, the
LA held that petitioner cannot validly claim that he was illegally dismissed
because his separation was a consequence of the completion of his contract. The
petitioner’s money claims were likewise denied for lack of evidentiary support.
The NLRC reversed the LA ruling and instead, declared that petitioner was a
regular employee. It denied respondents’ assertion that respondents could not
have employed petitioner in 1998 since it was only registered with the
Securities and Exchange Commission on February 1, 2000, as evinced by its
Certificate of Incorporation, ruling that the said document only proves that MEC
has been operating as such without the benefit of registration.
Respondents moved for reconsideration which was eventually denied. Hence,
they filed a petition for review on certiorari before the CA.
The CA annulled and set aside the NLRC’s ruling and reinstated the LA’s ruling.
It held that petitioner has not presented evidence to substantiate his claim of
illegal dismissal.
Petitioner moved for reconsideration but was denied in a Resolution dated
October 11, 2013; hence, this petition.
ISSUE:
Whether or not the CA committed reversible error in holding that the NLRC
gravely abused its discretion in declaring that petitioner was a regular
employee, and not a project employee.
RULING:
No. The petition is without merit.
In labor disputes, grave abuse of discretion may be ascribed to the NLRC when,
inter alia, its findings and the conclusions reached thereby are not supported by
substantial evidence, “or that amount of relevant evidence which a reasonable
mind might accept as adequate to justify a conclusion.”
Tested against these considerations, the Court finds that the CA correctly
granted respondents’ certiorari petition before it, since the NLRC gravely
abused its discretion in ruling that petitioner was a regular employee of MEC
when the latter had established by substantial evidence that petitioner was
merely a project employee. On the other hand, there is no evidence on record to
substantiate petitioner’s claim that he was employed as early as 1998. Article
294 of the Labor Code, as amended, distinguishes a project-based employee
from a regular employee as follows:
Art. 294. 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 services to be performed is seasonal in nature and
the employment is for the duration of the season.
Thus, for an employee to be considered project-based, the employer must show
that: (a) the employee was assigned to carry out a specific project or
undertaking; and (b) the duration and scope of which were specified at the time
the employee was engaged for such project.
Consequently, in order to safeguard the rights of workers against the arbitrary
use of the word “project” to prevent them from attaining regular status,
employers claiming that their workers are project employees should prove that:
(a) the duration and scope of the employment was specified at the time they
were engaged; and (b) there was indeed a project.
In this case, records reveal that petitioner was adequately informed of his
employment status (as project employee) at the time of his engagement for the
NECC and RCB-Malakas Projects. This is clearly substantiated by the latter’s
employment contracts duly signed by him, explicitly stating that: (a) he was
hired as a project employee; and (b) his employment was for the indicated
starting dates therein “and will end on completion/phase of work of project.”
Further, pursuant to Department Order No. 19, or the “Guidelines Governing the
Employment of Workers in the Construction Industry,” respondent duly
submitted the required Establishment Employment Reports43 to the DOLE
Makati/Pasay Field Office regarding the “permanent termination” of petitioner
from both of the projects for which he was engaged.
At any rate, the repeated and successive rehiring of project employees does not,
by and of itself, qualify them as regular employees. Case law states that length of
service (through rehiring) is not the controlling determinant of the employment
tenure, but whether the employment has been fixed for a specific project or
undertaking, with its completion having been determined at the time of the
engagement of the employee.
42
ISIDRO QUEBRAL, ET AL. VS. ANGBUS CONSTRUCTION, INC., ET AL.
FACTS:
Petitioners alleged that Angbus employed them as construction workers on
various dates from 2008 to 2011. They claimed to be regular employees. They
were, however, summarily dismissed from work on June 28, 2012 and July 14,
2012.Thus, they filed consolidated cases for illegal dismissal with prayer for
reinstatement and payment of full backwages, salary differential, ECOLA,
13th month pay, service incentive leave pay, overtime and holiday pay, including
moral and exemplary damages as well as attorney's fees.
Respondents maintained that petitioners were first employed by Angelfe
Management and Consultancy (Angelfe) for a one time project only. Two or
three years after the completion of the Angelfe project, they were then hired by
Angbus, which is a separate and distinct business entity from the former. Thus,
petitioners were hired only for two project employment contracts - one each
with Angelfe and Angbus. Respondents further stated that a long period of time
between the first project employment and the other intervened, which meant
that petitioners were not re-hired repeatedly and continuously.
However, respondents failed to present petitioners' employment contracts,
payrolls, and job application documents either at Angelfe or Angbus. They
averred that these documents were completely damaged by the flood caused by
the "habagat" on August 6 to 12, 2012, as evinced by a Certification issued by
the Chairman of Barangay Rosario, Pasig City, (Brgy. Rosario Certification)
where Angelfe and later, Angbus purportedly held offices.
The Labor Arbiter (LA) found that petitioners were not illegally dismissed. The
LA observed that despite the non-submission of the project employment
contracts between the parties, there was still sufficient basis to support
respondents' claim that petitioners were hired for specific projects with specific
durations by two different companies, i.e., Angbus and Angelfe. In this relation,
the LA gave credence to the Establishment Employment Reports submitted to
the Department of Labor and Employment (DOLE Reports) which showed that
the cause for petitioners' termination was project completion. Finally, the LA
pointed out that the hiring of petitioners for a definite period for a certain phase
of a project was an industry practice in the construction business.
The NLRC reversed the LA's ruling and declared that petitioners were regular
employees who were illegally dismissed on June 14, 2012; hence, they are
entitled to reinstatement and full backwages, including their other monetary
claims.
The NLRC stressed that respondents had control over the company records but
failed to present the project employment contracts signed by the workers to
rebut petitioners' claim that they were regular employees. The NLRC did not
give merit to the DOLE Reports as these were not submitted within 30 days
prior to the displacement of the workers.
NLRC denied the motion for reconsideration filed by Angbus and Bustamante.
Respondents elevated their case to the CA on certiorari.
The CA held that the NLRC gravely abused its discretion when it ruled that
petitioners were regular employees of Angbus. The CA reinstated the LA's
finding that petitioners were project employees, noting that the absence of a
project employment contract does not automatically confer regular status to the
employees. It also observed that the Brgy. Rosario Certification adequately
explained the non-submission of the employment contracts, and that the DOLE
Reports showed petitioners' status as project employees.
Petitioners filed a motion for reconsideration, which was, however, denied in a
Resolution dated November 2, 2015; hence, this petition.
ISSUE:
Whether the CA erred in declaring petitioners as project employees of Angbus
and consequently, holding their dismissal to be valid.
RULING:
Yes. The petition is meritorious.
The Court finds that the NLRC's Decision in this case was supported by
substantial evidence and is consistent with law and jurisprudence as to the
issues raised in the petition. Hence, the CA incorrectly held that the NLRC
gravely abused its discretion in giving due course to petitioners' appeal filed
before it and in declaring that the petitioners were regular employees of
Angbus. Accordingly, the NLRC's ruling must be reinstated.
Article 295of the Labor Code,as amended, distinguishes a project employee
from a regular employee, to wit:
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 services to be performed is seasonal in
nature and the employment is for the duration of the season.
A project-based employee is assigned to a project which begins and ends at
determined or determinable times. Unlike regular employees who may only be
dismissed for just and/or authorized causes under the Labor Code, the services
of employees who are hired as project-based employees may be lawfully
terminated at the completion of the project.
To safeguard the rights of workers against the arbitrary use of the word
"project" to preclude them from attaining regular status, jurisprudence provides
that employers claiming that their workers are project-based employees have
the burden to prove that these two requisites concur: (a) the employees were
assigned to carry out a specific project or undertaking; and (b) the duration and
scope of which were specified at the time they were engaged for such project.

In this case, Angbus failed to discharge this burden. Notably, Angbus did not
state the specific project or undertaking assigned to petitioners. As to the
second requisite, not only was Angbus unable to produce petitioners'
employment contracts, it also failed to present other evidence to show that it
informed petitioners of the duration and scope of their work.

The Court agrees with the NLRC that the Brgy. Rosario Certification cannot be
given credence as it was issued by the barangay captain in Rosario, Pasig City
rather than in Quezon City.

The Court further observes that the CA placed unwarranted emphasis on the
DOLE Reports or termination reports submitted by Angbus as basis to rule that
petitioners were project employees.

It is clear that the submission of the termination report to the DOLE "may be
considered" only as an indicator of project employment. By the provision's
tenor, the submission of this report, by and of itself, is therefore not conclusive
to confirm the status of the terminated employees as project employees,
especially in this case where there is a glaring absence of evidence to prove that
petitioners were assigned to carry out a specific project or undertaking, and
that they were informed of the duration and scope of their supposed project
engagement, which are, in fact, attendant to the first two (2) indicators of
project employment in the same DOLE issuance above-cited.

Since Angbus failed to discharge its burden to prove that petitioners were
project employees, the NLRC correctly ruled that they should be considered as
regular employees. Thus, the termination of petitioners' employment should
have been for a just or authorized cause, the lack of which, as in this case,
amounts to illegal dismissal.
43. employees with respect to the activity in which they are employed and their
employment shall continue while such activity actually exists. The
Omni Hauling Services Inc. v. Bon determination that respondents are regular employees and not merely project
Facts: employees means that their services could only be validly terminated by just
Omni Hauling Services Inc. was awarded a one year service contract by and/or authorized causes, thus they were illegally dismissed.
the local government of Quezon City to provide garbage hauling services for the
period July 01, 2002 to June 30, 2003. Omni then hired the respondents as
garbage truck drivers and paleros who were then paid on a per trip basis. When
their service contract was renewed for another year, Omni required the
respondents to sign employment contracts, in which they refused to do so. The
respondents claimed that they were regular employees since they were engaged
to perform activities which were necessary and desirable to Omni’s usual
business. Omni then terminated the employment of the respondents which
resulted in the filing of cases. During the mandatory conference before the
Labor Arbiter, Omni offered to re-employ the respondents, but they refused.
The LA ruled in favor of Omni. The LA found that the respondents were
not regular employees but merely project employees whose hiring was solely
dependent on the aforesaid contract.
The NLRC affirmed the LA’s ruling in toto.
The CA, however, reversed and set aside the NLRC’s earlier
pronouncement. It held that the NLRC failed to consider the fact that no contract
of employment exists to support petitioner’s allegation that respondents are
project employees. It further ruled that the respondents were illegally
dismissed.
Issue:
Whether or not the CA erred in granting respondents’ petition for
certiorari, thereby setting aside the NLRC’s Decision holding that respondents
were project employees
Held:
No.
The Court finds that the CA correctly granted respondents’ certiorari
petition since the NLRC gravely abused its discretion when it held that
respondents were project employees despite petitioners’ failure to establish
their project employment status through substantial evidence.
A project employee is assigned to a project which begins and ends at
determined or determinable times. Unlike regular employees who may be
dismissed for just and/or authorized causes under the Labor Code, the services
of employees who are hired as “project employees” may be lawfully terminated
at the completion of the project. Thus, the logical conclusion is that respondents
were not clearly and knowingly informed of their employment status as mere
project employees, with the duration and scope of the project specified at the
time they were engaged. As such, the presumption of regular employment
should be accorded in their favour pursuant to Article 280 of the Labor Code
which provides that “employees who have rendered at least one year of service,
whether such service is continuous or broken, shall be considered as regular
44.
Central Azucarera de Bais vs. Siason
Facts:
Central Azucarera de Bais hired Janet Siason as a purchasing assistant
and eventually promoted as purchasing officer. Antonio Chan confronted her on
the propriety of the delivery of a machine part via air freight in lieu of
previously approved sea freight. Siason responded that such delivery benefited
the company, but Chan considered it as a “big infraction of the rules and
regulations of the company.” Siason also received a letter from Chan informing
her that he had been committing various purchasing policy violations over the
past 12 months. This prompted Siason to write a resignation letter stating that
she was tendering her resignation because Chan told her to do so. Petitioners
refused to accept it. In 2011, Siason filed a complaint against petitioners alleging
that Chan forced her to resign.
The LA dismissed Siason’s complaint for lack of merit, but she was
awarded separation pay. The LA found that petitioners did not constructively
dismissed Siason, since Siason voluntarily resigned from her job.
The NLRC reversed the LR ruling and held that petitioners
constructively dismissed Siason.
The CA affirmed the NLRC ruling. It held that petitioners constructively
dismissed Siason, considering that the latter would not have resigned from her
job had it not been for the pressure exerted by Chan on her.
Issue:
Whether or not the CA correctly affirmed the NLRC ruling finding
Siason to have been constructively dismissed by petitioners.
Held:
No.
The Court finds that the CA erred in affirming the NLRC ruling, which
found Siason to have been constructively dismissed. A judicious review was
made on the record of purchases made by Siason that resulted to a discovery of
a number of discrepancies in several purchasing transactions consisting in
different price quotations for identical items contained in various purchase
documents prepared by Siason herself. It was shown that Siason was given the
option to voluntarily resign from the company instead of dealing with an
investigation which might result in her dismissal.
Verily, Chan’s decision to give Siason a graceful exit rather that to file an
action for redress is perfectly within the discretion of the former; as it is not
uncommon that an employee is permitted to resign to avoid the humiliation
and embarrassment of being terminated for just cause after the exposure of her
malfeasance. In sum, petitioners did not constructively dismissed Siason; but
rather the latter voluntarily resigned from her job in order to avoid a full-blown
administrative trial regarding her misdeeds.
45.
Issue:
Century Properties v. Babiano Whether or not the CA erred in denying CPI’s petition for certiorari thereby
holding it liable for the unpaid commissions of the respondents Babiano and
Facts:
Concepcion.
On October, 2002, Edwin J. Babiano was hired by Century Properties,
Whether or not labor tribunals correctly assumed jurisdiction over
Inc. (CPI) as Director of Sales and eventually appointed as Vice President for
Concepcion’s money claims
Sales effective September 1, 2007. As the Vice President for Sales, Babiano was
Ruling:
remunerated with the following benefits: a.) monthly salary of P70,000.00; b.)
I. The petition is partly meritorious.
allowance of P50,000.00; and c.) 0.5% override commission for completed sales.
His employment contract contained a Confidentiality of Documents and Non-
The CA erred in denying CPI’s petition for certiorari thereby
Compete Clause which, among others, barred him from disclosing confidential
holding it liable for the unpaid commissions of respondent
information, and from working in any business enterprise that is in direct
Babiano. Babiano’s violation of the Confidentiality of Documents
competition with CPI while employed and for a period of one year from date of
and Non-Compete Clause justifies the forfeiture of his commissions.
resignation/termination from CPI. Should Babiano breach any of the terms
thereof, his forms of compensation, including commissions and incentives will
In the interpretation of contracts, the Court must first determine
be forfeited.
whether a provision or stipulation therein is ambiguous. Absent
During the same period, Concepcion was initially hired as Sales Agent
any ambiguity, the provision on its face will be read as it is written
by CPI and was eventuallypromoted as Project Director on September 1, 2007.
and treated as the binding law of the parties to the contract. The
As such, she signed an employment agreement, denominated as "Contract of
language of the written contract is clear and unambiguous hence
Agency for Project Director" which provided, among others, that she would
the contract must be taken to mean that which, on its face, it
directly report to Babiano, and receive, a monthly subsidy of P60,000.00, 0.5%
purports to mean, unless some good reason can be assigned to
commission, and cash incentives. On March 31, 2008, Concepcion executed a
show that the words should be understood in the different sense.
similar contract anew with CPI in which she would receive a monthly subsidy of
P50,000.00, 0.5% commission, and cash incentives as per company policy.
On the other hand, CPI remains liable for the unpaid commissions
Notably, it was stipulated in both contracts that no employer-employee
of Concepcion provided that employer-employee relationship
relationship exists between Concepcion and CPI.
exists.
On February 25, 2009, Babiano tendered his resignation and revealed
that he had been accepted as Vice President of First Global BYO Development
II. YES. Concepcion was an employee of CPI considering the elements
Corporation (First Global), a competitor of CPI. On March 3, 2009, Babiano was
(power to hire, payment of wage, power of dismissal, power to
served a Notice of Termination for: (a) incurring AWOL; (b) violating the
control) of the existence of an employer-employee relationship.
"Confidentiality of Documents and Non-Compete Clause" when he joined a
The labor tribunals correctly assumed jurisdiction over her money
competitor enterprise while still working for CPI and provided such competitor
claims.
enterprise information regarding CPFs marketing strategies; and (c) recruiting
CPI personnel to join a competitor.
On the other hand, Concepcion resigned as CPFs Project Director
through a letter dated February 23, 2009, effective immediately.
46. Code, as amended by RA 7641, being the more beneficent retirement
scheme. They differ, however, in the resulting
Grace Christian High School v. Lavandera benefit differentials due to divergent interpretations of the term
“one-half (1/2) month salary” as used under the law.
Facts:
Elegir v. Philippine Airlines, Inc.: “one-half (1/2) month
Filipinas A. Lavandera was employed by petitioner Grace Christian High salary means 22.5 days: 15 days plus 2.5 days representing one-
School (GCHS) as high school teacher since June 1977 with a monthly salary of twelfth (1/12) of the 13th month pay and the remaining 5 days for
18,662.00 as of May 31, 2001. SIL.”

On August 30, 2001, Filipinas filed a complaint for illegal (constructive)
dismissal, non-payment of service incentive leave (SIL) pay, separation pay,
service allowance, damages, and attorney’s fees against GCHS and/or its
principal, Dr. James Tan. She alleged that on May 11, 2001, she was informed
that her services were to be terminated effective May 31, 2001, pursuant to
GCHS’ retirement plan which gives the school the option to retire a teacher who
has rendered at least 20 years of service, regardless of age, with a retirement
pay of one-half (½) month for every year of service. At that time, Filipinas was
only 58 years old and still physically fit to work. She pleaded with GCHS to allow
her to continue teaching but her services were terminated, contrary to the
provisions of Republic Act No. (RA) 7641 or otherwise known as the
"Retirement Pay Law."
The Court sees no reason to depart from this interpretation.
GCHS’ argument therefore that the 5 days SIL should be likewise
pro-rated to their 1/12 equivalent must fail.
Moreover, the Court held that the award of legal interest at the
rate of 6% per annum on the amount of P68,150.00 representing
the retirement pay differentials due Filipinas should be reckoned
from the rendition of the LA’s Decision on March 26, 2002 and not
from the filing of the illegal dismissal complaint.

For their part, GCHS denied that they illegally dismissed Filipinas. They
asserted that the latter was considered retired on May 31, 1997 after having
rendered 20 years of service pursuant to GCHS’ retirement plan and that she
was duly advised that her retirement benefits in the amount of 136,210.00
based on her salary at the time of retirement, for example, P13,621.00 had been
deposited to the trustee-bank in her name. Nonetheless, her services were
retained on a yearly basis until May 11, 2001 when she was informed that her
year-to-year contract would no longer be renewed.

Issue:
Whether or not the multiplier 22.5 days is to be used in computing the
retirement pay differentials of Filipinas.
Ruling:
I. YES. In the present case, GCHS has a retirement plan for its faculty
and non-faculty members, which gives it the option to retire a
teacher who has rendered at least 20 years of service, regardless of
age, with a retirement pay of one-half (1/2) month for every year
of service. Considering, however, that GCHS computed Filipinas’
retirement pay without including one-twelfth (1/12) of her 13th
month pay and the cash equivalent of her five (5) days SIL, both the
NLRC and the CA correctly ruled that Filipinas’ retirement benefits
should be computed in accordance with Article 287 of the Labor
47.
Padilla v. Rural Bank of Nabunturan
G.R. No. 199338 January 21, 2013
Facts:
Eleazar Padillo was an employee of the Rural Bank of Nabunturan. He was the
SA Bookkeeper. Due to liquidity problems, the Bank took out
retirement/insurance plans with Philippine American Life and General
Insurance Company for all its employees in anticipation of its possible closure
and the concomitant severance of its personnel. Mark Oropeza is the Bank’s
president and when he took over, the Bank’s finances improved, and eventually
its liquidity was regained.
However, in 2007 Padillo suffered a mild stroke due to hypertension coupled
with short term memory loss. It was classified as a total disability which
consequently impaired his capacity to effectively pursue his work. He wrote a
letter addressed to Oropeza expressing his intention to avail of an early
retirement package but his request remained unheeded.
On Octber 3, 2007 Padillo was separated from employment due to his poor and
failing health. He filed with the NLRC a complaint for the recovery of unpaid
retirement benefit, claiming that the Bank had adopted a policy of granting its
aging employees early retirement packages, pointing out that his co-employee,
Nenita Lusan, was accorded retirement benefits when she retired at the age of
only 53.
The Labor Arbiter dismissed his complaint on the ground that he did not qualify
to receive any benefits under Article 302 of the Labor Code as amended because
he was only 55 years old when he resigned, while the law specifically provides
for an optional retirement age of sixty (60) and compulsory retirement age of
sixty-five (65). The LA nevertheless directed the Bank to pay him the amount of
₱100,000.00 as financial assistance, treated as an advance from the amounts
receivable under the Philam Life Plan.
The National Labor Relations Commission reversed the LA ruling and ordered
the Bank to pay Padillo the amount of ₱164,903.70 as separation pay, on top of
the ₱100,000.00 Philam Life Plan benefit, holding that while Padillo did resign,
he did so only because of his poor health condition.
The Court of Appeals reversed the NLRCs ruling but with modification. It
directed the Bank to pay Padillo the amount of P50,000.00 as financial
assistance exclusive of the P100,000.00 Philam Life Plan benefit. It held that
Padillo could not, absent any agreement with the Bank, receive any retirement
benefits pursuant to Art. 302 of the Labor Code considering that he was only 55
years old when he retired.
It further held that the separation pay on the ground of disease under Art. 297
of the Labor Code should not be given to Padillo because he was the one who
initiated the severance of his employment.
Padillo was then substituted by his legal heirs due to his death in 2012.
Issue:
Whether or not Padillo entitled to the separation and retirement benefits under
Art. 297 of the Labor Code.
Ruling:
No. Art. 297 does not apply in this case, considering that it was Padillo, and not
the Bank who severed the employment relations. It was Padillo who voluntarily
retired and that he was not terminated by the Bank.
Art. 297. 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 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.
It contemplates a situation where the employer, and not the employee, initiates
the termination of employment on the ground of the latter’s disease or sickness.
The Court held that what remains applicable, however, is Art. 302 of the Labor
Code which provides:
Art. 302. Retirement. — Any employee may be retired upon reaching the
retirement age established in the collective bargaining agreement or
other applicable employment contract.
In case of retirement, the employee shall be entitled to receive such
retirement benefits as he may have earned under existing laws and any
collective bargaining agreement and other agreements: Provided,
however, That an employee's retirement benefits under any collective
bargaining and other agreements shall not be less than those provided
herein.1â wphi1
In the absence of a retirement plan or agreement providing for
retirement benefits of employees in the establishment, an employee upon
 reaching the age of sixty (60) years or more, but not beyond sixty-five
(65) years which is hereby declared the compulsory retirement age, who
has served at least five (5) years in the said establishment, may retire and
shall be entitled to retirement pay equivalent to at least one-half (1/2)
month salary for every year of service, a fraction of at least six (6)
months being considered as one whole year.

It presupposes that it is the employer who terminates the services of the

employee 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. It does not contemplate a situation where it is the
employee who severs his or her employment ties.

It was also not proven that there exists an established company policy of giving
early retirement packages to the Bank’s aging employees. It wasn’t sufficiently
established that the Bank’s grant of an early retirement package to Lusan
evolved into an established company practice precisely because of the palpable
lack of the element of consistency. The grant of an early retirement package to
Lusan doesn’t show that Padillo was unfairly discriminated upon. Records show
that the same was merely an isolated incident and petitioners have failed to
show that any had faith or motive attended such disparate treatment between
Lusan and Padillo.

The Court, considering Padillo’s 29 years of service in the Bank, increased the
amount of financial assistance award from ₱50,000 to ₱75,000 exclusive of the
₱100,000.00 benefit receivable by the petitioners under the Philam Life Plan
which remains undisputed.
48.
Barroga v. Quezon Colleges et. al.
G.R. No. 235572 December 5, 2018
Facts:
Barroga was a full-time science and chemistry teacher at the Quezon Colleges of
the Norh High School Department continuously from June 1985 to March 2014.
However, at the beginning of school year 2014-2015, QCN told him that he
could not be given any teaching load because there were not enough enrollees.
Barroga found the timing thereof suspicious as he was already due for optional
retirement for continuously serving QCN for almost 30 years.
Initially, Barroga filed a case via Single-Entry Approach before the Department
of Labor and Employment Regional Office in Aparri, Cagayan, where he and
QCN, agreed on a settlement whereby the latter undertook to pay him his
money claims. However, QCN failed to honor the settlement agreement,
prompting Barroga to file a complaint for inter alia illegal dismissal against
QCN, et al.
QCN failed to submit their position paper. Thus, the Labor Arbiter proceeded
with the decision, ruling that QCN’s failure to submit their position paper on
time is tantamount to their admission of Barroga’s illegal dismissal.
QCN’s belatedly filed position paper states that Barroga already resigned in
2006 as evidenced by his resignation letter and was already paid his retirement
benefits as per the letter of the Private Education Retirement Annuity
Association.
The National Labor Relations Commission affirmed the LA’s ruling. It pointed
out that while QCN claimed that Barroga resigned way back in 2006, they
nevertheless presented another letter dated June 9, 2014 allegedly prepared by
Barroga signifying his intention to retire (2014 Retirement Letter). In this
regard, the NLRC opined that if petitioner really resigned in 2006, then there
would be no reason for him to write respondents a retirement letter 8 years
after his alleged resignation.
Upon reaching the Court of Appeals, it modified the NLRC’s ruling and held that
Barroga was not illegally dismissed, but is nevertheless entitled to retirement
pay, proportionate 13th month pay for 2014, and service incentive leave pay
from 1985 until retirement, plus legal rate of interest of six percent per annum
from finality of the CA decision until fully paid.
Issue:
Whether or not failure to grant teaching load on account of resignation letter is
tantamount to illegal dismissal.
Ruling:
No. The Court held that while retirement from service is contractual, the
termination of employment is statutory. The main feature of retirement is that it
is the result of a bilateral act of both the employer and the employee based on
their voluntary agreement that upon reaching a certain age, the employee
agrees to sever his employment.
Therefore, if the intent to retire is not clearly established or if the retirement is
involuntary, it is to be treated as a discharge.
Voluntary retirement cuts the employment ties, leaving no residual employer
liability, while involuntary retirement amounts to a discharge, rendering the
employer liable for termination without cause.
In this case, Barroga's claim that QCN forced him to retire is anchored on the
supposed fact that at the start of school year 2014-2015, he was suddenly not
given any teaching load by QCN on the ground that there were not enough
enrollees in the school. However, aside from such bare claims, Barroga has not
shown any evidence that would corroborate the same. It is settled that bare
allegations of discharge, when uncorroborated by the evidence on record,
cannot be given credence.
Moreover, Barroga's aforesaid claim is belied by the fact that about a week after
the beginning of school year 2014-2015, he submitted to QCN the 2014
Retirement Letter wherein he expressed his intent to optionally retire at the age
of 61. Notably, records are bereft of any showing that Barroga ever challenged
the authenticity and due execution of such letter.
Further, if Barroga really believed that QCN indeed illegally dismissed him from
service, then he would have already made such claim at the earliest instance
when he filed a SENA. However, his SENA Form shows that Barroga's claim
against QCN was just for "non-payment of retirement benefits," which they
ultimately agreed to settle.
Clearly, this agreement to settle cements Barroga's intent and decision to opt for
voluntary retirement which, as mentioned, is separate and distinct from the
concept of dismissal as a mode of terminating employment. However QCN failed
to comply with its undertaking under the Settlement of Agreement as Barroga's
retirement benefits remain unpaid.
Thus, the SC held that Barroga retired from service, but nonetheless, pursued
the filing of the instant illegal dismissal case in order to recover the proper
benefits due to him. In fact, it is telling that he never asked to be reinstated as he
only sought the payment of his retirement benefits.
49. differentials, all benefits and allowances that she may have received as finance
Villena vs Batangas II Electric Cooperative (BATELEC II) manager, attorney’s fees, and damages. Thus, as the matter left for
determination is whether or not the aforesaid rulings, when executed, should
FACTS: include retirement pay and representation, transportation, and cellular phone
Villena was hired by BATELEC II as bookkeeper in 1978, was promoted usage allowances, the Court will harken back only to the context of the illegal
as Finance Manager in 1985, and was demoted to the position of Auditor in dismissal complaint from which such awards of “other benefits” stemmed from.
1994 causing her to file a complaint for constructive dismissal before the Labor
Arbiter. The LA dismissed the complaint but was reversed by the NLRC, Verily, the Court is not unaware of its rulings wherein it pronounced
ordering the reinstatement of Villena to her former position as Finance that retirement pay and separation pay are not mutually exclusive (unless there
Manager, or its equivalent, and to pay her salary differentials. However, the is a specific prohibition in the collective bargaining agreement or retirement
judgement was silent on the payment of allowances, benefits and attorney’s plan against the payment of both benefits);however, with Villena's entitlement
fees. to retirement pay not included as an issue in an illegal dismissal case which had
The case was elevated to the CA which modified the NLRC Resolution already been finally decided, it is quite absurd for Villena to submit a
and declared Villena to be entitled to the difference between the salary of the "contemporaneous"claim for retirement pay on the execution phase of these
Finance Manager and that of the auditor, plus allowances and any other benefits proceedings.
pertaining to the position of Finance Manager at the time she was removed
therefrom up to the date of her actual reinstatement. The case was then
remanded to the NLRC for the computation of the total amount due to Villena. In
the course thereof, the LA excluded, among others, Villana’s claim for separation
pay. Meanwhile, BATELEC II issued Policy No. 03-003 which provided for
retirement benefits to its regular employees.
In a Resolution dated March 22, 2007, the NLRC granted the appeal of
Villena, directing BATELEC II to pay Villena her claim for separation pay in lieu
of reinstatement. With no further action having been taken by BATELEC II, the
March 22, 2007 NLRC resolution attained finality.
Acting on the motion for execution, the Executive Labor Arbiter finds
Villena to be entitled to retirement pay. On appeal, the NLRC excluded from the
computation of monetary awards the retirement pay. On motion for
reconsideration, the NLRC deleted the award of separation pay and in lieu
thereof ordered the payment of retirement pay in the interest of justice and
fairness.

Villena filed a petition for certiorari before the CA wherein it ruled that the
NLRC acted beyond its authority in modifying the final and executory decision
by granting Villena retirement pay.
ISSUE: Whether or not retirement pay should be awarded in favor of Villena.
RULING: NO.
In order for her retirement pay claim to be considered, Villena's
complaint should have contained substantial allegations which would show that
she (a) had applied for the same, and (b) her application squares with the
requirements of entitlement under the terms of the company's retirement
plan, i.e., Policy No. 03-003, which, in fact, was issued on September 20, 2003, or
after the August 31, 2001 CA Decision had already attained finality.
However, based on the records, what she sought for in her illegal
dismissal complaint were the reliefs of reinstatement, payment of salary

50.
BAHIA SHIPPING SERVICES, INC vs. HIPE
FACTS:
Hipe had been continuously hired by petitioner Bahia Shipping Services, Inc.
(Bahia) for its foreign principal, Fred Olsen Cruise Line (Olsen), and deployed to
the latter’s various vessels under seven (7) consecutive contracts. He was last
employed by Bahia as plumber for the vessel M/S Braemar (vessel) under a six-
month contract. Despite the lapse of the six-month contract, Hipe continued to
work a board the vessel without any new contract.
On June 22, 2008, in the course of the performance of his duties as plumber, he
sustained a back injury while carrying heavy equipment for use in his plumbing
job. After one month, however, he claimed that his condition worsened and,
upon his request, he was repatriated to Manila.
Upon Hipe’s arrival, he was examined by the company-designated physician, Dr.
Lim. The medical assessment stated that Hipe was declared fit to work, and thus
executed the corresponding Certificate of Fitness for Work.
Subsequently, Hipe, sought a second opinion from Dr. Garduce of the UPPGH
Medical Center who (a) opined that he was suffering from "+ Tenderness on low
back area, + Straight leg raising test @ Associated with numbness and weakness
of both lower extremities," (b) declared him unfit to work as seaman-plumber,
and (c) assessed his disability rating at Grade 5.
Thereafter, Hipe filed a complaint for the payment of permanent disability
compensation, sick wages, reimbursement of medical and transportation
expenses, moral and exemplary damages, and attorney’s fees against Bahia and
its foreign principal, Olsen.
ISSUE: Whether or not Hipe is entitled to permanent disability benefits.
RULING:
NO.
Two elements must concur for an injury or illness of a seafarer to be
compensable:
(a) the injury or illness must be work-related; and
(b) that the work-related injury or illness must have existed during the
term of the seafarer’s employment contract.
In the present case, Hipe was made to continuously perform work aboard the
vessel beyond his six-month contract without the benefit of a formal contract.
Considering that any extension of his employment is discretionary on the part of
respondents and that the latter offered no explanation why Hipe was not
repatriated when his contract expired, it is correct to rule that he was still under
the employ of respondents when he sustained an injury. Consequently, the
injury suffered by Hipe was a work-related injury and his eventual repatriation
on which he was treated/rehabilitated can only be considered as a medical
repatriation.
Nonetheless, Hipe was subsequently declared fit to work by the company-
designated physician, thus negating the existence of any permanent disability
for which compensability is sought. Said fit-to-work certification must stand for
two reasons:
First, while Hipe’s personal doctor disagreed with assessment, opining
that "it would be impossible for him to work as seaman-plumber" and
recommending a disability grade of five, records show, however, that
such opinion was not supported by any diagnostic tests and/or
procedures as would adequately refute the fit-to-work assessment, but
merely relied on a review of Hipe’s medical history and his physical
examination; and
Second, Hipe failed to comply with the procedure laid down under
Section 20 (B) (3) of the 2000 POEA-SEC with regard to the joint
appointment by the parties of a third doctor whose decision shall be
final and binding on them in case the seafarer’s personal doctor
disagrees with the company-designated physician’s fit-to-work
assessment. In Philippine Hammonia Ship Agency, Inc. v.
Dumadag (Philippine Hammonia), the Court held that the seafarer’s
non-compliance with the said conflict resolution procedure results in
the affirmance of the fit-to-work certification of the company-
designated physician, viz.:
The filing of the complaint constituted a breach of [the seafarer’s] contractual
obligation to have the conflicting assessments of his disability referred to a third
doctor for a binding opinion. x xx Thus, the complaint should have been
dismissed, for without a binding third opinion, the fit-to-work certification of
the company-designated physician stands x xx.
51.
Millan v. Wallem Maritime Services Inc.
GR 195168 November 12, 2012
Facts:
Petitioner Benjamin C. Millan has been under the employ of Wallem
Maritime Services, Inc. as a seafarer since May 1981. On October 19, 2002, he
was deployed by the latter for its foreign principal, Wallem Shipmanagement,
Ltd., as a messman with a basic salary of US$405.00 a month on board M/T
"Front Vanadis."
On February 13, 2003, he slipped while carrying the ships provisions
and injured his left arm. He was examined at St. Pauls Surgical Clinic in Yosu
City, South Korea where he was diagnosed to have suffered "fracture on left
ulnar shaft." Hence, he was medically repatriated on February 26, 2003. On
February 28, 2003, he proceeded to the Manila Doctors Hospital where he
consulted Dr. Ramon S. Estrada, the company-designated physician, and
underwent an operation on March 3, 2003. After his discharge, he went through
a series of consultations and physical therapy sessions from May 6, 2003 until
July 2, 2003.
On July 5, 2003, Dr. Estrada reported that petitioner had completed his
physical therapy program but will have to undergo a physical capacity test on
August 28, 2003 to evaluate his fitness to work. Instead, on August 29, 2003,
petitioner filed a complaint against respondents Wallem Maritime Services, Inc.,
its President/Manager Reginaldo A. Oben, and Wallemshipmanagement, Ltd. for
medical reimbursement, sickness allowance, permanent disability benefits,
compensatory damages, exemplary damages and attorney’s fees.
On September 1, 2003, petitioner consulted Dr. Rimando C. Saguin, an
orthopedic surgeon, who diagnosed him as suffering from Philippine Overseas
Employment Administration (POEA) Disability Grade 11 and elbow bursitis
which rendered him "unfit to work at the moment." On September 10, 2003,
petitioner sought the opinion of Dr. Nicanor F. Escutin who assessed his
condition as a partial permanent disability with POEA Disability Grade 10,
20.15%. Dr. Escutin also opined that petitioner was suffering from "loss of
grasping power of small objects in one hand, and inability to turn forearm to
pronation or supination. The period of healing remains undetermined. The
patient is now unfit to go back to work at sea at whatever capacity."
In their defense, respondents denied any liability contending that
proper treatment and management were afforded petitioner but he deliberately
ignored his medical program by failing to appear on his scheduled appointment
with the company-designated physician. Respondents also claim that petitioner
was paid his sickness allowance in full, and his medical examinations, tests and
check-ups were shouldered by the company.
Issue: Whether or not a seafarer’s inability to resume his work after the lapse of
more than 120 days from the time he suffered an injury and/or illness
automatically warrants the grant of total and permanent disability benefits in
his favor.
Ruling:
There is no merit in this petition. A seafarer's inability to resume his
work after the lapse of more than 120 days from the time he suffered an injury
and/or illness is not a magic wand that automatically warrants the grant of total
and permanent disability benefits in his favor.
Records show that from the time petitioner was repatriated on February
26, 2003, 129 days had lapsed when he last consulted with the company-
designated physician on July 5, 2003 and 181 days had passed on the day he last
visited his physiatrist on August 26, 2003. Concededly, said periods have
already exceeded the 120-day period under Section 20(B) of the POEA-SEC and
Article 192 of the Labor Code. However, it cannot be denied that the company-
designated physician had determinedas early as March 5, 2003 or even before
his discharge from the hospital that petitioner's condition required further
medical treatment in the form of physical therapy sessions, which he had
subsequently completed per Dr. Estrada's Memo dated July 5, 2003, thus,
justifying the extension of the 120-day period. The company-designated
physician therefore had a period of 240 days from the time that petitioner
suffered his injury or until October 24, 2003 within which to make a finding on
his fitness for further sea duties or degree of disability.
Consequently, despite the lapse of the 120-day period, petitioner was still
considered to be under a state of temporary total disability at the time he filed
his complaint on August 29, 2003, 184 days from the date of his medical
repatriation which is well-within the 240-day applicable period in this case.
Hence, he cannot be said to have acquired a cause of action for total and
permanent disability benefits. To stress, the rule is that a temporary total
disability only becomes permanent when the company-designated physician,
within the 240-day period, declares it to be so, or when after the lapse of the
same, he fails to make such declaration.
Besides, petitioner's own evidence shows that he is suffering only from
partial permanent disability of either Grade 10 or 11.Accordingly, in the absence
of proof to the contrary, the Court concurs with the CA's finding that petitioner
suffers from a partial permanent disability grade of 10.
52. governed by Article 12 (2) of the CBA. A seafarer shall be entitled to the
payment of the full amount of disability compensation only if his injury,
MAGSAYSAY MARITIME CORPORATION vs. ROMEO V. PANOGALINOG regardless of the degree of disability, results in loss of profession, like for his
GR No. 212049 July 15, 2015 physical condition prevents a return to sea service. Based on the submissions of
the parties, this contractual attribution refers to permanent total disability
FACTS: Respondent, Romeo Panogalinog was employed by petitioner compensation as known in labor law. Temporary total disability only becomes
Magsaysay Maritime Corporation (MMC) for its foreign principal, Princess permanent when so declared by the company-designated physician within the
Cruise Lines, Ltd. (PCL) as Mechanical Fitter on board the vessel "Star Princess" periods he is allowed to do so, or upon the expiration of the maximum 240 day
under a ten (10) month contract. Respondent suffered injuries when he hit his medical treatment period without a declaration of either fitness to work or the
right elbow and forearm on a sewage pipe during a maintenance work existence of a permanent disability. While respondent has the right to seek the
conducted on board the vessel. He was immediately provided medical treatment opinion of other doctors under Section 20 (B) of the POEA-SEC and the CBA, it
at the ship's clinic and was diagnosed by the ship doctor with "Lateral bears stressing that the employer is liable for a seafarer's disability, arising from
Epicondylitis, Right". However, despite treatment, his condition did not a work-related injury or illness, only after the degree of disability has been
improve. Hence, he was medically repatriated. After the company-designated established by the company-designated physician and, if the seafarer consulted
physicians declared him fit to work, respondent sought the services of an with a physician of his choice whose assessment disagrees with that of the
independent physician, Dr. Manuel C. Jacinto, Jr. (Dr. Jacinto), who, on the other company designated physician, the disagreement must be referred to a third
hand, found him "physically unfit to go back to work”. Respondent filed a doctor for a final assessment.
complaint for the payment of permanent total disability compensation in
accordance with the parties' CBA, medical expenses, moral and exemplary
damages, and other benefits provided by law and the CBA against MMC. The LA
held that since the treatment of respondent's work related injury and
declaration of fitness to work exceeded the 120-day period under the POEA
Standard Employment Contract (POEA-SEC), and considering further that he
was not anymore rehired, respondent was entitled to permanent total disability
benefits in accordance with the CBA. Moral and exemplary damages were
equally awarded for petitioners' refusal to pay respondent's just claim, which
constitutes evident bad faith. The NLRC reversed and set aside the appealed LA
decision and instead, dismissed respondent's complaint. In reversing the NLRC,
the CA ruled that respondent was entitled to full permanent total disability
benefits, considering that a period of more than 120 days had elapsed before
the company-designated physicians made their findings, and that respondent
was no longer redeployed by petitioners despite the finding of fitness to work
by the company-designated physicians. In this relation, it further observed that
the award of said benefits was not based on the findings of respondent's
physician but rather on the number of days that he has been unfit to work.

Issue: Whether or not the CA committed grave error in awarding Romeo

Panogalinog permanent total disability benefits.

Ruling: Yes. It is doctrinal that the entitlement of seamen on overseas work to

disability benefits is a matter governed not only by medical findings but by law
and contract. Since respondent's injury on board the vessel "Star Princess" that
caused his eventual repatriation was sustained during the effectivity of the CBA,
his claim for the payment of permanent total disability compensation shall be
53.
SEAFARERS- DISABILITY BENEFITS
G.R. No. 207804 June 17, 2015
ACE NAVIGATION COMPANY and VELA INTERNATIONAL MARINE LIMITED
vs.
SANTOS D. GARCIA
Facts:
Ace Navigation hired Garcia to work as a fitter for the vessel M/T Capricorn
Star, owned by Vela International, for a period of 8 months. Garcia boarded the
vessel and on February 9, 2010, Garcia claimed that while doing grinding work,
he slipped and fell, causing pain in his right arm, shoulder, and chest. Upon
arrival of the vessel in Venezuela on May 17, 2010, Garcia underwent a medical
consultation where he was diagnosed with "Contracture Muscular Abnormality"
and was recommended to be repatriated. Thus, on May 20, 2010, Garcia was
repatriated back to the Philippines.
Garcia was initially diagnosed by company-designated physician Dr. Salvador to
be suffering from a work-related bilateral shoulder strain/sprain. It was also
discovered that he was suffering from bulges on his spine. Garcia continued
receiving medical treatment from another company-designated physician, Dr.
Cruz, for the persistent pain he was experiencing on his shoulder and posterior
cervical spine.
On November 8, 2010, Garcia filed a claim for total and permanent disability
benefits against petitioners before the NLRC. Garcia averred that he consulted
an independent physician, Dr. Escutin, who diagnosed him with a work-related
total and permanent injury on his cervical spine, rendering him unfit to be a
seaman in whatever capacity.
Petitioners asserted that Garcia’s illnesses are not work-related, and he was
already declared fit to work on October 28, 2010 by his urologist. Petitioners
also pointed out that Dr. Cruz already recommended that Garcia be accorded
disability rating of "Grade 10 – Moderate stiffness or two-thirds (⅔) loss of
motion of the neck, based on the POEA) Schedule of Disability Grading."
The LA ruled in Garcia’s favour. The LA found that Garcia is entitled to
permanent total disability benefits given that his physical condition prevented
him from resuming his trade for a period of more than 120 days. The LA gave
credence to the findings of the independent physician, Dr. Escutin, over that of
the company-designated physician, Dr. Cruz. Dissatisfied, petitioners
appealed to the NLRC.
Contrary to the findings of the LA, the NLRC discredited the declaration of the
independent physician, Dr. Escutin, that Garcia was permanently unfit for sea
duty given that his disability report did not show that he conducted
independent tests to verify his physical condition, but merely based his review
on the medical findings of petitioners’ designated physicians. Garcia moved for
reconsideration which the NLRC denied .Aggrieved, he filed a petition for
certiorari before the CA.
The CA reversed and set aside the ruling of the NLRC, and accordingly,
reinstated that of the LA.
Issue: Whether or not the CA correctly declared Garcia to be entitled to
permanent total disability benefits.
Ruling: NO.
A judicious review of the records reveals that Garcia was indeed unable to
obtain any gainful employment for more than 120 days after his repatriation;
however, this fact does not ipso facto render his disability total and permanent.
A temporary total disability only becomes permanent when so declared by the
company physician within the periods he is allowed to do so, or upon the
expiration of the maximum 240-day medical treatment period without a
declaration of either fitness to work or the existence of a permanent disability.
In the present case, while the initial 120-day treatment or temporary total
disability period was exceeded, the company-designated doctor duly made a
declaration well within the extended 240-day period that the petitioner was fit
to work.
The NLRC correctly relied on the findings of the company-designated physicians
despite the contrary findings of the independent physician. Jurisprudence holds
that, under these circumstances, the assessment of the company-designated
physician should be given more credence for having been arrived at after
months of medical attendance and diagnosis, compared with the assessment of
a private physician done in one day on the basis of an examination or existing
medical records.
As a final note, it must be stressed that while the Court adheres to the principle
of liberality in favor of the seafarer, it cannot allow claims for compensation
based on whims and caprices. When the evidence presented negates
compensability, the claim must fail, lest it causes injustice to the employer.
The Decision of the Court of Appeals are hereby REVERSED and SET ASIDE.
Accordingly, the Decision of the NLRC are hereby REINSTATED.
54.
G.R. No. 207639 July 1, 2015
BAHIA SHIPPING SERVICES, INC. and/or V-SHIP NORWAY and/or CYNTHIA
C. MENDOZA vs. CARLOS L. FLORES, JR.,
Facts:
Petitioner Bahia Shipping Services, Inc. hired respondent to work as a "Fitter"
on board the vessel Front Fighter owned by V-Ship Norway, for a period of 9
months. On April 15, 2009 and while on board overhauling the relief valve of the
vessel, a spring valve flew and hit the left side of respondent's face, causing
severe injuries to his teeth as well as multiple abrasions to his cheek, lips, and
nose. He was taken to a hospital in Singapore, where he was diagnosed to be
suffering from "blunt injuries to the left side of face" and was declared to be
unfit to return to ship. After undergoing an operation to treat his injury,
respondent was repatriated to the Philippines on April 18, 2009 for further
treatment.
Upon repatriation, respondent went to petitioners' accredited doctors who then
made him undergo a series of tests for months. On July 17, 2009, Dr. Romero-
Dacanay, the company-designated physician, gave respondent an interim
disability rating of Grade 7 (moderate residual or disorder).
Respondent sought a second opinion from an independent physician, Dr. Saguin,
who certified that because of his condition, he cannot work as a seafarer in any
capacity. Thus, on September 10, 2009, respondent filed a complaint before the
NLRC against petitioners for disability benefits, among others. This
notwithstanding, respondent continued to undergo treatment from the
company-designated physician to treat his condition until October 12, 2009.
Thereafter, respondent's treatment stopped and the company-designated
physician did not issue his final disability rating.
The CA affirmed the NLRC ruling.
Issue: Whether or not the CA correctly affirmed the NLRC ruling holding
respondent to be entitled to permanent total disability benefits.
Ruling: YES.
In Vergara v. Hammonia Maritime Services, Inc.,the Court held that the
company-designated physician is given a leeway of an additional 120 days, or a
total of 240 days from repatriation, to give the seafarer further treatment and,
thereafter, make a declaration as to the nature of the latter's disability. Thus, it
is only upon the lapse of 240 days from repatriation, or when so declared by the
company-designated physician, that a seafarer may be deemed totally and
permanently disabled.
The CA is correct in holding that respondent is deemed to be suffering from a
permanent total disability. The company-designated physician neither issued to
respondent a fit-to-work certification nor a final disability rating on or before
December 14, 2009, the 240th day since respondent's repatriation. Case law
instructs that, if after the lapse of the 240-day period, the seafarer is still
incapacitated to perform his usual sea duties and the company-designated
physician had not yet declared him fit to work or permanently disabled,
whether total or permanent, the conclusive presumption that the seafarer is
totally and permanently disabled arises. Perforce, it is but proper to hold that
respondent was permanently and totally disabled, and hence, entitled to the
corresponding benefits stated under the CBA.

In defense, petitioners countered, inter alia, that respondent's complaint should

be dismissed on account of prematurity, considering that he was still
undergoing treatment when he filed his complaint.

The LA ruled in respondent's favour. The LA found respondent to be suffering

from a permanent total disability, given that from the time of his repatriation
until the case was decided, there was no declaration from either the company-
designated or the independent physicians that respondent was fit to work.
Dissatisfied, petitioners appealed to the NLRC.

The NLRC affirmed the LA ruling. The NLRC held that the failure of the
company-designated physician to make an assessment of respondent's
condition within the 120-day period from his repatriation deemed his disability
to be permanent and total, and thus, he must be given the corresponding
benefits in accordance with the CBA.
55.
JEBSENS MARITIME, INC.,SEA CHEFS LTD., AND ENRIQUE M. ABOITIZ v.
FLORVIN G. RAPIZ,
G.R. No. 218871, January 11, 2017, PERLAS-BERNABE, J
Facts:
On March 16, 2011, Jebsens, on behalf of its foreign principal, Sea Chefs,
engaged the services of respondent to work on board the M/V Mercury as a
buffet cook for a period of nine (9) months with a basic monthly salary of
$501.00. On March 30, 2011, respondent boarded the said vessel. However, in
September 2011, respondent was diagnosed
with“TendovaginitisDequevain” which caused his medical repatriation since it
was not possible for him to work without using his right forearm.
On October 14, 2011, respondent was repatriated to the Philippines and
after a lengthy treatment, the company-designated physician gave him a
disability rating of Grade 11. Dissatisfied, respondent consulted an independent
physician, who classified his condition as a Grade 10 disability. Thereafter,
respondent requested petitioners to pay him total and permanent disability
benefits, which the latter did not heed, thus, constraining the former to file a
Notice to Arbitrate before the National Conciliation and Mediation Board
(NCMB). As the parties failed to amicably settle the case, the parties submitted
the same to the Office of the Panel of Voluntary Arbitrators (VA) for
adjudication.
Respondent argued that he is entitled to permanent and total disability
benefits as he was unable to work as a cook for a period of 120 days from his
medical repatriation. On the other hand, petitioners maintained that respondent
is only entitled to Grade 11 disability benefits pursuant to the classification
made by the company-designated physician.
The Panel of Voluntary Arbitrators ruled in respondent’s favor which was
later on affirmed by the CA. Petitioner’s moved for reconsideration, which was,
however, denied in a Resolution dated June 5, 2015; hence, this petition.
ISSUE: Whether or not the CA correctly held that respondent is entitled to
permanent and total disability benefits.
RULING: The petition is meritorious. In the case at bar, the VA and the CA’s
award of permanent and total disability benefits in respondent’s favor was
heavily anchored on his failure to obtain any gainful employment for more than
120 days after his medical repatriation. However, in Ace Navigation Company v.
Garcia, the Court explained that the company-designated physician is given an
additional 120 days, or a total of 240 days from repatriation, to give the seafarer
further treatment and, thereafter, make a declaration as to the nature of the
latter’s disability.
A temporary total disability only becomes permanent when so declared
by the company physician within the period he is allowed to do so, or upon the
expiration of the maximum 240-day medical treatment period without a
declaration of either fitness to work or the existence of a permanent disability.
In the present case, while the initial 120-day treatment or temporary total
disability period was exceeded, the company-designated doctor duly made a
declaration well within the extended 240-day period that the petitioner was fit
to work.
In Elburg Ship Management Phils. Inc. v. Quiogue, Jr., the Court further
clarified that for the company-designated physician to avail of the extended
240-day period, he must first perform some significant act to justify an
extension; otherwise, the seafarer’s disability shall be conclusively presumed to
be permanent and total. Accordingly, the Court laid down the following
guidelines that shall govern seafarer’s claims for permanent and total disability
benefits: (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, 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.
The records reveal that on October 14, 2011, respondent was medically
repatriated for what was initially diagnosed by the ship doctor
as “TendovaginitisDeQuevain.” As early as January 24, 2012, or just 102 days
from repatriation, the company-designated physician had already given his final
assessment on respondent when he diagnosed the latter with “ Flexor Carpi
Radialis Tendinitis, Right; Sprain, Right thumb; Extensor Carpi Ulnaris
Tendinitis, Right” and gave a final disability rating of “ Grade 11” pursuant to the
disability grading provided in the 2010 POEA-SEC. In view of the final disability
rating made by the company-designated physician classifying respondent’s
disability asd merely permanent and partial-which was not refuted by the
independent physician except that respondent’s condition was classified as
Grade 10 disability- it is plain error to award permanent and total disability
benefits to respondent. Hence, the petition is granted.
56.
BENEDICT N. ROMANA v. MAGSAYSAY MARITIME CORPORATION
GR No. 192442, Aug 09, 2017, PERLAS-BERNABE, J.
Facts: Petitioner Benedict Romana (Romana) was employed by respondents
Magsaysay Maritime Corporation, Eduardo Manese and/or Princess Cruise
Lines, Ltd. (Magsaysay Maritime, et al.) as a Mechanical Fitter and boarded the
vessel M/V Golden Princess. He claimed that while he and fellow shipmates
Alexander Mapa and Rogelio Acdal were walking along the ship alley, the metal
ceiling fell and wounded his head. A few days thereafter, he experienced
persisting headache and blurring of vision and consulted the ship’s doctor who
prescribed him medicines.
As his condition did not improve, he was referred to a specialist in
Barbados, West Indies, and was found to have a tumor (or hemangioblastoma)
at the left side of his brain, for which he underwent left posterior fossa
craniectomy.
He was repatriated on May 23, 2004 and the company-designated physician, in
a medical report dated May 24, 2004, issued a finding that Romana’s illness is
not work-related given that the same is an “abnormal growth of tissues in the
brain’s blood vessels.”
He was later cleared and discharged. No further consultations were
made. Thereafter, Romana consulted an independent physician, who on the
other hand, declared his illness to be work-related and gave him a Grade 1
impediment after finding him unfit to resume work as a seaman and incapable
of landing a gainful employment because of his medical background.
As a result, Romana filed a complaint, seeking payment of his disability benefits,
illness allowance, reimbursement of medical expenses, damages, and attorney’s
fees.
LA Ruling:
The Labor Arbiter (LA) dismissed the complaint, finding that Romana failed to
establish that his illness is work-related. In so ruling, the LA gave more credence
to the findings of the company-designated physician that his employment did
not increase the risk of contracting his illness, nor did his working conditions
contribute to his illness.
Thus, Romana appealed the LA ruling.
NLRC Ruling:
The NLRC affirmed the LA ruling, holding that there was no evidence to support
Romana’s claim that the nature of his work exposed him to risks of contracting a
brain tumor. Romana moved for reconsideration, but the same was denied.
Hence, Romana elevated his case to the CA via a petition for certiorari.
CA Ruling:
The CA dismissed the certiorari petition, finding no grave abuse of discretion on
the part of the NLRC. The CA debunked Romana’s claims that he was hit on the
head by a falling metal while on board the vessel, and that he was exposed to
different chemicals that aggravated his condition, for lack of substantiation. The
CA likewise did not give credence to the independent physician’s finding that
Romana’s illness is work-related, noting that said physician is a specialist in
internal medicine and not in diseases of the brain.
Aggrieved, Romana filed a motion for reconsideration, which was, however,
denied. Hence the petition before the SC.
Issue: Whether or not the illness not listed in the 2000 POEA-SEC does not
require proof of compensability
Ruling: The SC denied the petition.
Under the 2000 POEA-SEC, “any sickness resulting to disability or death as a
result of an occupational disease listed under Section 32-A of this Contract with
the conditions set therein satisfied” is deemed to be a “work-related illness.” On
the other hand, Section 20 (B) (4) of the 2000 POEA-SEC declares that “[t]hose
illnesses not listed in Section 32 of this Contract are disputably presumed as
work related.”
The legal presumption of work-relatedness was borne out from the fact that the
said list cannot account for all known and unknown illnesses/diseases that may
be associated with, caused or aggravated by such working conditions, and that
the presumption is made in the law to signify that the non-inclusion in the list of
occupational diseases does not translate to an absolute exclusion from disability
benefits.
Given the legal presumption in favor of the seafarer, he may rely on and invoke
such legal presumption to establish a fact in issue. “The effect of a presumption
upon the burden of proof is to create the need of presenting evidence to
overcome the prima facie case created, thereby which, if no contrary proof is
offered, will prevail.”
Citing Racelis vs. United Philippine Lines, Inc. and David vs. OSG
Shipmanagement Manila, Inc., the Court held that the legal presumption of
work-relatedness of a non-listed illness should be overturned only when the
employer’s refutation is found to be supported by substantial evidence, which,
as traditionally defined, is “such relevant evidence as a reasonable mind might
accept as sufficient to support a conclusion.
The presumption provided under Section 20 (B) (4) is only limited to the “work-
relatedness” of an illness. It does not cover and extend to compensabilitv. In this
sense, there exists a fine line between the work-relatedness of an illness and the
matter of compensability.
As differentiated from the matter of work-relatedness, no legal presumption of
compensability is accorded in favor of the seafarer. As such, he bears the burden
of proving that these conditions are met. In view of that, the SC cited the case of
Tagle vs. Anglo-Eastern Crew Management, Phils., lnc. that while work-
relatedness is indeed presumed, “the legal presumption in Section 20 (B) ( 4) of
the [2000] POEA-SEC should be read together with the requirements specified
by Section 32-A of the same contract.
The seafarer/claimant is burdened to present substantial evidence that his
work conditions caused or at least increased the risk of contracting the disease
and only a reasonable proof of work-connection, not direct causal relation is
required to establish its compensability.
The SC held that in Jebsen Maritime, Inc. vs. Ravena, 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.
In this regard, the seafarer, therefore, addresses the refutation of the employer
against the work-relatedness of his illness and, at the same time, discharges his
burden of proving compliance with certain conditions of compensability.
In this case, the company-designated physician, after due assessment of
Romana’s condition, found that his illness was caused by an abnormal growth of
tissue in the brain’s blood vessels (brain tumor) and therefore not work-related.
To refute the same, Romana argued that he accidentally injured his head when a
metal ceiling fell on his head that caused lesion and bleeding. The SC held that,
as correctly pointed out by the CA, no evidence was presented to substantiate
the said incident.
Romana asserted that the nature of his work may have contributed to his illness
having been previously employed on board the same vessel under two (2)
contracts, and that as a fitter, he was constantly exposed to inhalation of and
direct contact to harmful chemicals, formaldehyde, hydrocarbons, fumes, and
other deleterious emissions, changes of temperature of extreme hot and
freezing colds at the engine room and deck areas and as the vessel crossed
ocean boundaries. However, there is no showing that the foregoing work
conditions increased the risk of contracting his illness.

While Section 32-A of the 2000 POEA-SEC refers to conditions for
compensability of an occupational disease and the resulting disability or death,
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.
Probability, not the ultimate degree of certainty, is the test of proof in disability
compensation proceedings. Nevertheless, probability must be reasonable; hence
it should, at least, be anchored on credible information. A mere possibility will
not suffice, and a claim will fail if there is only a possibility that the employment
caused the disease.

The SC held further that it would result in a preposterous situation where a

seafarer, claiming an illness not listed under Section 32 of the [2000 PO EA-SEC]
which is then disputably presumed as work-related and is ostensibly not of a
serious or grave nature, need not satisfy the conditions mentioned in Section
32-A of the [2000 POEA-SEC]. In stark contrast, a seafarer suffering from an
occupational disease would still have to satisfy four (4) conditions before his or
her disease may be compensable.

For both listed occupational disease and a non-listed illness and their resulting
injury to be compensable, the seafarer must sufficiently show by substantial
evidence compliance with the conditions for compensability. Notably, the
seafarer will, in all instances, have to prove compliance with the conditions for
compensability, whether or not the work-relatedness of his illness is disputed
by the employer.
57.
Teodoro Ventura v. Crewtech Shipment PH, Inc
GR. No. 225995
Perlas-Bernabe, J.:
Facts:
In 2013. Ventura entered into a 9- month contract with Crewtech as Chief Cook
on board the vessel MV Maria Cristina Rizzo for the latters principal – Rizzo.
Petitioner claimed that he was consistently employed by Crewtech for the past
three years and was assigned in different vessels. After medical examination he
boarded the vessel. However, in 2014, MV Maria Cristina was transferred to
Elburg Shipmanagement Phils. On the same year, petitioner had a hard time
urinating accompanied by lower abdominal pain. When the vessel reached the
port Singapore he was brought to a specialist and was diagnosed to have
“Prostatitis” and declared “unfit for duty.” He also disclosed that he has history
of such illness three years ago. Later on he was medically repatriated and
referred to company-designated physician for further evaluation and treatment.
The medical result declared that the petitioner’s illness is not work-related but
a combination of genetic predisposition, diet, and water intake. Ventura was
recommended to undergo treatment with three sessions that is estimated to last
for three months. After the procedure, however, he claimed that he still
continuously feel the pain.
October 2014, Ventura was verbally informed that it would be his last check-up
session and that any subsequent consultations would be for his own account. He
was compelled to seek an independent physician – Dr. Tan, who declared him to
be permanently disabled, in view of his indwelling catheter and for being unable
to perform his job effectively.
Ventura the filed a complaint for total permanent disability benefits, sickness
allowance, transportation and medical expenses, damages and attorney's fees
against Crewtech before the NLRC. However, Crewtech denied the claim stating
that 1) the petitioner is guilty of fraudulent misrepresentation for failing to
disclose his previous medical history of having Prostatitis; 2) the illness is not
work related; 3) petitioner’s failure to observe the 2010 POEA-SEC was fatal to
his cause.
LA, NLRC, and CA Ruling
LA dismissed the complaint for 1) failure of the petitioner to discharge the
burden of proving that his illnesses were work-related; 2) failure of the
petitioner to take regular medication knowing that he has history of such
illness; 3) there is no convincing indication that his job has aggravated his
condition; 4) petitioner's non-disclosure of a previous illness petitioner's non-
disclosure of a previous illness.
NLRC reversed the decision and ruled in favor of the petitioner stating that 1)
there was no fraudulent concealment because Crewtech was well aware of the
medical history of Ventura as reflected in the Medical Report; 2) the illness is
work related holding that as Chief Cook, the latter cannot just excuse himself to
obey the call of nature more so when preparing and cooking food of the officers
and crew of the vessel.
On the other hand, CA set aside the decision of NLRC and only partly granting
the petition for the payment of total permanent disability benefit. It stated that
there is fraudulent concealment of Ventura’s illness because he marked “no” as
an answer in the question of whether or not he was suffering for any medical
condition.
Issue:
whether or not the CA erred in holding that the NLRC gravely abused its
discretion when it ruled that petitioner was entitled to total and permanent
disability benefits.
Held:
The petition in denied.
It is basic that the entitlement of a seafarer on overseas employment to
disability benefits is governed by the medical findings, the law, and the parties'
contract. The material statutory provisions are Articles 197 to 199 of the Labor
Code in relation to Section 2 (a), Rule X of the Amended Rules on Employees'
Compensation (AREC), while the relevant contracts are the POEA-SEC, the
parties' Collective Bargaining Agreement (CBA), if any, and the employment
agreement between the seafarer and the employer. In this case, petitioner
executed his employment contract with respondents during the effectivity of the
2010 POEA-SEC; hence, its provisions are applicable and should govern their
relations.
Pursuant to the 2010 POEA-SEC, the employer is liable for disability benefits
when the seafarer suffers from a work-related injury or illness during the term
of his contract. In this regard, Section 20 (E) thereof, mandates the seafarer to
disclose all his pre-existing illnesses in his Pre-employment Medical
Examination (PEME), failing which, shall disqualify him from receiving the
same. Since petitioner's prostatitis was shown to have been treated in 2011
with no indication that he was required to undergo further medical attention or
maintenance medication for the same, he cannot be faulted into believing that
he was completely cured and no longer suffering from said illness.
Be that as it may, the CA is nevertheless correct in holding that petitioner's
illnesses, Cystitis with Cystolithiases and BPH, were not work-related, hence,
not compensable. Section 20 (A) of the 2010 POEA-SEC is explicit that the
employer is liable for disability benefits only when the seafarer suffers from a
work-related injury or illness during the term of his contract. Thus, work-
relation must be established. As a general rule, the principle of work-relation
requires that the disease in question must be one of those listed as an
occupational disease under Section 32-A thereof. Nevertheless, should it not be
classified as occupational in nature, Section 20 (A) paragraph 4 thereof provides
that such diseases are disputably presumedas work-related. However, the
presumption does not necessarily result in an automatic grant of disability
compensation. The claimant still has the burden to present substantial evidence
that his work conditions caused or at least increased the risk of contracting the
illness.

Petitioner's general averments that he was exposed to stressful demands of his

duties and responsibilities and subjected to hazardous condition of his station
are mere allegations couched in conjectures. There was no evidence presented
to establish how and why petitioner's working conditions increased the risk of
contracting his illness. In the absence of substantial evidence, the Court cannot
just presume that petitioner's job caused his illness or aggravated any pre-
existing condition he might have had. Mere possibility will not suffice and a
claim will still fail if there is only a possibility that the employment caused the
disease.

Lastly, the Court notes that even petitioner's physician of choice, Dr. Tan, failed
to refute the company-designated physician's pronouncement that his illness
was not work-related
58.
Tomas Atienza v. Orophil Shipping International Co.
GR. No. 191049
Perlas- Bernabe, J.:
Facts:
Atienza was employed an as Able Seaman by Orophil for its principal Hakuho
Kisen Co and was assigned to MV Cape Apricot. During his employment he was
diagnosed to have Tolosa Hunt Syndrome or sinus inflammation. As a result he
was repatriated and referred to a company-designated physician – Dr. Cruz,
who confirmed the findings. Still, Dr. Cruz declared him fit to work. Petitioner
then consulted an independent physician – Dr Pasco, who assessed that his
illness is Grade IV thus unfit for sea duty. Afterwards, he filed a claim for
payment of disability benefits, reimbursement of medical expenses, damages,
and attorney's fees against Orophil before NLRC.
On the other hand, Orophil opposed the claim stating that 1) the illness is not
work related: 2) petitioner maliciously concealed that he previously suffered
from THS that would barred his from claiming disability benefits pursuant to
2000 POEA-Standard Employment Contract.
LA, NLRC, CA Ruling
LA ruled in favor of petitioner stating that 1) the illness is work related; and 2)
he cannot be faulted for not declaring his previous treatment for the same
illness given that it had occurred way back in 1996 and has not recurred despite
several contracts.
NLRC set aside the decision of LA holding that 1) petitioner failed to establish
that his illness is work related; 2) the certificate issued by Dr. Pasco is not
supported by any explanation.
CA affirmed the decision made by NLRC.
Issue:
Whether or not petitioner is entitled to total and permanent disability benefits
pursuant to the 2000 POEA-SEC.
Held:
The petition has merit.
Under the 2000 POEA-SEC, "any sickness resulting to disability or death as a
result of an occupational disease listed under Section 32-A of this Contract with
the conditions set therein satisfied" is deemed to be a "work-related illness." On
the other hand, Section 20 (B) (4) of the 2000 POEA-SEC declares that "[t]hose
illnesses not listed in Section 32 of this Contract are disputably presumed as
work related." The legal presumption of work-relatedness was borne out from
the fact that the said list cannot account for all known and unknown
illnesses/diseases that may be associated with, caused or aggravated by such
working conditions, and that the presumption is made in the law to signify
that the non-inclusion in the list of occupational diseases does not
translate to an absolute exclusion from disability benefits. Given the legal
presumption in favor of the seafarer, he may rely on and invoke such legal
presumption to establish a fact in issue. "The effect of a presumption upon the
burden of proof is to create the need of presenting evidence to overcome
the prima facie case created, thereby which, if no contrary proof is offered, will
prevail."
Nonetheless, the presumption provided under Section 20 (B) (4) is only limited
to the "work-relatedness" of an illness. It does not cover and extend
to compensability. In this sense, there exists a fine line between the work-
relatedness of an illness and the matter of compensability. The former
concept merely relates to the assumption that the seafarer's illness, albeit not
listed as an occupational disease, may have been contracted during and in
connection with one's work, whereas compensability pertains to the
entitlement to receive compensation and benefits upon a showing that his work
conditions caused or at least increased the risk of contracting the disease. This
can be gathered from Section 32-A of the 2000 POEA-SEC which already
qualifies the listed disease as an "occupational disease" (in other words, a
"work-related disease")
SECTION 32-A OCCUPATIONAL DISEASES
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.
(Emphasis and underscoring supplied)
As differentiated from the matter of work-relatedness, no legal
presumption of compensability is accorded in favor of the seafarer. As such,
he bears the burden of proving that these conditions are met.
59
ROBELITO MALINIS TALAROC, PETITIONER, VS. ARPAPHIL SHIPPING
CORPORATION, EPIDAURUS S.A., AND/OR NATIVIDAD PAPPAS, RESPONDENTS
G.R. No. 223721 | August 30, 2017
DOCTRINE OF THE CASE
A total disability does not require that the employee be completely
disabled, or totally paralyzed. What is necessary is that the injury must be
such that the employee cannot pursue his or her usual work and earn
from it. On the other hand, a total disability is considered permanent if it lasts
continuously for more than 120 days. What is crucial is whether the
employee who suffers from disability could still perform his work
notwithstanding the disability he incurred.[76]
PERLAS-BERNABE, J.:
FACTS: Petitioner was employed by respondent Arpaphil Shipping Corporation
(ASC) as Third Officer under a six (6)-month contract [7] that was signed on
February 18, 2013. petitioner boarded the vessel on March 8, 2013.
On March 16, 2013, the Ship Master informed respondent Epidaurus S.A. that
petitioner could not perform his duties due to fever and back pain. [11In a
Medical Report[15] dated March 24, 2013, petitioner was found to be suffering
from lumbago with stomach pains, in addition to his hypertension, and
recommended that he be repatriated for further medical treatment.
Upon arrival in Manila, or on March 26, 2013, petitioner was referred to the
company-designated physician of ASC, Dr. Esther G. Go (Dr. Go). Petitioner was
found to be suffering from gastric ulcer, duodenitis, hypertension, Generalized
Disc Bulge and Paracentral Disc Protrusion." [18] He was advised by Dr. Go to
undergo rehabilitation and continue his medications. [19]
On April 29, 2013, petitioner was again admitted to the hospital due to "left
facial asymmetry, loss of balance and left leg weakness" and referred to a
neurologist who found him to have "Right Brainstem Infarct."
Thereafter, in a confidential medical report [22] dated May 14, 2013 (May 14,
2013 medical report), the company designated physician assessed petitioner's
condition which showed that “he was diagnosed to have Gastric Ulcer;
Duodenitis; Hypertension; L-3 - L-4 and L4 - L-5 Generalized Disc Bulge; L5
- S1, Left Paracentral Disc Protrusion. All of which are not work-related. This
is not work-related…. The specialists opine that patient's prognosis for
returning to sea duties is guarded and fitness to work is unlikely due to risk of
another cerebrovascular event. His estimated length of further treatment is
approximately 3 more months before he reached his maximum medical
improvement…. If patient is entitled to a disability, his suggested
disability grading is Grade 10 - slight brain functional disturbance that
requires little attendance or aid and which interferes to a slight degree
with the working capacity of the patient.” (Emphases supplied)
In all of the follow-up sessions, petitioner persistently complained of left leg
weakness, low back pain and occasional dizziness, to which Dr. Go merely
advised him to continue his medications and rehabilitation program.
Unconvinced of the true state of his condition, petitioner consulted an
independent physician, Dr. Manuel Fidel M. Magtira (Dr. Magtira), who found
him unfit to return to work as a seafarer after evaluating his previous MRI and
upon physical examination.
In the interim, or on August 28, 2013, petitioner filed a complaint [28] for, among
others, include a claim for total and permanent disability benefits against ASC,
its Owner/Manager/President Natividad A. Pappas, and Epidaurus S.A.
(respondents), before the NLRC.
In support of his claim, petitioner averred that from the time he was repatriated
for his back injury, he was no longer capable of resuming work as a seafarer that
lasted for more than 240 days despite medical treatment and therapy. By
reason thereof, he had lost his capacity to obtain further sea employment and an
opportunity to earn an income. For their part, [33] respondents maintained that
petitioner was not entitled to permanent and total disability benefits under the
CBA since the latter's illness did not arise from an accident and contended
further that petitioner's action was premature as the 240-day extended medical
treatment has not yet expired at the time he filed his complaint. 37]
The LA dismissed the complaint for lack of cause of action, holding that the
claim for disability benefits was filed before the lapse of the allowable 240-day
extended medical treatment period. However,the NLRC set aside the LA
decision,[44] ruling that the 240-day extended medical treatment was not an
automatic application in case of disability claim. It pointed out that there must
be a need for further medical treatment before the 120-day period may be
extended which Dr. Go failed to show. Yet, the CA gave due course to the petition
finding the NLRC to have gravely abused its discretion, [54] and reinstated the
LA's Decision.There being no final assessment yet, the complaint for total and
permanent disability benefits was premature.
ISSUE:
.
Whether or not the petitioner is entitled to total and permanent
disability claim
RULING:
 Yes. The Labor Code and the Amended Rules on Employees
Compensation (AREC) provide that the seafarer is declared to be on temporary
total disability during the 120-day period within which the seafarer is unable
to work.[62] However, a temporary total disability lasting continuously for more
than 120 days , except as otherwise provided in the Rules, is considered as
a total and permanent disability.[63]

The exception referred to above pertains to a situation when the sickness "still
requires medical attendance beyond the 120 days but not to exceed 240
days" in which case the temporary total disability period is extended up to a
maximum of 240 days.[64] Note, however, that for the company-designated
physician to avail of the extended 240-day period, he must first perform some
significant act to justify an extension otherwise, the seafarer's disability shall be
conclusively presumed to be permanent and total.[65]

the NLRC correctly pointed out that aside from simply alleging "maximum
medical improvement," the same report failed to indicate what kind of further
treatment the seafarer would be subjected to. Moreover, while petitioner's
medical progress reports mention that he was "advised to continue his
rehabilitation and medication," they nonetheless failed to indicate what kind of
rehabilitation he has to undergo. Thus, for all these reasons, the Court agrees
with the NLRC that respondents failed to sufficiently show that further medical
treatment would address petitioner's alleged temporary total disability, which
therefore, discounts the proffered justification to extend the 120-day period to
240 days. As such, petitioner had rightfully commenced his complaint for
disability compensation.

In C.F. Sharp Crew Management, Inc. v. Taok,[71] the Court held that "a seafarer
may pursue an action for total and permanent disability benefits if x xx 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 x x x,"[72] as in this case.
60 following causes:
INTER-ORIENT MARITIME v. CRISTINA CANDAVA
G.R. No. 201251| June 26, 2013
Immediate Cause: RESPIRATORY FAILURE
DOCTRINE OF THE CASE Antecedent Cause: PULMONARY METASTASIS
the illness leading to the eventual death of seafarer need not be shown Underlying Cause: GERM CELL TUMOR
to be work-related in order to be compensable, but must be proven to have
been contracted during the term of the contract. Neither is it required that Respondent Cristina sent petitioner a demand letter for payment of death
there be proof that the working conditions increased the risk of contracting the benefits but was ignored Cristina filed a complaint for death and other
disease or illness monetary benefits against petitioners before the NLRC.

PERLAS-BERNABE, J.:
FACTS: In January 2002, petitioner Inter-Orient Maritime Incorporated (Inter-
Orient) hired Joselito C. Candava (Joselito) as an able-bodied seaman contract
period of nine (9) months.[7] Despite expiration of his contract period on
October 28, 2002, Joselito continued to work aboard the vessel and such work
extension lasted until February 2003.
On February 13, 2003, he complained of significant pain in the abdominal
region and was rushed to a hospital. Joselito was diagnosed to be suffering from
"direct inguinal hernia strangulated right" and "acute appendicitis." The doctors
further discovered that the tumor in Joselito's right inguinal canal
"corresponded to a tumor formation dependent on the right testicle”. As a result
thereof, Joselito was repatriated to Manila. Upon his arrival, the company
designated physician examined Joselito and declared him fit to work.
Nonetheless, his supplications for work were rejected.
On March 28, 2003, Joselito, accompanied by representatives of petitioner Inter-
Orient, filed a complaint[9] NLRC. However, on even date, Joselito sought for its
dismissal[10] in consideration of the sum of P29,813.04 and in relation thereto,
executed a Release of All Rights [11] and Pagpapaubaya ng Lahat ng Karapatan,
[12]
releasing Tankoil and Inter-Orient from any claim arising from the
appendicitis and inguinal hernia he suffered.
A month later, Joselito was diagnosed to have suspected "malignant cells that
may also be reactive mesothelial cells,"[13] and thereafter found to have, among
others, cancer of the testesand abdominal germ cell tumor. Thus, on August 11,
2003, Joselito, again accompanied by representatives from petitioner Inter-
Orient, filed another complaint[18] before the NLRC. Similarly, on even date,
Joselito sought for the dismissal[19] of his complaint in consideration of the
amount of P77,000.00 and executed a Receipt and Release, [20] releasing Tankoil
and Inter-Orient from any claim. Both cases were dismissed.
On October 9, 2003, Joselito passed away. His death certificate [21] listed the
Cristina claimed that Joselito's death was due to an illness contracted during the
latter's employment.
For their part, petitioners claimed that Cristina's complaint is barred by the
accompanying release documents the latter executed.
The LA ruled in favor of Cristina. However, the NLRC reversed and set aside the
LA's ruling.Thereafter, the CA annulled and set aside the NLRC's ruling and
reinstated that of the LA. The CA holds that while (POEA-SEC) allows an
employer to extend a seafarer's employment beyond the period stipulated if
there was no replacement crew available, such extension should not exceed
three (3) months. In Joselito's case, his original contract period expired
sometime in October 2002 but petitioners extended his employment until
February 2003, or for four (4) additional months. Thus, the CA deemed that
there was an implied renewal of Joselito's employment contract for another
nine (9) months starting from the expiration of the allowable three (3) month
extension on January 28, 2003, or for the period of January 29, 2003 up to
October 28, 2003. In view of this, Joselito's death on October 9, 2003 was within
the term of his contract and thus, compensable.
ISSUE:
whether Joselito's death is compensable as to entitle Cristina to claim
death benefits.
RULING:
Yes. An injury or accident is said to arise "in the course of employment"
when it takes place within the period of employment, at a place where the
employee reasonably may be, and while he is fulfilling his duties or is engaged
in doing something incidental thereto. [39] A meticulous perusal of the records
reveals that Joselito contracted his illness in the course of employment. It
cannot also be denied that the same was aggravated during the same period.
Thus, there was a clear causal connection between such illness and his apparently due to his worsening health. This only shows that his medical
eventual death, making his death compensable. condition effectively barred his chances of being hired by other maritime
employers and deployed abroad on an ocean-going vessel.
Verily, Joselito complained of significant pain in the abdominal region while
aboard M/T Demetra and during the extended period of his employment. Upon In view of the foregoing, Joselito's death is compensable for having been caused
undergoing different medical procedures, the doctors discovered that the tumor by an illness duly established to have been contracted in the course of his
in Joselito's right inguinal canal "corresponded to a tumor formation dependent employment.
on the right testicle.” Succeeding medical reports showed the presence of
testicular as well as abdominal germ tumors. Joselito's Death
Certificate[47] stated respiratory failure as the immediate cause of his death, with
pulmonary metastasis as antecedent cause. The underlying cause for his death
was germ cell tumor [48] The World Health Organization defines an underlying
cause as the disease or injury that initiated the train of events leading
directly to death, or circumstances of the accident or violence that produced
the fatal injury.[49] Perforce, there existed a clear causal connection between
Joselito's illness which he contracted during employment and his eventual
death.

The Court cannot give credence to petitioners' claim [50] that Joselito's death
occurred beyond the term of his employment because his extended/renewed
contract was void for lack of POEA approval and thus, barred recognition of any
rights and obligations arising therefrom. It was not Joselito’s fault. Petitioners
made such a scenario occur and should not benefit from their wrongful acts.
Thus, the CA is correct in holding that there was an implied renewal of Joselito's
contract of employment for another nine (9) months starting from January 29,
2003 up to October 28, 2003, with petitioners being deemed to have relied on
Joselito's fitness based on his previous PEME and assumed the risk of liability
for illness contracted during such extended term.

Neither may the execution of release documents in petitioners' favor detract

from the compensability of Joselito's death. They were the result of a pre-
designated scheme to evade payment of disability benefits due to Joselito. Anent
the release documents that Joselito executed, records show that Joselito's two
(2) previous complaints were actually "walk-in settlements," [53] thus explaining
his actions of filing such complaints and eventual motions to dismiss, as well as
the execution of release documents, all on the same day. Moreover, petitioners
never traversed Cristina's assertion [54] that the motion to dismiss and release
document in connection with Joselito's second complaint were already signed
and executed even before such complaint was filed and that respondent Inter-
Orient's representatives actually accompanied Joselito in filing the same. These
negate his voluntariness in executing his complaints, motions to dismiss, and
release documents.

Lastly, despite the declaration of fitness that would have entitled him to
reinstatement to his former position,[57] Joselito was not provided work,
61
G.R. No. 190161 October 13, 2014
ANITA N. CANUEL, for herself and on behalf of her minor children, namely:
CHARMAINE, CHARLENE, and CHARL SMITH, all surnamed
CANUEL, Petitioners,
vs.
MAGSAYSAY MARITIME CORPORATION, EDUARDO U. MANESE, and
KOTANI SHIPMANAGEMENT LIMITED, Respondents.
FACTS:
On July 14, 2006, Nancing R. Canuel (Nancing) was hired by respondent
Magsaysay Maritime Corporation (Magsaysay) as Third Assistant Engineer for
its foreign principal, respondent Kotani Ship management Limited (Kotani), to
be deployed on board the vessel M/V North Sea (vessel) for a period of twelve
(12) months, with a basic salary of US$640.00 a month. He underwent the
required pre-employment medical examination, and was declared fit to work by
the company-designated physician. Thereafter, he joined the vessel and
commenced his work on July 19, 2006.
On February 20, 2007, Nancing figured in an accident while in the performance
of his duties on board the vessel, and, as a result, injured the right side of his
body.7 On March 5, 2007, he was brought to Shanghai Seamen’s Hospital in
Shanghai, China where he was diagnosed to have suffered "bilateral closed
traumatic hemothorax."8 On March 12, 2007, Nancing informed his wife, herein
petitioner Anita N. Canuel (Anita), about the accident and his confinement. On
March 24, 2007, he was medically repatriated and immediately admitted to the
Manila Doctor’s Hospital under the care of a team of medical doctors led by Dr.
Benigno A. Agbayani, Jr., Magsaysay’s Medical Coordinator. Due to his
worsening condition, Nancing was placed at the hospital’s intensive care unit on
April 8, 2007. He eventually died on April 25, 2007. Nancing’s death certificate
indicated the immediate cause of his death as acute respiratory failure, with
lung metastasis and r/o bone cancer as antecedent cause and underlying cause,
respectively.
On May 23, 2007, Nancing’s widow, Anita, for herself and on behalf of their
children, Charmaine, Charlene, and Charl Smith, all surnamed Canuel
(petitioners) filed a complaint against Magsaysay and Kotani, as well as
Magsaysay’s Manager/President, Eduardo U. Manese (respondents), before the
National Labor Relations Commission (NLRC), docketed as NLRC-OFW Case No.
(M)-07-05-01423-00, seeking to recover death benefits, death compensation of
minor children, burial allowance, damages, and attorney’s fees.
In their defense, respondents denied any liability and contended that while
Nancing died of acute respiratory failure, the real cause of his death, as shown in
the autopsy conducted by the National Bureau of Investigation, was
"moderately differentiated andenocarcinoma, pneumonia and pulmonary
edema, lung tissue" or lung cancer. The said illness is not work-related per
advise of their company doctor, Dr. Marie Cherry Lyn Samson- Fernando, hence,
not compensable.
The LA ruled in favor of petitioners and thereby ordered respondents to pay
them: (a) the aggregate sum of US$72,000.00 consisting of US$50,000.00 as
death benefits, US$21,000.00 as death compensation for the three minor
children (US$7,000.00 each), and US$1,000.00 for burial expenses; (b) illness
allowance from March 5, 2007 to April 25, 2007; (c) _100,000.00 as moral
damages; (d) _100,000.00 as exemplary damages; and (e) 10% of the total
award as attorney’s fees.
The LA found that Nancing’s death on April 25, 2007 occurred during the term
of his twelve-month employment contract. Moreover, the evidence on record
supports the conclusion that his demise was caused by the injury he sustained
in an accident while performing his job on board the vessel. Hence, his death
was the result of a work-related injury that occurred during the term of his
employment. Corollary thereto, the LA disregarded respondents’ contention
that lung cancer, a non-work related illness, caused Nancing’s death as it was
apparent that it was the injury he sustained while working on board the vessel
that triggered the deterioration of his resistance against the said illness or any
other affliction that he may have had.
Respondents appealed to the NLRC. The NLRC denied the respondents’ appeal
and sustained the findings of the LA and affirmed the award of damages and
attorney’s fees in petitioners’ favor but found respondents not liable for
sickness allowance and burial benefits. The NLRC ruled that while respondents
correctly argued that Nancing’s death did not occur during the term of his
employment pursuant to Section 18 of the Philippine Overseas Employment
Administration Standard Employment Contract (POEA-SEC) as his employment
was deemed terminated after his medical repatriation, still, it cannot be
doubted that his death was brought about by the same or similar cause or
illness which caused him to be repatriated.
Respondents filed for motion for reconsideration but NRLC denied such. They
elevated the case to the CA on certiorari. The CA found that the NLRC Ruling
was tainted with grave abuse of discretion and, thus, rendered a new judgment
dismissing petitioners’ complaint for death benefits. Citing the case of Klaveness
Maritime Agency, Inc. v. Beneficiaries of the Late Second Officer Anthony S. Allas
(Klaveness), it held that the death of the seafarer after the termination of his
contract is not compensable, even if the death is caused by the same illness
which prompted the repatriation of the seafarer and the termination of his
contract. Petitioners’ motion for reconsideration was denied by the CA.
ISSUE: Whether or not the CA committed reversible error in holding that the
NLRC committed grave abuse of discretion in granting petitioners’ complaint for
death benefits.
HELD:
The terms and conditions of a seafarer’s employment are governed by the
provisions of the contract he signs with the employer at the time of his hiring.
Deemed integrated in his employment contract is a set of standard provisions
determined and implemented by the POEA, called the "Standard Terms and
Conditions Governing the Employment of Filipino Seafarers on Board Ocean-
Going Vessels," which provisions are considered to be the minimum
requirements acceptable to the government for the employment of Filipino
seafarers on board foreign ocean-going vessels.
First Requirement:it cannot be seriously disputed that the first
requirement for death compensability concurs in this case.
The Seafarer’s Death Should Be Work-Related.
While the 2000 POEA-SEC does not expressly define what a "work related
death" means, it is palpable from Part A (4) as above-cited that the said term
refers to the seafarer’s death resulting from a work-related injury or illness.
This denotation complements the definitions accorded to the terms "work-
related injury" and "work-related illness" under the 2000 POEA-SEC as follows:
Definition of Terms:
For purposes of this contract, the following terms are defined as
follows:
x xxx
11. Work-Related Injury – injury(ies) resulting in disability or death
arising out of and in the course of employment.
12. Work-Related Illness – any sickness resulting to disability or death
as a result of an occupational disease listed under Section 32-A of this
contract with the conditions set therein satisfied. (Emphases supplied)
Given that the seafarer’s death in this case resulted from a work-related injury
as defined in the 2000 POEA-SEC above, it is clear that the first requirement for
death compensability is present.
As the records show, Nancing suffered a work-related injury within the term of
his employment contract when he figured in an accident while performing his
duties as Third Assistant Engineer at cylinder number 7 of the vessel on
February 20, 2007. The foregoing circumstances aptly fit the legal attribution of
the phrase "arising out of and in the course of employment" which the Court, in
the early case of Iloilo Dock & Engineering Co. v. Workmen’s Compensation
Commission, pronounced as follows:
The two components of the coverage formula – "arising out of" and "in
the course of employment" – are said to be separate tests which must
be independently satisfied; however, it should not be forgotten that the
basic concept of compensation coverage is unitary, not dual, and is best
expressed in the word, "work-connection," because an uncompromising
insistence on an independent application of each of the two portions of
the test can, in certain cases, exclude clearly work-connected injuries.
The words "arising out of" refer to the origin or cause of the accident,
and are descriptive of its character, while the words "in the course of"
refer to the time, place, and circumstances under which the accident
takes place.
As a matter of general proposition, an injury or accident is said to arise
"in the course of employment" when it takes place within the period of
the employment, at a place where the employee reasonably may be, and
while he is fulfilling his duties or is engaged in doing something
incidental thereto.
That Nancing was suffering from lung cancer, which was found to have been
pre-existing, hardly impels a contrary conclusion since – as the LA herein earlier
noted – the February 20, 2007 injury actually led to the deterioration of his
condition. As held in More Maritime Agencies, Inc. v. NLRC, "[i]f the injury is the
proximate cause of [the seafarer’s] death or disability for which compensation is
sought, [his] previous physical condition x xx is unimportant and recovery may
be had for injury independent of any pre-existing weakness or disease," viz.:
Compensability x xx does not depend on whether the injury or
disease was pre-existing at the time of the employment but rather if
the disease or injury is work-related or aggravated his condition. It
is indeed safe to presume that, at the very least, the arduous nature
of [the seafarer’s] employment had contributed to the aggravation
of his injury, if indeed it was pre-existing at the time of his
employment. Therefore, it is but just that he be duly compensated for
it. It is not necessary, in order for an employee to recover
compensation, that he must have been in perfect condition or health at
the time he received the injury, or that he be free from disease. Every
workman brings with him to his employment certain infirmities, and
while the employer is not the insurer of the health of his employees, he
takes them as he finds them, and assumes the risk of having a
weakened condition aggravated by some injury which might not hurt or
bother a perfectly normal, healthy person. If the injury is the proximate
cause of his death or disability for which compensation is sought, the
previous physical condition of the employee is unimportant and
recovery may be had for injury independent of any pre-existing
weakness or disease.
Clearly, Nancing’s injury was the proximate cause of his death considering that
the same, unbroken by any efficient, intervening cause, triggered the following
sequence of events: (a) Nancing’s hospitalization at the Shanghai Seamen’s
Hospital where he was diagnosed with "bilateral closed traumatic
haemothorax"; (b) his repatriation and eventual admission to the Manila
Doctor’s Hospital; and (c) his acute respiratory failure, which was declared to be
the immediate cause of his death.
Second Requirement:
The Seafarer’s Death Should Occur During The Term Of Employment.
With respect to the second requirement for death compensability, the Court
takes this opportunity to clarify that while the general rule is that the seafarer’s
death should occur during the term of his employment, the seafarer’s death
occurring after the termination of his employment due to his medical
repatriation on account of a work-related injury or illness constitutes an
exception thereto. This is based on a liberal construction of the 2000 POEA-SEC
as impelled by the plight of the bereaved heirs who stand to be deprived of a
just and reasonable compensation for the seafarer’s death, notwithstanding its
evident work-connection. The present petition is a case in point.
Here, Nancing’s repatriation occurred during the eighth (8th) month of his one
(1) year employment contract. Were it not for his injury, which had been earlier
established as work-related, he would not have been repatriated for medical
reasons and his contract consequently terminated pursuant to Part 1 of Section
18 (B) of the 2000 POEA-SEC.
The terminative consequence of a medical repatriation case then appears to
present a rather prejudicial quandary to the seafarer and his heirs. Particularly,
if the Court were to apply the provisions of Section 20 of the 2000 POEA-SEC as
above-cited based on a strict and literal construction thereof, then the heirs of
Nancing would stand to be barred from receiving any compensation for the
latter’s death despite its obvious work-relatedness. Again, this is for the reason
that the work-related death would, by mere legal technicality, be considered to
have occurred after the term of his employment on account of his medical
repatriation. It equally bears stressing that neither would the heirs be able to
receive any disability compensation since the seafarer’s death in this case
precluded the determination of a disability grade, which, following Section 20
(B) in relation to Section 32 of the 2000 POEA-SEC, stands as the basis therefor.
However, a strict and literal construction of the 2000 POEA-SEC, especially
when the same would result into inequitable consequences against labor, is not
subscribed to in this jurisdiction. Concordant with the State’s avowed policy to
give maximum aid and full protection to labor as enshrined in Article XIII of the
1987 Philippine Constitution, ontracts of labor, such as the 2000 POEA-SEC, are
deemed to be so impressed with public interest that the more beneficial
conditions must be endeavoured in favor of the laborer. The rule therefore is
one of liberal construction.
The POEA Standard Employment Contract for Seamen 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
their favor [as it is only] then can its beneficent provisions be fully carried
into effect.
Applying the rule on liberal construction, the Court is thus brought to the
recognition that medical repatriation cases should be considered as an
exception to Section 20 of the 2000 POEA-SEC. Accordingly, the phrase "work-
related death of the seafarer, during the term of his employment contract"
under Part A (1) of the said provision should not be strictly and literally
construed to mean that the seafarer’s work-related death should have precisely
occurred during the term of his employment. Rather, it is enough that the
seafarer’s work-related injury or illness which eventually causes his death
should have occurred during the term of his employment. Taking all things into
account, the Court reckons that it is by this method of construction that undue
prejudice to the laborer and his heirs may be obviated and the State policy on
labor protection be championed. For if the laborer’s death was brought about
(whether fully or partially) by the work he had harbored for his master’s profit,
then it is but proper that his demise be compensated. Here, since it has been
established that (a) the seafarer had been suffering from a work-related injury
or illness during the term of his employment, (b) his injury or illness was the
cause for his medical repatriation, and (c) it was later determined that the
injury or illness for which he was medically repatriated was the proximate
cause of his actual death although the same occurred after the term of his
employment, the above-mentioned rule should squarely apply. Perforce, the
present claim for death benefits should be granted.
Thus, considering the constitutional mandate on labor as well as relative
jurisprudential context, the rule, restated for a final time, should be as follows: if
the seafarer’s work-related injury or illness (that eventually causes his medical
repatriation and, thereafter, his death, as in this case) occurs during the term of
his employment, then the employer becomes liable for death compensation
benefits under Section 20 (A) of the 2000 POEA-SEC. The provision cannot be
construed otherwise for to do so would not only transgress prevailing
constitutional policy and deride the bearings of relevant case law but also result
in a travesty of fairness and an indifference to social justice.
For all these reasons, the Court hereby grants the petition.
62.
G.R. No. 203161 February 26, 2014
MARTIN K. AYUNGO, Petitioner,
vs.
BEAMKO SHIPMANAGEMENT CORPORATION, EAGLE MARITIME RAK FZE,
AND JUANITO G. SALVATIERRA, JR., Respondents.
FACTS:
Ayungo entered into a 12 month Contract of Employment with respondent
Beamko whereby he was engaged as Chief Engineer. When he was asked during
his medical examination if he suffered Hypertension, he answered in the
negative. As a result, he was cleared to work and declared fit by the company
physician.
While on duty, Ayungo suddenly lost his sense of hearing and only heard a
constant ringing noise. He continued to work as the vessel was about to reach
the port of Yokohama, Japan. There, he was confined and was eventually
repatriated to the Philippines for further medical treatment. The company
physician reported that Ayungo’s hypertension and diabetes are both pre-
existing and not work-related.
In other words, not only must the seafarer establish that his injury or illness
rendered him permanently or partially disabled, it is equally pertinent that he
shows a causal connection between such injury or illness and the work for
which he had been contracted. Indeed, despite of the pre-existing nature of his
Diabetes Mellitus and the concomitant disputable presumption that it is work-
related, Ayungo still had the burden to prove the causal link between his
Diabetes Mellitus and his duties as Chief Engineer.
As for Ayungo’s Hypertension, suffice to state that he did not disclose that he
had been suffering from the same and/or had been actually taking medications
therefore during his PEME. As the records would show, the existence of
Ayungo’s Hypertension was only revealed after his repatriation, as reflected in
the Medical Report and reinforced by subsequent medical reports. To the
Court’s mind, Ayungo’s non-disclosure constitutes fraudulent misrepresentation
which, pursuant to Section 20(E) of the 2000 POEA-SEC, disqualifies him from
claiming any disability benefits from his employer.

Unconvinced, Ayungo consulted with another physician, and he was declared to

be suffering from hypertension, diabetes and coronary heart diseases which
would render him unfit for work, the status thereof being that of a permanent
total disability. In this regard, Ayungo filed before the NLRC a complaint for the
payment of permanent total disability benefits, sickness allowance,
reimbursement of medical expenses, damages and attorney’s fees against
respondents Beamko, Eagle Maritime and Salvatierra, Jr. He alleged that his
hypertension was aggravated by the conditions of his employment and his
employer assumed the risk of liability arising from his weakened condition
when it employed him despite of his declaration during his medical exam that
he has diabetes.

ISSUE: WON Ayungo is entitled to claim disability benefits

HELD:
Ayungo is not entitled to claim disability benefits

The Court held that for a disability to be compensable, the seafarer must
establish that there exists a reasonable linkage between the disease suffered by
the employee and his work to lead a rational mind to conclude that his work
may have contributed to the establishment or, at the very least, aggravation of
any pre-existing condition he might have had.
63.
GR. No. 206032, August 19, 2015
JOSE RUDY L. BAUTISTA, PETITIONER, VS. ELBURG SHIPMANAGEMENT
PHILIPPINES, INC., AUGUSTEA SHIPMANAGEMENT ITALY, AND/OR CAPTAIN
ANTONIO S. NOMBRADO,* RESPONDENTS.
PERLAS-BERNABE, J.:
Facts
On August 7, 2008, petitioner entered into a nine (9)-month Contract of
Employment with respondent Elburg Shipmanagement Philippines, Inc.
(Elburg) on behalf of its foreign principal, respondent Augustea
Shipmanagement Italy (Augustea), as Chief Cook on board the vessel "MV
Lemno." Prior to his embarkation, petitioner underwent a Pre-Employment
Medical Examination (PEME), and was certified as fit for sea duty by the
company-designated physician. He then boarded the vessel on August 14, 2008.
During petitioner's employment, he complained of breathing difficulty,
weakness, severe fatigue, dizziness, and grogginess. Upon referral to a portside
hospital, he was suspected to have "thoracic aneurysm," and thus, was
recommended for medical repatriation. Following his repatriation on May 8,
2009, petitioner was referred to Elburg's designated physicians at the
Metropolitan Medical Center (MMC) for further evaluation and medical
treatment. After several tests, he was diagnosed with "Hypertensive
Cardiovascular Disease" and "Diabetes Mellitus II," and thoracic aneurysm was
eventually ruled out.On September 4, 2009, the company-designated physician,
Dr. Melissa Co Sia (Dr. Sia) issued a working impression that petitioner was
suffering from "Hypertension", "Dyslipidemia", and "Chronic Obstructive
Pulmonary Disease," with a declaration that he would be cleared to go back to
his duties as a seafarer as soon as his blood pressure and lipid levels stabilize.
On September 16, 2009, petitioner filed a complaint against respondents
Augustea, Elburg, and the latter's President, Captain Antonio S. Nombrado
(respondents), seeking to recover disability benefits applicable to officers
amounting to US$118,800.00 pursuant to their Collective Bargaining
Agreement(CBA), as well as damages, and attorney's fees, alleging that: (a) his
illnesses were occupational diseases as they were developed, enhanced, and
aggravated by the nature of his work, as well as the environment at the jobsite;
and (b) he was unable to return to work within 120 days, thereby rendering his
disability permanent and total.
Respondents maintained that petitioner's Diabetes Mellitus II was familial or
genetic in nature, and thus, not work-connected. Additionally, they averred that
his Hypertensive Cardiovascular Disease was a mere complication thereof, and
as such, is also not work-related.
Thereafter, petitioner submitted the medical certificate and evaluation dated
January 6, 2010 of his own physician, Dr. Efren R. Vicaldo (Dr. Vicaldo), who
opined that his illnesses - i.e., "Hypertensive atherosclerotic cardiovascular
disease" and "Diabetes mellitus" - rendered him unfit to work as seaman in any
capacity, and were considered work-related/ aggravated. The said documents
were only attached by petitioner in his reply during the proceedings before the
Labor Arbiter.
LA Ruling
The LA ordered respondents, jointly and severally, to pay petitioner
US$89,100.00 representing total and permanent disability benefits under the
CBA, plus ten percent (10%) thereof as attorney's fees.
The LA ruled that petitioner's condition was undoubtedly contracted during the
term of his contract when he experienced the symptoms of his ailment,
considering that he was declared fit for sea duty in his PEME. The LA also lent
more credence to the medical certificate issued by Dr. Vicaldo, as being more
reflective of petitioner's actual condition. Moreover, while the LA conceded that
Diabetes Mellitus II was not a compensable ailment, since petitioner was
likewise diagnosed with Hypertensive Cardiovascular Disease, an occupational
disease, by no less than the company-designated doctor, his illness remained
compensable. Finally, the LA upheld the presumption of incapacity in favor of
petitioner considering that his ailment subsisted for more than 120 days.
Aggrieved, respondents appealed to the NLRC.
NLRC Ruling
The NLRC dismissed respondents' appeal and affirmed the LA's findings. It ruled
that while it is true that Diabetes Mellitus II is not an occupational disease, still,
the medical diagnosis of petitioner included a finding of Hypertensive
Cardiovascular Disease which is listed under Section 32-A of the Philippine
Overseas Employment Administration - Standard Employment Contract (POEA-
SEC). It further noted that petitioner's medical reports did not state that he
suffered from Diabetes Mellitus II with Hypertensive Cardiovascular Disease
which would have implied that the latter ailment was a mere necessary
complication thereof. Aside from echoing the findings of Dr. Viealdo that
petitioner's illnesses were work-related, the NLRC ruled that absent any
showing that his illnesses were pre-existing, the reasonable presumption is that
he obtained them during the period of his employment, and that they were
aggravated by the nature of his work as Chief Cook.
 not only by medical findings, but also by law and contract. The pertinent
Respondents moved for reconsideration which the NLRC denied. Undeterred, statutory provisions are Articles 197 to 199(formerly Articles 191 to 193) of the
they filed a petition for certiorari before the Court of Appeals. Labor Code in relation to Section 2, [29] Rule X of the Rules implementing Title II,
Book IV of the said Code; while the relevant contracts are: (a) the POEA-SEC,
Meanwhile, the NLRC issued an entry of judgment in the case, constraining which is a standard set of provisions that is deemed incorporated in every
respondents to settle the full judgment award. seafarer's contract of employment; (b) the CBA, if any; and (c) the employment
agreement between the seafarer and his employer. [31]
CA Ruling
In this case, petitioner executed his employment contract with respondents on
August 7, 2008. Accordingly, the provisions of the 2000 POEA-SEC are
The CA granted respondents' certiorari petition and thereby dismissed applicable and should govern their relations. Sec. 20 (B) (6), of the 2000 POEA-
petitioner's complaint for disability benefits. It ruled that petitioner failed to SEC provides:
prove, through substantial evidence, that his Hypertension and Cardiovascular
Disease were suffered during the effectivity of his employment, and that they SECTION 20. COMPENSATION AND BENEFITS
were connected to his work as Chief Cook. It did not give probative weight to
the medical evaluation issued by Dr. Viealdo as he attended to petitioner only x xxx
once and never conducted any medical tests on him, and in fact, merely limited
himself to a medical history review and physical examination of petitioner, B. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
noting too that petitioner only sought Dr. Viealdo's medical opinion four months
after he filed his complaint. Finally, the CA concluded that the "120-day rule" is The liabilities of the employer when the seafarer suffers work-related injury
not absolute but is dependent on the circumstances of each case, and that or illness during the term of his contract are as follows:
petitioner's mere failure to return to his work after 120 days does not ipso facto
entitle him to maximum disability benefits. x xxx

Undaunted, petitioner sought reconsideration, which was, however, denied;
hence, this petition.
Issue:
Whether or not the CA correctly ruled that the NLRC committed grave abuse of
discretion in granting petitioner's claim for total and permanent disability
benefits.
Held:
Yes. The Court finds that the CA committed reversible error in granting
respondents' certiorari petition since the NLRC did not gravely abuse its
discretion in awarding total and permanent disability benefits in favor of
petitioner, the same being amply supported by substantial evidence.
The entitlement of overseas seafarers to disability benefits is a matter governed,
6. In case of permanent total or partial disability of the seafarer caused by
either injury or illness the seafarer shall be compensated in accordance with
the schedule of benefits arising from an illness or disease shall be governed by
the rates and the rules of compensation applicable at the time the illness or
disease was contracted. (Emphasis supplied.)
Pursuant to the afore-quoted provision, two (2) elements must concur for an
injury or illness to be compensable: first, that the injury or illness must be work-
related; and second, that the work-related injury or illness must have existed
during the term of the seafarers employment contract. [32]
The 2000 POEA-SEC defines "work-related injury" as "injury(ies)" resulting in
disability or death arising out of and in the course of employment" and "work-
related illness" as "any sickness resulting to disability or death as a result of an
occupational disease listed under Section 32-A of this contract with the
conditions set therein satisfied," viz.:
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; and
4. There was no notorious negligence on the part of the seafarer.
Section 32-A (11) of the 2000 POEA-SEC expressly considers Cardiovascular
Disease (CVD) as an occupational disease if it was contracted under any of the
following instances, to wit:
(a) If the heart disease was known to have been present during employment,
there must be proof that an acute exacerbation was clearly precipitated by the
unusual strain by reasons of the nature of his work.
(b) The strain of work that brings about an acute attack must be sufficient
severity and must be followed within 24 hours by the clinical signs of cardiac
insult to constitute causal relationship.
(c) If a person who was apparently asymptomatic before being subjected
to strain at work showed signs and symptoms of cardiac injury during the
performance of his work and such symptoms and signs persisted, it is
reasonable to claim a causal relationship. (Emphasis supplied)
Consequently, for CVD to constitute as an occupational disease for which the
seafarer may claim compensation, it is incumbent upon said seafarer to show
that he developed the same under any of the three conditions identified above.
Records reveal that sometime during the performance of his duties as Chief
Cook on board MV Lemno, petitioner complained of breathing difficulty,
weakness, severe fatigue, dizziness, and grogginess, necessitating portside
medical intervention and consequent medical repatriation, albeit, on the basis of
suspected "thoracic aneurysm." Shortly after repatriation, he was diagnosed,
inter alia, with Hypertensive Cardiovascular Disease, also known as
hypertensive heart disease, which refers to a heart condition caused by high
blood pressure.
Petitioner's condition was apparently asymptomaticsince he manifested no
signs and symptoms of any cardiac injury prior to his deployment onboard MV
Lemno and was, in fact, declared fit for sea duty following his PEME. Notably,
petitioner's physical discomforts on-board the vessel already bore the
hallmarks of CVD for which he was eventually diagnosed upon his repatriation.
The said diagnosis was recognized by both the company-designated doctors and
petitioner's own doctor, and was well-documented. Thus, absent any showing
that petitioner had a pre-existing cardiovascular ailment prior to his
embarkation, the reasonable presumption is that he acquired his hypertensive
cardiovascular disease in the course of his employment pursuant to Section
32-A (11) (c) of the 2000 POEA-SEC, which recognizes a "causal relationship"
between a seafarer's CVD and his job, and qualifies his CVD as an occupational
disease. In effect, the said provision of law establishes in favor of a seafarer the
presumption of compensability of his disease.
It is not required that the employment of petitioner as Chief Cook should be the
sole factor in the development of his hypertensive cardiovascular disease so as
to entitle him to claim the benefits provided therefor. It suffices that his
employment as such had contributed, even in a small degree, to the
development of the disease. Thus, it is safe to presume that, at the very least, the
nature of petitioner's employment had contributed to the aggravation of his
illness, considering that as Chief Cook, he was exposed to constant temperature
changes, stress, and physical strain.
The fact that petitioner was also diagnosed as having Diabetes Mellitus II was of
no moment since the incidence of a listed occupational disease, whether or not
associated with a non-listed ailment, is enough basis for compensation, although
modern medicine has in fact recognized that diabetes, heart complications,
hypertension and even kidney disorders are all inter-related diseases.Besides,
Section 20 (B) (4) of the 2000 POEA-SEC explicitly establishes a disputable
presumption of compensability in favor of the seafarer and the burden rests
upon the employer to overcome the statutory presumption,which respondents
failed to discharge. Notably, it was not disputed that from the time of
petitioner's repatriation until the filing of the present petition, he was not able
to return to his customary work.
WHEREFORE the petition is GRANTED. The Decision and the Resolution of the
Court of Appeals are hereby REVERSED and SET ASIDE. The Decision and the
Resolution of the National Labor Relations Commission in NLRC NCR Case No.
(M) 09-13249-09 granting petitioner Jose Rudy L. Bautista's claim for total and
permanent disability benefits are REINSTATED.

64.
GR. No. 198408, November 12, 2014
CONCHITA J. RACELIS, PETITIONER, VS. UNITED PHILIPPINE LINES, INC.
AND/OR HOLLAND AMERICA LINES, INC.,* AND FERNANDO T. LISING,
RESPONDENTS.
PERLAS-BERNABE, J.:
Facts
On January 15, 2008, Rodolfo L. Racelis (Rodolfo) was recruited and hired by
respondent United Philippine Lines, Inc. (UPL) for its principal, respondent
Holland America Lines, Inc. (HAL) to serve as “Demi Chef De Partie” on board the
vessel MS Prinsendam, with a basic monthly salary of US$799.55.The Contract
of Employmentwas for a term of four (4) months, extendible for another two (2)
months upon mutual consent. After complying with the required pre-
employment medical examination where he was declared fit to work, Rodolfo
joined the vessel on January 25, 2008.Prior thereto, Rodolfo was repeatedly
contracted by said respondents and was deployed under various contracts since
December 17, 1985.
In the course of his last employment contract, Rodolfo experienced severe pain
in his ears and high blood pressure causing him to collapse while in the
performance of his duties. He consulted a doctor in Argentina and was
medically repatriated on February 20, 2008 for further medical treatment.
Upon arrival in Manila, he was immediately brought to Medical City, Pasig City,
where he was seen by a company-designated physician, Dr. Gerardo Legaspi,
M.D. (Dr. Legaspi), and was diagnosed to be suffering from Brainstem (pontine)
Cavernous Malformation. He underwent surgery twice for the said ailment but
developed complicationsand died on March 2, 2008.Through an electronic
mail (e-mail) dated July 22, 2008, a certain Dr. Antonio “Toby” Abaya (Dr.
Abaya) informed Atty. Florencio L. Aquino, Managing Associate of the law firm
of Del Rosario and Del Rosario,counsel for UPL, HAL, and its officer, Fernando T.
Lising (respondents),that Rodolfo’s illness was congenital and that there may be
familial strains in his case, hence, his death was not work-related.
Rodolfo’s surviving spouse, herein petitioner, sought to claim death benefits
pursuant to the International Transport Workers’ Federation-Collective
Bargaining Agreement (ITWF-CBA), of which her husband was a member, but to
no avail. Consequently, she filed a Complaint for death benefits, burial
assistance, moral and exemplary damages, and attorney’s fees against herein
respondents before the NLRC, docketed as NLRC OFW Case No. (M) NCR-06-
08452-08.
Respondents maintained that petitioner is not entitled to death benefits under
Section 20 (A) (1) of the 2000 Philippine Overseas Employment Administration
Standard Employment Contract (2000 POEA-SEC). They averred that Rodolfo’s
illness, i.e., Brainstem (pontine) Cavernous Malformation, was not work-related,
considering that said illness is not listed as an occupational disease under the
2000 POEA-SEC.[21] They likewise pointed out that Rodolfo’s death on March 2,
2008 did not occur during the term of his employment contract in view of his
prior repatriation on February 20, 2008, hence, was non-compensable.
Moreover, they denied the claim for damages and attorney’s fees for lack of
factual and legal bases.
LA Ruling
The LA ruled in favor of petitioner, and thereby ordered respondents to pay her
death benefits pursuant to the ITWF-CBA in the amount of US$60,000.00, burial
assistance in the amount of US$1,000.00, and attorney’s fees equivalent to 10%
of the total monetary awards.
The LA held that Rodolfo’s death was compensable as the illness that caused his
death occurred in the course of his employment contract. It was likewise ruled
that while Brainstem (pontine) Cavernous Malformation is not among the listed
occupational diseases under the 2000 POEA-SEC, the same was still
compensable, noting that the same may have been contracted in the course of
his engagement with respondents, which started back in 1985 under various
employment contracts. Also, the LA did not give credence to the medical
opinionof Dr. Abaya which was unsigned and not certified by said doctor
himself, hence, had no evidentiary value. Further, the LA observed that there is
no certainty as to the accuracy of the statement therein that the disease is
congenital in origin.
Unconvinced, respondents filed an appealbefore the NLRC.
NLRC Ruling
The NLRC affirmed the LA’s verdict, holding that Rodolfo’s illness is disputably
presumed to be work-related and that since it supervened in the course of his
employment, the burden is on the respondents to prove otherwise.It held that
the medical opinion of the company-designated physician, which showed that
Rodolfo’s ailment is not work-connected and may have pre-existed, is
insufficient to rebut the presumption of compensability.It likewise pointed out
that the occurrence of death after the term of the contract was immaterial since
the proximate cause of Rodolfo’s death was the illness that supervened during
his employment. Finally, the NLRC sustained the award of attorney’s fees as
petitioner was compelled to litigate to protect her rights and interests.
Dissatisfied, respondents filed a motion for reconsideration[36] which was denied
by the NLRC in a Resolutiondated March 11, 2010; hence, they elevated the
matter to the CA via a petition for certiorari.
Meanwhile, petitioner moved for the execution of the affirmed LA Decision,
which was granted by the NLRC. In consequence, respondents paid petitioner
the amount of P3,031,683.00 as full and complete satisfaction of the said NLRC
Decision, without prejudice to the outcome of the certiorari case before the CA.
CA Ruling
The CA granted respondents’ certiorari petition, and thereby annulled and set
aside the ruling of the NLRC granting petitioner’s claim for death benefits.
It held that Rodolfo’s death on March 2, 2008 did not occur while he was in the
employ of respondents, as his contract of employment ceased when he was
medically repatriated on February 20, 2008 pursuant to Section 18 (B) (1) of
the 2000 POEA-SEC.Moreover, it observed that Rodolfo’s illness cannot be
presumed to be work-related, absent any proof to show that his death was
connected to his work or that his working conditions increased the risk of
contracting Brainstem (pontine) Cavernous Malformation that eventually
caused his death.
Aggrieved, petitioner sought for reconsiderationbut was denied, hence, the
instant petition.
Issue
Whether or not the CA erred in annulling the NLRC’s grant of death benefits to
petitioner on certiorari.
Held:
Yes, CA erred in annulling the NLRC’s grant of death benefits to petitioner on
certiorari. Given that the NLRC’s ruling was amply supported by the evidence on
record and current jurisprudence on the subject matter, the Court, in opposition
to the CA, finds that no grave abuse of discretion had been committed by the
labor tribunal. Hence, the CA’s grant of respondents’ certiorari petition before it
ought to be reversed, and consequently the NLRC Decision be reinstated.
Deemed incorporated in every seafarer’s employment contract, denominated as
the POEA-SEC or the Philippine Overseas Employment Administration-Standard
Employment Contract, is a set of standard provisions determined and
implemented by the POEA, called the “Standard Terms and Conditions
Governing the Employment of Filipino Seafarers on Board Ocean Going Vessels,”
which are considered to be the minimum requirements acceptable to the
government for the employment of Filipino seafarers on board foreign ocean-
going vessels.
Among other basic provisions, the POEA-SEC – specifically, its 2000 version –
stipulates that the beneficiaries of a deceased seafarer may be able to claim
death benefits for as long as they are able to establish that (a) the seafarer’s
death is work-related, and (b) such death had occurred during the term of
his employment contract. These requirements are explicitly stated in Section
20 (A) (1) thereof, which reads:
SECTION 20. COMPENSATION AND BENEFITS
A. COMPENSATION AND BENEFITS FOR DEATH
1. In the case of work-related death of the seafarer, during the term of
his contract the employer shall pay his beneficiaries the Philippine
Currency equivalent to the amount of Fifty Thousand US dollars
(US$50,000) and an additional amount of Seven Thousand US dollars
(US$7,000) to each child under the age of twenty-one (21) but not
exceeding four (4) children, at the exchange rate prevailing during the
time of payment. (Emphases supplied)
After an assiduous examination of the records, and as will be expounded on
below, the Court, similar to both the LA and the NLRC, finds that the above-
stated requirements positively attend petitioner’s claim for death benefits.
I. The Death of the Seafarer is Work-Related.
In the recent case of Canuel v. Magsaysay Maritime Corporation (Canuel), the
Court clarified that the term “work-related death” refers to the seafarer’s death
resulting from a work-related injury or illness.

Under the 2000 POEA-SEC, the terms “work-related injury” and “work-related
illness” are, in turn, defined as follows:
Definition of Terms:
For purposes of this contract, the following terms are defined as follows:
x xxx
11. Work-Related Injury – injury(ies) resulting in disability or death arising
out of and in the course of employment.
12. Work-Related Illness – any sickness resulting to disability or death as a
result of an occupational disease listed under Section 32-A of this contract with
the conditions set therein satisfied. (Emphases supplied)
Case law explains that “[t]he words ‘arising out of’ refer to the origin or cause of
the accident, and are descriptive of its character, while the words ‘in the course
of’ refer to the time, place, and circumstances under which the accident takes
place. As a matter of general proposition, an injury or accident is said to arise ‘in
the course of employment’ when it takes place within the period of the
employment, at a place where the employee reasonably may be, and while he is
fulfilling his duties or is engaged in doing something incidental thereto.”
In this case, respondents submit that petitioner was unable to prove that
Rodolfo’s illness, i.e., Brainstem (pontine) Cavernous Malformation, which had
supposedly supervened during the term of his employment on board the vessel
MS Prinsendam, was not related to his work.To bolster the argument,
respondents point to the fact that Brainstem (pontine) Cavernous Malformation
is not listed as an occupational disease under Section 32-Aof the 2000 POEA-
SEC.
The contention is untenable.
While it is true that Brainstem (pontine) Cavernous Malformation is not listed
as an occupational disease under Section 32-A of the 2000 POEA-SEC, Section
20 (B) (4) of the same explicitly provides that “[t[he liabilities of the employer
when the seafarer suffers work-related injury or illness during the term of his
contract are as follows: (t)hose illnesses not listed in Section 32 of this
Contract are disputably presumed as work related.” In other words, the
2000 POEA-SEC “has created a disputable presumption in favor of
compensability[,] saying that those illnesses not listed in Section 32 are
disputably presumed as work-related. This means that even if the illness is not
listed under Section 32-A of the POEA-SEC as an occupational disease or illness,
it will still be presumed as work-related, and it becomes incumbent on the
employer to overcome the presumption.” This presumption should be
overturned only when the employer’s refutation is found to be supported by
substantial evidence, which, as traditionally defined is “such relevant evidence
as a reasonable mind might accept as sufficient to support a conclusion.” As held
in the case of Magsaysay Maritime Services v. Laurel:
Anent the issue as to who has the burden to prove entitlement to disability
benefits, the petitioners argue that the burden is placed upon Laurel to prove
his claim that his illness was work-related and compensable. Their posture does
not persuade the Court.
True, hyperthyroidism is not listed as an occupational disease under Section 32-
A of the 2000 POEA-SEC. Nonetheless, Section 20 (B), paragraph (4) of the
said POEA-SEC states that “those illnesses not listed in Section 32 of this
Contract are disputably presumed as work-related.” The said provision
explicitly establishes a presumption of compensability although
disputable by substantial evidence. The presumption operates in favor of
Laurel as the burden rests upon the employer to overcome the statutory
presumption. Hence, unless contrary evidence is presented by the seafarer’s
employer/s, this disputable presumption stands. In the case at bench, other
than the alleged declaration of the attending physician that Laurel’s illness was
not work-related, the petitioners failed to discharge their burden. In fact, they
even conceded that hyperthyroidism may be caused by environmental factor.
Similarly in Jebsens Maritime, Inc. v. Babol:
The Principle of Work-relation
The 2000 POEA-SEC contract governs the claims for disability benefits by
respondent as he was employed by the petitioners in September of 2006.
Pursuant to the said contract, the injury or illness must be work related and
must have existed during the term of the seafarer’s employment in order for
compensability to arise. Work-relation must, therefore, be established.
As a general rule, the principle of work-relation requires that the disease in
question must be one of those listed as an occupational disease under Sec. 32-A
of the POEA-SEC. Nevertheless, should it be not classified as occupational in
nature, Section 20 (B) paragraph 4 of the POEA-SEC provides that such
diseases are disputed are disputably presumed as work-related.
In this case, it is undisputed that NPC afflicted respondent while on board the
petitioners’ vessel. As a non-occupational disease, it has the disputable
presumption of being work-related. This presumption obviously works in
the seafarer’s favor. Hence, unless contrary evidence is presented by the
employers, the work-relatedness of the disease must be sustained.
And in Fil-Star Maritime Corporation v. Rosete:
Although Central Retinal Vein Occlusion is not listed as one of the occupational
diseases under Section 32-A of the 2000 Amended Terms of POEA-SEC, the
resulting disability which is loss of sight of one eye, is specifically mentioned in
Section 32 thereof (Schedule of Disability or Impediment for Injuries Suffered
and Diseases Including Occupational Diseases or Illness Contracted). More
importantly, Section 20 (B), paragraph (4) states that “those illnesses not
listed in Section 32 of this Contract are disputably presumed as work-
related.”
The disputable presumption that a particular injury or illness that results
in disability, or in some cases death, is work-related stands in the absence
of contrary evidence. In the case at bench, the said presumption was not
overturned by the petitioners. Although, the employer is not the insurer of the
health of his employees, he takes them as he finds them and assumes the risk of
liability. Consequently, the Court concurs with the finding of the courts below
that respondent’s disability is compensable.
Records show that respondents’ sole evidence to disprove that Rodolfo’s illness
is work-related was the medical opinion of Dr. Abaya, wherein it was explained
that Rodolfo’s ailment is a congenital malformation of blood vessels in the brain
that may be due to familial strains.However, as correctly observed by the LA, the
document presented cannot be given probative value as it was a mere print out
of an e-mail that was not signed or certified to by the doctor. Moreover, records
reveal that Rodolfo was attended by Dr. Legaspi from the time he was admitted
at the Medical City on February 20, 2008 up to his death on March 2, 2008 and
not by Dr. Abaya whose qualifications to diagnose such kind of illness was not
even established. Likewise, the medical opinion was not backed up by any
medical findings to substantiate the claim that Rodolfo’s ailment was congenital
in origin or that there were traces of the disease in Rodolfo’s family history.
Under the foregoing premises, the unsubstantiated and unauthenticated
medical findings of Dr. Abaya are therefore highly suspect and cannot be
considered as substantial evidence to support respondents’ postulation. Thus,
with no substantial evidence on the part of the employer and given that no
other cogent reason exists to hold otherwise, the presumption under Section 20
(B) (4) should stand. Accordingly, the Court is constrained to pronounce that
Rodolfo’s death, which appears to have been proximately caused by his
Brainstem (pontine) Cavernous Malformation, was work-related, in satisfaction
of the first requirement of compensability under Section 20 (A) (1) of the 2000
POEA-SEC.
II. The Seafarer’s Death Occurred During the Term of Employment.
Moving to the second requirement, respondents assert that Rodolfo’s death on
March 2, 2008 had occurred beyond the term of his employment, considering
his prior medical repatriation on February 20, 2008 which had the effect of
contract termination. The argument is founded on Section 18 (B) (1) of the 2000
POEA-SEC, which reads:
SECTION 18. TERMINATION OF EMPLOYMENT
x xxx
B. The employment of the seafarer is also terminated when the seafarer arrives
at the point of hire for any of the following reasons:
1. when the seafarer signs-off and is disembarked for medical reasons
pursuant to Section 20(B)[5] of this Contract.
While it is true that a medical repatriation has the effect of terminating the
seafarer’s contract of employment, it is, however, enough that the work-related
illness, which eventually becomes the proximate cause of death, occurred while
the contract was effective for recovery to be had. A further exposition is
apropos.
Consistent with the State’s avowed policy to afford full protection to labor as
enshrined in Article XIII of the 1987 Philippine Constitution, the POEA-SEC was
designed primarily for the protection and benefit of Filipino seafarers in the
pursuit of their employment on board ocean-going vessels. As such, it is a
standing principle that its provisions are to be construed and applied fairly,
reasonably, and liberally in their favor.
Guided by this principle, the Court, in the recent case of Canuel, recognized that
a medical repatriation case constitutes an exception to the second requirement
under Section 20 (A) (1) of the 2000 POEA-SEC, i.e., that the seafarer’s death had
occurred during the term of his employment, in view of the terminative
consequences of a medical repatriation under Section 18 (B) of the same. In
essence, the Court held that under such circumstance, the work-related death
need not precisely occur during the term of his employment as it is enough that
the seafarer’s work-related injury or illness which eventually causes his death
had occurred during the term of his employment. As rationalized in that case:
With respect to the second requirement for death compensability, the Court
takes this opportunity to clarify that while the general rule is that the seafarer’s
death should occur during the term of his employment, the seafarer’s death
occurring after the termination of his employment due to his medical
repatriation on account of a work-related injury or illness constitutes an
exception thereto. This is based on a liberal construction of the 2000 POEA-SEC
as impelled by the plight of the bereaved heirs who stand to be deprived of a
just and reasonable compensation for the seafarer’s death, notwithstanding its
evident work-connection. The present petition is a case in point.
Here, Nancing’s repatriation occurred during the eighth (8th) month of his one
(1) year employment contract. Were it not for his injury, which had been earlier
established as work-related, he would not have been repatriated for medical
reasons and his contract consequently terminated pursuant to Part 1 of Section
18 (B) of the 2000 POEA-SEC as hereunder quoted:
x xxx
The terminative consequence of a medical repatriation case then appears to
present a rather prejudicial quandary to the seafarer and his heirs. Particularly,
if the Court were to apply the provisions of Section 20 of the 2000 POEA-SEC as
above-cited based on a strict and literal construction thereof, then the heirs of
Nancing would stand to be barred from receiving any compensation for the
latter’s death despite its obvious work-relatedness. Again, this is for the reason
that the work-related death would, by mere legal technicality, be considered to
have occurred after the term of his employment on account of his medical
repatriation. It equally bears stressing that neither would the heirs be able to
receive any disability compensation since the seafarer’s death in this case
precluded the determination of a disability grade, which, following Section 20
(B) in relation to Section 32 of the 2000 POEA-SEC, stands as the basis therefor.
However, a strict and literal construction of the 2000 POEA-SEC, especially
when the same would result into inequitable consequences against labor, is not
subscribed to in this jurisdiction. Concordant with the State’s avowed policy to
give maximum aid and full protection to labor as enshrined in Article XIII of
the 1987 Philippine Constitution, contracts of labor, such as the 2000 POEA-
SEC, are deemed to be so impressed with public interest that the more
beneficial conditions must be endeavoured in favor of the laborer. The rule
therefore is one of liberal construction. As enunciated in the case of Philippine
Transmarine Carriers, Inc. v. NLRC [(405 Phil. 487 [2001])]:
The POEA Standard Employment Contract for Seamen 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 their favor [as it is only] then can its
beneficent provisions be fully carried into effect. (Emphasis supplied)
Applying the rule on liberal construction, the Court is thus brought to the
recognition that medical repatriation cases should be considered as an
exception to Section 20 of the 2000 POEA-SEC. Accordingly, the phrase “work-
related death of the seafarer, during the term of his employment contract”
under Part A (1) of the said provision should not be strictly and literally
construed to mean that the seafarer’s work-related death should have precisely
occurred during the term of his employment. Rather, it is enough that the
seafarer’s work-related injury or illness which eventually causes his death
should have occurred during the term of his employment. Taking all things
into account, the Court reckons that it is by this method of construction that
undue prejudice to the laborer and his heirs may be obviated and the State
policy on labor protection be championed. For if the laborer’s death was
brought about (whether fully or partially) by the work he had harbored for his
master’s profit, then it is but proper that his demise be compensated. Here,
since it has been established that (a) the seafarer had been suffering from a
work-related injury or illness during the term of his employment, (b) his injury
or illness was the cause for his medical repatriation, and (c) it was later
determined that the injury or illness for which he was medically repatriated was
the proximate cause of his actual death although the same occurred after the
term of his employment, the above-mentioned rule should squarely apply.
Perforce, the present claim for death benefits should be granted.(Citations
omitted)
As elucidated in Canuel, the foregoing liberal approach was applied in Inter-
Orient Maritime, Incorporated v. Candava,Interorient Maritime Enterprises, Inc. v.
Remo, and Wallem Maritime Services, Inc. v. NLRC, wherein the Court had
previously allowed the recovery of death benefits even if the seafarers in those
cases had died after repatriation, given that there was proof of a clear causal
connection between their work and the illness which was contracted in the
course of employment, and their eventual death. The converse conclusion was
reached in the cases of Gau Sheng Phils., Inc. v. Joaquin (Gau Sheng), Spouses Aya-
ay, Sr. v. Arpaphil Shipping Corp.(Spouses Aya-ay, Sr.), Hermogenes v. Osco
Shipping Services, Inc.,Prudential Shipping and Management Corp. v. Sta.
Rita(Prudential), and Ortega v. CA(Ortega), since the element of work-
relatedness had not been established. All in all, the sense gathered from these
cases, as pointed out in Canuel, is that it is crucial to determine whether the
death of the deceased was reasonably connected with his work, or whether the
working conditions increased the risk of contracting the disease that resulted in
the seafarer’s death. If the injury or illness is the proximate cause, or at least
increased the risk of his death for which compensation is sought, recovery may
be had for said death, or for that matter, for the injury or illness. Thus, in Seagull
Shipmanagement and Trans., Inc. v. NLRC, the Court significantly observed that:
Even assuming that the ailment of the worker was contracted prior to his
employment, this still would not deprive him of compensation benefits. For
what matters is that his work had contributed, even in a small degree, to
the development of the disease and in bringing about his eventual death.
Neither is it necessary, in order to recover compensation, that the employee
must have been in perfect health at the time he contracted the disease. 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. If the disease is the proximate
cause of the employee’s death for which compensation is sought, the
previous physical condition of the employee is unimportant, and recovery
may be had for said death, independently of any pre-existing disease.
(Emphases and underscoring supplied; citations omitted)
Employing the same spirit of liberality as fleshed out in Canuel, the Court finds
that it would be highly inequitable and even repugnant to the State’s policy on
labor to deny petitioner’s claim for death benefits for the mere technicality
triggered by Rodolfo’s prior medical repatriation. As it has been clearly
established that Rodolfo had been suffering from a work-related illness during
the term of his employment that caused his medical repatriation and, ultimately,
his death on March 2, 2008, it is but proper to consider the same as a
compensable work-related death despite it having occurred after his
repatriation. To echo Canuel, “it is enough that the seafarer’s work-related
injury or illness which eventually causes his death should have occurred
during the term of his employment. Taking all things into account, the Court
reckons that it is by this method of construction that undue prejudice to the
laborer and his heirs may be obviated and the State policy on labor protection
be championed. For if the laborer’s death was brought about (whether fully or
partially) by the work he had harbored for his master’s profit, then it is but
proper that his demise be compensated.
Lest it be misunderstood, the conclusion above-reached does not run counter to
the Court’s ruling in Klaveness Maritime Agency, Inc. v. Beneficiaries of the Late
Second Officer Anthony s. Allas (Klaveness),] which the CA inaccurately relied on.
As similarly pointed out in Canuel, the Klaveness case involved a seafarer who
was not medically repatriated but was actually signed off from the vessel after
the completion of his contract, his illness not proven to be work-related, and
died almost two (2) years after the termination of his contract. Since the
employment contract was terminated without any connection to a work-related
cause, but rather because of its mere lapse, death benefits were denied to the
seafarer’s heirs.This is definitely not the case here since Rodolfo’s employment
contract was terminated only because of his medical repatriation. Were it not
for his illness, Rodolfo would not have been medically repatriated and his
employment contract, in turn, terminated. Evidently, the termination of
employment was forced upon by a work-related cause and it would be in
contrast to the State’s policy on labor to deprive the seafarer’s heirs of death
compensation despite its ascertained work-connection.
This variance also exists as to the cases of Gau Sheng, Spouses Aya-ay,
Sr.,]Prudential, and Ortega,which respondents invoke in their Comment dated
February 16, 2012.As a common denominator, the element of work-relatedness
was not established in those cases. Thus, being the primary factor considered in
granting compensation, the Court denied the beneficiaries’ respective claims.
Again, the Court has pored over the records and remains satisfied that Rodolfo’s
death is work-related. Accordingly, this precludes the application of the above-
stated rulings.
III. Amount of Death Benefits.
With the compensability of Rodolfo’s death now traversed, a corollary matter to
determine is the amount of benefits due petitioner.
Records show that respondents do not deny – and therefore admit – the late
Rodolfo’s membership in the AMOSUP that had entered into a collective
bargaining agreement with HAL, or the ITWF-CBA.Its provisions therefore must
prevail over the standard terms and benefits formulated by the POEA in its
Standard Employment Contract.Hence, the NLRC’s award of US$60,000.00 as
compensation for the death of Rodolfo in accordance with Article 21.2.1of the
ITWF-CBA was in order. The same holds true for the award of burial assistance
in the amount of US$1,000.00 which is provided under Section 20 (A) (4) (c)of
the 2000 POEA-SEC. Moreover, conformably with existing case law, the NLRC’s
grant of attorney’s fees in the amount of US$6,100.00 was called for since
petitioner was forced to litigate to protect her valid claim. Where an employee is
forced to litigate and incur expenses to protect his right and interest, he is
entitled to an award of attorney’s fees equivalent to 10% of the award.
All in all, the NLRC’s award of US$67,100.00 – which, as the records bear, had
already been paid by respondents – is hereby sustained.
IV. A Final Point.
As a final point of rumination, it must be highlighted that the CA’s parameter of
analysis in cases elevated to it from the NLRC is the existence of the latter’s
grave abuse of discretion, considering that they come before the appellate court
through petitions for certiorari. This delimitation, in relation to the Court’s task
of reviewing the case eventually appealed before it, was explained in Montoya v.
Transmed Manila Corporationas follows:
[W]e review in this Rule 45 petition the decision of the CA on a Rule 65 petition
filed by Montoya with that court. In a Rule 45 review, we consider the
correctness of the assailed CA decision, in contrast with the review for
jurisdictional error that we undertake under Rule 65. Furthermore, Rule 45
limits us to the review of questions of law raised against the assailed CA
decision. In ruling for legal correctness, we have to view the CA decision in the
same context that the petition for certiorari it ruled upon was presented to it;
we have to examine the CA decision from the prism of whether it correctly
determined the presence or absence of grave abuse of discretion in the NLRC
decision before it, not on the basis of whether the NLRC decision on the merits
of the case was correct. In other words, we have to be keenly aware that the CA
undertook a Rule 65 review, not a review on appeal, of the NLRC decision
challenged before it. This is the approach that should be basic in a Rule 45
review of a CA ruling in a labor case. In question form, the question to ask is: Did
the CA correctly determine whether the NLRC committed grave abuse of
discretion in ruling on the case?

WHEREFORE, the petition is GRANTED. The Decision and the Resolution of the
Court of Appeals in CA-G.R. SP. No. 113835 are hereby reversed and SET ASIDE
and the Decision of the National Labor Relations Commission is REINSTATED.
65. No. The settlement agreement only pertains to the money claims of
Quillopa and to any other unrelated causes of action arising after the execution
RAFAEL QUILLOPA v QUALITY GUARDS SERVICES of the settlement. The agreement did not cover illegal dismissal. Furthermore,
GR 213814, December 02, 2015 the Waiver/Quitclaim and Release cannot be construed to sever the EER
because there is nothing stated to that effect.
FACTS:
Quality Guards Services & Investigation Agency (GQSIA) hired Quillopa The placing of a security guard in temporary “off-detail” or “floating status” is a
as a security guard and gave him various assignments. On September 28, 2010, valid exercise of management prerogative. However, it must be exercised in
the deputy manager of GQSIA informed Quillopa that he would be placed on good faith and the period shall not exceed 6 months, otherwise, he is deemed
floating status but was promised that he would be given a new assignment. He terminated. In this instance, Quillopa was constructively dismissed. Despite
was ordered to report to GQSIA office the next day for further instructions. repeated follow ups, he failed to get a new post or assignment purportedly for
However, despite the assurance and his repeated follow ups, he was not given lack of vacancy. For failure of GQSIA to place Quillopa back in active duty within
any new assignment. On November 11, 2010, he filed for money claims. Quillopa the 6 month period, they are liable for constructive dismissal.
and GSQIA amicably settled the controversy by executing a Waiver/Quitclaim
and Release. LA issued order approving and granting the settlement and
ordering dismissal of the complaint. On September 14, 2011, Quillopa filed for
illegal dismissal. He alleged that after the settlement of the first complaint, he
waited for a new posting but was not given one. He contends that this continued
failure for reinstatement amounts to termination since he has been on floating
status for 1 year. GSQIA argues that the Waiver/Quitclaim already terminated
the EER and thus, Quillopa has no more ground to file the second complaint.

LA: Settlement of the first complaint through Waiver/Quitclaim does not bar
Quillopa from filing the 2nd complaint. The settlement only referred to his
money claims and does not cover the complaint for illegal dismissal.
NLRC: Affirmed LA. Illegal dismissal was not a cause of action in the first
complaint, thus, Quillopa is not precluded from filing the 2 nd complaint. Also
ruled that he was constructively dismissed for being place on floating status
beyond the allowable period.
CA: Reversed NLRC. Held that Waiver/Quitclaim and Release severed the EER.
Quillopa had no more cause of action

ISSUE:
WON WAIVER/QUITCLAIM AND RELEASE PRECLUDED QUILLOPA
FROM FILING FOR ILLEGAL DISMISSAL

HELD:
66. justifiable cause, and (2) Clear intention to sever the EER. It must be
BARON, BERSABAL and MELENDRES v EPE TRANSPORT CORPORATION accompanied by overt acts pointing to the fact that the employee does not want
GR 202645, August 05, 2015 to work anymore. Mere absence or failure to report is not tantamount to
abandonment. It is merely neglect of duty. Abandonment was not proven by
FACTS: EPE Transport; thus, NLRC is correct in holding that they are illegally dismissed.
EPE Transport is engaged in the operation of taxi units. Baron and the
other petitioners were their taxi drivers paid on boundary system. They were The filing of an employee of a complaint for illegal dismissal is proof enough of
also members of the EPE Drivers Union-FilipinongSamahangManggagawa, the his desire to return to work. Moreover, prior to the filing of the illegal dismissal
exclusive bargaining agent of the taxi drivers. In 2008, Bersabal sought inquiry case, petitioners already filed cases to correct what they viewed as errors in
regarding boundary rates imposed, claiming that it was not in accordance with administration of the CBA. This shows that they actually desired to return to
the CBA. He was purportedly told that he was free to go if did not want to follow work since they were enforcing their rights under the CBA.
company policy and that he had no use to the company. Bersabal, with the other
drivers, filed a complaint for violation of the CBA and unfair labor practice
against EPE and its President. EPE counters that the employees were not
dismissed but rather, they themselves failed to return to work and that after
they filed separate complaints for violation of the CBA and unfair labor practice,
they suddenly went on absence without official leave.

LA: Dismissed petitioners’ claim for illegal dismissal, for lack of jurisdiction over
the subject matter and lack of cause of action. Petitioners failed to sufficiently
establish the fact of their dismissal. It also held that it had no jurisdiction over
the issue of ULP because the same is covered by the CBA provisions calling for
grievance machinery.
NLRC: Reversed LA. Petitioners were illegally dismissed. Held that the intent to
abandon work was negated by the filing of the complaints. An employee who
takes steps to protest his lay off cannot be said to have abandoned his work.
CA: Affirmed LA. Petitioners failed to name the persons who prevented them
from reporting for work or from using their taxi units. Since their absence from
work was not authorized, they were the one who unilaterally decided to cut ties.

ISSUE:
WON PETITIONERS WERE ILLEGALLY DISMISSED

HELD:
NO. The onus of proving that a dismissal was not illegal rests on the
employer. No proof was adduced by EPE to prove their theory on abandonment.
Abandonment connotes a deliberate and unjustified refusal on the part of the
employee to resume his employment.. For abandonment to occur, 2 elements
must concur. (1) Failure to report for work or absence without calid or
67.
G.R. No. 225044, October 03, 2016, PERLAS-BERNABE, J.
MANILA DOCTORS COLLEGE AND TERESITA O.
TURLA, Petitioners, v. EMMANUEL M. OLORES, Respondent.
Facts:
The respondent was a faculty member of the school-petitioner assigned at the
Humanities Department of the College of Arts and Sciences. After being found
guilty of employing a grading system not in accordance with the guidelines set
by the school-petitioner, the respondent was dismissed from service for Grave
Misconduct, Gross Inefficiency, and Incompetence. Consequently, the
respondent filed an illegal dismissal case against the school-petitioner and its
president before the NLRC, and sought to be accorded permanent appointment
after his service for 5 consecutive years.
LA Amansec found that the respondent was illegally dismissed, however, he
failed to meet the requisites for the acquisition of permanent status.
Accordingly, LA Amansec ordered the reinstatement of the respondent as
faculty member under the same terms and conditions of his employment,
without loss of seniority rights, but denied payment of backwages. Further,
respondent was given the option to receive a separation pay instead of
reinstatement.
The petitioners appealed before the NLRC, which reversed the LA’s Decision. It
found the respondent guilty of Serious Misconduct, but ordered payment to the
latter of service incentive leave pay.
Pending appeal, the respondent filed a Motion for Issuance of Writ of Execution
seeking to collect the SIL pay and the accrued wages. LA Rioflorido granted the
motion, but the NLRC issued a TRO commanding the former to desist from
execution proceedings.
The CA reversed the Decision and Resolution of the NLRC citing the
jurisprudence to the effect that LA's order of reinstatement is immediately
executory and that even if such order of reinstatement is reversed on appeal, the
employer is still obliged to reinstate and pay the wages of the employee during the
period of appeal until reversal by a higher court or tribunal. Petitioners’ motion
for reconsideration was denied.
Issue:
WON the award of reinstatement backwages in favor of the respondent should
be deleted
Ruling:
NO. Under Article 223 (now Article 229) of the Labor Code, "the decision of the
[LA] reinstating a dismissed or separated employee, insofar as the reinstatement
aspect is concerned, shall immediately be executory, even pending appeal. The
employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the
employer, merely reinstated in the payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement” Verily, the employer is duty-bound
to reinstate the employee, failing which, the employer is liable instead to pay the
dismissed employee's salary.
However, in the event that the LA's decision is reversed by a higher tribunal, the
employer's duty to reinstate the dismissed employee is effectively terminated. This
means that an employer is no longer obliged to keep the employee in the actual
service or in the payroll. The employee, in tum, is not required to return the wages
that he had received prior to the reversal of the LA's decision. Notwithstanding the
reversal of the finding of illegal dismissal, an employer, who, despite the LA's order
of reinstatement, did not reinstate the employee during the pendency of the appeal
up to the reversal by a higher tribunal may still be held liable for the accrued
wages of the employee, i.e., the unpaid salary accruing up to the time of the
reversal. By way of exception, an employee may be barred from collecting the
accrued wages if shown that the delay in enforcing the reinstatement pending
appeal was without fault on the part of the employer.
Meanwhile, the Court, in Bergonio, Jr., v. South East Asian Airlines,remarked that
"an order of reinstatement issued by the LA is self-executory, i.e., the dismissed
employee need not even apply for and the LA need not even issue a writ of
execution to trigger the employer's duty to reinstate the dismissed
employee." Thus, while herein respondent may have been given an alternative
option to instead receive separation pay in lieu of reinstatement, there is no
denying that, based on the provisions of the Labor Code and as attributed in
jurisprudence, it is his employer who should have first discharged its duty to
reinstate him.
68.
G.R. No. 216452, June 20, 2016, PERLAS-BERNABE, J.
TING TRUCKING/MARY VIOLAINE A. TING, Petitioner, v. JOHN C.
MAKILAN, Respondent.
Facts:
The respondent was hired as a driver by the petitioner for its trucking business,
with standby pay and allowances. The respondent claimed that on August 20,
2010, while on his way to work, he received a call from the petitioner
terminating his employment purportedly to avoid his regularization. No notice
of infraction or dismissal was given to him. On the other hand, the petitioner
denied the allegation of illegal dismissal arguing that the respondent was never
hired on a probationary basis. He further claimed that the respondent abused
the trust and confidence reposed on him for committing several anomalies
while in the performance of his duties. Upon respondent’s failure to comply
with the petitioner’s demand to turn over fuel receipts and spare parts of the
motor vehicle, the latter filed a complaint for Qualified Theft against the former.
To constitute a valid cause for the dismissal, the misconduct must: (a) be
serious; (b) relate to the performance of the employee's duties showing that the
employee has become unfit to continue working for the employer; and (c) have
been performed with wrongful intent.
In the case at bar, all of the foregoing requisites have been duly established by
substantial evidence. Records disclose that respondent was charged of
misappropriating fuel allowance, theft of fuel and corn, and sale of spare parts
while in the performance of his duties.
Indeed, it bears stressing that while there may be no direct evidence to prove that
respondent actually committed the offenses charged, there was substantial proof
of the existence of the irregularities committed by him. It is well to point out that
substantial proof, and not clear and convincing evidence or proof beyond
reasonable doubt, is sufficient as basis for the imposition of any disciplinary action
upon the employee. The standard of substantial evidence is satisfied where the
employer has reasonable ground to believe that the employee is responsible for the
misconduct and his participation therein renders him unworthy of the trust and
confidence demanded by his position, as in this case.

The LA ruled that the respondent’s actions constituted Serious Misconduct, a

just cause for termination under the Labor Code of the Philippines. However, as
it observed, said dismissal was without due process, ordering the petitioner to
pay nominal damages.

The NLRC affirmed the ruling of the LA, that the dismissal was warrantedfor the
respondent’s failure to support his claim that the evidence raised against him
were fabricated.

The CA reversed the decision of the NLRC, ruling that the fabrication claims
were true, and that the dismissal was tainted with malice and bad faith.

Issue:

WON the dismissal of the respondent was valid

Ruling:

Yes.Fundamental is the rule that an employee can be dismissed from employment

only for a valid cause. Serious misconduct is one of the just causes for termination
under Article 297 of the Labor Code. Misconduct is defined as an improper or
wrong conduct. 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.
69.
G.R. No. 222730, Nov. 7, 2016
Buenaflor Car Services, Inc. v. David Jr.
DOCTRINES:
 NLRC should not have bound itself by the technical rules of procedure as
it is allowed to be liberal in the application of its rules in deciding labor
cases.
 An employee can be dismissed from employment only for a valid cause as
enumerated in Article 297 of the LC.
FACTS:
Respondent was employed as Service Manager by petitioner. He was in charge
of the overall day-to-day operations of petitioner, including the authority to sign
checks, check vouchers, and purchase orders.
Petitioner implemented a company policy with respect to the purchase and
delivery of automotive parts and products. The process begins with the
preparation of a purchase order by the Purchasing Officer, Sonny D. De Guzman
(De Guzman), which is thereafter, submitted to respondent for his review and
approval. It was also a company policy that all checks should be issued in the
name of the specific supplier and not in "cash”.
On August 8, 2013, Chief Finance Officer Cristina S. David (David) of petitioner's
affiliate company, Diamond IGB, Inc., received a call from the branch manager of
China Bank, SM City Bicutan Branch, informing her that the latter had cleared
several checks issued by petitioner bearing the words "OR CASH" indicated after
the payee's name.
As a result, respondent, together with Del Rosario, De Guzman, and Caranto,
were placed under preventive suspension for a period of thirty (30) days, and
directed to submit their respective written explanations. Subsequently, they
were terminatedafter having been found guilty of violating Items B (2), (3)
and/or G (3) of the company's Code of Conduct and Behavior, particularly,
serious misconduct and willful breach of trust.
Aggrieved, respondent, De Guzman, and Caranto filed a complaint for illegal
dismissal with prayer for reinstatement and payment of damages and attorney's
fees against petitioner, Diamond IGB, Inc., and one IsaganiBuenaflor before the
NLRC.
The Labor Arbiter (LA) ruled that respondent, De Guzman, and Caranto were
illegally dismissed, and consequently, awarded backwages, separation pay and
attorney's fees.
The NLRC affirmed with modification the LA's Decision, finding De Guzman and
Caranto to have been dismissed for cause, but sustained the illegality of
respondent's termination from work. Respondent was directly implicated in the
controversy through the extrajudicial confession of his co-employee, Del
Rosario, who had admitted to be the author of the checks' alterations, although
mentioned that she did so only upon respondent's imprimatur.
The NLRC, as affirmed by the CA, however, deemed the same to be inadmissible
in evidence on account of the res inter alios acta rule, which, as per Section 30,
Rule 130 of the Rules of Court, provides that the rights of a party cannot be
prejudiced by an act, declaration, or omission of another. Consequently, an
extrajudicial confession is binding only on the confessant and is not admissible
against his or her co-accused because it is considered as hearsay against them.
The CA found no grave abuse of discretion on the part of the NLRC in holding
that respondent was illegally dismissed.
ISSUE: Whether or not the CA committed reversible error in upholding the
NLRC's ruling that respondent was illegally dismissed.
HELD: YES. Fundamental is the rule that an employee can be dismissed from
employment only for a valid cause as enumerated in Article 297 of the LC.
Respondent's termination was grounded on his violation of petitioner's Code of
Conduct and Behavior, which was supposedly tantamount to (a) serious
misconduct and/or (b) willful breach of the trust reposed in him by his
employer.
It is highly unlikely that respondent did not have any participation in the
abovementioned scheme to defraud petitioner. It is crucial to point out that the
questioned checks would not have been issued if there weren't any spurious
purchase orders. Thus, being the approving authority of these spurious
purchase orders, respondent cannot disclaim any culpability in the resultant
issuance of the questioned checks.
With regard to the argument on inadmissibility of the extrajudicial confession,
the NLRC should not have bound itself by the technical rules of procedure as it
is allowed to be liberal in the application of its rules in deciding labor cases.
The NLRC Rules of Procedure state that "[t]he rules of procedure and evidence
prevailing in courts of law and equity shall not be controlling and the
Commission shall use every and all reasonable means to ascertain the facts in
each case speedily and objectively, without regard to technicalities of law or
procedure . . . ."
Hence, the NLRC gravely abused its discretion in holding that respondent was
illegally dismissed.
70. Case No. 70: G.R. No. 219569, August 17, 2016
HSY MARKETING LTD. CO., V. VIRGILIO 0. VILLASTIQUE
Labor Law; Employment-Employee Relationship. It is worth noting that
respondent claimed in his Position Paper before the LA that he was hired by
petitioner and was required to report for work at its store in Cagayan de Oro City.
This was confirmed by petitioner in its own Position Paper, declaring respondent
to be a field driver for the Cagayan de Oro Branch of HSY MARKETING LTD., CO.
Clearly, petitioner should be bound by such admission and must not be allowed to
continue to deny any employer-employee relationship with respondent. The Court
had already exposed the practice of setting up "distributors" or "dealers" which
are, in reality, dummy companies that allow the mother company to avoid
employer-employee relations and, consequently, shield the latter from liability
from employee claims in case of illegal dismissal, closure, unfair labor practices,
and the like.
Same; Same; Separation Pay. Properly speaking, liability for the payment of
separation pay is but a legal consequence of illegal dismissal where reinstatement
is no longer viable or feasible. As a relief granted in lieu of reinstatement, it goes
without saying that an award of separation pay is inconsistent with a finding that
there was no illegal dismissal. This is because an employee, who had not been
dismissed, much less illegally dismissed, cannot be reinstated. Moreover, as there
is no reinstatement to speak of, respondent cannot invoke the doctrine of strained
relations to support his prayer for the award of separation pay.
Same; same; Service Incentive Leave Pay. Service incentive leave is a right which
accrues to every employee who has served within 12 months, whether continuous
or broken reckoned from the date the employee started working, including
authorized absences and paid regular holidays unless the working days in the
establishment as a matter of practice or policy, or that provided in the
employment contracts, is less than 12 months, in which case said period shall be
considered as one (1) year.
FACTS: On January 3, 2003, petitioner hired respondent as a field driver for
Fabulous Jeans & Shirt & General Merchandise which is tasked to deliver ready-
to-wear items and/or general merchandise for a daily compensation of P370.00.
On January 10, 2011, respondent figured in an accident when the service vehicle
he was driving in Iligan City bumped a pedestrian. Fabulous Jeans shouldered
the hospitalization and medical expenses of the pedestrian in the amount of
P64, 157.15, which respondent was asked to reimburse, but to no avail. On
February 24, 2011, respondent was allegedly required to sign a resignation
letter, which he refused to do. A couple of days later, he tried to collect his salary
for that week but was told that it was withheld because of his refusal to resign.
Convinced that he was already terminated on February 26, 2011, he lost no time
in filing a complaint for illegal dismissal with money claims against petitioner,
Fabulous Jeans, and its owner before the NLRC.
The Labor Arbiter dismissed the charge of illegal dismissal. Thus,
aggrieved, petitioner appealed to the NLRC which affirm the findings of the LA.
The petitioner moved for reconsideration but was denied. Thus, the case was
elevated to the Court of Appeals. But likewise sustain the decision of the lower
court. Hence, this petition.
ISSUES:
1. Whether or not an employment relationship existed between the
parties in this case?
2. Whether or not respondent voluntarily resign from work and petitioner
dismiss him from employment, and consequently, awarded respondent
separation pay?
3. Whether or not respondent is regular employee and thus, awarded him
service incentive leave pay?
HELD:
1. POSITIVE. Fabulous Jeans joined petitioner as respondent-appellant,
it was argued that the LA should have dismissed the charges against petitioner
instead, considering that respondent was employed as a field driver for
Fabulous Jeans and that there was no employer-employee relationship between
him and petitioner. In fact, it is even worth noting that respondent claimed in
his Position Paper before the LA that he was hired by petitioner and was
required to report for work at its store in Cagayan de Oro City. This was
confirmed by petitioner in its own Position Paper, declaring respondent to be "a
field driver for the Cagayan de Oro Branch of (petitioner) HSY MARKETING
LTD., CO., (NOVO JEANS & SHIRT)." Clearly, petitioner should be bound by such
admission and must not be allowed to continue to deny any employer-employee
relationship with respondent. The Court had already exposed the practice of
setting up "distributors" or "dealers" which are, in reality, dummy companies
that allow the mother company to avoid employer-employee relations and,
consequently, shield the latter from liability from employee claims in case of
illegal dismissal, closure, unfair labor practices, and the like.
2. NEGATIVE. The Court likewise upholds the unanimous conclusion of
the lower tribunals that respondent had not been dismissed at all. Other than
the latter's unsubstantiated allegation of having been verbally terminated from
his work, no substantial evidence was presented to show that he was indeed
dismissed or was prevented from returning to his work. Hence, since there is no
dismissal or abandonment to speak of, the appropriate course of action is to
reinstate the employee without, however, the payment of back wages. Properly
speaking, liability for the payment of separation pay is but a legal consequence
of illegal dismissal where reinstatement is no longer viable or feasible. As a
relief granted in lieu of reinstatement, it goes without saying that an award of
separation pay is inconsistent with a finding that there was no illegal dismissal.
This is because an employee, who had not been dismissed, much less illegally
dismissed, cannot be reinstated. Moreover, as there is no reinstatement to
speak of, respondent cannot invoke the doctrine of strained relations to support
his prayer for the award of separation pay.
3. POSITIVE. The Court nonetheless sustains the award of service
incentive leave pay in favor of respondent; in accordance with the finding of the
CA that respondent was a regular employee of petitioner and is, therefore,
entitled to such benefit. The Court has already held that company drivers who
are under the control and supervision of management officers - like respondent
herein - are regular employees entitled to benefits including service incentive
leave pay. "Service incentive leave is a right which accrues to every employee
who has served 'within 12 months, whether continuous or broken reckoned
from the date the employee started working, including authorized absences and
paid regular holidays unless the working days in the establishment as a matter
of practice or policy, or that provided in the employment contracts, is less than
12 months, in which case said period shall be considered as one (1) year.' It is
also commutable to its money equivalent if not used or exhausted at the end of
the year. In other words, an employee who has served for one (1) year is
entitled to it. He may use it as leave days or he may collect its monetary value."
71.
Ramos v. BPI Family Savings Bank
G.R. No. 203186
4 December 2013
Substantial Evidence
FACTS
Xavier Ramos was Vice-President for Dealer Network Marketing/Auto
Loans Division in BPI Family. Among his duties and responsibilities was to
receive applications for auto loans. During his tenure, a client named Trezita
Acosta obtained several auto loans which were duly approved and promptly
paid. Later on, Acosta purportedly secured another auto loan for the purchase of
a Toyota Prado vehicle. As it turned out, Acosta did not authorize or personally
apply for such auto loan. After investigation, BPI Family discovered that a
person misrepresented Acosta in obtaining a Toyota Prado pursuant to the
Purchase Order (PO) and Authority to Deliver (ATD) issued by Ramos. It was
likewise discovered that Ramos released the said documents without prior
approval from the company’s credit committee. Furthermore, Ramos was
grossly remiss in his duties since his subordinates did not follow the bank's
safety protocols.
As a consequence, BPI Family lost at least two million, which amount
was divided between Ramos and his three other subordinates, with Ramos
shouldering the proportionate amount of at least half a million. The foregoing
amount was subsequently deducted from Ramos' benefits which accrued upon
his retirement. Claiming that the deductions made by BPI Family were illegal,
Ramos filed a complaint for underpayment of retirement benefits and non-
payment of overtime and holiday pay and premium pay against BPI Family.
The Labor Arbiter dismissed the complaint because of Ramos’ failure to
ensure that his subordinates complied with the bank's safety protocols, and that
he issued the necessary documents without the prior approval of the credit
committee.
On appeal, the NLRC reversed the LA holding that the deduction
complained of was illegal and unreasonable in that the alleged negligence
committed by Ramos was not substantially proven as he was not expected to
personally examine all loan documents that pass through his hands or to
require the client to personally appear before him because he has subordinates
to do those details for him and that the issuance of the documents prior to the
loan's approval is not an irregular procedure, but an ordinary occurrence in BPI
Family.
The CA reversed the NLRC. It affirmed the finding of negligence on the
part of Ramos, holding that Ramos was remiss in his duty as head in failing to
determine the true identity of the person who availed of the auto loan.
Moreover, Ramos should not have authorized the release of the car loan without
clearance from the credit committee. However, it also attributed negligence on
the part of BPI Family since it sanctioned the practice of issuing the PO and ATD
prior to the approval of the credit committee which contributed to a large
extent to its defraudation.
ISSUE
Whether or not the CA erred in attributing grave abuse of discretion on
the part of the NLRC when it found the deduction made from Ramos's
retirement benefits to be illegal and unreasonable.
RULING
Yes. As a general rule, in certiorari proceedings under Rule 65 of
the Rules of Court, the appellate court does not assess and weigh the sufficiency
of evidence upon which the Labor Arbiter and the NLRC based their conclusion.
The query in this proceeding is limited to the determination of whether or not
the NLRC acted without or in excess of its jurisdiction or with grave abuse of
discretion in rendering its decision. However, as an exception, the appellate
court may examine and measure the factual findings of the NLRC if the same are
not supported by substantial evidence.
Here, the CA erred in attributing grave abuse of discretion on the part
of the NLRC in finding that the deduction made from Ramos's retirement
benefits was improper for two reasons. First, BPI Family was not able to
substantially prove its imputation of negligence against Ramos. Well-settled is
the rule that the burden of proof rests upon the party who asserts the
affirmative of an issue. In this case, BPI Family failed to establish that the duty to
confirm and validate information in credit applications and determine credit
worthiness of prospective loan applicants rests with the Dealer Network
Marketing Department, which is the department under the supervision of
Ramos. Quite the contrary, records show that these responsibilities lie with the
bank's Credit Services Department, namely its Credit Evaluation Section and
Loans Review and Documentation Section, of which Ramos was not part of.
Second, Ramos merely followed standing company practice when he
issued the PO and ATD without prior approval from the bank's Credit Services
Department. In fact, BPI Family adopted the practice of processing loans with
extraordinary haste in order to overcome arduous competition with other
banks and lending institutions, despite compromising procedural safeguards. In
a separate audit report, such practice has been adopted due in part to the stiff
competition with other banks and lending institutions. As such, Ramos cannot
be said to have been negligent in his duties.
72.
Lopez v. Irvine Construction Corp.
G.R. No. 207253
20 August 2014
Suspension of Business Operation
FACTS
Irvine Construction initially hired Crispin Lopez as laborer in 1994.
Later on, he was designated as a guard at its warehouse in 2000. Five years
thereafter, Lopez was purportedly terminated from his employment,
whereupon he was told “Ikaw ay lay-off muna.” Thus, he filed a complaint for
illegal dismissal against Irvine.
For its part, Irvine alleged that Lopez was employed only as a laborer
who sometimes doubled as a guard. As laborer, his duty was to bring
construction materials from the suppliers' vehicles to the company warehouse
when there is a construction project in Cavite. Lopez, however, was temporarily
laid-off after the Cavite project was finished. He was asked to return to work
through a letter allegedly sent to him within the 6-month period under Article
286 of the Labor Code which pertinently provides that "the bona-
fide suspension of the operation of a business or undertaking for a period not
exceeding six (6) months . . . shall not terminate employment.” Hence, Irvine
argued that the complaint was premature.
The LA ruled that Lopez was illegally dismissed because there was no
proof of the return to work order by Irvine. As such, the dismissal went beyond
the 6-month period fixed by Article 286 of the Labor Code.
The NLRC upheld the LA’s ruling for the reason that Lopez is a regular
employee working with Irvine since 1994 and thus entitled to security of
tenure. As such, he can only be dismissed for any just or authorized cause under
Articles 282 and 283 of the Labor Code.
The CA, however, found that the complaint was prematurely filed since
there was no indicia that Lopez was prevented from returning to work.
Accordingly, he was merely temporarily laid-off. Hence, he could not have been
dismissed.
ISSUE
Whether or not Lopez was illegally dismissed.
RULING
Yes. Lopez is not a project but a regular employee since there was no
substantial evidence that he was assigned to carry out a specific project or
undertaking. As such, he is entitled to security of tenure and, hence, dismissible
only upon a just or authorized cause. Among the authorized causes for
termination under Article 283 of the Labor Code is retrenchment or what is
sometimes referred to as lay-off. Lay-off is an act of the employer of dismissing
employees because of losses in the operation, lack of work, and considerable
reduction on the volume of its business, a right recognized and affirmed by the
Court. However, a lay-off would be tantamount to a dismissal only if it is
permanent. When a lay-off is only temporary, the employment status of the
employee is not deemed terminated, but merely suspended. Under Article 286
of the Labor Code, the suspension of the operation of business or undertaking in
a temporary lay-off situation must not exceed six (6) months. Within this six-
month period, the employee should either be recalled or permanently
retrenched. Otherwise, the employee would be deemed to have been dismissed,
and the employee held liable. Furthermore, in both a permanent and temporary
lay-off, jurisprudence dictates that the one-month notice rule to both the DOLE
and the employee under Article 283 of the Labor Code, is mandatory. Also, in
both cases, the lay-off, being an exercise of the employer's management
prerogative, must be exercised in good faith—that is, one which is intended for
the advancement of employers' interest and not for the purpose of defeating or
circumventing the rights of the employees under special laws or under valid
agreements.
In this case, the supposed lay-off of Lopez was hardly justified
considering the absence of any causal relation between the cessation of Irvine's
project in Cavite with the suspension of Lopez's work. To repeat, Lopez is a
regular and not a project employee. Hence, the continuation of his engagement
with Irvine, either in Cavite, or possibly, in any of its business locations, should
not have been affected by the culmination of the Cavite project alone.Irvine
should have established the bona fide suspension of its business operations or
undertaking that would have resulted in the temporary lay-off of its employees
for a period not exceeding six (6) months in accordance with Article 286 of
the Labor Code.
The burden of proving, with sufficient and convincing evidence, that
such closure or suspension is bona fide falls upon the employer. Here, Irvine
merely completed one of its numerous construction projects which does not, by
and of itself, amount to a bona fide suspension of business operations or
undertaking. In invoking Article 286 of the Labor Code, the paramount
consideration should be the dire exigency of the business of the employer that
compels it to put some of its employees temporarily out of work. This means
that the employer should be able to prove that it is faced with a clear and
compelling economic reason which reasonably forces it to temporarily shut
down its business operations or a particular undertaking, incidentally resulting
to the temporary lay-off of its employees.
 In addition, due to the grim economic consequences to the employee,
case law states that the employer should also bear the burden of proving that
there are no posts available to which the employee temporarily out of work can
be assigned.

In this case, no evidence was submitted by Irvine to show any dire

exigency which rendered it incapable of assigning Lopez to any of its projects.
Add to this the fact that Irvine did not proffer any sufficient justification for
singling out Lopez for lay-off among its other three hundred employees, thereby
casting a cloud of doubt on Irvine's good faith in pursuing this course of action.
Verily, Irvine cannot conveniently suspend the work of any of its employees in
the guise of a temporary lay-off when it has not shown compliance with the
legal parameters under Article 286 of the Labor Code. With Irvine failing to
prove such compliance, the resulting legal conclusion is that Lopez had been
constructively dismissed; and since the same was effected without any valid
cause and due process, Lopez's dismissal was illegal.
73.
G.R. No.187722, June 10, 2013
SURIGAO DEL NORTE ELECTRIC COOPERATIVE, INC. AND/OR DANNY Z.
ESCALANTE, Petitioners, v. TEOFILO GONZAGA, Respondent.
DECISION
The Facts
On October 13, 1993, petitioner Surigao Del Norte Electric Cooperative, Inc.
(SURNECO) hired Gonzaga as its lineman. On February 15, 2000, he was
assigned as Temporary Teller at SURNECO’s sub-office in Gigaquit, Surigao Del
Norte.7
Danny Escalante (Escalante), General Manager of SURNECO, issued
Memorandum Order No. 34, series of 2001 (Memorandum 34-01), with
attached report of SURNECO’s Internal Auditor, Pedro Denolos (Collection
Report) and two (2) sets of summaries of collections and remittances
(Summaries), seeking an explanation from Gonzaga regarding his remittance
shortages in the total amount of P314,252.23, covering the period from
February 2000 to May 2001.
On July 16, 2001, Gonzaga asked for an extension of three (3) weeks within
which to submit his explanation since he needed to go over the voluminous
receipts of collections and remittances with the assistance of an accountant. On
the same day, he sent another letter, denying any unremitted amount on his
part and thereby, requesting that the charges against him be lifted.Attached to
the same letter is an Audit Opinion11 prepared by one LeonidesLaluna (Laluna),
a certified public accountant (CPA), stating that the Internal Auditor’s Report
cannot accurately establish any remittance shortage on Gonzaga’s part since the
amount of collections stated in the Summaries was not supported by any bills or
official receipts.
In the meantime, SURNECO formed an Investigation Committee (Committee) to
investigate Gonzaga’s alleged remittance shortages. On July 30, 2001, the
Committee sent Gonzaga an invitation to attend the investigation proceedings,
in which he participated. Pending investigation, Gonzaga was placed under
preventive suspension from July 31 to August 29, 2001.
On August 9, 2001, the Committee tendered its report, finding Gonzaga guilty of
(a) gross and habitual neglect of duty under Section 5.2.15 of the Code of Ethics
and Discipline for Rural Electric Cooperative (REC) Employees (Code of Ethics);
(b) misappropriation of REC funds under Section 7.2.1 of the Code of Ethics; and
(c) failure to remit collections/monies under Section 7.2.2 of the Code of Ethics.
Thereafter, a notice of termination was served on Gonzaga on September 13,
2001. Gonzaga sought reconsideration before SURNECO’s Board of Directors but
the latter denied the same after he presented his case. On October 25, 2001,
another notice of termination (Final Notice of Termination) was served on
Gonzaga. Consequently, he was dismissed from the service on November 26,
2001.
In view of the foregoing incidents, Gonzaga filed a complaint with the NLRC
Regional Arbitration Branch No. XIII - Butuan City for illegal dismissal with
payment of backwages including damages and attorney’s fees, claiming that he
was denied due process and dismissed without just cause. He alleged that while
he was asked in Memorandum 34-01 to explain the P314,252.23 remittance
shortage, he was nonetheless denied due process since the actual grounds
for his dismissal, i.e., gross and habitual neglect of duties and
responsibilities, misappropriation of REC funds and failure to remit
collections/monies, were not indicated in the said memorandum. He also
claimed that petitioners’ evidence failed to show any missing collection since (a)
the attached Summary of Collections and Remittances dated June 7, 2001did not
bear any receipt numbers, both with respect to collections and remittances and
(b) the other Summary of Collections and Remittances only contained receipt
numbers for the remittances and none for the collections. 19
In defense, petitioners maintained that Gonzaga’s dismissal was attended with
due process and founded on a just and valid cause. They maintained that
Gonzaga’s remittance shortages accumulated to the amount of
P314,252.23, stressing that the so-called Collection Report was prepared by
Gonzaga himself. Petitioners further argued that Gonzaga was given enough
opportunity to defend himself during the investigation. Likewise, he was
properly informed of the accusation against him since the charge of cash
shortage has a direct and logical relation to the findings of gross and habitual
neglect of duties and responsibilities, misappropriation of REC funds and failure
to remit collections/monies. In this regard, there was no conflict between the
charge stated in Memorandum 34-01 and the grounds cited in the Final Notice
of Termination.
In reply, Gonzaga insisted that, contrary to petitioners’ claim, the Summaries
were prepared by SURNECO’s internal auditor. He also added that the
cooperative’s proper procedure for the conduct of investigation, as outlined in
Section 16.5 of the Code of Ethics was not followed; hence, he was denied due
process.
The Issue
 evidence presented by the petitioners, as opposed to the bare denial of Gonzaga,
The crux of the present controversy revolves around the propriety of Gonzaga’s sufficient to constitute substantial evidence to prove that he committed serious
dismissal. misconduct and gross and habitual neglect of duty to warrant his dismissal from
employment. Such are just causes for termination which are explicitly
The Court’s Ruling enumerated under Article 296 of the Labor Code, as amended:50

A. Cause of termination. Article 296. Termination by Employer. – An employer may terminate an

employment for any of the following causes:cralavvonlinelawlibrary
In termination cases, the burden of proof rests on the employer to show that the
dismissal is for a valid cause. Failing in which, the law considers the matter a (a) Serious Misconduct or wilful disobedience by the employee of the lawful
case of illegal dismissal.45 In this relation, the quantum of proof which the orders of his employer or representative in connection with his
employer must discharge is substantial evidence which, as defined in case law, work;chanroblesvirtualawlibrary
means that amount of relevant evidence as a reasonable mind might accept as
adequate to support a conclusion, even if other minds, equally reasonable, might (b) Gross and habitual neglect by the employee of his
conceivably opine otherwise.46 duties;chanroblesvirtualawlibrary

Applying the foregoing principles to this case, the Court finds that petitioners x xxx
were able to prove, by substantial evidence, that there lies a valid cause to
terminate Gonzaga’s employment. At any rate, Gonzaga had admitted that he failed to remit his collections daily in
violation of SURNECO’s company policy, rendering such fact conclusive and
The Court concurs with the NLRC’s finding that petitioners’ evidence – which binding upon him. Therefore, for his equal violation of Section 7.2.2 of the Code
consists of the Collection Report, the Summaries, and the September 15, 2003 of Ethics (failure to remit collections/monies), his dismissal is justified
Audit Report with attached Cash Flow Summary – adequately supports the altogether.
conclusion that Gonzaga misappropriated the funds of the cooperative. The data
indicated therein show gaping discrepancies between Gonzaga’s collections and B. Termination procedure; statutory compliance.
remittances, of which he was accountable for. In this accord, the burden of
evidence shifted to Gonzaga to prove that the reflected shortage was not The statutory procedure for terminating an employee is found in Section 2 (III),
attributable to him. However, despite being allowed to peruse the bills and Rule XXIII, Book V of the Omnibus Rules Implementing the Labor Code
receipts on record together with the assistance of an accountant and a counsel (Omnibus Rules) which states:cralavvonlinelawlibrary
during the investigation proceedings, Gonzaga could not reconcile the amounts
of his collections and remittances and, instead, merely interposed bare and
SEC. 2. Standards of due process: requirements of notice. – In all cases of
general denials.
termination of employment, the following standards of due process shall be
substantially observed:cralavvonlinelawlibrary
Also, it cannot be said that with the admission of the said evidence, Gonzaga
For termination of employment based on just causes as defined in Article 282 of
would be denied due process. Records show that he was furnished a copy of the
the Labor Code:51
Manifestation with the attached audit report on September 23, 2003 and the
NLRC only rendered a decision on August 31, 2004. This interim period gave
(i) A written notice served on the employee specifying the ground or grounds
him ample time to rebut the same; however, he failed to do so.
for termination, and giving said employee reasonable opportunity within which
to explain his side.
Finally, the records are bereft of any showing that SURNECO’s internal auditor
was ill-motivated when he audited Gonzaga. Thus, there lies no reason for the
(ii) A hearing or conference during which the employee concerned, with the
Court not to afford full faith and credit to his report.
assistance of counsel if he so desires is given opportunity to respond to the
charge, present his evidence, or rebut the evidence presented against him.
All told, considering the totality of circumstances in this case, the Court finds the
(iii) A written notice of termination served on the employee, indicating that to the charges of gross and habitual neglect of duties and responsibilities,
upon due consideration of all the circumstances, grounds have been established misappropriation of REC funds and failure to remit collections/monies. It stands
to justify his termination. to reason that the core of all these infractions is similar – that is, the loss of
money to which Gonzaga was accountable – such that by reconciling the
amounts purportedly missing, Gonzaga would have been exculpated from all
Succinctly put, the foregoing procedure consists of (a) a first written notice
these charges. Therefore, based on these considerations, the Court finds that the
stating the intended grounds for termination; (b) a hearing or conference where
first notice requirement had been properly met.
the employee is given the opportunity to explain his side; and (c) a second
written notice informing the employee of his termination and the grounds
Second, petitioners have conducted an informal inquiry in order to allow
therefor. Records disclose that petitioners were able to prove that they
Gonzaga to explain his side. To this end, SURNECO formed an investigation
sufficiently complied with these procedural
committee to investigate Gonzaga’s alleged remittance shortages. After its
requirements:cralavvonlinelawlibrary
formation, an invitation was sent to Gonzaga to attend the investigation
proceedings, in which he participated.53 Apropos to state, Gonzaga never denied
First, petitioners have furnished Gonzaga a written first notice specifying the
his participation during the said proceedings. Perforce, the second requirement
grounds on which his termination was sought.
had been equally complied with.
In particular, Memorandum 34-01, which was issued on June 26, 2001, reads:52
Third, a second written notice was sent to Gonzaga informing him of the
company’s decision to relieve him from employment, as well as the grounds
Attached is a report of Mr. Pedro A. Denolos, Internal Auditor, alleging that you
therefor.
incurred shortages as Teller of Sub-Office I which accumulated to THREE
HUNDRED FOURTEEN THOUSAND TWO HUNDRED FIFTY TWO PESOS AND
Records indicate that the Committee tendered its report on August 9, 2001,
TWENTY THREE CENTAVOS (P314,252.23).
finding Gonzaga guilty of gross and habitual neglect of duties and
responsibilities, misappropriation of REC funds and failure to remit
In this regard, please submit a written explanation within seventy two (72)
collections/monies. Subsequently, a notice of termination was served on
hours from receipt of this memorandum why no disciplinary action shall be
Gonzaga on September 13, 2001, stating the aforesaid grounds. Thereafter,
taken against you on this matter.
Gonzaga tried to appeal his dismissal before SURNECO’s Board of Directors
which was, however, denied after again being given an adequate opportunity to
x xxx
present his case.54 On October 25, 2001, a Final Notice of Termination was
served on Gonzaga which read as follows:cralavvonlinelawlibrary
As may be gleaned from the foregoing, not only was Gonzaga effectively notified
of the charge of cash shortage against him, he was also given an ample For violation of the Code of Ethics and Discipline for REC Employees, specifically
opportunity to answer the same through written explanation. Notably, attached Sections 5.2.15, 7.2.1 and 7.2.2 you are hereby notified of the termination of
to Memorandum 34-01 are the Summaries which particularly detail the your employment with this cooperative effective at the close of business hours
discrepancies in Gonzaga’s collections vis-à -vis his remittances. As it turned out, on November 26, 2001.55
Gonzaga submitted a letter to management on July 16, 2001, attaching
therewith an Audit Opinion prepared by Gonzaga’s accountant, Laluna, in order
Based on the foregoing, it cannot be gainsaid that Gonzaga had been properly
to preliminarily answer the charges against him.
informed of the company’s decision to dismiss him, as well as the grounds for
the same. As such, the second notice requirement had been finally observed.
While the actual grounds of Gonzaga’s dismissal, i.e., gross and habitual neglect
of duties and responsibilities, misappropriation of REC funds and failure to
remit collections/monies, were not explicitly stated in Memorandum 34-01, At this juncture, it must be pointed out that while petitioners have complied
with the procedure laid down in the Omnibus Rules, they, however, failed to
these infractions are, however, implicit in the charge of cash shortage. Due to
show that the established company policy in investigating employees was
the direct and logical relation between these grounds, Gonzaga could not have
adhered to. In this regard, SURNECO’s breach of its company procedure
been misled to proffer any mistaken defense or contrive any weakened position.
necessitates the payment of nominal damages as will be discussed below.
Rather, precisely because of the substantial identity of these grounds, any
defense to the charge of cash shortage equally constitutes an adequate defense
C. Company procedure; consequences of breach.

Jurisprudence dictates that it is not enough that the employee is given an “ample
opportunity to be heard” if company rules or practices require a formal hearing
Accordingly, since only an informal inquiry was conducted in investigating
or conference. In such instance, the requirement of a formal hearing and
Gonzaga’s alleged cash shortages, SURNECO failed to comply with its own
conference becomes mandatory. In Perez v. Philippine Telegraph and Telephone
company policy, violating the proper termination procedure altogether.
Company,the Court laid down the following principles in dismissing
employees:cralavvonlinelawlibrary
In this relation, case law states that an employer who terminates an employee
for a valid cause but does so through invalid procedure is liable to pay the latter
(a) “ample opportunity to be heard” means any meaningful opportunity (verbal
nominal damages.
or written) given to the employee to answer the charges against him and submit
evidence in support of his defense, whether in a hearing, conference or some
In Agabon v. NLRC (Agabon), the Court pronounced that where the dismissal is
other fair, just and reasonable way.
for a just cause, the lack of statutory due process should not nullify the
dismissal, or render it illegal, or ineffectual. However, the employer should
(b) a formal hearing or conference becomes mandatory only
indemnify the employee for the violation of his statutory rights. 60 Thus,
when requested by the employee in writing or substantial evidentiary disputes
in Agabon, the employer was ordered to pay the employee nominal damages in
exists or a company rule or practice requires it, or when similar
the amount of P30,000.00.61
circumstances justify it.
By analogy, the Court finds that the same principle should apply to the case at
(c) the “ample opportunity to be heard” standard in the Labor Code prevails
bar for the reason that an employer’s breach of its own company procedure is
over the “hearing and conference” requirement in the implementing rules and
equally violative of the laborer’s rights, albeit not statutory in source. Hence,
regulations. [emphases and underscoring supplied]
although the dismissal stands, the Court deems it appropriate to award Gonzaga
nominal damages in the amount of P30,000.00.
The rationale behind this mandatory characterization is premised on the fact
that company rules and regulations which regulate the procedure and
requirements for termination, are generally binding on the employer. Thus, as
pronounced in Suico v. NLRC, et al.:

Company policies or practices are binding on the parties. Some can ripen
into an obligation on the part of the employer, such as those which confer
benefits on employees or regulate the procedures and requirements for
their termination. [emphases supplied; citations omitted]

Records reveal that while Gonzaga was given an ample opportunity to be heard
within the purview of the foregoing principles, SURNECO, however, failed to
show that it followed its own rules which mandate that the employee who is
sought to be terminated be afforded a formal hearing or conference. As above-
discussed, SURNECO remains bound by – and hence, must faithfully observe –
its company policy embodied in Section 16.5 of its own Code of Ethics which
reads:cralavvonlinelawlibrary

16.5. Investigation Proper. The conduct of investigation shall be open to the

public. If there is no answer from the respondent, as prescribed, he shall be
declared in default.
74.
G.R. No. 192571 July 23, 2013
ABBOTT LABORATORIES, PHILIPPINES, CECILLE A. TERRIBLE, EDWIN D.
FEIST, MARIA OLIVIA T. YABUTMISA, TERESITA C. BERNARDO, AND ALLAN G.
ALMAZAR, Petitioners, vs. PEARLIE ANN F. ALCARAZ, Respondent.
Perlas-Bernabe, J.
Topic: Termination of Employment
Facts:
On June 27, 2004, Abbott Laboratories, Philippines (Abbott) caused the
publication in a major broadsheet newspaper of its need for a Medical and
Regulatory Affairs Manager who would: (a) be responsible for drug safety
surveillance operations, staffing, and budget; (b) lead the development and
implementation of standard operating procedures/policies for drug safety
surveillance and vigilance; and (c) act as the primary interface with internal and
external customers regarding safety operations and queries.
Alcaraz – who was then a Regulatory Affairs and Information Manager
at Aventis Pasteur Philippines, Incorporated (another pharmaceutical company
like Abbott) – showed interest and submitted her application on October 4,
2004.
On December 7, 2004, Abbott formally offered Alcaraz the above-
mentioned position which was an item under the company’s Hospira Affiliate
Local Surveillance Unit (ALSU) department.
In Abbott’s offer sheet, it was stated that Alcaraz was to be employed on
a probationary basis.
Later that day, she accepted the said offer and received an electronic
mail (e-mail) from Abbott’s Recruitment Officer, Teresita C. Bernardo
(Bernardo), confirming the same. Attached to Bernardo’s e-mail were Abbott’s
organizational chart and a job description of Alcaraz’s work.
On February 12, 2005, Alcaraz signed an employment contract which
stated that she was to be placed on probation for a period of six (6) months
beginning February 15, 2005 to August 14, 2005.
During Alcaraz’s pre-employment orientation, Allan G. Almazar,
Hospira’s Country Transition Manager, briefed her on her duties and
responsibilities as Regulatory Affairs Manager:
(a) she will handle the staff of Hospira ALSU and will directly report to Almazar
on matters regarding Hopira’s local operations, operational budget, and
performance evaluation of the Hospira ALSU Staff who are on probationary
status;(b) she must implement Abbott’s Code of Good Corporate Conduct (Code
of Conduct), office policies on human resources and finance, and ensure that
Abbott will hire people who are fit in the organizational discipline;(c) Kelly
Walsh, Manager of the Literature Drug Surveillance Drug Safety of Hospira, will
be her immediate supervisor;(d) she should always coordinate with Abbott’s
human resource officers in the management and discipline of the staff;(e)
Hospira ALSU will spin off from Abbott in early 2006 and will be officially
incorporated and known as Hospira, Philippines; and(f) the processing of
information and/or raw material data subject of Hospira ALSU operations will
be strictly confined and controlled under the computer system and network
being maintained and operated from the United States. For this purpose, all
those involved in Hospira ALSU are required to use two identification cards:
one, to identify them as Abbott’s employees and another, to identify them as
Hospira employees.
On March 3, 2005, Maria Olivia T. Yabut-Misa, Abbott’s Human
Resources (HR) Director, sent Alcaraz an e-mail which contained an explanation
of the procedure for evaluating the performance of probationary employees and
further indicated that Abbott had only one evaluation system for all of its
employees. Alcaraz was also given copies of Abbott’s Code of Conduct and
Probationary Performance Standards and Evaluation (PPSE) and Performance
Excellence Orientation Modules (Performance Modules) which she had to apply
in line with her task of evaluating the Hospira ALSU staff.
Abbott’s PPSE procedure mandates that the job performance of a
probationary employee should be formally reviewed and discussed with the
employee at least twice: first on the third month and second on the fifth month
from the date of employment. The necessary Performance Improvement Plan
should also be made during the third-month review in case of a gap between the
employee’s performance and the standards set. These performance standards
should be discussed in detail with the employee within the first two (2) weeks
on the job. It was equally required that a signed copy of the PPSE form must be
submitted to Abbott’s Human Resources Department (HRD) and shall serve as
documentation of the employee’s performance during his/her probationary
period. This shall form the basis for recommending the confirmation or
termination of the probationary employment.
On April 20, 2005, Alcaraz had a meeting with Cecille Terrible, Abbott’s
former HR Director, to discuss certain issues regarding staff performance
standards. In the course thereof, Alcaraz accidentally saw a printed copy of an e-
mail sent by Walsh to some staff members which essentially contained queries
regarding the former’s job performance. Alcaraz asked if Walsh’s action was the
normal process of evaluation. Terrible said that it was not.
On May 16, 2005, Alcaraz was called to a meeting with Walsh and
Terrible where she was informed that she failed to meet the regularization
standards for the position of Regulatory Affairs Manager. Thereafter, Walsh and
Terrible requested Alcaraz to tender her resignation, else they be forced to
terminate her services. She was also told that, regardless of her choice, she
should no longer report for work and was asked to surrender her office
identification cards. She requested to be given one week to decide on the same,
but to no avail.
On May 17, 2005, Alcaraz told her administrative assistant, Claude
Gonzales (Gonzales), that she would be on leave for that day. However, Gonzales
told her that Walsh and Terrible already announced to the whole Hospira ALSU
staff that Alcaraz already resigned due to health reasons.
 On May 23, 2005, Walsh, Almazar, and Bernardo personally handed to
Alcaraz a letter stating that her services had been terminated effective May 19,
2005. The letter detailed the reasons for Alcaraz’s termination – particularly,
that Alcaraz:
(a) did not manage her time effectively;(b) failed to gain the trust of her staff
and to build an effective rapport with them;(c) failed to train her staff
effectively; and(d) was not able to obtain the knowledge and ability to make
sound judgments on case processing and article review which were necessary
for the proper performance of her duties.
Alcaraz felt that she was unjustly terminated from her employment and
thus, filed a complaint for illegal dismissal and damages against Abbott and its
officers, namely, Misa, Bernardo, Almazar, Walsh, Terrible, and Feist. She
claimed that she should have already been considered as a regular and not a
probationary employee given Abbott’s failure to inform her of the reasonable
standards for her regularization upon her engagement as required under Article
295 of the Labor Code. In this relation, she contended that while her
employment contract stated that she was to be engaged on a probationary
status, the same did not indicate the standards on which her regularization
would be based. She further averred that the individual petitioners maliciously
connived to illegally dismiss her when:
(a) they threatened her with termination;
(b) she was ordered not to enter company premises even if she was still
an employee thereof; and
(c) they publicly announced that she already resigned in order to
humiliate her.
Abbott maintained that Alcaraz was validly terminated from her
probationary employment given her failure to satisfy the prescribed standards
for her regularization which were made known to her at the time of her
engagement.The Labor Arbiter ruled in Abbott’s favor. The NLRC reversed,
upholding Alcaraz’s allegations. The CA affirmed the NLRC decision.
ISSUES:
I) WON Alcaraz was sufficiently informed of the reasonable standards to qualify
her as a regular employee;
II) WON Alcaraz was validly terminated from her employment
III) WON the individual petitioners herein are liable
Ruling:
I.)YES. Abbott clearly conveyed to Alcaraz her duties and responsibilities as
Regulatory Affairs Manager prior to, during the time of her engagement, and the
incipient stages of her employment. On this score, the Court finds it apt to detail
not only the incidents which point out to the efforts made by Abbott but also
those circumstances which would show that Alcaraz was well-apprised of her
employer’s expectations that would, in turn, determine her regularization:
(a) On June 27, 2004, Abbott caused the publication in a major broadsheet
newspaper of its need for a Regulatory Affairs Manager, indicating therein the
job description for as well as the duties and responsibilities attendant to the
aforesaid position; this prompted Alcaraz to submit her application to Abbott on
October 4, 2004;
(b) In Abbott’s December 7, 2004 offer sheet, it was stated that Alcaraz was to
be employed on a probationary status;
(c) On February 12, 2005, Alcaraz signed an employment contract which
specifically stated, inter alia, that she was to be placed on probation for a period
of six (6) months beginning February 15, 2005 to August 14, 2005;
(d) On the day Alcaraz accepted Abbott’s employment offer, Bernardo sent her
(d) On the day Alcaraz accepted Abbott’s employment offer, Bernardo sent her
copies of Abbott’s organizational structure and her job description through e-
mail;
(e) Alcaraz was made to undergo a pre-employment orientation where Almazar
informed her that she had to implement Abbott’s Code of Conduct and office
policies on human resources and finance and that she would be reporting
directly to Walsh;
(f) Alcaraz was also required to undergo a training program as part of her
orientation;
(g) Alcaraz received copies of Abbott’s Code of Conduct and Performance
Modules from Misa who explained to her the procedure for evaluating the
performance of probationary employees; she was further notified that Abbott
had only one evaluation system for all of its employees; and
(h) Moreover, Alcaraz had previously worked for another pharmaceutical
company and had admitted to have an “extensive training and background” to
acquire the necessary skills for her job.
Considering the totality of the above-stated circumstances, Alcaraz was
well-aware that her regularization would depend on her ability and capacity to
fulfill the requirements of her position as Regulatory Affairs Manager and that
her failure to perform such would give Abbott a valid cause to terminate her
probationary employment. Verily, basic knowledge and common sense dictate
that the adequate performance of one’s duties is, by and of itself, an inherent
and implied standard for a probationary employee to be regularized; such is a
regularization standard which need not be literally spelled out or mapped into
technical indicators in every case.
Keeping with [the Omnibus Rules Implementing the Labor Code], an
employer is deemed to have made known the standards that would qualify a
probationary employee to be a regular employee when it has exerted
reasonable efforts to apprise the employee of what he is expected to do to
accomplish during the trial of probation. This goes without saying that the
employee is sufficiently made aware of his probationary status as well as the
length of time of the probation.
The exception to the foregoing is when the job is self-descriptive in
nature, for instance, in the case of maids, cooks, drivers, or messengers. Also in
Aberdeen Court, Inc v. Agustin, it has been held that the rule on notifying a March 30, 2006 of the Labor Arbiter is REINSTATED with the MODIFICATION
probationary employee of the standards of regularization should not be used to that petitioner Abbott Laboratories, Philippines be ORDERED to pay respondent
exculpate an employee in a manner contrary to basic knowledge and common Pearlie Ann F. Alcaraz nominal damages in the amount of ₱30,000.00 on account
sense in regard to which there is no need to spell out a policy or standard to be of its breach of its own company procedure.
met. In the same light, an employee’s failure to perform the duties and
responsibilities which have been clearly made known to him constitutes a
justifiable basis for a probationary employee’s non-regularization.
II.) NO. Abbott failed to follow the above-stated procedure in evaluating Alcaraz.
For one, there lies a hiatus of evidence that a signed copy of Alcaraz’s PPSE form
was submitted to the HRD. It was not even shown that a PPSE form was
completed to formally assess her performance. Neither was the performance
evaluation discussed with her during the third and fifth months of her
employment. Nor did Abbott come up with the necessary Performance
Improvement Plan to properly gauge Alcaraz’s performance with the set
company standards.
The Court modified Agabon v. NLRC in the case of Jaka Food Processing
Corporation v. Pacot where it created a distinction between procedurally
defective dismissals due to a just cause, on one hand, and those due to an
authorized cause, on the other. If the dismissal is based on a just cause under
Article 296 of the Labor Code but the employer failed to comply with the notice
requirement, the sanction to be imposed upon him should be tempered because
the dismissal process was, in effect, initiated by an act imputable to the
employee. If the dismissal is based on an authorized cause under Article 297 but
the employer failed to comply with the notice requirement, the sanction should
be stiffer because the dismissal process was initiated by the employer’s exercise
of his management prerogative. Alcaraz’s dismissal proceeded from her failure
to comply with the standards required for her regularization. As such, it is
undeniable that the dismissal process was, in effect, initiated by an act
imputable to the employee, akin to dismissals due to just causes under Article
296 of the Labor Code. Therefore, the Court deems it appropriate to fix the
amount of nominal damages at the amount of P30,000.00, consistent with its
rulings in both Agabon and Jaka.
III.) NO. Other than her unfounded assertions on the matter, there is no
evidence to support the fact that the individual petitioners herein, in their
capacity as Abbott’s officers and employees, acted in bad faith or were
motivated by ill will in terminating Alcaraz’s services. The fact that Alcaraz was
made to resign and not allowed to enter the workplace does not necessarily
indicate bad faith on Abbott’s part since a sufficient ground existed for the latter
to actually proceed with her termination. On the alleged loss of her personal
belongings, records are bereft of any showing that the same could be attributed
to Abbott or any of its officers.
Dispositive Portion:
WHEREFORE, the petition is GRANTED. The Decision dated December 10, 2009
and Resolution dated June 9, 2010 of the Court of Appeals in CA-G.R. SP No.
101045 are hereby REVERSED and SET ASIDE. Accordingly, the Decision dated
75. off-season period. The law simply considers these seasonal workers on leave
Universal Robina Sugar Milling Corporation v. Ablay until re-employed.

(Serious Misconduct; To constitute a valid cause for the dismissal within the
text and meaning of Article 282 of the Labor Code, the employee’s
misconduct must be serious, i.e., of such grave and aggravated character,
and not merely trivial or unimportant. Additionally, the misconduct must be
related to the performance of the employee’s duties showing him to be unfit
to continue working for the employer.)
Facts:
URSUMCO is a domestic corporation engaged in the sugar cane milling business;
Cabati is URSUMCO's Business Unit General Manager. The complainants were
employees of URSUMCO. They were hired on various dates (between February
1988 and April 1996) and on different capacities, 8 i.e., drivers, crane operators,
bucket hookers, welders, mechanics, laboratory attendants and aides, steel
workers, laborers, carpenters and masons, among others. At the start of their
respective engagements, the complainants signed contracts of employment for a
period of one (1) month or for a given season. URSUMCO repeatedly hired the
complainants to perform the same duties and, for every engagement, required
the latter to sign new employment contracts for the same duration of one month
or a given season.
The complainants filed before the LA complaints for regularization, entitlement
to the benefits under the existing Collective Bargaining Agreement (CBA), and
attorney's fees.
The nature of the employment depends on the nature of the activities to be
performed by the employee, considering the nature of the employer's business,
the duration and scope to be done, and, in some cases, even the length of time of
the performance and its continued existence. In light of the above legal
parameters laid down by the law and applicable jurisprudence, the respondents
are neither project, seasonal nor fixed-term employees, but regular seasonal
workers of URSUMCO.
(1) The respondents were made to perform various tasks that did not at all
pertain to any specific phase of URSUMCO's strict milling operations
that would ultimately cease upon completion of a particular phase in
the milling of sugar; rather, they were tasked to perform duties
regularly and habitually needed in URSUMCO's operations during the
milling season.
(2) The respondents were regularly and repeatedly hired to perform the
same tasks year after year.

Issue: Whether or not respondents are regular employees of URSUMCO

Held:
We find the respondents to be regular seasonal employees of URSUMCO.
Seasonal employment operates much in the same way as project employment,
albeit it involves work or service that is seasonal in nature or lasting for the
duration of the season. As with project employment, although the seasonal
employment arrangement involves work that is seasonal or periodic in nature,
the employment itself is not automatically considered seasonal so as to prevent
the employee from attaining regular status. To exclude the asserted "seasonal"
employee from those classified as regular employees, the employer must show
that: (1) the employee must be performing work or services that are seasonal in
nature; and (2) he had been employed for the duration of the season. Hence,
when the "seasonal" workers are continuously and repeatedly hired to perform
the same tasks or activities for several seasons or even after the cessation of the
season, this length of time may likewise serve as badge of regular employment.
In fact, even though denominated as "seasonal workers," if these workers are
called to work from time to time and are only temporarily laid off during the off-
season, the law does not consider them separated from the service during the
76.
Borja v. Minoza
Doctrine: Constructive dismissal exists when an act of clear discrimination,
insensibility, or disdain on the part of the employer has become so unbearable
as to leave an employee with no choice but to forego continued employment, or
when 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. The test of constructive dismissal is whether a
reasonable person in the employee's position would have felt compelled to give
up his job under the circumstances.
Facts: Minoza and Bandalanwere employed as cooks of Dong Juan, a restaurant
owned and operated by Borja. Located in Cebu City. On April 1, 2011, a Friday,
Minoza was absent from work and chose not to report for the next day, since
the company implements a "double-absent" policy, which considers an
employee absent for two (2) days without pay if he/she incurs an absence on a
Friday, Saturday, or Sunday, the busiest days for the restaurant.
On the other hand, Bandalan reported for work on April 2, 2011, a Saturday, but
was later advised by Borja to go home and take a rest, with which he complied.
Bandalan discovered thereafter that Borja was angry at him for having drinking
sessions after work on April 1, 2011. Because of the "double-absent" policy,
Bandalan purposely absented himself from work on April 3, 2011.
On April 3, 2011, the company called a meeting of its employees, including
respondents. When asked about his absence on April 1, 2011, Miñ oza explained
that he had an argument with his wife, who had been demanding for his
payslips. As for Bandalan, who managed to be present at the meeting despite his
intention to be absent from work, he answered that it would be pointless to
report for work that day, as he would not be paid anyway, considering that he
was not allowed to work the day before.
The following day, John accused Minoza and Bandalan of planning to extort
money from the company and told them that if they no longer wish to work,
they should resign. He then gave them blank sheets of paper and pens and
ordered them to write their own resignation letters.
The next day, Minoza and Bandalan reported for work but were barred from
entering the restaurant. Instead, Borja brought them to another restaurant
where they were forced to receive separate memoranda asking them to justify
their unexplained absences. Thereat, a certain "Mark" was present, who
appeared to respondents as an intimidating and ominous person.
When Minoza and Bandalan reported for work on April 6, 2011, they were
purportedly refused entry once more. At closing time that day, respondents
were invited to go inside the restaurant and were subjected to an on-the-spot
drug test, the results of which yielded negative. To his humiliation, Bandalan
had to undergo a second test, which also came out negative. Thereafter, when
Bandalan went outside to buy food, he saw "Mark" and a group of unfamiliar
people standing in a dark area near the restaurant. Later, when he and Miñ oza
were on their way home, they heard some people, presumably "Mark" and his
hired goons, shouting at them, "[y]ou fools, do not come back here as something
bad will happen to you."
Out of fear, Minoza and Bandalan no longer reported for work and instead, files
a complaint for illegal dismissal, with claim for monetary benefits, against Borja.
The Labor Arbiter found Minoza and Bandalan were illegally and constructively
dismissed. The two were placed in a difficult situation and left with no choice
but to leave their employment, the LA Minoza and Bandalan found that were
able to establish the existence of threats to their security and safety, which were
the bases for the finding of constructive dismissal.
On the other hand, The NLRC found that Minoza and Bandalan were not
constructively dismissed on the basis of the following circumstances: first, there
was nothing wrong or irregular for an employer to hold meetings with its
employees if only to monitor their performance or allow them an avenue to air
their grievances; second, there was likewise nothing wrong if an employer
issues memoranda to its employees, as a means of exercising control over them;
and third, similarly, the conduct of a drug test is within the prerogative of the
employer in order to ensure that its employees are fit to remain in its employ.
The NLRC stressed that Borja also have a business interest to protect and
recognized that employers have free rein to regulate all aspects of employment
including the prerogative to instill discipline and to impose penalties on errant
employees. The NLRC also concluded that Opura's (Mike) presence did not
create a hostile work environment Minoza and Bandalan ; neither was it proven
that they hurled threats against them.
However the CA reinstated the LA's Decision, finding Minoza and Bandalan have
been constructively dismissed. The CA held that Borja made employment
unbearable for Minoza and Bandalan on account of the following
circumstances: first, Borja formulated and implemented a "double-absent"
policy, which is offensive to sound labor-related management prerogative and
actually deters employees from reporting to work; second, Minoza and
Bandalan did not resign or go on AWOL - instead, they reported for work,
showing their intention to keep their employment; and finally, the hiring of
Opura caused a hostile and antagonistic environment for the employees.
Issue: whether or not Minoza and Bandalan were illegally and constructively
dismissed.
Held: Minoza and Bandalan were not illegally and constructively dismissed.
Borja were validly exercising their management prerogative when they called
meetings to investigate respondents' absences, gave them separate memoranda
seeking explanation therefor, and conducted an on-the-spot drug test on its
employees. Likewise, Minoza and Bandalan failed to substantiate their
allegation that they were prohibited from entering the restaurant, or that they
were threatened and intimidated by Opura as to keep them away from the
premises. Instead, they failed to prove that Opura's presence created a hostile
work environment, or that the latter threatened and intimidated them so much
as to convince them to leave their employment. Borja found it necessary to
enforce the foregoing measures to control and regulate the conduct and
behavior of their employees, to maintain order in the work premises, and
ultimately, preserve their business.
Constructive dismissal exists when an act of clear discrimination, insensibility,
or disdain on the part of the employer has become so unbearable as to leave an
employee with no choice but to forego continued employment, or when 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. The test of constructive dismissal is whether a reasonable
person in the employee's position would have felt compelled to give up his job
under the circumstances.
Despite their allegations, Minoza and Bandalan failed to prove through
substantial evidence that they were discriminated against, or that working at
the restaurant had become so unbearable that they were left without any choice
but to relinquish their employment. Neither were they able to prove that there
was a demotion in rank or a diminution in pay such that they were forced to
give up their work.
77. sustaining the finding of the labor arbiter that her dismissal was proper under
the circumstances.
PHILIPPINE PLAZA HOLDINGS, INC., Petitioner,
vs. MA. FLORA M. EPISCOPE, Respondent.
G.R. No. 192826, February 27, 2013, PERLAS-BERNABE, J.

Facts:
Ma. Flora M. Episcope (respondent) was employed as a service
attendant by Philippine Plaza Holdings, Inc. (PPHI) (petitioner) in its Café Plaza.
She was tasked to attend to dining guests, handle their bills and receive their
payments for transmittal to the cashier.

On August 28, 2004, Sycip, Gorrres and Velayo auditors dined at the
Café Plaza and were billed the total amount of P2,306.65. It was discovered later
that the hotel’s copy of the receipt bore a discount of P906.45 on account of the
use of a Starwood Privilege Discount Card, while the receipt issued by Episcope
reflected the undiscounted amount of P2,306.65. Thus, the amount actually
remitted to the hotel was only P1,400.20 leaving a shortage of P906.45.

Episcope was dismissed from the service by PPHI for, among others,
loss of trust and confidence.

Issue:
Whether or not the dismissal is justified.

Ruling:
YES. From the foregoing incidents, it is clear that Episcope was remiss
in her duty to carefully account for the money she received from the café’s
guests. It must be observed that though the receipts were prepared by the
cashier, Episcope, as a service attendant, was who actually handled the money
tendered to her by the hotel clients.

Prudence dictates that Episcope should have at least known why there
was a shortage in remittance. Yet when asked, Episcope could not offer any
plausible explanation but merely shifted the blame to the cashier. As an
employee who was routinely charged with the care and custody of her
employer’s money, Episcope was expected to have been more circumspect in
the performance of her duties as a service attendant. This she failed to observe
in the case at bar which, thus, justifies PPHI’s loss of trust and confidence in her
as well as her consequent dismissal.

Having substantially established the actual breach of duty committed

by Episcope and the due observance of due process, no grave abuse of
discretion can be imputed against the National Labor Relations Commission in
78. property custodians, or those who, in the normal exercise of their functions
regularly handle significant amounts of money or property.
Cebu People’s Multipurpose Cooperative (CPMPC) vs. Carbonilla Carbonilla occupied a position of trust and confidence as he was
Facts: employed as Credit and Collection Manager, and later on, as Legal and Collection
CPMPC hired Carbonilla as Credit and Collection Manager and was Manager, tasked with the duties of handling the credit and collection activities
tasked with the handling of the credit and collection activities of the of the cooperative. The loss of CPMPC’s trust and confidence in Carbonilla was
cooperative. Sometime in 2007, CPMPC underwent a reorganization whereby later justified by the following acts:
Carbonilla was also assigned to perform the duties of Human Resources 1. Forwarding of the mediation settlements for notarization to a lawyer
Department Manager. In 2008, he was appointed as Legal Officer and who was not authorized legal retainer of CPMPC
subsequently, held the position of Legal and Collection Manager. 2. The pull-out of important records and vital documents from the office
Beginning February 2008, CPMPC, through its HRD manager, sent premises, which were either lost or returned already tampered and
various memoranda to Carbonilla seeking explanation on the various infractions altered.
he allegedly committed. 3. Incurring of unliquidated cash advances related to the notarial
Unconvinced by Carbonilla’s explanations, CPMPC scheduled several
transactions of the mediation agreements.
clarificatory hearings but Carbonilla failed to attend despite due notice. CPMPC
conducted a formal investigation where it ultimately found Carbonilla to have Cast against this light, Carbonilla’s performance of the said acts therefore
committed acts prejudicial to CPMPC’s interests. As such, CPMPC sent Carbonilla gives CPMPC more than enough reason to lose trust and confidence in him.
a notice of dismissal on the ground of, among others, loss of trust and Mere existence of basis for believing that the employee has breached the
confidence. trust and confidence of the employer is sufficient and does not require proof
Carbonilla filed the instant case for illegal dismissal against CPMPC beyond reasonable doubt. Thus, when an employee has been guilty of breach of
before the NLRC. trust or his employer has ample reason to distrust him, a labor tribunal cannot
The LA dismissed Carbonilla’s complaint for lack of merit. The LA found deny the employer the authority to dismiss him.
that Carbonilla committed a litany of infractions, the totality of which
constituted just cause for the termination of his employment. The NLRC
affirmed the LA ruling. The CA, however, reversed and set aside the NLRC ruling
and ordered Carbonilla’s reinstatement.
Issue:
WON the CA correctly ascribed grave abuse of discretion on the part of the
NLRC in ruling that Carbonillas dismissal was valid.
Ruling:
The Court finds that the CA committed reversible error in granting
Carbonilla’s certiorari petition since the NLRC did not gravely abuse its
discretions in ruling that he was validly dismissed from the employment as
CPMPC was able to prove, through substantial evidence the existence of just
causes warranting the same.
It was apparent that Carbonilla’s employment was terminated on the
ground of, among others, loss of trust and confidence.
Carbonilla’s dismissal was also justified on the ground of loss of trust
and confidence. Loss of trust and confidence will validate an employee’s
dismissal when it is shown that: 1. The employee concerned holds a position of
trust and confidence and 2. He performs an act that would justify such loss of
trust and confidence. There are 2 classes of positions of trust. First, managerial
employees whose primary duty consists of the management of the
establishment in which they are employed or of department or a subdivision
thereof. Second, fiduciary rank-and-file employees, such as cashiers, auditors,
79. c) If he has been absent from duty for more that [sic] seven consecutive days
without any legal reason."
79. Global Resource for Outsourced Workers vs. Velasco
FACTS: Therefore, company decided to terminate your employment contract and
Petitioner Global Resource for Outsourced Workers (GROW), Inc. is a domestic blacklist both of you in entering Kuwait.
corporation engaged in the placement of workers for overseas deployment, with
petitioner Eusebio Tanco as its President. Consider this email as your official termination letter.
Respondents Abraham Velasco and Nanette Velasco were hired by petitioners
MS Retail KSC/MS Retail Central Marketing Co. (MS Retail), through GROW, as Unknown to MS Retail, the respondents had already filed a labor case for
Circus Performer and Circus Performer-Assistant, respectively, at MS Retail's constructive dismissal, breach of contract, and payment of the remaining
Store located in Kuwait. portion of their contracts, damages and attorney's fees on September 15,
Based on their employment contracts, respondents Abraham and Nanette were 2008. They claimed that, contrary to the terms of their employment contracts,
entitled to monthly salaries of KD 650 or USD 2,303.92 and KD 150 or USD they were made to work for at least eight (8) hours a day or 48 hours per week,
531.87, respectively under the following work schedule: without overtime pay. Moreover, they were assigned work not related to their
task as circus performers. Hence, they were deemed to have been constructively
No. of shows per day: 4 shows/day dismissed, warranting the payment of the unexpired portion of their contract,
No. of work days per week: 6 days/wk. damages and attorney's fees.
No. of work hours per month-: 48 hrs/mo. The Labor Arbiter found respondents to have been constructively dismissed
from service without just cause.
It was also stipulated that MS Retail may determine the hours of work assigned The NLRC dismissed the complaint for constructive dismissal on the ground of
to respondents "from time to time in accordance with the general and particular abandonment.
requirements of the operation" of MS Retail. The Court of Appeals, ruled that while respondents were validly terminated, the
petitioners failed to comply with the twin-notice rule, to wit: first informing the
February 22, 2008, respondent arrived in Kuwait and began performing in respondents of the charfe and affording them an opportunity to be heard, then
compliance with their contrac. subsequently advising them of their termination.
On August 26, 2008, respondents went to Thailand on approved vacation leave. ISSUE: Whether or not the CA erred in granting the respondents overtime pay
On September 2, 2008, respondent Abraham sent an electronic mail (email) to considering that its denial by the LA was nor appealed by the respondents.
Mr. Joseph San Juan, the Human Resources Coordinator of MS Retail, advising RULING:
him of their inability to return for work on September 3, 2008 because of the Although respondents were found to have been dismissed for cause, depriving
political protests in Thailand and that they had rebooked their return flight to them of overtime pay, if rightly due to them, would still amount to an
Kuwait on September 10, 2008. However, contrary to their representation, the impairment of substantive rights. Thus, following the dictates of equity and as
respondents proceeded to the Philippines on September 9, 2008. an exception to the general rule, the Court hinds it proper for the CA to have
passed upon the matter of overtime pay, despite the fact that respondents did
On September 17, 2008, Mr. San Juan emailed respondents asking for their not appeal from the LA Decision denying the same claim.
definite date of return to Kuwait and warning them that if they do not Petitioners argue that the "48 hours per month" work schedule stipulated in the
immediately return to work before the end of the month, they will be dismissed employment contract is a mere typographical error, the true intention of the
from employment for cause. parties being for the respondents to render work of at least 48 hours per week.

The respondents ignored the said email. Thus, on September 23, 2008, MS Retail The Court agrees with the petitioners.
terminated their employment through email, which reads:
Please be informed that we are terminating your employment contract Obligations arising from contracts, like an employment contract, have the force
with MS Retail effective today, 23rd September 2008. Due to Kuwait of law between the contracting parties and should be complied with in good
Private Labour Law Article 55. "The employer has the right to terminate faith. When the terms of a contract are clear and leave no doubt as to the
the labourer without notice and indemnity in the following cases: intention of the contracting parties, the literal meaning of its stipulations
governs. However, when the contract is vague and ambiguous, as in the case at
bar, it is the Court's duty to determine the real intention of the contracting
parties considering the contemporaneous and subsequent acts of the latter.
An evaluation of the terms of the employment contracts and the acts of the
parties indeed reveal that their true intention was for the respondents to
perform work of at least forty eight (48) hours per week, and not 48 hours per
month.

It should be emphasized that in case of conflict between the text of a contract

and the intent of the parties, it is the latter that prevails,for intention is the soul
of a contract, not its wording which is prone to mistakes, inadequacies or
ambiguities.To hold otherwise would give life, validity, and precedence to mere
typographical errors and defeat the very purpose of agreements.

Accordingly, the CA's award for overtime pay must necessarily be recalled.
80.

The New Philippine Skylanders, Inc. v. Francisco N. Dakila

Facts:
Francisco Dakila was employed by The New Philippine Skylanders
(NPS), Inc. as early as 1987 and terminated for cause in April 1997 when the
corporation was sold. Dakila was rehired as consultant by NPS under a Contract
for Consultancy Services. Thereafter, Dakila informed NPS of his compulsory
retirement and sought for the payment of retirement benefits pursuant to the
CBA. His request was not acted upon. Instead, he was terminated from service.
Consequently, Dakila filed for constructive illegal dismissal, non-
payment of retirement benefits, under/non-payment of wages and other
benefits of a regular employee, and damages against NPS before the NLRC. He
averred that the consultancy contract was a scheme to deprive him of the
benefits of regularization, claiming to have assumed tasks necessary and
desirable in the trade of business of NPS and under their direct control and
supervision.
NPS on the other hand counter-argue that Dakila was a consultant and
not their regular employee. The latter was not included in their payroll and paid
a fixed amount under the consultancy contract. He was not required to observe
regular working hours and was free to adopt means and methods to accomplish
his task except as to the results of the work required of him. Hence, no
employer-employee relationship existed between them. It was Dakila who
terminated his contract, negating his dismissal.
Issue:
Whether or not Dakila has employer-employee relationship with The
New Philippine Skylanders, Inc., and was illegally dismissed.
Held:
Yes. Records reveal that both the LA and the NLRC, as affirmed by the
CA, have found substantial evidence to show that respondent Dakila was a
regular employee who was dismissed without cause.
Following Article 279 of the Labor Code, an employee who is unjustly
dismissed from work is entitled to reinstatement without loss of seniority rights
and other privileges and to his full backwages computed from the time he was
illegally dismissed. However, considering that respondent Dakila was
terminated on May 1, 2007, or one (1) day prior to his compulsory retirement
on May 2, 2007, his reinstatement is no longer feasible. Accordingly, the NLRC
correctly held him entitled to the payment of his retirement benefits pursuant
to the CBA. On the other hand, his backwages should be computed only for days
prior to his compulsory retirement which in this case is only a day.
Consequently, the award of reinstatement wages pending appeal must be
deleted for lack of basis.
81.
Case 81
GRACE R. ALUAG v. BIR MULTI-PURPOSE COOPERATIVE,
NORMA L. LIPANA and ESTELITA V. DATU
G.R. No. 228449, 6 December 2017, Second Division (Perlas-Bernabe, J.)
FACTS:
Petitioner, Grace R. Aluag (Aluag), worked as cashier for respondent,
BIR Multi-Purpose Cooperative (BIRMPC). When BIRMPC reviewed loan
documents, they found rampant violations of its by-laws, rules, and regulations.
BIRMPC sent Aluag a letter temporarily relieving her from position pending an
investigation against her involving several suspicious loans and requiring her to
submit an answer within ten (10) days. Aluag admitted the infractions but
claimed that the general manager had full knowledge of the matters. She
received a second letter from BIRMPC suspending her for three (3) months.
After the 3-month suspension, Aluag was sent another letter terminating her
employment. BIRMPC terminated Aluag's employment on the ground of loss of
trust and confidence for the following infractions: (a) acceptance of
accommodation checks; (b) failure to deposit checks on due dates, pursuant to a
member/debtor's request; (c) not reporting to the manager those checks with
no sufficient funds or which accounts had already closed; and (d) failure to act
upon returned checks. As a result, Aluag filed a complaint for illegal dismissal
against BIRMPC.
The Labor Arbiter (LA) dismissed the complaint for illegal dismissal for
lack of merit. As a company cashier, Aluag held a position of trust and
confidence. Thus, her commission of various infractions, which substantially
contributed damages to BIRMPC's financial position in the amount of 35 Million,
constituted sufficient basis for loss of trust and confidence.
National Labor Relations Commission (NLRC) reversed the LA ruling
and found Aluag to have been illegally dismissed. NLRC found that Aluag's
perceived infractions were insufficient to dismiss her on the ground of loss of
trust and confidence because they were not violations of her ministerial duties
as cashier.
The Court of Appeals (CA) reversed and set aside the NLRC ruling and
reinstated that of the LA. It held that Aluag was validly dismissed on the
grounds of serious misconduct and loss of trust and confidence, which were
applicable because her position as a cashier required trust and confidence. CA
concluded that it would already be inimical to BIRMPC's interests should it be
compelled to keep Aluag within its employ.
ISSUE:
Whether or not the CA correctly reversed and set aside the NLRC ruling,
and accordingly held that BIRMPC had just cause to terminate Aluag's
employment
RULING:
The Court finds that the CA correctly ascribed grave abuse of discretion
on the part of the NLRC, as the latter tribunal's finding that BIRMPC illegally
dismissed Aluag patently deviates from the evidence on record, as well as
settled legal principles of labor law.
A valid dismissal necessitates compliance with both substantive and
procedural due process requirements. In the present case, BIRMPC alleged that
Aluag's employment was terminated on the ground of loss of trust and
confidence under Article 297 (c) (formerly Article 282 [c])of the Labor Code.
The requisites for the existence of such ground are as follows: (a) the employee
concerned holds a position of trust and confidence; and (b) he performs an act
that would justify such loss of trust and confidence.
Anent the first requisite, case law instructs that "[t]here are two (2)
classes of positions of trust: first, managerial employees whose primary duty
consists of the management of the establishment x xx and second, fiduciary
rank-and-file employees, such as cashiers, auditors, property custodians, 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."Being a cashier charged with the collection of remittances and
payments, Aluag undoubtedly occupied a position of trust and confidence.
As regards the second requisite, the employee's act causing the loss of
confidence must be directly related to her duties rendering her woefully unfit to
continue working for the employer. In the present case, one of the infractions
that BIRMPC cited in justifying Aluag's dismissal is her failure to deposit checks
on due dates, pursuant to a member/debtor's request. She admitted in her
explanation that she received verified postdated checks for safekeeping and
deposit to the bank when due.More relevantly, she likewise admitted in her
explanation that she opted not to deposit matured checks upon request of the
debtors. Her failure to deposit the checks on their due dates means that she
failed to deliver on her task to safeguard BIRMPC's finances. It is also well to
note that she was not given any discretion to determine whether or not to
deposit the checks. Under these circumstances, BIRMPC had ample reason to
lose the trust and confidence it reposed upon her and thereby, terminate her
employment. Indeed, it would be most unfair to require an employer to
continue employing a cashier whom it reasonably believes is no longer capable
of giving full and wholehearted trustworthiness in the stewardship of company
funds,as in this case. In fine, BIRMPC had just cause for Aluag's dismissal.
Moreover, the Court finds that BIRMPC sufficiently observed the
standards of procedural due process in effecting Aluag's dismissal, considering
that it: (a) issued a written notice specifying her infractions; (b) granted her
ample opportunity to be heard or explain her side when she was required to
submit an explanation; and (c) served a written notice of termination after
verifying the infraction committed.
Petition denied.
82.
Security Bank Savings Corporation v. Singson G.R. No. 214230
February 10, 2016 J. Perlas-Bernabe
Facts
On November 25, 1985, respondent was initially employed by petitioner
Premiere Development Bank (now Security Bank Savings Corporation [SBSC])
as messenger until his promotion as loans processor at its Sangandaan Branch.
Thereafter, he was appointed as Acting Branch Accountant and, in June 2007, as
Acting Branch Manager. On March 26, 2008, he was assigned to its Quezon
Avenue Branch under the supervision of Branch Manager Corazon Pinero
(Pinero) and held the position of Customer Service Operations Head (CSOH)
tasked with the safekeeping of its checkbooks and other bank forms.
On July 22, 2008, respondent received a show-cause memorandum from Ms.
Ruby O. Go, head of West Regional Operations, charging him of violating the
bank's Code of Conduct when he mishandled various checkbooks under his
custody. The matter was referred to SBSC's Investigation Committee which
discovered, among others, that as of July 11, 2008, forty-one pre-encoded
checkbooks of the Quezon Avenue Branch were missing.
Respondent readily admitted having allowed the Branch Manager (i.e., Pinero)
to bring out of the bank's premises the missing checkbooks and other bank
forms on the justification that the latter was a senior officer with lengthy tenure
and good reputation. He added that the reported missing checkbooks had been
returned by Pinero to his custody after the inventory.
Pending investigation, respondent was transferred to SBSC's Pedro Gil Branch.
On September 30, 2008, he was again issued a memorandum directing him to
explain his inaccurate reporting of some Returned Checks and Other Cash Items
(RCOCI) which amounted to P46,279.33. A month thereafter, respondent was
again transferred and reassigned to another branch in Sampaloc, Manila.
Dismayed by his frequent transfer to different branches, respondent tendered
his resignation on November 10, 2008, effective thirty (30) days from
submission. However, SBSC rejected the same in view of its decision to
terminate his employment on November 11, 2008 on the ground of habitual
neglect of duties.
Consequently, respondent instituted a complaint for illegal dismissal with
prayer for backwages, damages, and attorney's fees against SBSC and its
President, Herminio M. Famatigan, Jr. (petitioners), before the NLRC, docketed
as NLRC-NCR Case No. 10-14683-09.
For their part, petitioners maintained that respondent was validly dismissed for
cause on the ground of gross negligence in the performance of his duties when
he repeatedly allowed Pinero to bring outside the bank premises its pre-
encoded checks and accountable forms in flagrant violation of the bank's
policies and procedures, and in failing to call Pinero's attention on the matter
which was tantamount to complicity and consent to the commission of said
irregularity.
LA Ruling
The Labor Arbiter (LA) dismissed the complaint and accordingly, declared
respondent to have been terminated from employment for a valid cause. The LA
found that respondent not only committed a violation of SBSC's Code of Conduct
but also gross and habitual neglect of duties when he repeatedly allowed Pinero
to bring outside the bank premises the checkbooks and bank forms despite
knowledge of the bank's prohibition on the matter. Aggrieved, petitioners
appealed to the NLRC, assailing the grant of financial assistance to respondent
despite a finding that he was validly dismissed.
NLRC Ruling
The NLRC affirmed the LA decision, ruling that the grant of separation pay was
justified on equitable grounds such as respondent's length of service, and that
the cause of his dismissal was not due to gross misconduct or that reflecting on
his moral character but rather, a weakness of disposition and grievous error in
judgment. It likewise observed that respondent never repeated the act
complained of when he was transferred to other branches. Thus, it found the
award of separation pay of one-half (Yi) month pay for every year of service to
be reasonable. Petitioners moved for reconsideration which was likewise
denied, prompting them to elevate the matter to the CA on certiorari.
CA Ruling
The CA denied the petition and sustained the award of separation pay.
The CA pointed out that separation pay may be allowed as a measure of social
justice where an employee was validly dismissed for causes other than serious
misconduct or those reflecting on his moral character. It held that since
respondent's infractions involved violations of company policy and habitual
neglect of duties and not serious misconduct, and that his dismissal from work
was not reflective of his moral character, the NLRC committed no grave abuse of
discretion in sustaining the award of separation pay by way of financial
assistance. It further concluded that respondent did not commit a dishonest act
since he readily admitted to the petitioners that he allowed the Branch Manager
to bring out the subject checkbooks.
Issue
Whether or not the CA erred in upholding the award of separation pay as
financial assistance to respondent despite having been validly dismissed.
Ruling
YES. The Court finds the CA to have erred in awarding separation pay. To
reiterate, the grant of separation pay to a dismissed employee is primarily
determined by the cause of the dismissal. In the case at bar, respondent's
established act of repeatedly allowing Branch Manager Pinero to bring the
checkbooks and bank forms outside of the bank's premises in violation of the
company's rules and regulations had already been declared by the LA to be
gross and habitual neglect of duty under Article 282 of the Labor Code, which
finding was not contested on appeal by respondent. It was petitioners who
interposed an appeal solely with respect to the award of separation pay as
financial assistance. As they aptly pointed out, the infractions, while not clearly
indicative of any wrongful intent, is, nonetheless, serious in nature when one
considers the employee's functions, rendering it inequitable to award
separation pay based on social justice. As the records show, respondent was the
custodian of accountable bank forms in his assigned branch and as such, was
mandated to strictly comply with the monitoring procedure and disposition
thereof as a security measure to avoid the attendant high risk to the bank.
Indeed, it is true that the failure to observe the processes and risk preventive
measures and worse, to take action and address its violation, may subject the
bank to regulatory sanction
The Court held that separation pay shall be allowed as a measure of social
justice only in those instances where the employee is validly dismissed for
causes other than serious misconduct or those reflecting on his moral character.
Where the reason for the valid dismissal is, for example, habitual intoxication or
an offense involving moral turpitude, like theft or illicit sexual relations with a
fellow worker, the employer may not be required to give the dismissed
employee separation pay, or financial assistance, or whatever other name it is
called, on the ground of social justice.
Notably, respondent's long years of service and clean employment record will
not justify the award of separation pay in view of the gravity of the foregoing
infractions. Length of service is not a bargaining chip that can simply be stacked
against the employer. As ruled in Central Pangasinan Electric Cooperative, Inc. v.
NLRC:
Although long years of service might generally be considered for the award of
separation benefits or some form of financial assistance to mitigate the effects of
termination, this case is not the appropriate instance for generosity under the
Labor Code nor under our prior decisions. The fact that private respondent
served petitioner for more than twenty years with no negative record prior to
his dismissal, in our view of this case, does not call for such award of benefits,
since his violation reflects a regrettable lack of loyalty and worse, betrayal of the
company. If an employee's length of service is to be regarded as a justification
for moderating the penalty of dismissal, such gesture will actually become a
prize for disloyalty, distorting the meaning of social justice and undermining the
efforts of labor to cleanse its ranks ofundesirables.44
All told, the Court finds that the award of separation pay to respondent as a
measure of social justice is not warranted in this case. A contrary ruling would
effectively reward respondent for his negligent acts instead of punishing him for
his offense, in observation of the principle of equity.
83.
JESSIE G. MARTINEZ, petitioner, vs. CENTRAL PANGASINAN
ELECTRIC COOPERATIVE, INC., respondent.
G.R. No. 192306. July 15, 2013.
case digest by: CALUAG, LirahAlorra
To validly dismiss an employee on the ground of loss of trust and
confidence under Article 296(c) (formerly Article 282[c]) of the Labor Code, the
following guidelines must be observed: (1) the employee concerned must be
holding a position of trust and confidence; and (2) there must be an act that would
justify the loss of trust and confidence.
FACTS
Central Pangasinan Electric Cooperative, Inc. (CENPELCO) employed
Jessie Martinez (Martinez) on contractual basis in 1991 and was subsequently
regularized as a billing clerk at the former’s main office in San Carlos City,
Pangasinan, in 1993. On January 2002, CENPELCO gave Martinez the position of
teller at Area VI in Malasiqui, Pangasinan.
On April 2002, CENPELCO’s Internal Audit Department (IAD)
conducted a cash count audit at its Area VI. Josefina Mandapat (Mandapat), IAD
Officer-in-Charge, analyzed the audit results and concluded that there was an
error in the count of Benjamin Madriaga (Madriaga), cashier for Area VI,
regarding the breakdown of collection turned over by Martinez. Specifically,
Madriaga erroneously recorded that Martinez remitted 390 pieces of P500-bills,
instead of the correct number which was just 290, and issued a handwritten
temporary receipt for P406,130.31 instead of P360,447.13. Upon noting that
Madriaga issued Official Receipts Nos. 77365-77367 for the amount of
P360,447.13 with corresponding remittance stubs for Martinez’s April 23, 2002
collections, Mandapat concluded that Martinez’s overage for the same day in the
amount of P45,682.58 is questionable. Further, Mandapat noted that on April
25, 2002, Martinez committed a shortage in the amount of P44,846.77,
considering that the latter’s total accountability for the said date is in the
amount of P212,258.56 but his actual cash count only amounted to
P167,411.79.
Mandapat recommended that Madriaga and Martinez be made to
explain why no disciplinary action should be taken against them. Martinez filed
his letter-explanation, explaining that he submitted his collections and
remittance stubs to Madriaga who was the one tasked to make the report
thereon and who may have mishandled the proper listing and tallying of the
money collected vis-à -vis the collection stubs.
The Company’s Grienvance Committee submitted its report
recommending Martinez’s termination. Martinez was dismissed from service on
November 2002, prompting him to file a complaint.
The LA ruled that Martinez was illegally dismissed. CENPELCO failed to
dischared the onus to prove that Martinez’s dismissal was for a just cause. Thus,
the LA opined that there is no ascribable offense against Martinez which may
constitute the charges of misappropriation and loss of confidence against him.
On appeal, NLRC reversed the ruling of the LA. It found that a closer
scrutiny of the audit report reveals that on April 25, 2002, Martinez indeed had
a shortage in the amount of P44,846.77, which he himself admitted in his letter-
explanation dated May 15, 2002. Further, Martinez was not able to account for
such shortage and instead, tried to offset the same with his April 23, 2002
overage in the amount of P45,682.58.
On a petition for certiorari, CA affirmed the NLRC’s ruling. The CA held
that the anomalies charged against Martinez are duly substantiated as such
finding is supported by an audit report issued after Mandapat conducted a cash
count audit on the collections and remittances made by the former.
Aggrieved, Martinez moved for reconsideration but was denied.
Hence, this petition for review on certiorari.
ISSUE
Whether or not Martinez’s dismissal on the ground of loss and trust and
confidence is valid.
RULING
YES, Martinez’s dismissal on the ground of loss and trust and
confidence is valid.
To validly dismiss an employee on the ground of loss of trust and
confidence under Article 296(c) (formerly Article 282[c]) of the Labor Code, the
following guidelines must be observed: (1) the employee concerned must be
holding a position of trust and confidence; and (2) there must be an act that
would justify the loss of trust and confidence.
Anent the first requisite, it is noteworthy to mention that there are two
classes of positions of trust, namely: (1) managerial employees 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; and (2) fiduciary rank-and-file employees
such as cashiers, auditors, property custodians, 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. Being an employee tasked to collect
payments and remit the same to CENPELCO, Martinez belongs to the latter class
and thus, occupies a position of trust and confidence.
Anent the second requisite, the audit report conducted on Martinez’s
cash count revealed that he had a shortage in the amount of P44,846.77 in his
remittance for April 25, 2002.
When asked to explain such shortage, Martinez not only admitted the
same but even tried to exculpate himself from liability by attempting to offset
said shortage with his alleged overage on April 23, 2002 in the amount of
P45,682.58. The Court agrees with the CA that this practice should never be
countenanced because it would allow the employees to patch up inaccuracies or
even their own wrongdoings and thus, the true revenues or losses of the
company will never be correctly identified. Verily, this irregular practice would
be detrimental to the interests of the employer whose bread and butter depends
solely on realized profits. Perforce, Martinez’s failure to properly account for his
shortage of such a significant amount is enough reason for CENPELCO to lose
trust and confidence in him.
WHEREFORE, the petition is DENIED. Accordingly, the December 23,
2009 Decision and April 27, 2010 Resolution of the Court of Appeals in CA-G.R. SP.
No. 106466 are hereby AFFIRMED.
84.
PNOC Energy Development Corp. v. Estrella G.R. No. 197789
July 8, 2013 J. Perlas Bernabe
FACTS:
Estrella was the Senior Logistics Assistant, at the Materials Control
Department of petitioner PNOC-Energy Development Corporation (PNOC-EDC),
then a government-owned and controlled corporation engaged in the
exploration and utilization of renewable energy resources.
On December 4, 2003 and February 14, 2004, PNOC-EDC opened the
technical and financial bids for its 2004 Annual Contract on Heavy/Support
Equipment Rental for SNGPF. As part of the bidding process, Estrella carried out
an inspection wherein JR Car Services, owned by Dumaguete-based contractor
Remigio S. P. Jacobe (Jacobe), qualified as the first priority contractor for the
Asian Utility Vehicle (AUV) Category, having offered three (3) units for lease at
the rental rate of ₱1,250.00 per day.
On January 20, 2005, Jacobe, who also claimed to be a distributor of
Dream Satellite Cable units (cable unit), executed an Affidavitcharging Estrella
with irregularities in dealing with JR Car Services’ bid, wherein the latter asked
for a free cable unit, among other favors, in exchange for a positive treatment of
JR Car Services’ future bids.
Prompted by Jacobe’s Affidavit, PNOC-EDC’s Senior Manager, petitioner
Francis A. Palafox, formed an audit committee to investigate the charges.Estrella
found to have altered the Bid Summary concerning JR Car Services’ vehicle
count, turning three to one, and texting Jacobe asking for afree cable unit,
among other favors, in exchange for a positive treatment of JR Car Services’
future bids.
In his written explanation, Estrella admitted the alteration but
explained that he did so in order to reflect the results of a second inspection he
later conducted. He also denied having demanded a free cable unit from Jacobe,
averring instead that he purchased one.
Subsequently, an Investigation/Disciplinary Action Committee
(Committee) was formed to further probe into the matter, before whom Estrella
personally testified. After the investigation, the Committee
recommended Estrella’s dismissal for willful dishonesty, extortion, grave
misconduct and misbehavior, and abuse of authority, on account of his
alteration, tampering or manipulation of the Bid Summary as well as his attempt
to extort from Jacobe.
On July 5, 2005, Estrella was dismissed, prompting him to file a
complaint for illegal dismissal, with prayer for reinstatement and payment of
full backwages and exemplary damages, against PNOC-EDC.
The LA held that Estrella to have been illegally dismissed, observing
that he did not act with bad faith and malice in the performance of his duties
and that his infractions were not major violations but only minor ones which
did not merit the penalty of dismissal. Hence, the LA ordered PNOC-EDC to
reinstate Estrella to his former or equivalent position without loss of seniority
rights and privileges and to pay him his full backwages and other benefits from
the date of his dismissal up to his reinstatement.
On appeal, the NLRC affirmed in toto the LA’s decision, upholding its
finding that the inconsistencies in Jacobe’s statements rendered doubtful the
charges against Estrella. It echoed the LA’s opinion that Estrella’s infractions
were minor ones which did not merit the penalty of dismissal.
The CA found no grave abuse of discretion on the part of the NLRC in
sustaining the LA’s decision, considering Estrella’s long unblemished years of
service in PNOC-EDC.
ISSUES:
WON Estrella was illegally dismissed.
HELD:
YES. an employee can be dismissed from employment only for a valid
cause. Serious misconduct is one of the just causes for termination under Article
282 of the Labor Code.
For misconduct to be serious and therefore a valid ground for dismissal,
it must be (1) of grave and aggravated character and not merely trivial or
unimportant and (2) connected with the work of the employee.
In this relation, The SC stresses that the employer bears the burden of
proving, through substantial evidence, that the aforesaid just cause – or any
other valid cause for that matter – forms the basis of the employee’s dismissal
from work.
Substantial evidence is the amount of relevant evidence as a reasonable
mind might accept as adequate to support a conclusion, even if other minds,
equally reasonable, might conceivably opine otherwise.
Although PNOC-EDC remarked that the fact Estrella initiated the field
copy proved his intent to make the alteration official, the former did not
corroborate such with substantial evidence. Neither do the text messages sent
to Jacobe predicate any corrupt motive on Estrella’s part since the causal
connection between these messages and the conduct of Estrella’s bid inspection
and/or approval was not adequately shown.
Due to the failure of PNOC-EDC to present substantial evidence to prove
that their dismissal was valid, the LA’s ruling stands.
85.
Torrefiel v. Beauty Lane Philippines GR 214186
August 03, 2016 J. Perlas- Bernabe
Facts
Respondent Beauty Lane Phils., Inc. (Beauty Lane), with respondent Ma.
Henedina D. Tobojka (Tobojka; collectively; respondents) as its president, is a
company engaged in the importation and distribution of certain beauty,
aesthetic, and grooming products including, among others, a product called
"Brazilian Blowout." "Brazilian Blowout" is a set of grooming products
composed of five (5) items worth a total of P40,000.00. It has a short lifespan
and may only be used for a maximum of 50 times.
As exclusive distributor of "Brazilian Blowout," Beauty Lane provides free
training to its prospective buyers through its "beauty educators" who conduct
trainings and demonstrations at the company's training center.
On January 3 to 5, 2013, respondents conducted an inventory in the warehouse
and discovered discrepancies between the recorded stocks and the actual stocks
of supply, particularly its "Brazilian Blowout" product. Thus, respondents
conducted an investigation and installed closed circuit (television (CCTV)
cameras on the premises. On January 25, 2013, Beauty Lane received
information from its Sales Manager, Mark Quibral (Quibral), that one of its
former employees is selling sets of "Brazilian Blowout" at a much lower price.
This prompted the warehouse supervisors to meet and discuss the results of the
inventory, by virtue of which it was discovered that some sets of "Brazilian
Blowout" were incomplete.
On February 1, 2013, respondents conducted a full-blown investigation,
summoning and questioning employees on their involvement the apparent
pilferage. After comparing its client list vis-a-vis the salons and online sellers
offering "Brazilian Blowout," respondents discovered that Rean Metro Salon, a
client registered under the account of Torrefiel who is a Sales Coordinator, had
not been ordering "Brazilian Blowout" for months but continued to offer it and
its allied services. They also discovered that Torrefiel and Lao, a beauty
educator, sold Gigi Professional Waxing System to Angelic Nails Spa and Waxing
Salon, which is not among respondents' approved clients. Later that day, Coke
Gonzales (Gonzales), a Sales Executive, confided to Tobojka that Lao had asked
her to sell opened bottles of Brazilian Blowout Solution and Anti-Residue
Shampoo.
Respondents issued Notices to Explain and Preventive Suspension against
petitioners and two (2) other employees, including Marcel Mendoza (Mendoza),
a beauty educator who also happened to operate his own salon. Torrefiel and
Lao denied any participation in the alleged pilferage and maintained that they
had no access to the "Brazilian Blowout" products. Lao further clarified that her
access is limited to the training center where no "Brazilian Blowout" sets are
stored.
For her part, Libot who was also a beauty educator, denied conniving with
Torrefiel and Lao and maintained that she reported all her activities to Quibral.
Meanwhile, Suacillo and Orenday asserted their lack of information on the
allegations against them, pointing out that they were not among those
questioned during the February 1, 2013 investigation
On February 27, 2013, an administrative hearing was held where petitioners,
however, failed to appear. Instead, they sent letters stating that they had already
submitted their respective written explanations, and that they had an
appointment with the Department of Labor of Employment (DOLE) on the same
day. After assessing the evidence before them, respondents sent Notices of
Termination to petitioners on February 28, 2013. Meanwhile, in an entrapment
operation conducted by the National Bureau of Investigation on February 18,
2013, two (2) former employees, namely, RomarGeroleo and Cipriano Layco,
were caught in possession of "Brazilian Blowout" products.
On March 18, 2013, petitioners filed a complaint for illegal dismissal and money
claims before the NLRC, averring that respondents had no valid cause in
dismissing them as none of them had access to the stolen products.
LA Ruling
The LA dismissed the complaint for lack of merit, holding that there was valid
cause for petitioners' dismissal and due process therefor was observed. The LA
pointed out that while no direct evidence was presented showing that
petitioners indeed pilfered the "Brazilian Blowout" products, the circumstances
of the case show that petitioners are guilty of the charges against them
Aggrieved, petitioners appealed to the NLRC.
NLRC Ruling
The NLRC reversed the decision of the LA, finding that petitioners were illegally
dismissed, after observing that there was no proof of their involvement in the
pilferage. Respondents moved for reconsideration, which was, however, denied
by the NLRC in its Resolution dated November 27, 2013. Thus, Beauty Lane
elevated the case to the CA via petition for certiorari.
CA Ruling
The CA reversed the ruling of the NLRC and reinstated the findings of the LA. It
pointed out that there was no dispute that "Brazilian Blowout" products were
missing from respondent's warehouse and that petitioners were individuals
who had access to the room where the said products were stored. Furthermore,
petitioners were implicated by their colleagues - namely, Mendoza and Gonzales
— who had no axe to grind against them.
Issue
Whether or not the CA committed any reversible error in reinstating the LA
ruling holding that petitioners were validly dismissed.
Ruling
YES. The Court agrees with the NLRC's observation that the rudiments of due
process were not observed in dismissing Suacillo and Orenday. As correctly
pointed out by the NLRC, the copies of the Notices to Explain and Preventive
Suspension issued to them did not specify the charges against them but simply
stated that they condoned and failed to report anomalies to the management.
Time and again, the Court has repeatedly held that two (2) written notices are
required before termination of employment can be legally effected, namely: (1)
the notice which apprises the employee of the particular acts or omissions for
which his dismissal is sought; and (2) the subsequent notice which informs the
employee of the employer's decision to dismiss him. The failure to inform an
employee of the charges against him deprives him of due process. Besides,
Suacillo and Orenday were not among those questioned during the February 1,
2013 investigation. Hence, they cannot be presumed to know exactly what
anomalies respondents were referring to.
In any event, there was no valid reason for their dismissal considering the lack
of proof of their involvement in the alleged pilferage. As conveyed by the NLRC,
Suacillo's duties as Office Assistant did not include monitoring and keeping an
inventory and she cannot be presumed to know the results of the inventory
which was conducted by her supervisors. Meanwhile, Orenday was no longer an
Inventory Officer at the time the alleged anomalies happened since she was
reassigned as Sales and Administrative Assistant. She cannot, therefore, be
charged of responsibility for respondents' inventory.
All told, the respondents failed to prove by substantial evidence that petitioners
were the authors of or at least participated in the alleged pilferage of the
"Brazilian Blowout" products. Unlike respondents' two (2) former employees,
namely, RomarGeroleo and Cipriano Layco, who were caught red-handed in an
entrapment operation, no direct evidence showing petitioners' guilt was
presented and respondents relied on inconclusive circumstantial evidence in
determining who the perpetrators of the pilferage are. While proof beyond
reasonable doubt is not required in dismissing an employee, the employer must
prove by substantial evidence the facts and incidents upon which the
accusations are made. Unsubstantiated suspicions, accusations, and conclusions
of the employer, as in this case, are not enough to justify an employee's
dismissal.
86.
Holcim Philippines Inc. vs. RenanteObra
G.R. No. 220998
Facts:
RenanteObra was employed as packhouse operator by Holcim which ensures
the safety and efficient operation of rotopackers, auto bag placers and
cariramats, as well as their auxiliaries.
On July 8, 2013, Obra was about to exit Holcim Plant when the security guard
ask to submit himself his backpack for inspection in which he refuse and
disclose to the security guard that he has a scrap electrical wire in his bag and
ask the security guard not to tell it to the management. However, the security
guard disagreed which prompted Obra to return the scrap electrical wire.
Thereafter, another security guard arrived and directed him to go to the
security office and write a statement regarding the incident.
In his statement he alleged that he does not have any intention to steal and
explained that the 16-meter electrical wire was a mere scrap that he had asked
from the contractor who removed it from the Packhouse Office. He also averred
that as far as he knows, only scrap materials which are to be taken out of the
company premises in bulk required a gate pass and that he had no idea that it
was also necessary to takeout a piece of loose, scrap wire out of the company's
premises.
Obra then received a letter directing him to explain why no disciplinary action
should be taken against him including termination. He was placed also under
preventive suspension for thirty days. On August 8, 2013, Holcim issued a
resolution dismissing Obra for serious misconduct. petitioner found no merit in
respondent's claim that he was unaware that a gate pass is required to take out
a piece of scrap wire, pointing out that the same is incredulous since he had
been working thereat for nineteen (19) years already. It also drew attention to
the fact that respondent refused to submit his bag for inspection, which,
according to petitioner, confirmed his intention to take the wire for his personal
use. Further, petitioner emphasized that respondent's actions violated its rules
which, among others, limit the use of company properties for business purposes
only and mandate the employees, such as respondent, to be fair, honest, ethical,
and act responsibly and with integrity. Obra sought for reconsideration but was
denied.
Obra filed a complaint for Illegal dismissal and money claims averring that the
penalty of dismissal from service imposed upon him was too harsh since he had
acted in good faith in taking the piece of scrap wire. 36 Respondent maintained
that there was no wrongful intent on his part which would justify his dismissal
from service for serious misconduct, considering that the contractor who
removed it from the Packhouse Office led him to believe that the same was
already for disposal
Labor Arbiter (LA) dismissed respondent's complaint and held that the latter
was validly dismissed from service by petitioner for committing the crime of
theft, and therefore, not entitled to reinstatement, backwages, and other money
claims.
NLRC reversed the LA's ruling and held that the penalty of dismissal from
service imposed upon respondent was unduly harsh since his misconduct was
not so gross to deserve such penalty. It found merit in respondent's defense
that he took the scrap wire on the belief that it was already for disposal, noting
that petitioner never denied the same. Moreover; he did not hold a position of
trust and confidence and was remorseful of his mistake, as evidenced by his
repeated pleas for another chance
The CA on the other hand, affirmed decision of the NLRC. It agreed with the
NLRC's observation that respondent was illegally dismissed, pointing out that
petitioner failed to prove that it prohibited its employees from taking scrap
materials outside the company premises. Besides, respondent's taking of the
scrap wire did not relate to the performance of his work as packhouse operator.
Issue: Whether or not Obra was illegally dismiss
Held:
In this case, the Com1 agrees with the CA and the NLRC that respondent's
misconduct is not so gross as to deserve the penalty of dismissal from service.
As correctly observed by the NLRC, while there is no dispute that respondent
took a piece of wire from petitioner's La Union Plant and tried to bring it outside
the company premises, he did so in the belief that the same was already for
disposal petitioner did not suffer any damage from the incident, given that after
being asked to submit himself and his bag for inspection, respondent had a
change of heart and decided to just return the wire to the Packhouse Office.
Respondent has also shown remorse for his mistake, pleading repeatedly with
petitioner to reconsider the penalty imposed upon him.
As in the foregoing cases, herein respondent deserves compassion and humane
understanding more than condemnation, especially considering that he had
been in petitioner's employ for nineteen (19) years already, and this is the first
time that he had been involved in taking company property, which item, at the
end of the day, is practically of no value. Besides, respondent did not occupy a
position of trust and confidence, the loss of which would have justified his
dismissal over the incident. As packhouse operator, respondent's duties are
limited to ensuring the safe and efficient operation of rotopackers, auto-bag
placers, and cariramats, as well as their auxiliaries.
Neither can respondent's infraction be characterized as a serious misconduct
which, under Article 282 (now Article 297) of the Labor Code is a just cause for
dismissal. Misconduct is an improper or wrong conduct, or 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.72 To constitute a valid cause for dismissal within the text and
meaning of Article 282 (now Article 297) of the Labor Code, the employee's
misconduct must be serious, i.e., of such grave and aggravated character and not
merely trivial or unimportant, as in this case where the item which respondent
tried to takeout was practically of no value to petitioner. Moreover, ill will or
wrongful intent cannot be ascribed to respondent, considering that, while he
asked Castillo not to report the incident to the management, he also volunteered
the information that he had a piece of scrap wire in his bag and offered to return
it if the same could not possibly be brought outside the company premises sans
a gate pass.

Unfortunately, the Court failed to find the factual basis for the award of
separation pay to herein respondent. The NLRC Decision did not state the facts
which demonstrate that reinstatement is no longer a feasible option that could
have justified the alternative relief of granting separation pay. Hence,
reinstatement cannot be barred, especially, as in this case, when the employee
has not indicated an aversion to returning to work, or does not occupy a
position of trust and confidence in, or has no say in the operation of the
employer's business.
87.
Termination of Project Employment
G.R. No. 209499 January 28, 2015
MA. CHARITO C. GADIA, ERNESTO M. PENAS, GEMMABELLE B. REMO,
LORENA S. QUESEA, MARIE JOY FRANCISCO, BEVERLY A. CABINGAS, IVEE U.
BALINGIT, ROMA ANGELICA 0. BORJA, MARIE JOAN RAMOS, KIM
GUEVARRA, LYNN S. DE LOS SANTOS, CAREN C. ENCANTO, EIDEN
BALDOVINO, JACQUELINE B. CASTRENCE,MA.ESTRELLA V. LAPUZ,
JOSELITO L. LORD, RAYMOND G. SANTOS, ABIGAIL M. VILORIA, ROMMEL C.
ACOSTA, FRANCIS JAN S. BAYLON, ERIC 0. PADIERNOS, MA. LENELL P.
AARON, CRISNELL P. AARON, and LAWRENCE CHRISTOPHER F.
PAPA, Petitioners,
vs.
SYKES ASIA, INC./ CHUCK SYKES/ MIKE HINDS/ MICHAEL
HENDERSON, Respondents.
DECISION
PERLAS-BERNABE, J.:
FACTS:
Sykes Asia is a corporation engaged in Business Process Outsourcing (BPO)
which provides support to its international clients from various sectors (e.g.,
technology, telecommunications, retail services) by carrying on some of their
operations, governed by service contracts that it enters with them.
Alltel Communications, Inc. (Alltel), a United States-based telecommunications
firm, contracted Sykes Asia’s services to accommodate the needs and demands
of Alltel clients for its postpaid and prepaid services (Alltel Project). Thus, on
different dates, Sykes Asia hired petitioners as customer service
representatives, team leaders, and trainers for the Alltel Project. 13
Services for the said project went on smoothly until Alltel sent two (2) letters to
Sykes Asia dated August 7, 2009 and September 9, 2009 informing the latter
that it was terminating all support services provided by Sykes Asia related
to the Alltel Project.
In view of this development, Sykes Asia sent each of the petitioners
end-of-life notices, informing them of their dismissal from employment due to
the termination of the Alltel Project. Aggrieved, petitioners filed separate
complaints17 for illegal dismissal praying for reinstatement, backwages, 13th
month pay, service incentive leave pay, night shift differential, moral and
exemplary damages, and attorney’s fees. In their complaints, petitioners
alleged that their dismissal from service was unjust as the same was
effected without substantive and procedural due process.
In their defense, respondents averred that petitioners were not regular
employees but merely project-based employees, and as such, the
termination of the Alltel Project served as a valid ground for their dismissal. In
support of their position, respondents noted that it was expressly indicated in
petitioners’ respective employment contracts that their positions are "project-
based" and thus, "co-terminus to the project." Respondents further maintained
that they complied with the requirements of procedural due process in
dismissing petitioners by furnishing each of them their notices of termination at
least thirty (30) days prior to their respective dates of dismissal. 22
The LA Ruling
I It found that petitioners are merely project-based employees, as their
respective employment contracts indubitably provided for the duration and
term of their employment, as well as the specific project to which they were
assigned, i.e., the Alltel Project. Hence, the LA concluded that the cessation of the
Alltel Project naturally resulted in the termination of petitioners’ employment in
Sykes Asia.26 Dissatisfied, petitioners appealed to the NLRC.
The NLRC Ruling
petitioners are regular employees but were validly terminated due to
redundancy. Accordingly, petitioners, except Viloria and Acosta whose
complaints were dismissed without prejudice for failure to prosecute, 30 were
awarded their separation pay with interest of 12% per annum reckoned from
the date of their actual dismissal until full payment, plus attorney’s fees
amounting to 10% of the total monetary award. In addition, the NLRC awarded
nominal damages in the amount of ₱10,000.00 each to petitioners Gadia, Remo,
Quesea, Balingit, Castrence, Lapuz, and Lord for respondents’ failure to furnish
them the required written notice of termination within the prescribed period. 31
Contrary to the LA’s finding, the NLRC found that petitioners could not be
properly characterized as project-based employees, ratiocinating that
while it was made known to petitioners that their employment would be
co-terminus to the Alltel Project, it was neither determined nor made
known to petitioners, at the time of hiring, when the said project would
end, be terminated, or be completed. In this relation, the NLRC concluded
that inasmuch as petitioners had been engaged to perform activities which are
necessary or desirable in respondents’ usual business or trade of BPO,
petitioners should be deemed regular employees of Sykes Asia This
notwithstanding, and in view of the cessation of the Alltel Project, the NLRC found
petitioners’ employment with Sykes Asia to be redundant; hence, declared that
they were legally dismissed from service and were only entitled to receive their
respective separation pay.
Respondents moved for reconsideration,35 which was, however, denied in a
Resolution36 dated May 10, 2011. Unconvinced, Sykes Asia 37 elevated the case to
the CA on certiorari.38
The CA Ruling
It held that a perusal of petitioners’ respective employment contracts readily
shows that they were hired exclusively for the Alltel Project and that it was
specifically stated therein that their employment would be project-based.
The CA further held that petitioners’ employment contracts need not state an
actual date as to when their employment would end, opining that it is enough that
such date is determinable.
Petitioners moved for reconsideration,43 which was, however, denied in a
Resolutiondated October 3, 2013, hence, this petition.
ISSUE:
whether or not the CA correctly granted respondents’ petition for certiorari,
thereby setting aside the NLRC’s decision holding that petitioners were regular
employees and reinstating the LA ruling that petitioners were merely project-
based employees, and thus, validly dismissed from service.
HELD:
The petition is without merit.
The Court finds that the CA correctly granted respondents’ certiorari petition
before it, since the NLRC gravely abused its discretion in ruling that petitioners
were regular employees of Sykes Asia when the latter had established by
substantial evidence that they were merely project-based.
Article 294 of the Labor Code, as amended, distinguishes a project-based
48
employee from a regular employee as follows:
Art. 294. 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 services to be performed is
seasonal in nature and the employment is for the duration of the season.
In Omni Hauling Services, Inc. v. Bon,49 the Court extensively discussed how to
determine whether an employee may be properly deemed project-based or
regular, to wit:
A project employee is assigned to a project which begins and ends at
determined or determinable times.1âwphi1 Unlike regular employees who may
only be dismissed for just and/or authorized causes under the Labor Code, the
services of employees who are hired as "project[-based] employees" may be
lawfully terminated at the completion of the project.
According to jurisprudence, the principal test for determining whether
particular employees are properly characterised as "project[-based] employees"
as distinguished from "regular employees," is whether or not the employees
were assigned to carry out a "specific project or undertaking," the duration
(and scope) of which were specified at the time they were engaged for that
project. The project could either be (1) a particular job or undertaking that is
within the regular or usual business of the employer company, but which is
distinct and separate, and identifiable as such, from the other undertakings of
the company; or (2) a particular job or undertaking that is not within the
regular business of the corporation. In order to safeguard the rights of workers
against the arbitrary use of the word "project" to prevent employees from
attaining a regular status, employers claiming that their workers are project[-
based] employees should not only prove that the duration and scope of the
employment was specified at the time they were engaged, but also, that there
was indeed a project
Verily, for an employee to be considered project-based, the employer must
show compliance with two (2) requisites, namely that: (a) the employee was
assigned to carry out a specific project or undertaking; and (b) the duration and
scope of which were specified at the time they were engaged for such project.
In this case, records reveal that Sykes Asia adequately informed petitioners of
their employment status at the time of their engagement, as evidenced by the
latter’s employment contracts which similarly provide that they were hired in
connection with the Alltel Project, and that their positions were "project-based
and as such is co-terminus to the project." In this light, the CA correctly ruled that
petitioners were indeed project-based employees, considering that: (a) they
were hired to carry out a specific undertaking, i.e., the Alltel Project; and (b) the
duration and scope of such project were made known to them at the time of
their engagement, i.e., "co-terminus with the project."

As regards the second requisite, the CA correctly stressed that "[t]he law and
jurisprudence dictate that ‘the duration of the undertaking begins and ends at
determined or determinable times’" while clarifying that "[t]he phrase
‘determinable times’ simply means capable of being determined or fixed." 51 In
this case, Sykes Asia substantially complied with this requisite when it expressly
indicated in petitioners’ employment contracts that their positions were "co-
terminus with the project." To the mind of the Court, this caveat sufficiently
apprised petitioners that their security of tenure with Sykes Asia would
only last as long as the Alltel Project was subsisting. In other words, when
the Alltel Project was terminated, petitioners no longer had any project to work
on, and hence, Sykes Asia may validly terminate them from employment. Further,
the Court likewise notes the fact that Sykes Asia duly submitted an
Establishment Employment Report52 and an Establishment Termination
Report53 to the Department of Labor and Employment Makati-Pasay Field Office
regarding the cessation of the Alltel Project and the list of employees that would
be affected by such cessation. As correctly pointed out by the CA, case law
deems such submission as an indication that the employment was indeed
project-based.

In sum, respondents have shown by substantial evidence that petitioners were

merely project-based employees, and as such, their services were lawfully
terminated upon the cessation of the Alltel Project.
88. petitioners failed to observe the twin notice rule laid down in Section 17 of the
POEA-SEC.
Termination twin notice rule
cralawlawlibrary
Maersk-Filipinas Crewing Inc v. Avestruz The CA reversed and set aside the rulings of the NLRC and instead, found
Avestruz to have been illegally dismissed. The CA found that petitioners failed to
accord procedural due process to Avestruz,
Facts:
Issue: Whether or not Avestruz was accorded of procedural due process.
Petitioner Maersk-Filipinas Crewing, Inc., on behalf of its foreign principal,
petitioner A.P. Moller Singapore Pte. Ltd., hired Avestruz as Chief Cook on board Ruling: No.
the vessel M/V Nedlloyd Drake.
There being no compliance with the provisions of Section 17 of the POEA-SEC as
above-cited,
In the course of the weekly inspection of the vessel’s galley, Captain Woodward
noticed that the cover of the garbage bin in the kitchen near the washing area
was oily. As part of Avestruz’s job was to ensure the cleanliness of the galley,
Captain Woodward called Avestruz and asked him to stand near the garbage bin
where the former took the latter’s right hand and swiped it on the oily cover of
the garbage bin, telling Avestruz to feel it. Shocked, Avestruz remarked, “Sir if
you are looking for [dirt], you can find it[;] the ship is big. Tell us if you want to
clean and we will clean it.” Captain Woodward replied by shoving Avestruz’s
chest, to which the latter complained and said, “Don’t touch me,” causing an
argument to ensue between them.lawred

Later that afternoon, Captain Woodward summoned and requiredAvestruz to

state in writing what transpired in the galley that morning. Avestruz complied
and submitted his written statementon that same day.Captain Woodward
likewise asked Messman Jomilyn P. Kong (Kong) to submit his own written
statement regarding the incident, to which the latter immediately complied. On
the very same day, Captain Woodward informed Avestruz that he would be
dismissed from service and be disembarked in India.

Subsequently, Avestruz filed a complaintfor illegal dismissal, he alleged that no

investigation or hearing was conducted nor was he given the chance to defend
himself before he was dismissed, and that Captain Woodward failed to observe
the provisions under Section 17 of the Philippine Overseas Employment
Administration (POEA) Standard Employment Contract (POEA-SEC) on
disciplinary procedures. Also, he averred that he was not given any notice
stating the ground for his dismissal.

The Labor Arbiter dismissed Avestruz’s complaint for lack of merit. la

The NLRC sustained the validity of Avestruz’s dismissal but found that
which requires the “two-notice rule.” As explained in Skippers Pacific, Inc. v.
Mira:red

An erring seaman is given a written notice of the charge against

him and is afforded an opportunity to explain or defend
himself. Should sanctions be imposed, then a written notice of
penalty and the reasons for it shall be furnished the erring
seafarer. It is only in the exceptional case of clear and existing
danger to the safety of the crew or vessel that the required
notices are dispensed with; but just the same, a complete
report should be sent to the manning agency, supported by
substantial evidence of the findings.74cralawlawlibrary

In this case, there is dearth of evidence to show that Avestruz had been given a
written notice of the charge against him, or that he was given the opportunity to
explain or defend himself. The statementgiven by Captain Woodward requiring
him to explain in writing the events that transpired at the galley in the morning
of June 22, 2011 hardly qualifies as a written notice of the charge against him,
nor was it an opportunity for Avestruz to explain or defend himself. While
Captain Woodward claimed in his e-mail that he conducted a “disciplinary
hearing” informing Avestruz of his inefficiency, no evidence was presented to
support the same.

Therefore, the Court affirms the finding of the CA that Avestruz was not
accorded procedural due process,
89. the award of backwages, moral and exemplary damages, and attorney's fees.

PNCC SKYWAY CORPORATION (PSC) v. THE SECRETARY OF LABOR & SOLE and CA’s Ruling
EMPLOYMENT (SOLE)
SOLE found that there was an authorized cause for the closure of the operation
G. R. No. 196110 February 06, 2017 of PSC albeit it failed to comply with the procedural requirements set forth
under Article 298 (283) of the Labor Code. The dispositive portion of the
Decision reads, as thus:
FACTS:
WHEREFORE, premises considered, judgment is hereby
Sometime in March 1977, the Philippine National Construction Corporation
rendered:
(PNCC) was awarded by the Toll Regulatory Board (TRB) with the franchise of
1. HOLDING there was lawful cause to terminate the employees
constructing, operating and maintaining the north and south expressways,
and deny their claims for reinstatement as there was valid
including the South Metro Manila Skyway (Skyway). On December 15, 1998, it
cessation of PSC's operation.
created petitioner PNCC Skyway Corporation (PSC) for the purpose of taking
2. DISMISSING the charges of unfair labor practice and union-
charge of its traffic safety, maintaining its facilities and collecting toll.
busting for lack of basis.
3. DISMISSING the charge of illegal strike against the Union and
Eight years later, or on July 18, 2007, the Citra Metro Manila Tollway its members for lack of basis.
Corporation (Citra), a private investor under a build-and-transfer scheme, 4. HOLDING there was failure on the part of the PNCC Skyway
entered into an agreement with the TRB and the PNCC to transfer the operation Corporation to comply with the procedural notice
of the Skyway from petitioner PSC to the Skyway O & M Corporation (SOMCO). requirements of Article 283 of the Labor Code.
The said transfer provided for a five-month transition period from July 2007 5. DENYING the payment of moral and exemplary damages,
until the full torn-over of the Skyway at 10:00 p.m. of December 31, 2007 upon and attorney's fees for lack of bases.
which petitioner PSC will close its operation.
As it had previously offered, PSC is hereby ORDERED to pay the
On December 28, 2007, or three (3) days before the flail transfer of the affected employees their separation pay in the amount of no
operation of the Skyway to SOMCO, petitioner PSC served termination letters to less than 250% of their respective basic monthly pay per year
its employees, many of whom were members of private respondent PNCC of service, a gratuity pay of Php40,000 each employee, plus all
Skyway Traffic Management and Security Division Worker's Organization their remaining benefits like 13 th month pay, rice subsidy, cash
(Union). According to the letter, PSC has no choice but to close its operations conversion of vacation and sick leaves, and medical
resulting in the termination of its employees effective January 31, 2008. reimbursement.
However, the employees are entitled to receive separation pay amounting to
250% of the basic monthly pay for every year of service, among others things. Likewise, PSC is ordered to pay the amount of Php30,000 as
Petitioner PSC, likewise, served a notice of termination to the Department of indemnity to each dismissed employee covered by this case,
Labor and Employment (DOLE). who were not validly notified in writing of their termination on
31 December 2007 pursuant to Article 283 of the Labor Code.
On that same day of December 28, 2007, private respondent Union, immediately
upon receipt of the termination letters, filed a Notice of Strike before the DOLE SO ORDERED.
alleging that the closure of the operation of PSC is tantamount to union-busting
because it is a means of terminating employees who are members thereof. CA dismissed PSC's petition. The appellate court held that the Secretary of Labor
Furthermore, the notices of termination were served on its employees three (3) was correct in saying that the extension of the employee's employment in paper
days before petitioner PSC ceases its operations, thereby violating the only and the payment of the employee's salaries for said period cannot
employees' right to due process. Private respondent Union, thus, prayed that substitute for the PSC's failure to comply with the due process requirements.
petitioner PSC be held guilty of unfair labor practice and illegal dismissal. It, Thus, the SOLE cannot be said to have acted capriciously or whimsically, in the
likewise, prayed for the reinstatement of all dismissed employees, along with exercise of his official duties.
ISSUE:
Whether or not the PSC failed to comply with the procedural requirements set
forth under Art. 298 (283) of the Labor Code.

RULLING: Yes.

Under Article 298 (283) of the Labor Code, three requirements are necessary
for a valid cessation of business operations: (a) service of a written notice to the
employees and to the DOLE at least one month before the intended date thereof;
(b) the cessation of business must be bona fide in character; and (c) payment to
the employees of termination pay amounting to one month pay or at least one-
half month pay for every year of service, whichever is higher.

The required written notice under Article 298 (283) of the Labor Code is to
inform the employees of the specific date of termination or closure of business
operations, and must be served upon them at least one (1) month before the
date of effectivity to give them sufficient time to make the necessary
arrangements. The purpose of this requirement is to give employees time to
prepare for the eventual loss of their jobs, as well as to give DOLE the
opportunity to ascertain the veracity of the alleged cause of termination. Thus,
considering that the notices of termination were given merely three (3) days
before the cessation of the PSC's operation, it defeats the very purpose of the
required notice and the mandate of Article 283 of the Labor Code. Neither the
payment of employees' salaries for the said one-month period nor the
employees' alleged actual knowledge of the ASTOA is sufficient to replace the
formal and written notice required by the law.

Moreover, as early as July 2007, PSC already had knowledge of the eventual
take-over by SOMCO of the Skyway by December 31, 2007. Thus, considering
that PSC had ample time of more than five (5) months to serve the notice of
termination to its employees, its failure to comply with the notice requirement
under Article 298 (283) of the Labor Code is inexcusable.
90.
Sta. Isabel v. Perla Compania de Seguros
Facts:
Perla, a corporation engaged in the insurance business, hired Sta. Isabel as a
Claims Adjuster with the task of handling and settling claims of Perla's Quezon
City Branch (QC Branch). Later on, Perla discovered that Sta. Isabel owned a
separate insurance agency known as JRS Insurance Agency (JRS). To avoid
conflict of interests, Perla instructed its QC Branch manager to: (a) allow the
licensing of JRS as a licensed agent of the QC Branch at the soonest time
possible; and (b) forward all claims coded under JRS to Perla's Claims
Department at the Head Office for processing, evaluation, and approval.
Pending the resolution of the JRS issue, Sta. Isabel received a Notice to Explain
why no disciplinary action should be taken against her for her poor services
towards the clients of PAIS Insurance Agency (PAIS), to which she submitted
her written explanation. Sta. Isabel attended a meeting with Perla's officers
concerning the JRS and PAIS incidents. Perla issued a Report on Status of the
Hearing for Jinky Sta. Isabel wherein it resolved the foregoing incidents by
agreeing that: (a) claims under JRS shall be approved by the Head Office; and (b)
claims under PAIS will be transferred to the Head Office for processing.
Sta. Isabel received another Notice to Explainwhy no disciplinary action should
be taken against her for her poor services towards the clients of Ricsons
Consultants and Insurance Brokers, Inc. (Ricsons). In view of Sta. Isabel's failure
to submit a written explanation and to appear before the Head Office to explain
herself, Perla issued a Final Written Warning to be more circumspect with her
claims servicing, with a stem admonition that "any repetition of the same
offense or any acts analogous to the foregoing shall be dealt with more severely
and shall warrant drastic disciplinary action including the penalty of
Termination in order to protect the interest of the company."Perla likewise
issued a Final Directive to Report to Head Office instructing Sta. Isabel to report
to the Head Office and explain her alleged refusal to receive the afore-cited Final
Written Warning.
Perla issued the following to Sta. Isabel: (a) a Notice to Explain why no
disciplinary action should be taken against her for failing to report to the Head
Office despite due notice; and (b) a Notice of Termination dismissing Sta. Isabel
from employment on the ground of insubordination. Consequently, Sta. Isabel
filed the instant complaint for: (a) illegal dismissal; (b) underpayment of wages;
(c) non-payment of overtime pay, service incentive leave pay, accrued leave pay,
and 13th to 16th month pay; (d) retirement pay benefits under the corporation's
Provident Fund; (e) actual, moral, and exemplary damages; and (f) attorney's
fees against Perla before the NLRC.In relation to her claim for illegal dismissal,
Sta. Isabel prayed for the grant of separation pay and backwages, maintaining
that there is already strained relations between her and Perla which would
render reinstatement impossible.
In support of her complaint, Sta. Isabel claimed that Perla could no longer use
the PAIS and Ricsons incidents against her, considering that she was already
penalized with multiple warnings to be more circumspect with her claims
servicing. She likewise alleged that after receipt of the Final Directive to Report
to Head Office, she met with Renato Carino (Carino), Perla's Vice-President for
Operations,albeit not at the Head Office, but at a nearby restaurant where
Carino himself instructed her to proceed. At the restaurant, Carino asked Sta.
Isabel if she would voluntarily resign over the Ricsons incident, to which the
latter replied that the incident had already been dealt with. Finally, Sta. Isabel
concluded that Perla was bent on easing her out of work, pointing out that the
Notice to Explain and Notice of Termination regarding her alleged
insubordination was dated on the same day.
In its defense, Perla maintained that it validly terminated Sta. Isabel's
employment on the ground of insubordination. It averred that since Sta. Isabel
did not submit any written explanation regarding the Notice to Explain
(pertaining to the Ricsons incident), it was constrained to issue the Final
Written Warning, which Sta. Isabel refused to accept. Carino then called her via
telephone to get an explanation and, thereafter, sent a Final Directive to Report
to Head Office. Instead of reporting at the Head Office, Sta. Isabel requested for
an informal meeting with Carino at a restaurant as she did not want to see the
faces of the other officers. Thereat, Carino asked Sta. Isabel if she was willing to
voluntarily retire, and at the same time, reminded her to report to the Head
Office. In view of Sta. Isabel's recalcitrance in complying with the aforesaid
directives, Perla issued a Notice to Explain charging Sta. Isabel of
insubordination. Perla received a letter from Sta. Isabel saying that she will only
report to the Head Office if Perla's President, Operations Head, Assistant Vice
President, Human Resources Manager, and QC Branch Manager will all be
present for a meeting/conference to clear all issues surrounding her. Thus,
Perla terminated Sta. Isabel's employment on the ground of insubordination.
LA’s Ruling:
LA dismissed the complaint for lack of merit. The LA found that since Perla's
directives for Sta. Isabel to appear before the Head Office were in connection
with the administrative proceedings against the latter, her refusal to comply
therewith was not tantamount to willful disobedience or insubordination. At the
most, it only amounted to a waiver of her opportunity to be heard in said
proceedings. Nevertheless, the LA found just cause in terminating Sta Isabel's
employment, opining that her disrespectful language in her letter not only
constitutes serious misconduct, but also insubordination as it showed her
manifest refusal to cooperate with Perla.
NLRC’s Ruling:
NLRC granted Sta. Isabel’s appeal and ordered Perla to pay her separation pay,
backwages, benefits under the Provident Fund, 14 th month pay, and attorney’s
fees equivalent to 10% of all the monetary awards. The NLRC held that Sta.
Isabel's refusal to report to the Head Office was not willful disobedience,
considering that the directives were in connection with the administrative
proceedings against her and, as such, her failure to appear was only tantamount
to a waiver of her opportunity to be heard. Hence, she cannot be dismissed on
such cause, which incidentally, was the sole ground for her termination as
stated in the Notice of Termination. Sta. Isabel’s dismissal was without just
cause, hence, unlawful.
CA Ruling:
CA nullified and set aside the NLRC ruling, and reinstated that of the LA. It held
that the NLRC gravely abused its discretion in failing to appreciate the evidence
showing Sta. Isabel's sheer defiant attitude on the orders of Perla and its
officers. In this regard, the CA held that Sta. Isabel's conduct towards Perla's
officers by deliberately ignoring the latter's directives for her to appear before
the Head Office, coupled with her letter, constitutes insubordination or willful
disobedience. Thus, the CA concluded that Sta. Isabel's dismissal was valid, it
being a valid exercise of management prerogative in dealing with its affairs,
including the right to dismiss its erring employees.
Issue:
Whether or not the CA correctly ascribed grave abuse of discretion on the part
of the NLRC in ruling that Sta. Isabel’s dismissal was illegal.
Held:
The Court finds that the CA committed reversible error in granting
Perla's certiorari petition considering that the NLRC's finding that Sta. Isabel
was illegally dismissed from employment is supported by substantial evidence.
As may be gleaned from the records, Sta. Isabel received a total of three (3)
Notices to Explain dated October 19, 2012, November 9, 2012, and
November 26, 2012.
In the Notice to Explain dated October 19, 2012, Sta. Isabel was charged with
serious misconduct for her poor services towards the clients of PAIS. After Sta.
Isabel submitted her written explanation and attended the corresponding
meeting, Perla resolved the matter through a Report on Status of the Hearing for
Jinky Sta. Isabelwherein she was penalized with a "VERBAL WARNING to
improve on the claims servicing of clients in QC Branch." Thus, the proceedings
with regard to the PAIS incident should be deemed terminated.
In the Notice to Explain dated November 9, 2012, Sta. Isabel was charged with
serious misconduct and gross neglect of duty for her poor services towards the
clients of Ricsons. Notwithstanding Sta. Isabel's failure to submit her written
explanation despite due notice, Perla went ahead and resolved the matter
anyway in the Final Written Warning wherein it penalized her with a "FINAL
WARNING to be more circumspect in [her] claims servicing with agents,
brokers, and assureds" with an admonition that "any repetition of the same
offense or any acts analogous to the foregoing shall be dealt with more severely
and shall warrant drastic disciplinary action including the penalty of
Termination in order to protect the interest of the company." Hence, Perla's
issuance of the Final Written Warning should have likewise terminated the
administrative proceedings relative to the Ricsons incident.
Finally, in the Notice to Explain dated November 26, 2012, Perla charged her of
willful disobedience for her failure to appear before the Head Office despite due
notice. In the Notice of Termination of even date - although Perla insists that the
date indicated therein was a mere typographical error and that it was actually
made on November 28, 2012 - Sta. Isabel was terminated from work on the
ground o insubordination.
Since Sta. Isabel was actually dismissed on the ground of insubordination, there
is a need to determine whether or not there is sufficient basis to hold her guilty
on such ground.
Insubordination or willful disobedience, is a just cause for termination of
employment listed under Article 297 (formerly Article 282) of the Labor Code,
[58]
to wit:
Article 297. Termination by Employer. - An employer may terminate an
employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the
lawful orders of his employer or representative in connection with his
work;
In this case, a plain reading of the Notice to Explain and Notice of Termination
both dated November 26, 2012 reveals that the charge of insubordination
against Sta. Isabel was grounded on her refusal to report to the Head Office
despite due notice. While Perla's directives for Sta. Isabel to report to the Head
Office indeed appear to be reasonable, lawful, and made known to the latter, it
cannot be said that such directives pertain to her duties as a Claims
Adjuster, i.e., handling and settling claims of Perla's Quezon City Branch,
regardless of whether her refusal to heed them was actually willful or not. The
aforesaid directives, whether contained in the Notice to Explain dated
November 9, 2012 or the Final Directive to Report to Head Office dated
November 22, 2012, all pertain to Perla's investigation regarding the Ricsons
incident and, thus, were issued in compliance with the requisites of procedural
due process in administrative cases. Otherwise stated, such directives to appear
before the Head Office were for the purpose of affording Sta. Isabel an
opportunity to be heard regarding the Notice to Explain dated November 9,
2012. As correctly pointed out by the labor tribunals, Sta. Isabel's failure or
refusal to comply with the foregoing directives should only be deemed as a
waiver of her right to procedural due process in connection with the Ricsons
incident, and is not tantamount to willful disobedience or insubordination.
In sum, the totality of the foregoing circumstances shows that Sta. Isabel was
not guilty of acts constituting insubordination, which would have given Perla a
just cause to terminate her employment. As such, the CA erred in holding that
the NLRC gravely abuse its discretion in ruling that Sta. Isabel's dismissal was
illegal; hence, the NLRC ruling must be reinstated.