Recitation in Labor Law Review

Case
CEBU ROYAL PLANT VS. DEPUTY MINISTER OF LABOR AND RAMON PILONES
153 SCRA 38 (August 12, 1987)
Facts: Based on the facts of the case, Ramon Pilones was employed on 16 February
1978 by Cebu Royal Plant on a probationary period of 6 months. He was entrusted with
the function of a syrup man handling ingredients in the processing of soft drinks. After 6
months, he was required by the company to undergo medical examination to qualify him
as regular employee. However, the medical exam result showed that he was suffering
from Pulmonary Tuberculosis minimal. He was then informed by the company of his
termination from employment alleging that his illness is not curable within 6 months.
Aggrieved, Pilones filed a complaint for illegal dismissal with the Regional Director of
DOLE. The latter dismissed the complaint but was reversed by the Deputy Minister of
Labor finding that the private respondent was already a permanent employee at the
time of his dismissal and so was entitled to security of tenure. The alleged ground for
his removal, to wit, "pulmonary tuberculosis minimal," was not certified as incurable
within six months as to justify his separation. Additionally, Pilones insists that the
petitioner company should have first obtained a clearance, as required by the
regulations then in force, for the termination of his employment.
Cebu Royal Plant for its part claims that the Pilones was still on probation at the
time of his dismissal and so had no security of tenure. His dismissal was not only
inconformity with company policy but also necessary for the protection of the public
health, as he was handling ingredients in the processing of soft drinks which were being
sold to the public. It is also argued that the findings of the regional director, who had
direct access to the facts, should not have been disturbed on appeal. For these same
reasons, it contends, the employee's reinstatement as ordered by the public respondent
should not be allowed. Required to reinstate the separated employee and pay him back
wages, the petitioner company elevated the case to the Supreme Court faulting the
Deputy Minister with grave abuse of discretion.
The Supreme Court ruled that the six-month period of probation started from the
said date of appointment and so ended on August 17, 1978, but it is not shown that the
private respondent's employment also ended then; on the contrary, he continued
working as usual. Under Article 282 of the Labor Code, "an employee who is allowed to
work after a probationary period shall be considered a regular employee." Hence,
Pilones was already on permanent status when he was dismissed on 21 August 1978,
or four days after he ceased to be a probationer.
The petitioner claims it could not have dismissed the private respondent earlier because
the x-ray examination was made only on August 17, 1978, and the results were not

immediately available. That excuse is untenable. We note that when the petitioner had
all of six months during which to conduct such examination, it chose to wait until exactly
the last day of the probation period. In the light of such delay, its protestations now that
reinstatement of Pilones would prejudice public health cannot but sound hollow and
hypocritical. By its own implied admission, the petitioner had exposed its customers to
the employee's disease because of its failure to examine him before entrusting him with
the functions of a "syrup man." Its belated concern for the consuming public is hardly
persuasive, if not clearly insincere and self-righteous.
The applicable rule on the ground for dismissal invoked against him is Section 8,
Rule I, Book VI, of the Rules and Regulations Implementing the Labor Code reading as
follows:
Sec. 8. Disease as a ground for dismissal. Where the employee suffers from a
disease and his continued employment is prohibited by law or prejudicial to his health or
to the health of his co-employees, the employer shall not terminate his employment
unless there is a certification by a competent public health authority that the disease is
of such nature or at such a stage that it cannot be cured within a period of six (6)
months even with proper medical treatment. If the disease or ailment can be cured
within the period, the employer shall not terminate the employee but shall ask the
employee to take a leave. The employer shall reinstate such employee to his former
position immediately upon the restoration of his normal health.
The record does not contain the certification required by the above rule. The medical
certificate offered by the petitioner came from its own physician, who was not a
"competent public health authority," and merely stated the employee's disease, without
more. It can be surmised that if the required certification was not presented, it was
because the disease was not of such a nature or seriousness that it could not be cured
within a period of six months even with proper medical treatment. If so, dismissal was
unquestionably a severe and unlawful sanction.
It is also worth noting that the petitioner's application for clearance to terminate the
employment of the private respondent was filed with the Ministry of Labor only on
August 28, 1978, or seven days after his dismissal. As the NLRC has repeatedly and
correctly said, the prior clearance rule (which was in force at that time) was not a "trivial
technicality." It required "not just the mere filing of a petition or the mere attempt to
procure a clearance" but that "the said clearance be obtained prior to the operative act
of termination.
There was here an attempt to circumvent the law by separating the employee after five
months' service to prevent him from becoming a regular employee, and then rehiring
him on probation, again without security of tenure. We cannot permit this subterfuge if
we are to be true to the spirit and mandate of social justice. On the other hand, we have
also the health of the public and of the dismissed employee himself to consider. Hence,
although we must rule in favor of his reinstatement, this must be conditioned on his
fitness to resume his work, as certified by competent authority.
We take this opportunity to reaffirm our concern for the lowly worker who, often at the
mercy of his employers, must look up to the law for his protection. Fittingly, that law
regards him with tenderness and even favor and always with faith and hope in his
capacity to help in shaping the nation's future. It is error to take him for granted. He

deserves our abiding respect. How society treats him will determine whether the knife in
his hands shall be a caring tool for beauty and progress or an angry weapon of defiance
and revenge. The choice is obvious, of course. If we cherish him as we should, we must
resolve to lighten "the weight of centuries" of exploitation and disdain that bends his
back but does not bow his head.
WHEREFORE, the petition is DISMISSED and the temporary restraining order of
November 18, 1981, is LIFTED. The Order of the public respondent dated July 14,
1981, is AFFIRMED, but with the modification that the backwages shall be limited to
three years only and the private respondent shall be reinstated only upon certification by
a competent public health authority that he is fit to return to work.
Discussion
BOOK FOUR
HEALTH, SAFETY AND SOCIAL WELFARE BENEFITS
TITLE I
MEDICAL, DENTAL AND OCCUPATIONAL SAFETY
CHAPTER I
MEDICAL AND DENTAL SERVICES
Section 1 of the IR states the applicability of this rule. It shall apply to all employers,
whether operating for profit or not, including the Government and any of its political
subdivisions and government-owned or controlled corporations, which employs in any
workplace one or more workers.
The development and enforcement of dental standards shall continue to be under the
responsibility of the Bureau of Dental Health Services of the Department of Health.
Article 156. First-aid treatment. Every employer shall keep in his establishment such
first-aid medicines and equipment as the nature and conditions of work may require, in
accordance with such regulations as the Department of Labor and Employment shall
prescribe.
The employer shall take steps for the training of a sufficient number of employees in
first-aid treatment.
Comment:

FIRST-AID TREATMENT adequate, immediate, and necessary medical and dental

attention or remedy given in case of injury or illness suffered by a worker during
employment, irrespective of whether or not such injury or illness is work-connected,
before a more extensive medical and/or dental treatment can be secured.
FIRST AIDER any person trained and duly certified as qualified to administer first aid
by the Phil. National Red Cross or by any other organization accredited by the former.

Article 157. Emergency medical and dental services. It shall be the duty of every
employer to furnish his employees in any locality with free medical and dental
attendance and facilities consisting of:
The services of a full-time registered nurse when the number of employees exceeds fifty
(50) but not more than two hundred (200) except when the employer does not maintain
hazardous workplaces, in which case, the services of a graduate first-aider shall be
provided for the protection of workers, where no registered nurse is available. The
Secretary of Labor and Employment shall provide by appropriate regulations, the
services that shall be required where the number of employees does not exceed fifty
(50) and shall determine by appropriate order, hazardous workplaces for purposes of
this Article;
The services of a full-time registered nurse, a part-time physician and dentist, and an
emergency clinic, when the number of employees exceeds two hundred (200) but not
more than three hundred (300); and
The services of a full-time physician, dentist and a full-time registered nurse as well as a
dental clinic and an infirmary or emergency hospital with one bed capacity for every one
hundred (100) employees when the number of employees exceeds three hundred
(300).
In cases of hazardous workplaces, no employer shall engage the services of a
physician or a dentist who cannot stay in the premises of the establishment for at least
two (2) hours, in the case of those engaged on part-time basis, and not less than eight
(8) hours, in the case of those employed on full-time basis. Where the undertaking is
non-hazardous in nature, the physician and dentist may be engaged on retainer basis,
subject to such regulations as the Secretary of Labor and Employment may prescribe to
insure immediate availability of medical and dental treatment and attendance in case of
emergency. (As amended by Presidential Decree NO. 570-A, Section 26)
Comment: Art. 157 clearly allow employers in non-hazardous establishments to engage
on retained basis the services of a dentist or physician. Nowhere does the law provide
that the physician or dentist so engaged thereby becomes a regular employee. The
phrase on retained basis negates the idea that this engagement necessarily gives rise
to an employer-employee relationship.
Article 158. When emergency hospital not required. The requirement for an emergency
hospital or dental clinic shall not be applicable in case there is a hospital or dental clinic
which is accessible from the employers establishment and he makes arrangement for
the reservation therein of the necessary beds and dental facilities for the use of his
employees.
Comment: where the employer is not required to put up an emergency hospital, the
existing hospital to be utilized should be within five kilometers from the workplace or is
accessible within 25-minute travel. The employer must provide the transport in

emergency cases. The Implementing Rules also explain the workplaces that are
considered hazardous.
Article 159. Health program. The physician engaged by an employer shall, in addition
to his duties under this Chapter, develop and implement a comprehensive occupational
health program for the benefit of the employees of his employer.
Article 160. Qualifications of health personnel. The physicians, dentists and nurses
employed by employers pursuant to this Chapter shall have the necessary training in
industrial medicine and occupational safety and health. The Secretary of Labor and
Employment, in consultation with industrial, medical, and occupational safety and health
associations, shall establish the qualifications, criteria and conditions of employment of
such health personnel.
Article 161. Assistance of employer. It shall be the duty of any employer to provide all
the necessary assistance to ensure the adequate and immediate medical and dental
attendance and treatment to an injured or sick employee in case of emergency.
Comment: the IR in Book 4, Rule 1 section 4 requires any covered employer, employing
10-50 workers in the workplace, to provide the services of a graduate first-aider who
may be one of the workers in the workplace and who has immediate access to first-aid
medicines.
Chapter II
OCCUPATIONAL HEALTH AND SAFETY
Article 162. Safety and health standards. The Secretary of Labor and Employment
shall, by appropriate orders, set and enforce mandatory occupational safety and health
standards to eliminate or reduce occupational safety and health hazards in all
workplaces and institute new, and update existing, programs to ensure safe and
healthful working conditions in all places of employment.
Article 163. Research. It shall be the responsibility of the Department of Labor and
Employment to conduct continuing studies and research to develop innovative methods,
techniques and approaches for dealing with occupational safety and health problems; to
discover latent diseases by establishing causal connections between diseases and work
in environmental conditions; and to develop medical criteria which will assure insofar as
practicable that no employee will suffer impairment or diminution in health, functional
capacity, or life expectancy as a result of his work and working conditions.
Article 164. Training programs. The Department of Labor and Employment shall
develop and implement training programs to increase the number and competence of
personnel in the field of occupational safety and industrial health.
Article 165. Administration of safety and health laws.

The Department of Labor and Employment shall be solely responsible for the
administration and enforcement of occupational safety and health laws, regulations and
standards in all establishments and workplaces wherever they may be located;
however, chartered cities may be allowed to conduct industrial safety inspections of
establishments within their respective jurisdictions where they have adequate facilities
and competent personnel for the purpose as determined by the Department of Labor
and Employment and subject to national standards established by the latter.
The Secretary of Labor and Employment may, through appropriate regulations, collect
reasonable fees for the inspection of steam boilers, pressure vessels and pipings and
electrical installations, the test and approval for safe use of materials, equipment and
other safety devices and the approval of plans for such materials, equipment and
devices. The fee so collected shall be deposited in the national treasury to the credit of
the occupational safety and health fund and shall be expended exclusively for the
administration and enforcement of safety and other labor laws administered by the
Department of Labor and Employment.
Comment: the employer is required to observe safety standards and provide safety
devices. On the part of the employee, the Implementing Rules require proper use of
these safeguards and devices.
The Rules also require the setting up of a safety committee. Safety inspections are to
be done annually by the Department of Labor, specifically the Regional Office.
Title II
EMPLOYEES COMPENSATION AND STATE INSURANCE FUND
Chapter I
POLICY AND DEFINITIONS
Article 166. Policy. The State shall promote and develop a tax-exempt employees
compensation program whereby employees and their dependents, in the event of workconnected disability or death, may promptly secure adequate income benefit and
medical related benefits.
Comment: Workmens compensation is a general and comprehensive term applied to
those laws providing for compensation for loss resulting from the injury, disablement, or
death of workmen through industrial accident, casualty, or disease. While differing in
many instances with respect to scope and method, these laws posses the common
feature of providing compensation.
COMPENSATION -Money relief afforded according to the scale established under the
statute as differentiated from compensatory damages recoverable in an action at law for
breach of contract or for tort.

The general purpose of workmens compensation legislation are:

- To improve the economic status of the workers;
- To obviate the uncertainties, delay, expense, and hardship attendant upon the
enforcement of court remedies;
- To transfer from the worker to the industry in which he is employed, and
ultimately to the consuming public, a greater proportion of the economic loss due
to industrial accidents and injuries;
- To improve the relations between employers and employees by avoiding or
reducing the friction incident to litigation;
- To provide, not only for employees a remedy which is both expeditious and
independent of proof of fault, but also for employers a liability which is limited and
determinate.
Source of Compensation:
1. Direct Payment Statutes payment by the employer directly to the employee
2. Insurance Statutes
a. require the employer to take out insurance either with
i. an insurance bureau operated by the state
ii. private company
b. require and employer to contribute to a compensation fund
if an employee is injured the compensation is paid by the insurer or from the
compensation fund.
As regards source of compensation, the Labor Code adopts the compensation fund
type. All covered employers are required to remit to a common fund a monthly
contribution equivalent to one percent of the monthly salary credit of every covered
employee. The employee pays NO contribution into the fund; agreement to the contrary
is VOID and PROHIBITED. The employers contribution make up the State Insurance
Fund from which comes the compensation to be paid to claimant employee or the
employees dependents in case the employee suffers from a work-connected injury or
disease.
Compensation is in the form of medical supplies and services and/or cash income if
employee is unable to earn because of injury of disease. Death benefits and funeral
benefits are also given.
Process:
A compensation claim starts with a work-related injury or disease that:
1. befalls an employee
2. Within 5 days must notify employer, if notification is required, who in turn, must enter
notice in the logbook
3. Within 5 days after entry report the sickness, injury or death deemed work connected
to:
a. SSS in private sector or;
b. GSIS in public sector

Note: The employer INITIALLY decided whether the injury, sickness or death is work
related or not.
4. The claim is decided by the SSS or GSIS. Decisions of the two administering
agencies are appealable to the Employees Compensation Commission, which is the
policy making body, within 30 days.
a. If the result of the appeal is favorable to the employee becomes final and executory,
appealable to the SC in limited cases
b. If SSS or GSIS is reversed the two systems cannot appeal to the high court.
The old law destroyed the parity or balance between the competing interests of
employer and employee with respect to workmens compensation. The balance was
tilted unduly in favor of the workmen since it was possible to stretch the work-related
nature of an ailment beyond the seemingly rational limits.
Under the present law for an employee to be entitled to sickness, injury or death
benefits, it must be result from or must have resulted:
1. Any illness definitely accepted as an occupational disease listed by the Commission
2. Any illness caused by employment subject to proof that the risk of contracting the
same is increased by working conditions
WORKMENS
COMPENSATION
ACT

EMPLOYEES
COMPENSATION
LAW

1. There is a
presumption of
compensability

1. no presumption of
compensability

2. there is a
presumption of
aggravation

2. no presumption of
aggravation

3. there is a need
for the employer
to controvert the
claim within 14
days otherwise
he is deemed to
have waived the
right

3. no need for the

employer to
controvert

4. payment of
compensation
made by the
employer

4. payment of
compensation
made by
SSS/GSIS
through the State
Insurance Fund

4.1. Presumptive Compensability for AFP Members and Policemen

In a limited sense, Presumption of Compensability has been restored through
Resolution No 3906, adopted on July 5, 1988 by the ECC which states:
This board resolves, as it hereby resolves, to approve the adoption of a policy that the
moment an AFP member suffers a contingency, the presumption is that it is because of
the nature of his work; provided that evidentiary details of his injury, or death, are clearly
established through duly issued medical certifications on his injury or injuries, or death,
by the attending physician or duly authorized representatives of the hospital where he is
brought for treatment.
5. LIBERAL INTERPRETATION
The ECC should adopt a liberal attitude in favor of the employee in deciding claims for
compensability, especially where there is some basis in the facts for inferring a workconnection to the accident. This kind of interpretation gives meaning and substance to
the compassionate spirit of the law as embodied in Article 4 of the New Labor Code.
However, it is not the intention of the legislature the insurer against all accidental injuries
which might happen to an employee while in the course of the employment, but only for
such injuries arising from, or growing out of, the risks peculiar to the nature of the work
in the scope of the workmens employment or incidental to such employment, and
accidents in which it is possible to trace the injury to some risk or hazard to which the
employee is exposed in a special degree by reason of such employment.
ART 164. DEFINITION OF TERMS.
INJURY - Any harmful change in the human organism from any accident arising out of
and in the course of employment.
GROUNDS FOR AN INJURY TO BE COMPENSABLE
1. the employee must have been injured at the place where the work requires him to be
2. the employee must have been performing his official functions
3. if the injury is sustained elsewhere, the employee must have been executing an
order for the employer
4. the injury was not due to the employees intoxication, willful intention to injure or kill
himself or another, notorious negligence or otherwise prohibited under this Title.
SICKNESS - Any illness definitely accepted as an occupational disease listed by the
Commission or any illness caused by employment subject to proof that the risk of
contracting the same is increased by working conditions.
Conditions for an occupational disease and the resulting disability or death to be
compensable :
1. The employees work must involve the risk described therein

2. The disease was contracted as a result of the employees 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 employee
DEATH -

Loss of life resulting from injury or sickness

DISABILITY -Loss or impairment of a physical or mental function resulting from injury

or sickness.
DIRECT PREMISES RULE as a general rule, the accident should have occurred at
the place of work to be compensable
EXCEPTIONS TO THE DIRECT PREMISES RULE
1. INGRESS- EGRESS/ PROXIMITY RULE- when the employer is about to leave or
about to enter the premises of the employer by way of the customary or exclusive
means of ingress or egress.
2. GOING TO OR COMING FROM WORK- when the injury occurred when the
employee is proceeding to or from his work on the premises of the employer
must be a continuing act and has not diverted there from by any other activity and he
has not departed from his usual route to or from his workplace and if the employee is
on a special errand, it must have been official and in connection with his work.
3. EXTRA-PREMISES RULE (or the shuttle bus rule) where the company provides
the means of transportation in going to or coming from the place of work is liable to
the injury sustained by the employees while on board said means of transportation.
4. SPECIAL ERRAND RULE injury sustained outside the company premises is
compensable if his being out is covered by an office order or a locator slip or a pass
for official business.
5. DUAL PURPOSE DOCTRINE allows compensation where a special trip would
have to be made for the employer if the employee had not combined the service for
the employer with his own going or coming trip.
6. SPECIAL ENGAGEMENT RULE covers field trips, outings, intramurals and
picnics when initiated or sanctioned by the employer
7. POSITIONAL AND LOCAL RISKS DOCTRINE If an employee by reason of his
duties is exposed to a special or peculiar danger from the elements, that is, one
greater than that to which other persons in the community are exposed and an
unexpected injury occurs, the injury is compensable

8. FORCE MAJEURE OR AN ACT OF GOD- when one in the course of his

employment is reasonably required to be at a particular place at a particular time
and there meets an accident although one which any other person then and there
present would have met irrespective of his employment.
CHAPTER II
COVERAGE AND LIABILITY
ART 168. COMPULSORY COVERAGE
-

ECL applies to all employers, public or private, and to all employees, public or
private including casual, emergency, temporary, or substitute employees.

Every employee is covered who is not over 60 years over 60 years of age or over 60
years of age if he had been paying contributions prior to the age of 60

ART 170. EFFECTIVE DATE OF COVERAGE

-

The employer is covered compulsorily from first day of operation and the employee from the first day
of employment

ART 172. LIMITATIONS OF LIABILITY

-

NO COMPENSATION can be obtained if the injury, death or disability is a result of the employees:

1.
2.
3.
4.

Intoxication;
Willful intention to injure or kill himself or another;
Notorious negligence; or
Unless otherwise provided by the LC

NOTORIOUS NEGLIGENCE deliberate act of the employee to disregard his own personal safety.
Is death through suicide compensable ?
As a rule NO. However as held in NAESS vs. NLRC, the supreme court ruled that a self inflicted
death could be compensable if :
1. by agreement of the parties
2. The suicide/death is caused by a work related or compensable illness or disease.

ART 173. EXTENT OF LIABILITY

-

Simultaneous recovery under the Labor Code and the Civil Code cannot be made. The action is
selective and the employee may either choose to file the claim under either. But once the election
is made, the claimant cannot opt for the other remedy.

Simultaneous recovery under the LC and the SSS can be made as per an advisory opinion dated
May 23, 1989 of Sec. Drilon since PD 1921 has lifted the ban on simultaneous recovery.

STATE INSURANCE FUND: all covered employers are required to remit to a common fund a monthly
contribution equivalent to one percent of the monthly salary credit of every covered employee. The
employee pays no contribution to the fund. Any agreement to the contrary is prohibited.

CHAPTER VI
DISABILITY BENEFITS
DISABILITY CATEGORIES:
TEMPORARY TOTAL - if as a result of the injury or sickness, the employee is unable to
perform any gainful occupation for a continuous period not exceeding 120 days
PERMANENT TOTAL - if as a result of the injury or sickness, the employee is unable to
perform any gainful occupation for a continuous period exceeding 120 days
PERMANENT PARTIAL - if as a result of the injury or sickness, the employee suffers a
permanent partial loss of the use of any part of his body.
DEATH BENEFITS
- The System shall pay to the primary beneficiaries upon the death of the covered employee
an amount equal to his monthly income benefit, plus ten percent thereof for each dependent
child, but not exceeding five, beginning with the youngest and without substitution. The
income benefit shall be guaranteed for five years.
DEPENDENTS:
1. the legitimate, legitimated, legally adopted or acknowledged natural child who is unmarried,
not gainfully employed and not over 21 years of age or over 21 years of age provided that
he is incapable of self- support due to a physical or mental defect which is congenital or
acquired during minority
2. legitimate spouse living with the employee
3. the parents of said employee wholly dependent upon him for regular support
BENEFITS
1. for life to the primary beneficiaries, guaranteed for five years
2. for not more than 60 months to the secondary beneficiaries in case there are no primary
beneficiaries
3. in no case shall the total benefit be less that P 15, 000.00
THE BENEFICIARIES ARE:
PRIMARY BENEFICIARIES
a. Dependent spouse until he remarries
b. dependent children ( legitimate, legitimated, natural born or legally adopted)
SECONDARY BENEFICIARIES
a. Illegitimate children and legitimate descendants
b. parents, grandparents, grandchildren