1.
teaching load by appointing him as a Clinical Instructor for Preceptorship Program to
G.R. No. 212861, October 14, 2015
MELVIN P. MALLO, Petitioner, v. SOUTHEAST ASIAN COLLEGE, INC. AND EDITA
ENATSU,* Respondents.
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
be conducted at the United Doctors Medical Center (UDMC) instead, beginning June
23, 2011, which 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.
G.R. No. 206942, February 25, 2015
VICENTE C. TATEL, Petitioner, v. JLFP INVESTIGATION SECURITY AGENCY, INC., JOSE
LUIS F. PAMINTUAN, AND/OR PAOLO C. TURNO, Respondents.
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 BaggerWerken Decloedt En 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. Pamintuan 11(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 even for want of cause, such that the replaced security guard
may be placed on temporary "off-detail" if there are no available posts under the
agency's existing contracts. During such time, the security guard does not receive any employment, which therefore leads to the logical conclusion that the latter had no
salary or any financial assistance provided by law. It does not constitute a dismissal, as 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 directive
reasonable time. When such a "floating status" lasts for more than six (6) months, the to return to work following his receipt of the November 26, 2009 Memorandum. The
employee may be considered to have been constructively dismissed. Court finds no compelling reason not to give credence to 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
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 abandoned his work, and the filing of the complaint is proof enough of his desire to
leave an employee with no choice but to forego continued employment, 64 or when return to work, thus negating any suggestion of abandonment.69 As the Court sees it,
it is simply incongruent for Tatel to refuse any offer of an assignment and thereafter,
there is cessation of work because continued employment is rendered impossible,
seek redress by filing a case for illegal dismissal.
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 from his
Court's conclusion that he was constructively dismissed. In his petition, he explained
post at BaggerWerken on August 24, 2009 due to several infractions committed
thereat, they subsequently reassigned him to SKI from September 16, 2009 to October that he was hired by JLFP in March 1997 but became a regular employee on March
14, 1998.70 In this regard, respondents themselves have stated that they hired Tatel
12, 2009 and then to IPVG from October 21 to 23, 2009. Thereafter, and until Tatel
on March 14, 1998,71 which effectively puts the issue to rest.
filed the instant complaint for illegal dismissal six (6) 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 work through the November 26, 2009 Similarly, Tatel clarified the discrepancy in his declared salaries, stating
that P12,400.00 was the amount of his monthly salary, which therefore translates to
Memorandum, which Tatel acknowledged to have received on December 11, 2009,
P6,200.00 every fifteen (15) days. Such explanation is reasonable and is not far-
records are bereft of evidence to show that he was given another detail or assignment.
As the "off-detail" period had already lasted for more than six (6) months, Tatel is fetched; hence, the Court accepts the same. Likewise, Tatel explained that he was
constructively dismissed on October 13, 2009, after he had filed the underpayment
therefore deemed to have been constructively dismissed.
case against respondents on October 11, 2009, and believed that he was actually
dismissed on October 24, 2009. On this score, the Court finds that he was
In this regard, the Court concurs with the finding of the NLRC that respondents failed
to establish that Tatel abandoned his work. To constitute abandonment, two elements constructively dismissed on October 24, 2009, as adverted to elsewhere, considering
that he was still given a last detail at the IPVG from October 21 to 23, 2009. In any
must concur: (a) the failure to report for work or absence without valid or justifiable
case, six (6) months have already lapsed since Tatel was last given any assignment,
reason, and (b) a clear intention to sever the employer-employee relationship, with
the second element as the more determinative factor and being manifested by some hence, he is deemed to have already been constructively dismissed when he filed the
instant case.
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 for his employer for more
than ten (10) years would just abandon his work and forego whatever benefits he may
be entitled to as a consequence thereof.68 As such, respondents failed to sufficiently
establish a deliberate and unjustified refusal on the part of Tatel to resume his
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 Komunikasyon sa Pilipinas (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.
. separation benefits at the rate of 19 days for every year of service.
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 Agreement dated 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 which explicitly states that should
the employees be terminated through no fault of their own, they should be awarded
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. Issue: whether or not there Dimagan was constructively dismissed.
Held: Yes. The reduction in Dimagan’s responsibilities and duties, particularly from
Dimagan v. Dacworks United supervisor to ordinary technician, constituted a demotion in rank tantamount to
Doctrine: Constructive dismissal is defined as a quitting because continued constructive dismissal.
employment is rendered impossible, unreasonable or unlikely; when there is a As held in the case of Coca-Cola Bottlers Philippines, Inc. vs. Del Villar, the burden falls
demotion in rank or a diminution of pay. The test of constructive dismissal is whether upon the company to prove that the employee's assignment from one position to
a reasonable person in the employee's position would have felt compelled to give up another was not tantamount to constructive dismissal. In the case at bar, Dacworks
his position under the circumstances. It is an act amounting to dismissal but is made United failed to discharge said burden. In fact, it never even disputed that petitioner
to appear as if it were not. Constructive dismissal is therefore a dismissal in was relegated from the position of OIC to supervisor and, subsequently, to an ordinary
disguise. The law recognizes and resolves this situation in favor of employees in order technician. Clearly it is guilty of constructive dismissal.
to protect their rights and interests from the coercive acts of the employer. Constructive dismissal is defined as a quitting because continued employment is
rendered impossible, unreasonable or unlikely; when there is a demotion in rank or a
Facts: Dimagan is a stockholder of DACWORKS UNITED, INC., which is engaged in the diminution of pay. The test of constructive dismissal is whether a reasonable person
business of installing, maintaining and repairing airconditioning systems. Sometimes in the employee's position would have felt compelled to give up his position under the
in 1997, he started working for the company as Officer- in- Chare (OIC) for mechanical circumstances. It is an act amounting to dismissal but is made to appear as if it were
installation with monthly salary of ₱8,000.00. not. Constructive dismissal is therefore a dismissal in disguise. The law recognizes and
In 2002, Dimagan was downgraded from his post as OIC to supervisor. Then, in March resolves this situation in favor of employees in order to protect their rights and
of the following year, he was made to work as a mere technician. When he vocally interests from the coercive acts of the employer.
expressed his concerns regarding his assignments, one Loida Aquino, who was in
charge of servicing/personnel under the direct supervision of Cancino, told him not to
report for work anymore. Thereafter, a certain Carlito Diaz, Operations Manager of
respondent company, castigated Dimagan for not following Aquino's instruction to
work as a technician. This prompted Dimagan to file a complaint for illegal dismissal,
non-payment of overtime pay, holiday pay, service incentive leave and separation pay
against Dacworks United.
Dacworks Ubnited 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.
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, considering the
absence of substantial evidence to prove that his services were, in fact, terminated by
respondents; or that there was a demotion in rank or a diminution of his salaries,
benefits and privileges
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. To this end, the employer’s act of posting notices to this effect in conspicuous
areas in the workplace is not enough. As enunciated in the case of Galaxie:
Sangwoo Philippines Inc.(SPI) vs. Sangwoo Philippines Employee Union (SPEU) “xxx The mere posting on the company bulletin board does not meet the
Facts: requirement under Article 297 of serving a written notice on the workers. Xxx In order
On July 25, 2003, during the Collective Bargaining Agreement negotiations to meet the foregoing purpose, service of the written notice must be made individually
between SPI and SPEU, the former filed a letter-notice of temporary suspension with upon each and every employee of the company.”
DOLE due to lack of orders from its buyers. Negotiations on the CBA, however, An employer which has valid cause for dismissing its employee but conducts
continued and the parties signed a Memorandum of Agreement which provides that the dismissal with procedural infirmity is liable to pay the employee nominal damages
in the event of a temporary shutdown, all machineries and raw materials would not in the amount of P30,000 for just causes and P50,000 for authorized cause. However,
be taken out of the SPI premises. where the payment of such damages becomes impossible or unjust, modification
On September 15, 2003, SPI ceased operations and thereafter filed two becomes necessary in order to harmonize the dispositions with the prevailing
letters with DOLE, and a copy furnished SPEU, for the extension of the temporary circumstances.
shutdown. Considering that SPI closed down its operations due to serious business
Meanwhile, on October 15, 2003, SPEU filed a complaint for unfair labor losses and that said closure appears to have been done in good faiths, the Court deems
practice, illegal closure illegal dismissal, damages and attorney’s fees before the it just to reduce the amount of nominal damages to be awarded to each of the
Regional Arbitration of NLRC. minority employees from P50,000 to P10,000.
Subsequently, on February 12, 2004, SPI posted in conspicuous places within
the company premises, notices of its permanent closure and cessation of 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 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 employees of their impending termination
of employment.
12. finds that BIchara should instead, be awarded the salary differential of a flight purser
Philippine Airlines, Inc. vs. Alexander Bichara from a flight steward from the time of his illegal demotion up until the time he was
Facts: retrenched.
On October 28, 1968, PAL hired Bichara as a flight attendant. By April 1971, Unlike LA Macam’s award of separation pay in lieu of reinstatement, the
Bichara voluntarily resigned. On May 15, 1975, he was rehired. On Augus 1993, award of salary differential is not dependent on the validity of his termination, as it is,
Bichara was included in PAL’s Purser Upgrading Program in which he graduated. intrinsically linked to the illegality of Bichara’s demotion.
As flight purser, he was required to take five check rides for his performance
evaluation and earn at least 85% rating for each ride. However, Bichara failed in the
two check rides. Consequently Bichara was demoted to the 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.
It would not be proper to accord such relief in this case since, the awards of
separation pay in lieu of reinstatement were all hinged on the validity of the
employee’s dismissal. LA Macam exceeded his authority when he ruled on this issue
and directed PAL to pay Bichara separation pay in lieu of reinstatement. This Court
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, as well
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 (orthopedic) - 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. Howeve
r, MTI still denied Gamboa's request
for MRI, and instead, issued medical certificates indicating Gamboa's illness as "Bron
chial 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 partie
s 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 work-
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 prior t
o 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 Benerando Noya 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
Nagkakaisang Lakas 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 Bantay Manggagawa sa 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. In this case, respondents themselves claimed that after having removed Tatel
from his post at BaggerWerken on August 24, 2009 due to several infractions
Vicente Tatel v. JLFP Investigation Security Agency committed thereat, they subsequently reassigned him to SKI from September 16,
Facts: 2009 to October 12, 2009 and then to IPVG from October 21 to 23, 2009. Thereafter,
JLFP Investigation Security Agency, Inc. (JLFP) hired Tatel as a security guard. and until Tatel filed the instant complaint for illegal dismissal six (6) months later, or
Tatel alleged that he was last posted at BaggerWerken located at the Port Area in on May 4, 2010, he was not given any other postings or assignments. While it may be
Manila. He was required to word twelve hours (12) from Monday to Sundays with true that respondents summoned him back to work through the November 26, 2009
P12,400 monthly salary. Tatel later on filed a complaint against JLFP and its officer Jose Memorandum, which Tatel acknowledged to have received on December 11, 2009,
Pamintuan, as well as SKI Group of Companies (SKI) and its officer Joselito Dueñas for records are bereft of evidence to show that he was given another detail or assignment.
underpayment of salaries and wages, non-payment of other benefits, 13th month pay, As the "off-detail" period had already lasted for more than six (6) months, Tatel is
and attorney’s fees. therefore deemed to have been constructively dismissed.
On October 24, 2009, Tatel was placed on “floating status”; On May, 4, 2010,
or after the lapse of six months without having been given any assignments. He filed
another complaint against JLFP and its officers, Paolo Turno and Jose Fabella, for illegal
dismissmal, reinstatement, back wages, 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
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.
16. employee has become unfit to continue working for the employer; and (c) it must have
been performed with wrongful intent.
Fabricator Philippines, Inc., v. Jeanie Rose Estolas In this case, the tribunals a quo aptly observed that while respondent indeed
Facts: committed some sort of misconduct when she engaged in a verbal tussle with Banayad
Jeanie Estolas alleged that Fabricator Philippines, Inc., hired her as a welder. during work hours and in front of their superior, Abaya, the same was not serious
Before break time sometime in 2011, while waiting for a replacement part she enough to warrant respondent's dismissal. Neither was it shown that respondent
requested to be installed on the welding machine she was using, Estolas took a seat performed such act of misconduct with wrongful intent nor did the same render her
and rested. At that time, Rosario Banayad passed by and saw her sitting, then uttered unfit to continue working for petitioner.
“Ayos ka ha.” The matter was brought to the Team Leader, Warlito Abaya. While
Abaya and Banayad were talking to each other, Estolas told the later “Ang kitid ng utak
mo[.] [B]akit hindi mo muna ako tinanong kung bakit ako nakaupo[?] [B]akit hindi mo
muna tinanong kung ano [ang] nasa likod ng nakita mo?" Banayad retorted, saying,
"Matapang ka ha! Matapang ka!" Estolas replied, "Candy, ikaw pa naman ang
nagdadasal araw-araw, tapos ganyan 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 text and meaning of the foregoing
provision, the following elements must concur: (a) the misconduct must be serious;
(b) it must relate to the performance of the employee's duties, showing that the
17. NLRC should require the appellant to provide the opposing party copies of the notice
LEI SHERYLL FERNANDEZ v. BOTICA CLAUDIO and GUADALUPE JOSE of appeal and memorandum of appeal.
G.R. No. 205870, 13 August 2014, Second Division (Perlas-Bernabe, J.) Additionally, the NLRC could not be expected to require compliance from
Fernandez, the appellant, since it was not aware that the opposing party, Jose, was
FACTS: not notified of her appeal. Hence, it cannot be faulted in relying on Fernandez’s
Petitioner, Lei Sheryll Fernandez (Fernandez) worked for four (4) years at representation that she had sent Jose, through her counsel, a copy of her
Botica Claudio, a drugstore owned by respondent, Guadalupe Jose (Jose). However, memorandum of appeal by registered mail.
Fernandez’s employment was terminated on the grounds of taking an absence The Court also stated that the CA erred in declaring that the failure of
without official leave (AWOL), dispensing wrong medicines, allowing some clients to Fernandez to furnish Jose with copies of her notice of appeal and memorandum of
buy medicines on credit without her employer’s consent, and dishonesty among appeal before the NLRC deprived the latter of her right to due process. What the law
others. As a result, Fernandez filed a complaint for illegal dismissal with prayer for the prohibits is absolute absence of the opportunity to be heard, thus, an aggrieved party
payment of statutory benefits before the NLRC Regional Arbitration Branch. cannot feign denial of due process where he had been afforded the opportunity to
The Labor Arbiter (LA) held that while just cause attended Fernandez’s ventilate his side, as Jose was in this case.
dismissal from work due to her AWOL, the same was nonetheless effected without Petition granted.
procedural due process. Thus, the LA ordered Jose to pay Fernandez 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 formal lapse, an excusable neglect, and,
hence, not a jurisdictional defect warranting the dismissal of an appeal. Instead, the
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 the CA 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 Rules on 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, Lirah Alorra
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, Lirah Alorra
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, however,
misplaced. Case law instructs that although the Court's dismissal of a case via a minute
resolution constitutes a disposition on the merits, the same could not be treated as a
binding precedent to cases involving other persons who are not parties to the case, or
another subject matter that may or may not have the same parties and issues. In other WHEREFORE, the petition is GRANTED. The Decision dated March 30, 2016
words, a minute resolution does not necessarily bind non-parties to the action even if and the Resolution dated January 6, 2017 rendered by the Court of Appeals in CA-G.R.
it amounts to a final action on a case. SP No. 136333 are hereby REVERSED and SET ASIDE. Accordingly, the Decision dated
The NLRC was also correct in holding that CBMI has substantial capital and January 28, 2014 and the Resolution dated April 30, 2014 of the National Labor
investment. Based on CBMI's 2012 General Information Sheet,49 it has an authorized Relations Commission in NLRC-NCR Nos. 04-05060-13, 05-06931-13, 05-07363-13, 05-
capital stock in the amount of P10,000,000.00 and subscribed capital stock in the 07941-13, and 06-08125-13 are REINSTATED.
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 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.
23. WON The CA correctly ruled that petitioners failed to comply with the filing
and service requirements in connection with their appeal to the NLRC.
Bismonte et.al. v. Golden Sunset Resort G.R. No. 229326 HELD:
November 05, 2018 PERLAS-BERNABE, J. NO, the Court finds enough justification to relax technical rules of procedure
“Thus, dismissal of appeals purely on technical grounds is frowned upon where the in order to afford the litigants the amplest opportunity to properly and justly
policy of the court is to encourage hearings of appeals on their merits and the rules of determine their rights and obligations to one another.
procedure ought not to be applied in a very rigid, technical sense; rules of procedure Although there is a preference of personal service and filing, it is only
are used only to help secure, not override substantial justice. It is a far better and more mandatory when practicable. If not, then other modes of service must be
prudent course of action for the court to excuse a technical lapse and afford the parties accompanied with a written explanation.
a review of the case on appeal to attain the ends of justice rather than dispose of the CA correctly pointed out that the appeal of petitioners contained no written
case on technicality and cause a grave injustice to the parties, giving a false impression explanation when it was delivered by mail. However, the NLRC excused such absence
of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of written explanation and allowed its admission.
of justice.” On the issue of whether the appeal was filed on time, the envelope that
FACTS: contained petitioners' Notice of Appeal with Appeal Memorandum bears the post
Petitioners, along with several others, filed several complaints for, inter alia, office stamp with the date of March 31, 2014, which is the tenth day after they
illegal dismissal against respondents, asserting that they were dismissed without any received the copy of the LA decision.
just or authorized cause and without affording them due process. Some claimed that In sum, the CA erred in setting aside the NLRC rulings and affirming the LA
they were constructively dismissed when their work schedule was unjustifiably ruling purely on technical grounds, i.e., that petitioners improperly availed of filing
reduced from six (6) to three (3) working days a week, leading to substantial reduction their appeal via registered mail and/or failed to file their appeal on time. However,
of income. since the appellate court did not tackle the substantial issues of this case, the Court
Respondent Golden Sunset Resort and Spa posited that petitioners were not deems it proper to remand the same to the CA for a resolution on the merits.
regular employees but were really seasonal employees due to the nature of their work
(reducing hours work in rainy seasons) and, in addition, 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.
ISSUES:
24. Filipino workers for overseas employment. Jurisdiction is conferred by law and cannot
Augustin International Center Inc. v. Bartolome GR. No. 226578 be acquired or waived by agreement of the parties.
January 28, 2019 J. Perlas Bernabe The SC also ruled that what the stipulation contemplates is an amicable
FACTS: settlement and not voluntary arbitration. The therein named third-party was tasked
Petitioners Bartolome and Yamat (Petitioners) applied as carpenter and tile merely to participate and not to decide the dispute. Considering that the parties did
setter at Augustin International Center, Inc. (AICI) who provides manpower to foreign not submit the present illegal termination case to the voluntary arbitration
corporations. They were eventually engaged by Golden Arrow Company, Ltd., which mechanism, the dispute remained under the exclusive and original jurisdiction of the
had its office in Khartoum, Republic of Sudan. Their contract stated they would render LA. Hence, the LA’s ruling in this case stands and AICI and Al Mamoun are liable for the
service for not less than 24 months and that all claims and complaints shall “be settled payment of the unexpired portion of petitioners’ contract.
amicably with the participation of the Labour Attache or any authorized
representative of the Philippine Embassy nearest the site of employment.”
Upon their arrival in Sudan sometime around March and April 2011, 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
Labour Attache 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:
YES. Under Section 10 of R.A. no. 8042, as amended by R.A. no. 10022, it
explicitly provides that the LA has original and exclusive jurisdiction over claims arising
out of employer-employee relations or by virtue of any law or contract involving
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 Manggagawa sa Mas 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.
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 noted by the CA, it was CEPALCO that established
the working procedure and methods and supervised CESCO's workers in their tasks.

"Substantial capital or investment" refers to capital stocks and subscribed The foregoing findings notwithstanding, the Court, similar to the CA and the labor
capitalization in the case of corporations, tools, equipment, implements, machineries tribunals, finds that CEPALCO's contracting arrangements with CESCO did not amount
and work premises, actually and directly used by the contractor or subcontractor in to ULP. This is because respondent was not able to present any evidence to show that
the performance or completion of the job, work or service contracted out. 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
The "right to control" shall refer to the right reserved to the person for whom the was further appealed by respondent. Thus, the complaints filed by respondent should
services of the contractual workers are performed, to determine not only the end to be dismissed with finality.
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 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
the employer to "interfere with, restrain or coerce employees in the exercise of their
CESCO to CEPALCO be declared as the latter's own employees, petitioners correctly
rights to self-organization. Article 259 (c) of the Labor Code, as amended, which
enumerates certain prohibited activities constitutive of ULP, provides that Unfair argue that respondent is not a real party-in-interest and hence, had no legal standing
Labor Practices of Employers is unlawful where an employer commits contract out insofar as these matters are concerned.
services or functions being performed by union members when such will interfere
WHEREFORE, the petitions are PARTLY GRANTED. The portions of the Decisions and
with, restrain or coerce employees in the exercise of their rights to self-organization.
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
The Court agrees with the CA that CEPALCO was engaged in labor-only contracting as
responsible to said workers in the same manner and extent as if those workers were
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 directly employed by CEPALCO are hereby DELETED. The rest of the CA Decisions
stand.
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
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
complaint for 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 disagreed with the findings of the LA and found Montallana's
acts 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 reconsideration but 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 letter dated 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 certiorari before 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.
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.

"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.

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 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
29.
The LA rejected petitioner's claim that private respondents were contractual or
LIBERAL INTERPRETATION OF THE LAW project employees, considering that petitioner: (a) failed to present any written
contract duly signed by private respondents containing details such as the work or
WILLIAM GO QUE CONSTRUCTION AND/OR WILLIAM GO QUE, Petitioner, v. COURT OF service to be rendered, the place of work, the wage rate, and the term or duration of
APPEALS AND DANNY SINGSON, RODOLFO PASAQUI,1 LENDO LOMINIQUI, AND JUN employment; (b) continuously employed private respondents to perform the same
ANDALES, Respondents. 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).
G.R. No. 191699, April 19, 2016
The LA likewise rejected petitioner's claim that private respondents have
DECISION 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
PERLAS-BERNABE, J.: LA denied private respondents' monetary claims for lack of factual basis.16

Facts

Private respondents filed complaints for illegal dismissal against petitioner The NLRC Ruling
William Go Que Construction and/or William Go Que (petitioner) before the National
Labor Relations Commission (NLRC), National Capital Region-North Sector Arbitration In a Decision (December 8, 2008 Decision), the NLRC reversed and set aside
Branch, claiming that they were hired as steelmen on various dates, and were regular the LA ruling, holding that private respondents were validly dismissed as they stole from
employees of petitioner until their illegal dismissal on June 3, 2006. Moreover, they petitioner. It noted the Resolution of the Quezon City Prosecutor's Office finding
alleged that petitioner failed to pay their monetary benefits, such as service incentive probable cause for theft against the private respondents and that the latter abandoned
leave pay, holiday pay, and 13th month pay. 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
For his part, petitioner averred that private respondents were hired as project NLRC ordered him to pay each of the private respondents the amount of P5,000.00 as
employees, and were informed of the specific period or phase of construction wherein nominal damages.
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 Dissatisfied, private respondents moved for reconsideration, 3 which the NLRC denied
shops, prompting him to announce that he will bring the matter to the proper in a Resolution dated March 31, 2009, prompting them to elevate their case to the
authorities. Thereafter, private respondents no longer reported for work, and were CA via a petition for
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 The CA Proceedings
against them and filed the corresponding Information before the Regional Trial Court
of Quezon City. In a Resolution, the CA granted private respondents' motion but
noted that the Affidavit of Service and the Verification/Certification of Non-Forum
The LA Ruling Shopping30 contained a defective jurat. Thus, private respondents were directed to
cure the defects within five (5) days from notice.
In a Decision, the Labor Arbiter (LA) found petitioner to have illegally dismissed the CA required private respondents anew to submit a
private respondents, and declared them to be regular employees entitled to Verification/Certification of Non-Forum Shopping with a properly
reinstatement to their former positions without loss of seniority rights and backwages. 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-Affidavit45 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 x x 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 x x."
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 IDs64of 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 Shopping attached 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 complied with when one who has ample
knowledge to swear to the truth of the allegations in the complaint or petition signs the
verification, and when matters alleged in the petition have been made in good faith or
are true and correct."
Here, there was no substantial compliance with the verification requirement
as it cannot be ascertained that any of the private respondents actually swore to the
truth of the allegations in the petition for certiorari in CA-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 x x. 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 the rule; it cannot be made without any valid reasons
underpinning the said course of action. To merit liberality, the one seeking such
treatment must show reasonable cause justifying its non-compliance with the Rules,
and must establish that the outright dismissal of the petition would defeat the
administration of substantial justice. Procedural rules must, at all times, be followed,
save for instances when a litigant must be rescued from an injustice far graver than
the degree of his carelessness in not complying with the prescribed procedure. The
limited exception does not obtain in this case.ch
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 Services Department 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 notice terminating 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 reconsideration from 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",which Mahilum, 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 x x 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 x x. 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 x x 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 x x 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
x x 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 Decision84 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 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
Mergers of Corporation 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'
Sumifru Corporation v. Baya aforesaid takeover.

Facts: Baya alleged that he had been employed by AMSFC since February 5, 1985, and The LA ruled in favor of Baya.
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 The NLRC reversed and set aside the LA ruling.
Kapalong Agrarian Reform Beneficiaries Multipurpose Cooperative (AMSKARBEMCO),
the basic agrarian reform organization of the regular employees of AMSFC. In June The CA set aside the NLRC ruling and reinstated that of the LA with modification.
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 Issue: Whether or not Sumifru should be held solidarily liable with AMSFC's for Baya's
while at the same time, remaining active at AMSKARBEMCO. Later on and upon monetary awards.
AMSKARBEMCO's petition before the Department of Agrarian Reform (DAR), some
220 hectares of AMSFC's 513-hectare banana plantation were covered by the Ruling: YES.
Comprehensive Agrarian Reform Law. Eventually, said portion was transferred to
AMSFC's regular employees as Agrarian Reform Beneficiaries (ARBs), including Baya. Section 80 of the Corporation Code of the Philippines clearly states that one of the
Thereafter, the ARBs explored a possible agribusiness venture agreement with AMSFC, effects of a merger is that the surviving company shall inherit not only the assets, but
but the talks broke down, prompting the Provincial Agrarian Reform Officer to also the liabilities of the corporation it merged with.In this case, it is worthy to stress
terminate negotiations and, consequently, give AMSKARBEMCO freedom to enter into that both AMSFC and DFC are guilty of acts constitutive of constructive dismissal
similar agreement with other parties. In October 2001, the ARBs held a referendum in performed against Baya. As such, they should be deemed as solidarily liable for the
order to choose as to which group between AMSKARBEMCO or SAFFPAI, an monetary awards in favor of Baya. Meanwhile, Sumifru, as the surviving entity in its
association of pro-company beneficiaries, they wanted to belong 280 went to merger with DFC, must be held answerable for the latter's liabilities, including its
AMSKARBEMCO while 85 joined SAFFPAI. solidary liability with AMSFC arising herein. Verily, jurisprudence states that "in the
merger of two existing corporations, one of the corporations survives and continues
When AMSFC learned that AMSKARBEMCO entered into an export agreement with the business, while the other is dissolved and all its rights, properties and liabilities are
another company, it summoned AMSKARBEMCO officers, including Baya, to lash out acquired by the surviving corporation,"as in this case.
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, Therefore, Sumifru's contention that it should only be held liable for the period when
who told the former that he would be putting himself in a "difficult situation" if he will Baya stayed with DFC as it only merged with the latter and not with AMSFC is
not shift his loyalty to SAFFPAI; this notwithstanding, Baya politely refused to betray untenable.
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
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. Columbano Pagunsan Gallano
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 Barcenas Deocariza was 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 Seacare Maritime 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 complaint against 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 Code in relation to Section 2 (a), Rule X of 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:
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.

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.
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), hired
petitioner 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 certiorari before 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 Operaña, 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. maintaining that it could not appoint respondent to a regular and permanent position
as she has yet to complete the probationary period of six (6) consecutive semesters,
G.R. No. 224319, November 20, 2017 as laid down in the MORPHE, as well as in the 2009 DLSAU Personnel Handbook. In
this regard, petitioner pointed out that respondent's appointments all throughout her
DE LA SALLE ARANETA UNIVERSITY, INC., Petitioner, probationary employment were on a fixed-term basis, which she voluntarily and freely
v. DR. ELOISA G. MAGDURULANG, Respondent. accepted. As such, it is within the university's prerogative to re-hire her or not at the
end of such contracts.

The Labor Arbiter's (LA) Ruling

Facts:
Respondent Dr. Eloisa G. Magdurulang alleged that petitioner initially hired her as a
The LA dismissed the complaint for lack of merit. The LA found that since the
part-time faculty member for the latter's College of Business for the second semester
respondent has not held a full time academic teaching position for a period of six (6)
of SY 2007-2008 (November 5, 2007-March 18, 2008), as well as the summer semester
consecutive semesters or nine (9) straight trimesters, she is not eligible for permanent
of 2008 (March 31, 2008-May 13, 2008).For the second semester of SY 2008-2009
appointment. Moreover, considering that respondent's employment contracts were
(October 13, 2008-May 31, 2009), she was then appointed as a full-time faculty
on a fixed-term basis, her services may be subject to termination.
member/BSBA Program Coordinator, with such designation being renewed for the
first and second semesters of SY 2009-2010 (June 1, 2009-May 31, 2010). During the
Aggrieved, respondent appealed to the NLRC.
pendency of respondent's contract for SY 2009-2010, the University's Acting Assistant
Dean recommended to the University President that respondent be already accorded
The NLRC Ruling
a permanent status, effective the second semester of SY 2009-2010. The University
President ended up not extending a permanent appointment to respondent, pursuant
NLRC reversed and set aside the LA ruling, and accordingly, declared respondent to
to Section 117 of the Manual of Regulations for Private Higher Education (MORPHE)
have been constructively dismissed. Consequently, it ordered petitioner to reinstate
which provides that "[t]he probationary employment of academic teaching personnel
her to the position of Associate Professor with full backwages.
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." Thus, the University President
The NLRC held that petitioner's act of voluntary shortening respondent's probationary
instead issued a reappointment to respondent as full-time faculty member/BSBA
period effectively accorded the latter the status of a regular employee.
Program Coordinator for the first and second semesters of SY 2010-2011 (June 1,
2010-May 31, 2011), with a re-classified ranking of Assistant Professor 4 and on
contractual basis.
Petitioner moved for reconsideration, which was denied and filed a petition
for certiorari before the CA.
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 Assistant Professor
The CA Ruling
4 in her reappointment for SY 2010-2011, resulting in diminution of salaries and
benefits; and (b) she was not extended a permanent appointment despite the
CA modified the NLRC ruling, deleting respondent's reinstatement.
favorable recommendation from the Acting Assistant Dean.
CA held that respondent has no vested right to a permanent appointment since she
The respondent then filed the instant complaint, claiming that despite her re- had not completed the pre-requisite six (6) consecutive semesters necessary to be
appointment for SY 2010-2011, she was no longer given any teaching load and that eligible for the same.
her academic administrative position as BSBA Program Coordinator was likewise
discontinued. Respondent also insisted that she had already attained the status of a Nonetheless, as a probationary employee, respondent still enjoys a limited security of
regular employee since she has been teaching for about three (3) years beginning in tenure, and therefore, cannot be terminated except for just or authorized causes, or
2007. 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
Petitioner countered that it neither constructively nor actually dismissed respondent, 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.
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.

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.
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 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
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,
13th 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 295 of 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. employed and their employment shall continue while such activity actually exists. The
determination that respondents are regular employees and not merely project
Omni Hauling Services Inc. v. Bon employees means that their services could only be validly terminated by just and/or
Facts: authorized causes, thus they were illegally dismissed.
Omni Hauling Services Inc. was awarded a one year service contract by 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 employees with respect to the activity in which they are
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:
Whether or not the CA erred in denying CPI’s petition for certiorari thereby holding it
Century Properties v. Babiano liable for the unpaid commissions of the respondents Babiano and Concepcion.
Whether or not labor tribunals correctly assumed jurisdiction over Concepcion’s
Facts:
money claims
On October, 2002, Edwin J. Babiano was hired by Century Properties, Inc.
Ruling:
(CPI) as Director of Sales and eventually appointed as Vice President for Sales effective
I. The petition is partly meritorious.
September 1, 2007. As the Vice President for Sales, Babiano was remunerated with
the following benefits: a.) monthly salary of P70,000.00; b.) allowance of P50,000.00;
The CA erred in denying CPI’s petition for certiorari thereby holding it
and c.) 0.5% override commission for completed sales. His employment contract
liable for the unpaid commissions of respondent Babiano. Babiano’s
contained a Confidentiality of Documents and Non-Compete Clause which, among
violation of the Confidentiality of Documents and Non-Compete Clause
others, barred him from disclosing confidential information, and from working in any
justifies the forfeiture of his commissions.
business enterprise that is in direct competition with CPI while employed and for a
period of one year from date of resignation/termination from CPI. Should Babiano
In the interpretation of contracts, the Court must first determine
breach any of the terms thereof, his forms of compensation, including commissions
whether a provision or stipulation therein is ambiguous. Absent any
and incentives will be forfeited.
ambiguity, the provision on its face will be read as it is written and
During the same period, Concepcion was initially hired as Sales Agent by CPI
treated as the binding law of the parties to the contract. The language
and was eventually promoted as Project Director on September 1, 2007. As such, she
of the written contract is clear and unambiguous hence the contract
signed an employment agreement, denominated as "Contract of Agency for Project
must be taken to mean that which, on its face, it purports to mean,
Director" which provided, among others, that she would directly report to Babiano,
unless some good reason can be assigned to show that the words should
and receive, a monthly subsidy of P60,000.00, 0.5% commission, and cash
be understood in the different sense.
incentives. On March 31, 2008, Concepcion executed a similar contract anew with CPI
in which she would receive a monthly subsidy of P50,000.00, 0.5% commission, and
On the other hand, CPI remains liable for the unpaid commissions of
cash incentives as per company policy. Notably, it was stipulated in both contracts that
Concepcion provided that employer-employee relationship exists.
no employer-employee relationship exists between Concepcion and CPI.
On February 25, 2009, Babiano tendered his resignation and revealed that he
II. YES. Concepcion was an employee of CPI considering the elements
had been accepted as Vice President of First Global BYO Development Corporation
(power to hire, payment of wage, power of dismissal, power to control)
(First Global), a competitor of CPI. On March 3, 2009, Babiano was served a Notice of
of the existence of an employer-employee relationship. The labor
Termination for: (a) incurring AWOL; (b) violating the "Confidentiality of Documents
tribunals correctly assumed jurisdiction over her money claims.
and Non-Compete Clause" when he joined a competitor enterprise while still working
for CPI and provided such competitor 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. in accordance with Article 287 of the Labor Code, as amended by RA
7641, being the more beneficent retirement scheme. They differ,
Grace Christian High School v. Lavandera however, in the resulting benefit differentials due
to divergent interpretations of the term “one-half (1/2) month salary” as
Facts: used under the law.

Filipinas A. Lavandera was employed by petitioner Grace Christian High Elegir v. Philippine Airlines, Inc.: “one-half (1/2) month salary means
School (GCHS) as high school teacher since June 1977 with a monthly salary of 22.5 days: 15 days plus 2.5 days representing one-twelfth (1/12) of the
18,662.00 as of May 31, 2001. 13th month pay and the remaining 5 days for 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
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.1âwphi1
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. fees, and damages. Thus, as the matter left for determination is whether or not the
Villena vs Batangas II Electric Cooperative (BATELEC II) aforesaid rulings, when executed, should include retirement pay and representation,
transportation, and cellular phone usage allowances, the Court will harken back only
FACTS: to the context of the illegal dismissal complaint from which such awards of “other
Villena was hired by BATELEC II as bookkeeper in 1978, was promoted as benefits” stemmed from.
Finance Manager in 1985, and was demoted to the position of Auditor in 1994 causing
her to file a complaint for constructive dismissal before the Labor Arbiter. The LA Verily, the Court is not unaware of its rulings wherein it pronounced that
dismissed the complaint but was reversed by the NLRC, ordering the reinstatement of retirement pay and separation pay are not mutually exclusive (unless there is a specific
Villena to her former position as Finance Manager, or its equivalent, and to pay her prohibition in the collective bargaining agreement or retirement plan against the
salary differentials. However, the judgement was silent on the payment of allowances, payment of both benefits); however, with Villena's entitlement to retirement pay not
benefits and attorney’s fees. included as an issue in an illegal dismissal case which had already been finally decided,
The case was elevated to the CA which modified the NLRC Resolution and it is quite absurd for Villena to submit a "contemporaneous" claim for retirement pay
declared Villena to be entitled to the difference between the salary of the Finance on the execution phase of these proceedings.
Manager and that of the auditor, plus allowances and any other benefits 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 differentials, all
benefits and allowances that she may have received as finance manager, attorney’s

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 x x 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 x x.
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
determined as 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. compensation only if his injury, regardless of the degree of disability, results in loss of
profession, like for his physical condition prevents a return to sea service. Based on
MAGSAYSAY MARITIME CORPORATION vs. ROMEO V. PANOGALINOG the submissions of the parties, this contractual attribution refers to permanent total
GR No. 212049 July 15, 2015 disability compensation as known in labor law. Temporary total disability only
becomes permanent when so declared by the company-designated physician within
FACTS: Respondent, Romeo Panogalinog was employed by petitioner Magsaysay the periods he is allowed to do so, or upon the expiration of the maximum 240 day
Maritime Corporation (MMC) for its foreign principal, Princess Cruise Lines, Ltd. (PCL) medical treatment period without a declaration of either fitness to work or the
as Mechanical Fitter on board the vessel "Star Princess" under a ten (10) month existence of a permanent disability. While respondent has the right to seek the opinion
contract. Respondent suffered injuries when he hit his right elbow and forearm on a of other doctors under Section 20 (B) of the POEA-SEC and the CBA, it bears stressing
sewage pipe during a maintenance work conducted on board the vessel. He was that the employer is liable for a seafarer's disability, arising from a work-related injury
immediately provided medical treatment at the ship's clinic and was diagnosed by the or illness, only after the degree of disability has been established by the company-
ship doctor with "Lateral Epicondylitis, Right". However, despite treatment, his designated physician and, if the seafarer consulted with a physician of his choice
condition did not improve. Hence, he was medically repatriated. After the company- whose assessment disagrees with that of the company designated physician, the
designated physicians declared him fit to work, respondent sought the services of an disagreement must be referred to a third doctor for a final assessment.
independent physician, Dr. Manuel C. Jacinto, Jr. (Dr. Jacinto), who, on the other hand,
found him "physically unfit to go back to work”. Respondent filed a 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 governed by Article 12 (2) of the
CBA. A seafarer shall be entitled to the payment of the full amount of disability
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“Tendovaginitis Dequevain” 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 “Tendovaginitis
DeQuevain.” 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.
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.
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.
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.

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
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
37]
his complaint.
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 x x 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
INTER-ORIENT MARITIME v. CRISTINA CANDAVA
G.R. No. 201251| June 26, 2013 Immediate Cause: RESPIRATORY FAILURE
Antecedent Cause: PULMONARY METASTASIS
DOCTRINE OF THE CASE Underlying Cause: GERM CELL TUMOR
the illness leading to the eventual death of seafarer need not be shown to be
work-related in order to be compensable, but must be proven to have been contracted Respondent Cristina sent petitioner a demand letter for payment of death benefits
during the term of the contract. Neither is it required that there be proof that the but was ignored Cristina filed a complaint for death and other monetary benefits
working conditions increased the risk of contracting the disease or illness 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 testes and 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 following
causes:
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 eventual death, making his death compensable.
 In view of the foregoing, Joselito's death is compensable for having been caused by an
Verily, Joselito complained of significant pain in the abdominal region while aboard illness duly established to have been contracted in the course of his employment.
M/T Demetra and during the extended period of his employment. Upon undergoing
different medical procedures, the doctors discovered that the tumor in Joselito's right
inguinal canal "corresponded to a tumor formation dependent 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, apparently due to his
worsening health. This only shows that his medical condition effectively barred his
chances of being hired by other maritime employers and deployed abroad on an
ocean-going vessel.
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:
xxxx
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 x x is unimportant and recovery may be had for injury independent of any
pre-existing weakness or disease," viz.:
Compensability x x x 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. contracted. Indeed, despite of the pre-existing nature of his Diabetes Mellitus and the
G.R. No. 203161 February 26, 2014 concomitant disputable presumption that it is work-related, Ayungo still had the
MARTIN K. AYUNGO, Petitioner, burden to prove the causal link between his Diabetes Mellitus and his duties as Chief
vs. Engineer.
BEAMKO SHIPMANAGEMENT CORPORATION, EAGLE MARITIME RAK FZE, AND
JUANITO G. SALVATIERRA, JR., Respondents. 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
FACTS: his PEME. As the records would show, the existence of Ayungo’s Hypertension was
Ayungo entered into a 12 month Contract of Employment with respondent Beamko only revealed after his repatriation, as reflected in the Medical Report and reinforced
whereby he was engaged as Chief Engineer. When he was asked during his medical by subsequent medical reports. To the Court’s mind, Ayungo’s non-disclosure
examination if he suffered Hypertension, he answered in the negative. As a result, he constitutes fraudulent misrepresentation which, pursuant to Section 20(E) of the 2000
was cleared to work and declared fit by the company physician. POEA-SEC, disqualifies him from claiming any disability benefits from his employer.

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.

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.

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

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, not
only by medical findings, but also by law and contract. The pertinent statutory
provisions are Articles 197 to 199 (formerly Articles 191 to 193) of the 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, which is a standard set of
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 factor in the development of his hypertensive cardiovascular disease so as to entitle
instances, to wit: 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
(a) If the heart disease was known to have been present during employment, there safe to presume that, at the very least, the nature of petitioner's employment had
must be proof that an acute exacerbation was clearly precipitated by the unusual contributed to the aggravation of his illness, considering that as Chief Cook, he was
strain by reasons of the nature of his work. exposed to constant temperature changes, stress, and physical strain.

(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.
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.

Petitioner's condition was apparently asymptomatic since 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
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 Employment
was 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 complications and 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 opinion of 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 appeal before 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 of Filipino Seafarers on Board Ocean Going Vessels,” which are considered to be the
the NLRC in a Resolution dated March 11, 2010; hence, they elevated the matter to minimum requirements acceptable to the government for the employment of Filipino
the CA via a petition for certiorari. seafarers on board foreign ocean-going vessels.

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 reconsideration but 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.
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.

Held: Under the 2000 POEA-SEC, the terms “work-related injury” and “work-related illness”
are, in turn, defined as follows:
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 Definition of Terms:
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, For purposes of this contract, the following terms are defined as follows:
the CA’s grant of respondents’ certiorari petition before it ought to be reversed, and
consequently the NLRC Decision be reinstated. x x x x

11. Work-Related Injury – injury(ies) resulting in disability or death arising out of and in
Deemed incorporated in every seafarer’s employment contract, denominated as the the course of employment.
POEA-SEC or the Philippine Overseas Employment Administration-Standard
Employment Contract, is a set of standard provisions determined and implemented 12. Work-Related Illness – any sickness resulting to disability or death as a result of an
by the POEA, called the “Standard Terms and Conditions Governing the Employment
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-A of 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 x x x
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 x x x
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 21.2.1 of 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
Corporation as 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.
RAFAEL QUILLOPA v QUALITY GUARDS SERVICES
GR 213814, December 02, 2015
FACTS:
Quality Guards Services & Investigation Agency (GQSIA) hired Quillopa as a
security guard and gave him various assignments. On September 28, 2010, the deputy
manager of GQSIA informed Quillopa that he would be placed on floating status but
was promised that he would be given a new assignment. He was ordered to report to
GQSIA office the next day for further instructions. However, despite the assurance and
his repeated follow ups, he was not given any new assignment. On November 11,
2010, he filed for money claims. Quillopa 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.
No. The settlement agreement only pertains to the money claims of Quillopa
and to any other unrelated causes of action arising after the execution of the
settlement. The agreement did not cover illegal dismissal. Furthermore, the
Waiver/Quitclaim and Release cannot be construed to sever the EER because there is
nothing stated to that effect.
The placing of a security guard in temporary “off-detail” or “floating status” is a valid
exercise of management prerogative. However, it must be exercised in good faith and
the period shall not exceed 6 months, otherwise, he is deemed terminated. In this
instance, Quillopa was constructively dismissed. Despite repeated follow ups, he failed
to get a new post or assignment purportedly for lack of vacancy. For failure of GQSIA
to place Quillopa back in active duty within the 6 month period, they are liable for
constructive dismissal.

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 2nd 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.
BARON, BERSABAL and MELENDRES v EPE TRANSPORT CORPORATION
GR 202645, August 05, 2015
FACTS:
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 also members
of the EPE Drivers Union-Filipinong Samahang Manggagawa, the exclusive bargaining
agent of the taxi drivers. In 2008, Bersabal sought inquiry regarding boundary rates
imposed, claiming that it was not in accordance with the CBA. He was purportedly told
that he was free to go if did not want to follow 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.
sever the EER. It must be accompanied by overt acts pointing to the fact that the
employee does not want 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 EPE Transport; thus, NLRC is correct in holding that they are illegally
dismissed.
The filing of an employee of a complaint for illegal dismissal is proof enough of his
desire to return to work. Moreover, prior to the filing of the illegal dismissal case,
petitioners already filed cases to correct what they viewed as errors in administration
of the CBA. This shows that they actually desired to return to work since they were
enforcing their rights under the CBA.

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 justifiable cause, and (2) Clear intention to
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. To constitute a valid cause for the dismissal, the misconduct must: (a) be serious; (b)
G.R. No. 216452, June 20, 2016, PERLAS-BERNABE, J. 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
TING TRUCKING/MARY VIOLAINE A. TING, Petitioner, v. JOHN C. MAKILAN, Respondent. wrongful intent.

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.
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.
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 NLRC affirmed the ruling of the LA, that the dismissal was warranted for 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 terminated
after 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 Isagani Buenaflor 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. 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
G.R. No.187722, June 10, 2013 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
SURIGAO DEL NORTE ELECTRIC COOPERATIVE, INC. AND/OR DANNY Z. the service on November 26, 2001.
ESCALANTE, Petitioners, v. TEOFILO GONZAGA, Respondent.
In view of the foregoing incidents, Gonzaga filed a complaint with the NLRC Regional
DECISION 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
The Facts
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
On October 13, 1993, petitioner Surigao Del Norte Electric Cooperative, Inc.
and habitual neglect of duties and responsibilities, misappropriation of REC funds and
(SURNECO) hired Gonzaga as its lineman. On February 15, 2000, he was assigned as
failure to remit collections/monies, were not indicated in the said memorandum. He
Temporary Teller at SURNECO’s sub-office in Gigaquit, Surigao Del Norte.7
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
Danny Escalante (Escalante), General Manager of SURNECO, issued Memorandum
any receipt numbers, both with respect to collections and remittances and (b) the
Order No. 34, series of 2001 (Memorandum 34-01), with attached report of
other Summary of Collections and Remittances only contained receipt numbers for
SURNECO’s Internal Auditor, Pedro Denolos (Collection Report) and two (2) sets of
the remittances and none for the collections.19
summaries of collections and remittances (Summaries), seeking an explanation from
Gonzaga regarding his remittance shortages in the total amount of P314,252.23,
In defense, petitioners maintained that Gonzaga’s dismissal was attended with due
covering the period from February 2000 to May 2001.
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
On July 16, 2001, Gonzaga asked for an extension of three (3) weeks within which to
so-called Collection Report was prepared by Gonzaga himself. Petitioners further
submit his explanation since he needed to go over the voluminous receipts of
argued that Gonzaga was given enough opportunity to defend himself during the
collections and remittances with the assistance of an accountant. On the same day,
investigation. Likewise, he was properly informed of the accusation against him since
he sent another letter, denying any unremitted amount on his part and thereby,
the charge of cash shortage has a direct and logical relation to the findings of gross
requesting that the charges against him be lifted. Attached to the same letter is an
and habitual neglect of duties and responsibilities, misappropriation of REC funds and
Audit Opinion11 prepared by one Leonides Laluna (Laluna), a certified public
failure to remit collections/monies. In this regard, there was no conflict between the
accountant (CPA), stating that the Internal Auditor’s Report cannot accurately
charge stated in Memorandum 34-01 and the grounds cited in the Final Notice of
establish any remittance shortage on Gonzaga’s part since the amount of collections
Termination.
stated in the Summaries was not supported by any bills or official receipts.
In reply, Gonzaga insisted that, contrary to petitioners’ claim, the Summaries were
In the meantime, SURNECO formed an Investigation Committee (Committee) to
prepared by SURNECO’s internal auditor. He also added that the cooperative’s proper
investigate Gonzaga’s alleged remittance shortages. On July 30, 2001, the Committee
procedure for the conduct of investigation, as outlined in Section 16.5 of the Code of
sent Gonzaga an invitation to attend the investigation proceedings, in which he
Ethics was not followed; hence, he was denied due process.
participated. Pending investigation, Gonzaga was placed under preventive suspension
from July 31 to August 29, 2001.
The Issue
On August 9, 2001, the Committee tendered its report, finding Gonzaga guilty of (a)
The crux of the present controversy revolves around the propriety of Gonzaga’s
gross and habitual neglect of duty under Section 5.2.15 of the Code of Ethics and
dismissal.
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
The Court’s Ruling
 Article 296. Termination by Employer. – An employer may terminate an employment
A. Cause of termination. for any of the following causes:cralavvonlinelawlibrary

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

Applying the foregoing principles to this case, the Court finds that petitioners were
At any rate, Gonzaga had admitted that he failed to remit his collections daily in
able to prove, by substantial evidence, that there lies a valid cause to terminate violation of SURNECO’s company policy, rendering such fact conclusive and binding
Gonzaga’s employment.
upon him. Therefore, for his equal violation of Section 7.2.2 of the Code of Ethics
(failure to remit collections/monies), his dismissal is justified altogether.
The Court concurs with the NLRC’s finding that petitioners’ evidence – which consists
of the Collection Report, the Summaries, and the September 15, 2003 Audit Report B. Termination procedure; statutory compliance.
with attached Cash Flow Summary – adequately supports the conclusion that Gonzaga
misappropriated the funds of the cooperative. The data indicated therein show gaping
The statutory procedure for terminating an employee is found in Section 2 (III), Rule
discrepancies between Gonzaga’s collections and remittances, of which he was XXIII, Book V of the Omnibus Rules Implementing the Labor Code (Omnibus Rules)
accountable for. In this accord, the burden of evidence shifted to Gonzaga to prove which states:cralavvonlinelawlibrary
that the reflected shortage was not attributable to him. However, despite being
allowed to peruse the bills and receipts on record together with the assistance of an SEC. 2. Standards of due process: requirements of notice. – In all cases of termination
accountant and a counsel during the investigation proceedings, Gonzaga could not of employment, the following standards of due process shall be substantially
reconcile the amounts of his collections and remittances and, instead, merely observed:cralavvonlinelawlibrary
interposed bare and general denials.
For termination of employment based on just causes as defined in Article 282 of the
Labor Code:51
Also, it cannot be said that with the admission of the said evidence, Gonzaga would be
denied due process. Records show that he was furnished a copy of the Manifestation (i) A written notice served on the employee specifying the ground or grounds for
with the attached audit report on September 23, 2003 and the NLRC only rendered a termination, and giving said employee reasonable opportunity within which to explain
decision on August 31, 2004. This interim period gave him ample time to rebut the his side.
same; however, he failed to do so.
(ii) A hearing or conference during which the employee concerned, with the assistance
Finally, the records are bereft of any showing that SURNECO’s internal auditor was ill- of counsel if he so desires is given opportunity to respond to the charge, present his
motivated when he audited Gonzaga. Thus, there lies no reason for the Court not to evidence, or rebut the evidence presented against him.
afford full faith and credit to his report.
(iii) A written notice of termination served on the employee, indicating that upon due
All told, considering the totality of circumstances in this case, the Court finds the consideration of all the circumstances, grounds have been established to justify his
evidence presented by the petitioners, as opposed to the bare denial of Gonzaga, termination.
sufficient to constitute substantial evidence to prove that he committed serious
misconduct and gross and habitual neglect of duty to warrant his dismissal from
employment. Such are just causes for termination which are explicitly enumerated Succinctly put, the foregoing procedure consists of (a) a first written notice stating the
under Article 296 of the Labor Code, as amended:50 intended grounds for termination; (b) a hearing or conference where 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 therefor. Records disclose that
petitioners were able to prove that they sufficiently complied with these procedural
requirements:cralavvonlinelawlibrary
First, petitioners have furnished Gonzaga a written first notice specifying the grounds
on which his termination was sought.
In particular, Memorandum 34-01, which was issued on June 26, 2001, reads:52
Attached is a report of Mr. Pedro A. Denolos, Internal Auditor, alleging that you
incurred shortages as Teller of Sub-Office I which accumulated to THREE HUNDRED
FOURTEEN THOUSAND TWO HUNDRED FIFTY TWO PESOS AND TWENTY THREE
CENTAVOS (P314,252.23).
In this regard, please submit a written explanation within seventy two (72) hours from
receipt of this memorandum why no disciplinary action shall be taken against you on
this matter.
xxxx
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 opportunity to
answer the same through written explanation. Notably, attached to Memorandum 34-
01 are the Summaries which particularly detail the discrepancies in Gonzaga’s
collections vis-à-vis his remittances. As it turned out, Gonzaga submitted a letter to
management on July 16, 2001, attaching therewith an Audit Opinion prepared by
Gonzaga’s accountant, Laluna, in order to preliminarily answer the charges against
him.
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, these
infractions are, however, implicit in the charge of cash shortage. Due to the direct and
logical relation between these grounds, Gonzaga could not have been misled to
proffer any mistaken defense or contrive any weakened position. Rather, precisely
because of the substantial identity of these grounds, any defense to the charge of cash
shortage equally constitutes an adequate defense to the charges of gross and habitual
neglect of duties and responsibilities, misappropriation of REC funds and failure to
remit collections/monies. It stands 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 these charges. Therefore, based on these considerations, the Court finds that
the first notice requirement had been properly met.
Second, petitioners have conducted an informal inquiry in order to allow Gonzaga to
explain his side. To this end, SURNECO formed an investigation committee to
investigate Gonzaga’s alleged remittance shortages. After its formation, an invitation
was sent to Gonzaga to attend the investigation proceedings, in which he
participated.53 Apropos to state, Gonzaga never denied his participation during the
said proceedings. Perforce, the second requirement had been equally complied with.
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 therefor.
Records indicate that the Committee tendered its report on August 9, 2001, finding
Gonzaga guilty of gross and habitual neglect of duties and responsibilities,
misappropriation of REC funds and failure to remit collections/monies. Subsequently,
a notice of termination was served on Gonzaga on September 13, 2001, stating the
aforesaid grounds. Thereafter, Gonzaga tried to appeal his dismissal before
SURNECO’s Board of Directors which was, however, denied after again being given an
adequate opportunity to present his case.54 On October 25, 2001, a Final Notice of
Termination was served on Gonzaga which read as follows:cralavvonlinelawlibrary
For violation of the Code of Ethics and Discipline for REC Employees, specifically
Sections 5.2.15, 7.2.1 and 7.2.2 you are hereby notified of the termination of your
employment with this cooperative effective at the close of business hours on
November 26, 2001.55
Based on the foregoing, it cannot be gainsaid that Gonzaga had been properly
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.
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 show that the
established company policy in investigating employees was adhered to. In this regard,
SURNECO’s breach of its company procedure necessitates the payment of nominal
damages as will be discussed below.
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 or
conference. In such instance, the requirement of a formal hearing and conference
becomes mandatory. In Perez v. Philippine Telegraph and Telephone Company, the
Court laid down the following principles in dismissing In this relation, case law states that an employer who terminates an employee for a
employees:cralavvonlinelawlibrary valid cause but does so through invalid procedure is liable to pay the latter nominal
damages.
(a) “ample opportunity to be heard” means any meaningful opportunity (verbal or
written) given to the employee to answer the charges against him and submit In Agabon v. NLRC (Agabon), the Court pronounced that where the dismissal is for a
evidence in support of his defense, whether in a hearing, conference or some other just cause, the lack of statutory due process should not nullify the dismissal, or render
fair, just and reasonable way. it illegal, or ineffectual. However, the employer should indemnify the employee for
the violation of his statutory rights.60 Thus, in Agabon, the employer was ordered to
(b) a formal hearing or conference becomes mandatory only when requested by the pay the employee nominal damages in the amount of P30,000.00.61
employee in writing or substantial evidentiary disputes exists or a company rule or
practice requires it, or when similar circumstances justify it. By analogy, the Court finds that the same principle should apply to the case at bar for
the reason that an employer’s breach of its own company procedure is equally
(c) the “ample opportunity to be heard” standard in the Labor Code prevails over the violative of the laborer’s rights, albeit not statutory in source. Hence, although the
“hearing and conference” requirement in the implementing rules and regulations. dismissal stands, the Court deems it appropriate to award Gonzaga nominal damages
[emphases and underscoring supplied] 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.

Accordingly, since only an informal inquiry was conducted in investigating Gonzaga’s

alleged cash shortages, SURNECO failed to comply with its own company policy,
violating the proper termination procedure altogether.
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 probationary
employee of the standards of regularization should not be used to exculpate an
employee in a manner contrary to basic knowledge and common sense in regard to
which there is no need to spell out a policy or standard to be 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 March 30, 2006 of
the Labor Arbiter is REINSTATED with the MODIFICATION that petitioner Abbott
Laboratories, Philippines be ORDERED to pay respondent Pearlie Ann F. Alcaraz
nominal damages in the amount of ₱30,000.00 on account of its breach of its own
company procedure.
75.
Universal Robina Sugar Milling Corporation v. Ablay 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
(Serious Misconduct; To constitute a valid cause for the dismissal within the text and duration and scope to be done, and, in some cases, even the length of time of the
meaning of Article 282 of the Labor Code, the employee’s misconduct must be performance and its continued existence. In light of the above legal parameters laid
serious, i.e., of such grave and aggravated character, and not merely trivial or down by the law and applicable jurisprudence, the respondents are neither project,
unimportant. Additionally, the misconduct must be related to the performance of the seasonal nor fixed-term employees, but regular seasonal workers of URSUMCO.
employee’s duties showing him to be unfit to continue working for the employer.)
(1) The respondents were made to perform various tasks that did not at all
Facts: pertain to any specific phase of URSUMCO's strict milling operations that
URSUMCO is a domestic corporation engaged in the sugar cane milling business; would ultimately cease upon completion of a particular phase in the milling
Cabati is URSUMCO's Business Unit General Manager. The complainants were of sugar; rather, they were tasked to perform duties regularly and habitually
employees of URSUMCO. They were hired on various dates (between February 1988 needed in URSUMCO's operations during the milling season.
and April 1996) and on different capacities, 8 i.e., drivers, crane operators, bucket (2) The respondents were regularly and repeatedly hired to perform the same
hookers, welders, mechanics, laboratory attendants and aides, steel workers, tasks year after year.
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.

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 off-season period. The law simply considers these seasonal
workers on leave until re-employed.
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 Bandalan were 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, Miñoza 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 Miñoza 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.

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 sustaining the finding of
the labor arbiter that her dismissal was proper under the circumstances.
78. Carbonilla occupied a position of trust and confidence as he was employed
as Credit and Collection Manager, and later on, as Legal and Collection Manager,
Cebu People’s Multipurpose Cooperative (CPMPC) vs. Carbonilla tasked with the duties of handling the credit and collection activities of the
Facts: cooperative. The loss of CPMPC’s trust and confidence in Carbonilla was later justified
CPMPC hired Carbonilla as Credit and Collection Manager and was tasked by the following acts:
with the handling of the credit and collection activities of the cooperative. Sometime 1. Forwarding of the mediation settlements for notarization to a lawyer who
in 2007, CPMPC underwent a reorganization whereby Carbonilla was also assigned to was not authorized legal retainer of CPMPC
perform the duties of Human Resources Department Manager. In 2008, he was 2. The pull-out of important records and vital documents from the office
appointed as Legal Officer and subsequently, held the position of Legal and Collection premises, which were either lost or returned already tampered and altered.
Manager. 3. Incurring of unliquidated cash advances related to the notarial transactions
Beginning February 2008, CPMPC, through its HRD manager, sent various of the mediation agreements.
memoranda to Carbonilla seeking explanation on the various infractions he allegedly
committed. Cast against this light, Carbonilla’s performance of the said acts therefore gives
Unconvinced by Carbonilla’s explanations, CPMPC scheduled several CPMPC more than enough reason to lose trust and confidence in him.
clarificatory hearings but Carbonilla failed to attend despite due notice. CPMPC Mere existence of basis for believing that the employee has breached the trust
conducted a formal investigation where it ultimately found Carbonilla to have and confidence of the employer is sufficient and does not require proof beyond
committed acts prejudicial to CPMPC’s interests. As such, CPMPC sent Carbonilla a reasonable doubt. Thus, when an employee has been guilty of breach of trust or his
notice of dismissal on the ground of, among others, loss of trust and confidence. employer has ample reason to distrust him, a labor tribunal cannot deny the employer
Carbonilla filed the instant case for illegal dismissal against CPMPC before the the authority to dismiss him.
NLRC.
The LA dismissed Carbonilla’s complaint for lack of merit. The LA found 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, property custodians, or those who, in the normal exercise of their
functions regularly handle significant amounts of money or property.
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 Circus Unknown to MS Retail, the respondents had already filed a labor case for constructive
Performer and Circus Performer-Assistant, respectively, at MS Retail's Store located in dismissal, breach of contract, and payment of the remaining portion of their contracts,
Kuwait. damages and attorney's fees on September 15, 2008. They claimed that, contrary to
Based on their employment contracts, respondents Abraham and Nanette were the terms of their employment contracts, they were made to work for at least eight
entitled to monthly salaries of KD 650 or USD 2,303.92 and KD 150 or USD 531.87, (8) hours a day or 48 hours per week, without overtime pay. Moreover, they were
respectively under the following work schedule: assigned work not related to their task as circus performers. Hence, they were deemed
to have been constructively dismissed, warranting the payment of the unexpired
No. of shows per day: 4 shows/day portion of their contract, damages and attorney's fees.
No. of work days per week: 6 days/wk. The Labor Arbiter found respondents to have been constructively dismissed from
No. of work hours per month-: 48 hrs/mo. service without just cause.
The NLRC dismissed the complaint for constructive dismissal on the ground of
It was also stipulated that MS Retail may determine the hours of work assigned to abandonment.
respondents "from time to time in accordance with the general and particular The Court of Appeals, ruled that while respondents were validly terminated, the
requirements of the operation" of MS Retail. petitioners failed to comply with the twin-notice rule, to wit: first informing the
respondents of the charfe and affording them an opportunity to be heard, then
February 22, 2008, respondent arrived in Kuwait and began performing in compliance subsequently advising them of their termination.
with their contrac. ISSUE: Whether or not the CA erred in granting the respondents overtime pay
On August 26, 2008, respondents went to Thailand on approved vacation leave. On considering that its denial by the LA was nor appealed by the respondents.
September 2, 2008, respondent Abraham sent an electronic mail (email) to Mr. Joseph RULING:
San Juan, the Human Resources Coordinator of MS Retail, advising him of their inability Although respondents were found to have been dismissed for cause, depriving them
to return for work on September 3, 2008 because of the political protests in Thailand of overtime pay, if rightly due to them, would still amount to an impairment of
and that they had rebooked their return flight to Kuwait on September 10, substantive rights. Thus, following the dictates of equity and as an exception to the
2008. However, contrary to their representation, the respondents proceeded to the general rule, the Court hinds it proper for the CA to have passed upon the matter of
Philippines on September 9, 2008. overtime pay, despite the fact that respondents did not appeal from the LA Decision
denying the same claim.
On September 17, 2008, Mr. San Juan emailed respondents asking for their definite Petitioners argue that the "48 hours per month" work schedule stipulated in the
date of return to Kuwait and warning them that if they do not immediately return to employment contract is a mere typographical error, the true intention of the parties
work before the end of the month, they will be dismissed from employment for cause. 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 with MS Obligations arising from contracts, like an employment contract, have the force of law
Retail effective today, 23rd September 2008. Due to Kuwait Private Labour Law between the contracting parties and should be complied with in good faith. When the
Article 55. "The employer has the right to terminate the labourer without notice terms of a contract are clear and leave no doubt as to the intention of the contracting
and indemnity in the following cases: 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 x x 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, Lirah Alorra
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 Affidavit charging 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,
Romar Geroleo 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, Romar Geroleo 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. Renante Obra
G.R. No. 220998
Facts:
Renante Obra 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. 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.
Termination of Project Employment
In their defense, respondents averred that petitioners were not regular employees but
G.R. No. 209499 January 28, 2015 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
MA. CHARITO C. GADIA, ERNESTO M. PENAS, GEMMABELLE B. REMO, LORENA S. noted that it was expressly indicated in petitioners’ respective employment contracts
QUESEA, MARIE JOY FRANCISCO, BEVERLY A. CABINGAS, IVEE U. BALINGIT, ROMA that their positions are "project-based" and thus, "co-terminus to the project."
ANGELICA 0. BORJA, MARIE JOAN RAMOS, KIM GUEVARRA, LYNN S. DE LOS SANTOS, Respondents further maintained that they complied with the requirements of
CAREN C. ENCANTO, EIDEN BALDOVINO, JACQUELINE B. CASTRENCE,MA.ESTRELLA V. procedural due process in dismissing petitioners by furnishing each of them their
LAPUZ, JOSELITO L. LORD, RAYMOND G. SANTOS, ABIGAIL M. VILORIA, ROMMEL C. notices of termination at least thirty (30) days prior to their respective dates of
ACOSTA, FRANCIS JAN S. BAYLON, ERIC 0. PADIERNOS, MA. LENELL P. AARON, CRISNELL dismissal.22
P. AARON, and LAWRENCE CHRISTOPHER F. PAPA, Petitioners,
vs. The LA Ruling
SYKES ASIA, INC./ CHUCK SYKES/ MIKE HINDS/ MICHAEL HENDERSON, Respondents.
I It found that petitioners are merely project-based employees, as their respective
DECISION 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
PERLAS-BERNABE, J.: 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.
FACTS:

The NLRC Ruling

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, petitioners are regular employees but were validly terminated due to
governed by service contracts that it enters with them. 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
Alltel Communications, Inc. (Alltel), a United States-based telecommunications firm,
dismissal until full payment, plus attorney’s fees amounting to 10% of the total
contracted Sykes Asia’s services to accommodate the needs and demands of Alltel
monetary award. In addition, the NLRC awarded nominal damages in the amount of
clients for its postpaid and prepaid services (Alltel Project). Thus, on different dates,
₱10,000.00 each to petitioners Gadia, Remo, Quesea, Balingit, Castrence, Lapuz, and
Sykes Asia hired petitioners as customer service representatives, team leaders, and
Lord for respondents’ failure to furnish them the required written notice of
trainers for the Alltel Project.13
termination within the prescribed period.31
Services for the said project went on smoothly until Alltel sent two (2) letters to Sykes
Contrary to the LA’s finding, the NLRC found that petitioners could not be properly
Asia dated August 7, 2009 and September 9, 2009 informing the latter that it was
characterized as project-based employees, ratiocinating that while it was made known
terminating all support services provided by Sykes Asia related to the Alltel Project.
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
In view of this development, Sykes Asia sent each of the petitioners end-of-
project would end, be terminated, or be completed. In this relation, the NLRC
life notices, informing them of their dismissal from employment due to the
concluded that inasmuch as petitioners had been engaged to perform activities which
termination of the Alltel Project. Aggrieved, petitioners filed separate complaints 17 for
are necessary or desirable in respondents’ usual business or trade of BPO, petitioners
illegal dismissal praying for reinstatement, backwages, 13th month pay, service
should be deemed regular employees of Sykes Asia This notwithstanding, and in view
incentive leave pay, night shift differential, moral and exemplary damages, and
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 Asia37 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,48 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.
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. cralawlawlibrary
The CA reversed and set aside the rulings of the NLRC and instead, found Avestruz to
Termination twin notice rule have been illegally dismissed. The CA found that petitioners failed to accord
procedural due process to Avestruz,
Maersk-Filipinas Crewing Inc v. Avestruz
Issue: Whether or not Avestruz was accorded of procedural due process.

Facts: Ruling: No.

Petitioner Maersk-Filipinas Crewing, Inc., on behalf of its foreign principal, petitioner There being no compliance with the provisions of Section 17 of the POEA-SEC as
A.P. Moller Singapore Pte. Ltd., hired Avestruz as Chief Cook on board the vessel M/V above-cited,
Nedlloyd Drake.

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 required Avestruz 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 complaint for 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 petitioners failed
to observe the twin notice rule laid down in Section 17 of the POEA-SEC.
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 statement given 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. SOLE and CA’s Ruling

PNCC SKYWAY CORPORATION (PSC) v. THE SECRETARY OF LABOR & EMPLOYMENT SOLE found that there was an authorized cause for the closure of the operation of
(SOLE) 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:
G. R. No. 196110 February 06, 2017 WHEREFORE, premises considered, judgment is hereby rendered:
1. HOLDING there was lawful cause to terminate the employees and
deny their claims for reinstatement as there was valid cessation of
FACTS:
PSC's operation.
Sometime in March 1977, the Philippine National Construction Corporation (PNCC)
2. DISMISSING the charges of unfair labor practice and union-
was awarded by the Toll Regulatory Board (TRB) with the franchise of constructing,
busting for lack of basis.
operating and maintaining the north and south expressways, including the South
3. DISMISSING the charge of illegal strike against the Union and its
Metro Manila Skyway (Skyway). On December 15, 1998, it created petitioner PNCC
members for lack of basis.
Skyway Corporation (PSC) for the purpose of taking charge of its traffic safety,
4. HOLDING there was failure on the part of the PNCC Skyway
maintaining its facilities and collecting toll.
Corporation to comply with the procedural notice requirements of
Article 283 of the Labor Code.
Eight years later, or on July 18, 2007, the Citra Metro Manila Tollway Corporation
5. DENYING the payment of moral and exemplary damages, and
(Citra), a private investor under a build-and-transfer scheme, entered into an
attorney's fees for lack of bases.
agreement with the TRB and the PNCC to transfer the operation of the Skyway from
petitioner PSC to the Skyway O & M Corporation (SOMCO). The said transfer provided
As it had previously offered, PSC is hereby ORDERED to pay the
for a five-month transition period from July 2007 until the full torn-over of the Skyway
affected employees their separation pay in the amount of no less
at 10:00 p.m. of December 31, 2007 upon which petitioner PSC will close its operation.
than 250% of their respective basic monthly pay per year of service,
a gratuity pay of Php40,000 each employee, plus all their remaining
On December 28, 2007, or three (3) days before the flail transfer of the operation of
benefits like 13th month pay, rice subsidy, cash conversion of
the Skyway to SOMCO, petitioner PSC served termination letters to its employees,
vacation and sick leaves, and medical reimbursement.
many of whom were members of private respondent PNCC Skyway Traffic
Management and Security Division Worker's Organization (Union). According to the
Likewise, PSC is ordered to pay the amount of Php30,000 as
letter, PSC has no choice but to close its operations resulting in the termination of its
indemnity to each dismissed employee covered by this case, who
employees effective January 31, 2008. However, the employees are entitled to receive
were not validly notified in writing of their termination on 31
separation pay amounting to 250% of the basic monthly pay for every year of service,
December 2007 pursuant to Article 283 of the Labor Code.
among others things. Petitioner PSC, likewise, served a notice of termination to the
Department of Labor and Employment (DOLE).
SO ORDERED.
On that same day of December 28, 2007, private respondent Union, immediately upon
CA dismissed PSC's petition. The appellate court held that the Secretary of Labor was
receipt of the termination letters, filed a Notice of Strike before the DOLE alleging that
correct in saying that the extension of the employee's employment in paper only and
the closure of the operation of PSC is tantamount to union-busting because it is a
the payment of the employee's salaries for said period cannot substitute for the PSC's
means of terminating employees who are members thereof. Furthermore, the notices
failure to comply with the due process requirements. Thus, the SOLE cannot be said
of termination were served on its employees three (3) days before petitioner PSC
to have acted capriciously or whimsically, in the exercise of his official duties.
ceases its operations, thereby violating the employees' right to due process. Private
respondent Union, thus, prayed that petitioner PSC be held guilty of unfair labor
ISSUE:
practice and illegal dismissal. It, likewise, prayed for the reinstatement of all dismissed
Whether or not the PSC failed to comply with the procedural requirements set forth
employees, along with the award of backwages, moral and exemplary damages, and
under Art. 298 (283) of the Labor Code.
attorney's fees.
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 Explain why 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, 14th 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. Isabel
wherein 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.