Labor Digests

JULY 2019 – FEB 2020
SUPREME COURT
DECISIONS
LABOR LAW REVIEW
Prepared by:
Anne Lizeth R. Vallarit
2019-1-003007
LPU – SAT 5PM-7PM
Submitted to:
Atty. Oswaldo Lorenzo
[JULY 2019 – FEB 2020 SUPREME COURT DECISIONS] LABOR LAW REVIEW
TABLE OF CONTENTS
DOLE V. KENTEX MANUFACTURING CORPORATION 3
SPOUSES HIPOLITO DALEN, SR. v.MITSUI O.S.K. LINES DIAMOND CAMELLA, S.A. 5
MARINO B. DAANG v. SKIPPERS UNITED PACIFIC, INC 8
THE PENINSULA MANILA v. EDWIN A. JARA 10
DOMINIC INOCENTES v. RSCI 12
EFREN J. JULLEZA v. ORIENT LINE PHILIPPINES, INC. 14
HAYDEN KHO, SR. v. DOLORES G. MAGBANUA ET. AL 16
COCA-COLA FEMSA PHILIPPINES v. RICARDO S. MACAPAGAL ET. AL. 18
PDMC v. GLORIA V. GOMEZ 20
VICTORIA MANUFACTURING CORPORATION EMPLOYEES UNION v. VICTORIA MANUFACTURING

CORPORATION 23
ARLENE A. CUARTOCRUZ v.ACTIVE WORKS, INC. 25
REY BEN P. MADRIO v. ATLAS FERTILIZER CORPORATION 27
PHILIPPINE TRANSMARINE CARRIERS, INC. v. RAYMOND F. BERNARDO 29
SKYWAY O & M CORPORATION v. WILFREDO M. REINANTE 31
AUGORIO A. DELA ROSA v. ABS-CBN CORPORATION 33
JULIETA T. VERZONILLA v. EMPLOYEES' COMPENSATION COMMISSION 35
CARISSA E. SANTO v. UNIVERSITY OF CEBU 37
CELSO S. MANGUBAT, JR. v. DALISAY SHIPPING CORPORATION 39
YUSHI KONDO v. TOYOTA BOSHOKU (PHILS.) CORPORATION 41
1
J' MARKETING CORPORATION v. FERNANDO S. IGUIZ 44
GERRY S. MOJICA v. GENERALI PILIPINAS LIFE ASSURANCE COMPANY, INC. 46
JEBSENS MARITIME, INC. v. RUPERTO S. PASAMBA. 48
FEATI UNIVERSITY v. ANTOLIN PANGAN. 51
JERRY BERING TALAUGON v. BSM CREW SERVICE CENTRE PHILS., INC. 53
APOLINARIO Z. ZONIO, JR. v. 88 ACES MARITIME SERVICES, INC. 55
CLARET SCHOOL OF QUEZON CITY v. MADELYN I. SINDAY 58
ERNESTO P. GUTIERREZ v. NAWRAS MANPOWER SERVICES, INC., 60
PASAY CITY ALLIANCE CHURCH v. FE BENITO 62
JHEROME G. ABUNDO V. MAGSAYSAY MARITIME CORPORATION 64
MAGSAYSAY MARITIME CORPORATION v. ALLAN F. BUICO 66
PACIFIC METALS CO., LTD. VS. EDGAR ALLAN TAMAYO, 68
RAMON R. MAGADIA v. ELBURG SHIPMANAGEMENT PHILIPPINES, INC. 70
AUTOMATIC APPLIANCES INC. V. FRANCIA B. DEGUIDOY 72
TELUS INTERNATIONAL PHILIPPINES, INC. v. HARVEY DE GUZMAN.. 74
EDITHA SALINDONG AGAYAN v. KITAL PHILIPPINES CORP 76
DEL MONTE FRESH PRODUCE (PHIL.), INC. v. REYNALDO P. BETONIO 78
PAPERTECH INC. v. JOSEPHINE P. KATANDO 80
PRIME STARS INTERNATIONAL PROMOTION CORPORATION v. NORLY M. BAYBAYAN 82
MICHAEL ADRIANO CALLEON v. HZSC REALTY CORPORATION 84
JOLLY D. TEODORO v. TEEKAY SHIPPING PHILIPPINES, INC. 86
MICHAEL ANGELO T. LEMONCITO v. BSM CREW SERVICE CENTRE 89
2
DEPARTMENT OF LABOR AND EMPLOYMENT V. KENTEX MANUFACTURING CORPORATION

AND ONG KING GUAN
G.R. No. 233781, July 08, 2019, DEL CASTILLO, J.
FACTS: On May 13, 2015, a fire broke out in the factory located in Valenzuela City owned by
Kentex. The fire claimed 72 lives and injured a number of workers. As part of its standard
procedures, personnel of the DOLE CAMANAVA Field Office went to Kentex's premises. For its
part, the DOLE-NCR also assessed Kentex's compliance with the occupational health and safety
standards.
In the course of the investigation, it was discovered that Kentex had contracted with CJC
Manpower Services (CJC) for the deployment of workers. A mandatory conference was set on
May 18 and 20, 2015 at the DOLE-NCR Office in Malate, Manila. Kentex, its Chairman and Chief
Executive Officer Beato Ang, and the corporation's Chief Finance Officer Ong, were made
parties to this case before the DOLE-NCR.
The DOLE-RO III discovered that CJC, which deployed workers to Kentex, was an unregistered
private recruitment and placement agency. Moreover, it noted that CJC was non-compliant
with the occupational health and safety standards as well as with labor standards. As a result of
these findings, the DOLE RO III issued a Compliance Order which effectively declared CJC as a
labor-only contractor with Kentex as its principal.
Meanwhile, during the mandatory conference set by the DOLE-NCR, CJC's representatives
admitted that there was no service contract between CJC and Kentex; that CJC had deployed 99
workers at the Kentex factory on the day of the unfortunate incident; that there were no
employment contracts between CJC and the workers, among others.
Kentex and its corporate officers, through counsel, refuted CJC's claims. They contended that
while the corporate/business and employment records had all been gutted by fire, Kentex
nevertheless complied with the labor standards particularly on the minimum wage requirement
and with the occupational health and safety standards, as evidenced by a Certificate of
Compliance (COC) signed by the DOLE-NCR Regional Director Alex Avila (Avila).
The DOLE-NCR rejected the aforementioned arguments of Kentex. Aggrieved, Kentex and Ong
filed with the CA a Rule 43 Petition assailing the (1) June 8, 2015 Compliance Order; (2) the June
26, 2015 Order; and (3) the July 7, 2015 letter of the DOLE-NCR Regional Director. Although the
CA ruled on the merits of the case and upheld the assailed Orders and letter of the DOLE-NCR
Regional Director, it observed at the outset that Kentex and Ong resorted to the wrong remedy
in filing a Rule 43 Petition, when the proper remedy should have been a Rule 65 certiorari
petition from the decisions/resolutions of the DOLE Secretary. The CA discharged Ong from
liability.
3
ISSUE: Whether Ong should be held liable
RULING: NO. Both the DOLE-NCR and the CA correctly ruled that the June 26, 2015 Order had
already become final and executory in view of the failure of respondents Kentex and Ong to
appeal therefrom to the Secretary of Labor. Notice ought to be taken of the fact that, at the
time the DOLE-NCR rendered its ruling, Department Order No. 131-13 Series of 201325 was the
applicable rule of procedure.
Here, instead of filing an appeal with the DOLE Secretary, Ong moved for a reconsideration of
the subject Order; needless to say, this did not halt or stop the running of the period to elevate
the matter to the DOLE Secretary. Indeed, the DOLE-NCR took no action at all on Ong's motion
for reconsideration; in fact, it categorically informed Ong that his resort to the filing of a motion
for reconsideration was procedurally infirm. The June 26, 2015 Order having become final, it
could no longer be altered or modified by discharging or releasing Ong from his accountability.
Neither was there merit in respondents' claim that they had been denied or deprived of due
process. The facts clearly disclose that they had substantially participated in the proceedings
before the DOLE-NCR from the mandatory conference up to the filing of a position paper where
their side was sufficiently heard. It is axiomatic that "[t]he observance of fairness in the conduct
of any investigation is at the very heart of procedural due process. The essence of due process
is to be heard, and, as applied to administrative proceedings, this means a fair and reasonable
opportunity to explain one's side, or an opportunity to seek a reconsideration of the action or
ruling complained of."
In the absence of any showing that the CA's modification or alteration of the subject Order falls
within the exceptions to the rule on the immutability of final judgments, the DOLE-NCR's June
26, 2015 Order must be upheld and respected.
4
SPOUSES HIPOLITO DALEN, SR. AND FE G. DALEN, EVERLISTA LARIBA AND THE MINOR
BEVERLY T. LARIBA, MAGDALENA F. MARPAGA AND THE MINORS MIKE ANTHONY AND
THOMIE MAE, BOTH SURNAMED MARPAGA, AGNES C. MOLINA AND THE MINORS SHEILA,
SIMOUN, STEPHEN JOHN AND SHARON ANN, ALL SURNAMED MOLINA, EMMA C. NAVARRO
AND THE MINORS RAYMOND, MARAH, AND RYAN ALL SURNAMED NAVARRO, RUTH T.
SULAM AND THE MINOR JEINAR REECE T. SULAM, v.
MITSUI O.S.K. LINES DIAMOND CAMELLA, S.A.
G.R. No. 194403, July 24, 2019, CARANDANG, J.
FACTS: Mitsui O.S.K. Lines, a non-resident corporation, not doing business in the Philippines,
was the charterer of MV Sea Prospect while Diamond Camellia, S.A., another non-resident
corporation, not doing business in the Philippines, and of Panamian registry is the registered
owner of the said vessel.
On or about August 22, 1998, MV Sea Prospect headed to Japan with inclement weather. While
nearing the Island of Okinawa, MV Sea Prospect sunk, drowning 10 crew members.
Respondents alleged that petitioners who are heirs and beneficiaries of the missing seafarers
received full payment of death benefits based on the employment contract as well as the
International Transport Workers' Federation-Japan Seaman Union Associated Marine Officers
and Seafarers Union of the Philippines Collective Bargaining Agreement (CBA) governing the
employment of the seafarers. Petitioners were accompanied by their counsel, Atty. Emmanuel
Partido in signing the settlement agreements, affidavits of heirship and receipts of payment
before the Overseas Workers Welfare Administration (OWWA). According to respondents, the
contents of said documents were explained to petitioners.
Petitioners allegedly demanded in writing further compensation in connection with the sinking
of the vessel and threatened that an action arising from tort would be commenced in Panama
should their demand be unheeded. Hence, respondents filed before the Regional Trial Court
(RTC) of Manila, a Petition for Declaratory Relief and Approval of the Compromise/Settlement
Agreement against petitioners, and a complaint for damages against respondents before the
Admiralty Court of Panama. On September 28, 2000, respondent converted the petition for
declaratory relief into an ordinary civil action for breach of contract and damages and prayed
for the approval of the settlement agreement.
The trial court upheld the validity of the settlement agreement, declaring that the petitioners
breached the material provisions of the settlement agreement, and approved such settlement
agreement. The Supreme Court of Panama, meanwhile, dismissed petitioners' case for lack of
jurisdiction based on forum non conveniens.
5
On July 18, 2002, the Labor Arbiter (LA) dismissed the complaint on the grounds of lack of
jurisdiction over the persons of the respondents and prescription of action. Moreover, the LA
found that the action filed by petitioners has already prescribed. The Labor Code provides that
all money claims arising from employer employee relationship accruing during the effectivity of
this Code shall be filed within three years from the time the cause of action accrued. They filed
their complaint on April 17, 2002 or more than three years therefrom.
The petitioners appealed to the National Labor Relations Commission (NLRC) but it was
dismissed saying that the claim, even if based on tort was already included in the quitclaims
executed in favor of the respondents. It also held that prescription has already set in.
The CA dismissed the appeal, reiterating the ruling of the LA and NLRC that the complaint for
damages was filed out of time and that the claim filed with the Admiralty Court of Panama did
not toll the prescriptive period for filing a claim here in the Philippines.
ISSUE: Whether the Labor Arbiter has no jurisdiction over tort cases
RULING: NO. The Labor Code provides that claims for actual, moral, exemplary and other forms
of damages arising from the employer-employee relations are within the jurisdiction of the
Labor Arbiter.
In deciding whether a case arises out of employer-employee relations, the Court formulated the
"reasonable causal connection rule", wherein if there is a reasonable connection between the
claim asserted and the employer-employee relations, then the case is within the jurisdiction of
the labor courts.
In this case, petitioners' claim for damages is grounded on respondents' gross negligence which
caused the sinking of the vessel and the untimely demise of their loved ones. Based on this, the
subject matter of the complaint is one of claim for damages arising from quasi-delict, which is
within the ambit of the regular court's jurisdiction.
According to Article 2176 of the New Civil Code, "Whoever by act or omission causes damage to
another, there being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence, if there is no pre-existing contractual relation between the parties, is called quasi-
delict."
Thus, to sustain a claim liability under quasi-delict, the following requisites must concur: (a)
damages suffered by the plaintiff; (b) fault or negligence of the defendant, or some other
person for whose acts he must respond; and (c) the connection of cause and effect between the
fault or negligence of the defendant and the damages incurred by the plaintiff.
6
Here, petitioners argue that respondents are duty bound to exercise due diligence required by
law in order to ensure the safety of the crew and all the passengers therein. It was further
averred that the negligence on the part of the respondents is quite apparent when they
allowed the vessel to load and transport wet cargo. For failure therefore to exercise extra
ordinary diligence required of them, the respondents must be held liable for damages to the
surviving heirs of the deceased crew members. Notwithstanding the contractual relation
between the parties, the act of respondents is a quasi-delict and not a mere breach of contract.
Where the resolution of the dispute requires expertise, not in labor management relations nor
in wage structures and other terms and conditions of employment, but rather in the application
of the general civil law, such claim falls outside the area of competence or expertise ordinarily
ascribed to the LA and the NLRC.
Therefore, the LA has no jurisdiction over the case in the first place; it should have been filed to
the proper trial court.
7
MARINO B. DAANG v.
SKIPPERS UNITED PACIFIC, INC. and COMMERCIAL S.A.,
G.R. No. 191902, July 30, 2019, JARDELEZA, J.
FACTS: Petitioner Marino B. Daang (Daang) was hired by the Respondents on October 15, 2005
as a chief cook on board MV Merry Fisher. On May 15, 2007, Daang strained his back while
lifting a 50-kilo bag of flour. He was sent to a clinic in Santiago, Cuba where he was diagnosed
with acute lumbago and given medication. He was eventually repatriated to the Philippines on
May 28, 2007. Upon arrival, Daang was referred to respondents' company-designated
physician, Dr. Leynard Rubico (Dr. Rubico).
Daang was found to be suffering from degenerative changes of the lumbar spine and
underwent physiotherapy. On July 2, 2007, Dr. Rubico declared Daang fit to work. Respondents
thereafter paid Daang sickness benefits in the amount of US$1,194.88 as evidenced by the
notarized Receipt and Release dated July 14, 2007.
Meanwhile, Daang sought re-employment with respondents. He executed a waiver freeing

respondents from any liability in case he incurs another disease in relation to his back injury.
While undergoing medical examination, Daang discovered that he had gallbladder polyps and
eventually decided to forego re-employment. He consulted Dr. Magtira, an orthopedic surgeon,
who issued a Medical Report finding him "partially and permanently disabled with Grade 6
(50%) impediment based on the Philippine Overseas Employment Administration (POEA)
Standard Employment Contract." Daang thereafter demanded payment of disability benefits
from respondents. When his demands went unheeded, he filed a complaint for total and
permanent disability benefits and damages before the NLRC.
Relying on Dr. Magtira's Medical Report, the Labor Arbiter (LA) ruled in Daang's favor and
ordered respondents to pay total and permanent disability benefits in the amount of
US$60,000.00 plus 10% attorney's fees. The NLRC affirmed the ruling of the LA.
The CA reversed the NLRC. On September 6, 2011, and pending resolution of his action before
this Court, Daang filed an urgent manifestation with motion to dismiss, alleging that the parties
jointly executed and filed with the NLRC a Conditional Satisfaction of Judgment. Daang claims
that he received from respondents the amount of ₱2,985,129.00 as conditional payment of the
judgment award of the LA.
ISSUE: Whether the Conditional Satisfaction of Judgment shall stay the hearing of the case.
8
RULING: NO. The court, relying on the case of Hernandez v. Crossworld Marine Services, Inc.,
affirmed that this kind of agreement is unfair and against public policy. Accordingly, We held
that such conditional payment of the seafarer's claim should be treated as a "voluntary
settlement" in full satisfaction of the NLRC's judgment-which consequently rendered the
employer's petition before the CA moot and academic.
In a nutshell, the documents above enabled respondents to prevent the execution of the NLRC
Decision, maintain their petition before the CA, and, in the event of an unfavorable outcome,
seek an appeal before Us. Daang, on the other hand, would not only be obliged to return all
settlement money he received in the event that the CA reverses the NLRC, by his waiver of his
claims and right to prosecute any further action, he also gave up any legal recourse which
would otherwise have been available to him. Clearly, Daang is on the losing end. The terms of
the Conditional Satisfaction of Judgment and the Affidavit, not unlike those considered by this
Court in Hernandez, are highly unfair and prejudicial against him.
Applying Hernandez, We find respondents to be in bad faith and should therefore bear the
consequence of their actions-the conditional payment of the judgment award to Daang will be
treated as a voluntary settlement in full satisfaction of the NLRC's judgment. With the judgment
award satisfied as of March 10, 2009-when the parties signed and filed the Conditional
Satisfaction of Judgment with the NLRC, respondents' petition before the CA became moot and
academic.
We reject respondents' contention that the Conditional Satisfaction of Judgment is their only
protection against the execution proceedings before the NLRC. Respondents are not compelled
to immediately pay the judgment award. In fact, they had already filed with the NLRC an appeal
bond intended as an assurance to Daang that he would receive the money judgment upon
dismissal of respondents' appeal.
9
THE PENINSULA MANILA and SONJA VODUSEK v.

EDWIN A. JARA
G.R. No. 225586, July 29, 2019, LAZARO-JAVIER, J.
FACTS: Respondent Edwin Jara worked at petitioner The Peninsula Manila from 2002 until his
dismissal in 2011. The termination of Jara's services as captain waiter spawned from the
incident which happened on July 22, 2011. Jara was tasked to tally the actual cash count of thee
respondent's buffet restaurant Escolta with the cash transaction receipts and match the same
with the data in the micros system, a touch-screen computer system which records all
transactions in a particular outlet in the hotel, including cash and credit card payments.
Jara discovered a discrepancy between the actual cash on hand and cash transaction receipts,
with an overcharge of ₱6,500.00 cash. The same was relayed to Assistant Supervisor Michelle
Jardines and his supervisor Jimmy Tabamo. He was instructed to reconcile his cash transactions.
The next morning, Jara submitted his report, and remitted the cash collections but kept the
excess cash of ₱6,500.00 in his office locker.
Jara did not report for work the next two days, for it was his birthday and day-off, respectively.
When he reported for work on July 25, he informed the hotel's internal auditor about the
overcharge of ₱6,500.00. When directed to surrender the excess cash to his supervisor, he
turned over the money to the captain waitress instead.
On July 27, 2011, petitioner issued a Memorandum to Explain, requiring Jara to explain why he
should not be sanctioned for dishonesty. In his written explanation, Jara stated that he posted
the ₱613.00 payment because he thought that there was only a micros error due to the tax
exemption on the original check of Table 32. Jara, however, admitted that he kept the overage
of ₱6,500.00 in his office locker and failed to inform his supervisor of such overage.
An administrative hearing was held on August 11, 2011, and was terminated for
misappropriation or falsification of hotel receipts and dishonesty in violation of the Hotel's
Code of Discipline on September 28, 2011. Consequently, Jara filed a complaint for illegal
dismissal against respondent.
The Labor Arbiter found Jara to have been illegally dismissed. The NLRC reversed. On petition
for certiorari, the Court of Appeals reversed the decision of NLRC.
ISSUE: Was Jara illegally dismissed?
RULING: NO. Article 297 (formerly Article 282) par. C of the Labor Code provides that fraud or
willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative is one of the just causes for termination of employment.
10
For dismissal due to cause under subsection (c), certain requirements must be complied with,
viz: (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.
As correctly pointed out by the Court of Appeals, there are two (2) classes of positions of trust.
The first class consists of managerial employees, or those vested with the powers or
prerogatives to lay down management policies and to hire, transfer suspend, lay-off, recall,
discharge, assign or discipline employees or effectively recommend such managerial actions.
While the second class consists of cashiers, auditors, property custodians, etc. or those who, in
the normal and routine exercise of their functions, regularly handle significant amounts of
money or property.
As for the first requirement, Jara indisputably comes within the second class of employees as he
is tasked to handle significant amounts of money from sales in petitioners' restaurant Escolta.
Jara cannot claim otherwise for he would not be entrusted with the duty to balance the sales
transactions and actual cash on hand from restaurant sales if he did not have the trust of the
management.
We now determine if Jara's actions justified petitioners' loss of trust and confidence in him.
To begin with, Jara never denied that upon his failure to balance the cash transaction receipts
and cash on hand, he remedied the discrepancy by posting only the ₱613.00 payment, not the
₱7,113.08 actually paid by the customer and kept the excess of ₱6,500.00 in his office locker.
He merely justified his actions by saying that he believed there was only a micros system error
and that he did not bring home the excess money with him anyway and turned it over when he
reported for work two days later.
We are not convinced.
Loss of trust and confidence to be a valid cause for dismissal must be based on a willful breach
of trust and founded on clearly established facts. Here, record bears significant details pointing
to the willfulness of Jara's action showing the breach of the trust reposed in him by petitioner.
That due to the irreconcilable cash count and transaction receipts, Jara deliberately made it
appear that the same tallied and even misrepresented such fact to his supervisor. To be able to
do this, Jara tampered with the transaction and sales receipts to come up with a balanced cash
sales record at the end of his shift. This is pure dishonesty and clearly a violation of the trust
reposed in him by his employer.
Hence, when the breach of trust or reason for the loss of confidence is clearly borne by the
records, as in this case, the right of the employer to dismiss an employee based on this ground
must be upheld.
11
DOMINIC INOCENTES, JEFFREY INOCENTES, JOSEPH CORNELIO AND REYMARK CATANGUI v.

R. SYJUCO CONSTRUCTION, INC. (RSCI) / ARCH. RYAN I. SYJUCO
G.R. No. 237020, July 29, 2019, INTING, J.
FACTS: Petitioners claim that Respondent employed them as construction workers with shifts
from 7:00 p.m. to 7:00 a.m. every night. Despite this work circumstance, they purportedly
never received night differential, overtime pay, rest day pay, service incentive leave pay, ECOLA,
13th month pay as well as holiday premium pay; and, neither did they receive the mandated
minimum wage. They added that for more than a year, they worked for respondents on a no-
work-no-pay basis.
Petitioners further alleged that on separate dates in September 2015, they went to work but
they were denied entry at the jobsite. The security guard instead informed them that they were
already terminated. Hence, they filed a case for constructive dismissal and money claims
against respondents, alleging that they were regular employees and that they were terminated
without any valid cause and without observance of due process of law.
Respondents claim that they engaged petitioners as carpenters and were under project
employment and mat they did not work continuously because their assignments depended on
the availability of projects.
Respondents maintained that they did not constructively dismiss petitioners, separating the
same from work due to the completion of their respective project assignments. They affirm that
per the summary of project assignments and length of service, petitioners' work was not
continuous and the rule that no-project-no-work applied to them.
The Labor Arbiter (LA) dismissing the complaint for illegal dismissal but nevertheless ordered
RSCI to pay all petitioners the underpayment of salaries, overtime pay as well as 13th month
pay. The NLRC partly granted the appeal ruling that petitioners were regular employees and
that RSCI illegally dismissed them. On appeal, CA annulled and set aside the NLRC Decision and
Resolution and concomitantly, reinstated the LA Decision.
ISSUE: Whether the petitioners were illegally dismissed.
RULING: YES. Article 29521 of the Labor Code, as amended and renumbered, defines a regular
employee as (a) one that has been engaged to perform tasks usually necessary or desirable in
the employer's usual business or trade — without falling within the category of either a fixed, a
project, or a seasonal employee; or (b) one that has been engaged for a least a year, with
respect to the activity he or she is engaged, and the work of the employee remains while such
activity exists. On the other hand, a project employee is one whose employment has been fixed
12
for a specified project or undertaking, the completion or termination of which is made known
at the time of the engagement of the employee.
In this case, to ascertain whether petitioners were project employees, as claimed by

respondents, it is primordial to determine whether notice was given them that they were being
engaged just for a specific project, which notice must be made at the time of hiring. However,
no such prior notice was given by respondents.
Stated differently, the summary of projects of peitioners only listed the projects after
petitioners were assigned to them but it did not reflect that petitioners were informed at the
time of engagement that their work was only for the duration of a project. Notably, it was only
in their Rejoinder (filed with the LA) that respondents stated that at the time of their
engagement, petitioners were briefed as to the nature of their work but respondents did not
fully substantiate this claim. Also, the fact that respondents did not submit a report with the
DOLE (anent the termination of petitioners' employment due to alleged project completion)
further bolsters that petitioners were not project employees.
Equally important to stress that the employer has the burden to prove that the employee is
indeed a project employee. On this, the employer must establish that (a) the employee was
assigned to carry out a particular project or undertaking; and, (b) the duration and scope of
which was specified at the time of engagement.
While the lack of a written contract does not necessarily make one a regular employee, a
written contract serves as proof that employees were informed of the duration and scope of
their work and their status as project employee at the commencement of their engagement.
There being none that was adduced here, the presumption that the employees are regular
employees prevails.
Notably, considering that respondents failed to discharge their burden to prove that petitioners
were project employees, the NLRC properly found them to be regular employees. It thus
follows that as regular employees, petitioners may only be dismissed for a just or authorized
cause and upon observance of due process of law. As these requirements were not observed,
the Court also sustains the finding of the NLRC that petitioners were illegally dismissed.
Let it be underscored too that even if we rely on the averment of respondents that petitioners
ceased to work at the end of their purported project contract, this assertion will not hold water
since it is not a valid cause to terminate regular employees. This is in addition to the fact that
there was no showing that petitioners were given notice of their termination, an evident
violation of their right to due process.
13
EFREN J. JULLEZA v. ORIENT LINE PHILIPPINES, INC., ORIENT NAVIGATION

CORPORATION AND MACARIO DELA PEÑA
G.R. No. 225190, July 29, 2019, CAGUIOA, J.
FACTS: Petitioner was employed by respondents as a bosun on board MV Orient Phoenix for a
period of nine (9) months. The aforesaid employment was covered by the IBF-JSU/PSU-IMMAJ
Collective Bargaining Agreement (CBA). Meanwhile, for lack of a replacement, the employment
of private respondent was extended.
On 19 December 2012, private respondent allegedly slipped while cleaning the cargo hold
under bad weather condition. The ship master advised private respondent to just wait a while
until his extended contract ends on 25 December 2012 and thereafter have his medical check
up. In the meantime, private respondent was given medication to alleviate the pain on his
lower back.
Upon his return to the Philippines, private respondent went to the company-designated
physician who further certified that private respondent was suffering from bilateral
nephrolithiasis and lumbar spondylosis, with disability grade of 8.
On 04 May 2013, private respondent consulted chi independent physician, Dr. Rogelio
Catapang, Jr. who found him unfit for further strenuous duties. This prompted Petitioner to file
a complaint for illness allowance, disability benefits, reimbursement of medical expenses and
damages.
Disputing the claim, petitioners countered that the bilateral nephrolithiasis suffered by private
respondent is not work related as certified by the company-designated [physician]; rather, it is
caused by a combination of genetic predisposition, diet and water intake. Consequently, private
respondent is not entitled to the disability compensation granted under Paragraphs 28.1 and
28.4, Article 28 of the CBA.
The LA ruled that petitioner was entitled to permanent total disability benefits following the
Collective Bargaining Agreement (CBA). The NLRC affirmed the LA. In reversing the NLRC, the CA
ruled that the company-designated physician has determined the final suggested disability
grading of petitioner, which was Grade 8 due to loss of 2/3 lifting power of the trunk.
ISSUE: Whether Petitioner is entitled to permanent total disability benefits.
RULING: NO. Petitioner failed to comply with the conflict-resolution procedure under the CBA.
It is undisputed that petitioner suffered from lumbar spondylosis. But the company-designated
and the independent physicians arrived at different findings. The company-designated
14
physician, who saw petitioner for medical check-up for at least 10 instances from December
2012 to April 2013,22 issued his medical findings on April 23, 2013, or 119 days from
petitioner's repatriation on December 25, 2012.
Unsatisfied, petitioner consulted an independent doctor on May 4, 2013. His own doctor saw
him twice and issued his Medical Report26 subsequently on June 29, 2013.
Further, with regard to the procedure for referral to a third doctor, jurisprudence has set that it
is the duty of the seafarer to signify his intent to refer the conflict between the findings of the
company-designated physician and that of his own doctor to a third doctor. After notice from
the seafarer, the company must then commence the process of choosing the third doctor.
Here, after receipt of his own doctor's medical report, petitioner did not show any proof that he
sent the· medical report to respondents and signify to respondents that he would like to refer
the conflicting medical findings to a third doctor. The CA was therefore correct that absent
compliance with the conflict-resolution procedure, the findings of the company-designated
physician that petitioner has a Grade 8 disability rating should prevail over that of the seafarer's
doctor.
Petitioner's injury was not a result of an accident.
An accident has been defined in NFD International Manning Agents, Inc. v. Illescas as "[a]n
unintended and unforeseen injurious occurrence; something that does not occur in the usual
course of events or that could not be reasonably anticipated, x x x [a]n unforeseen and injurious
occurrence not attributable to mistake, negligence, neglect or misconduct."
The totality of the foregoing evidence attached to the records convinces the Court that the CA
was correct in ruling that petitioner was not involved in an accident. The Court gives more
weight to the reports of the ship captain, company-designated physician, and petitioner's own
doctor, all of which are silent on the fact that he slipped and fell. In fact, the reports of both
doctors reveal that petitioner had been experiencing back pain since August 2010 and his back
pain got worse on December 19, 2012, a few days before the end of his contract, when he was
carrying heavy objects.
15
HAYDEN KHO, SR. v. DOLORES G. MAGBANUA ET. AL.

G.R. No. 237246, July 24, 2019, PERLAS-BERNABE, J.
FACTS: A complaint for illegal dismissal was filed by respondents before the LA against the
Reespondent Corporation, including its alleged President/Manager, Kho, and the latter's wife,
Irene S. Kho (Irene; collectively Spouses Kho ). Respondents claim that they were employed by
the Corporation in the Tres Pares as cooks, cashiers, or dishwashers. They posited that Spouses
Kho's daughter, Sheryl Kho, posted a notice in the company premises that the restaurant would
close down on January 19, 2011. Fearing the loss of their jobs, they tried to seek an audience
with Kho about the closure, but to no avail. The restaurant closed as scheduled; thus
respondents filed the present case with payment of separation pay, salary differentials, nominal
damages, differentials on overtime pay, service incentive leave pay, and holiday pay, including
damages, as well as attorney's fees.
For their part, Spouses Kho argued that they had no employer-employee relationship with
respondents, as the latter's employer was the Corporation, and that they cannot be held liable
for the acts of the Corporation, the same having been imbued with a personality separate and
distinct from its stockholders, directors, and officers.
The LA ruled in favor of respondents, and accordingly, ordered the Corporation and Kho to
solidarily pay respondents separation pay, salary and 13th month pay differentials, nominal
damages, and attorney's fees in the aggregate amount of ₱3,254,466.60. The NLRC reversed
and set aside the LA Decision and dismissed the complaint as against Kho. The CA reversed and
set aside the NLRC ruling, holding the Corporation and Kho solidarily liable for the payment of
respondents' separation pay, nominal damages of ₱50,000.00 each and attorney's fees.
ISSUE: Is Kho solidarily liable with the Corporation for the payment of respondents' money
claims?
RULING: NO. It is settled that a corporation is a juridical entity with legal personality separate
and distinct from those acting for and in its behalf and, in general, from the people comprising
it. As a juridical entity, a corporation may act only through its directors, officers, and
employees. As such, obligations incurred by the corporation, acting through its directors,
officers, and employees, are its sole liabilities, and these persons should not be held jointly and
solidarily liable with the corporation.
However, being a mere fiction of law, this corporate veil can be pierced when such corporate
fiction is used: (a) to defeat public convenience or as a vehicle for the evasion of an existing
16
obligation; (b) to justify wrong, protect or perpetuate fraud, defend crime, or as a shield to
confuse legitimate issues;42 or (c) as a mere alter ego or business conduit of a person, or is so
organized and controlled and its affairs are so conducted as to make it merely an
instrumentality, agency, conduit, or adjunct of another corporation.
Fundamental in the realm of labor law that corporate directors, trustees, or officers can be held
solidarily liable with the corporation when they assent to a patently unlawful act of the
corporation, or when they are guilty of bad faith or gross negligence in directing its affairs, or
when there is a conflict of interest resulting in damages to the corporation, its stockholders, or
other persons. However, it bears emphasis that a finding of personal liability against a director,
trustee, or a corporate officer requires the concurrence of these two (2) requisites, namely: (a)
a clear allegation in the complaint of gross negligence, bad faith or malice, fraud, or any of the
enumerated exceptional instances; and (b) clear and convincing proof of said grounds relied
upon in the complaint sufficient to overcome the burden of proof borne by the complainant.
In this case, the evidence on record do not support the findings of both the LA and the CA that
Kho was the Corporation's President at the time of its closure, and that he assented to a
patently unlawful act, thereby exposing him to solidary liability with the Corporation. A plain
reading of the Corporation's GIS for the years 2007 and 2008 show that Kho was not the
Corporation's President as he was merely its Treasurer, while the GIS for the year 2009
indicates that he is no longer a corporate officer of the Corporation. More importantly, aside
from respondents' bare allegations, there is a dearth of evidence on record that would indicate
that Kho was a corporate officer at the time the restaurant, where respondents worked, closed
down.
On this score, even assuming arguendo that Kho was a corporate officer, nowhere in the
complaint nor in the respondents' submissions before the labor tribunals did they allege that
Kho committed bad faith, fraud, negligence, or any of the aforementioned exceptions to
warrant his personal liability.
Verily, absent any finding that Kho was a corporate officer of the Corporation who willfully and
knowingly assented to patently unlawful acts of the latter, or who is guilty of bad faith or gross
negligence in directing its affairs, or is guilty of conflict of interest resulting in damages thereto,
he cannot be held personally liable for the corporate liabilities arising from the instant case.
17
COCA-COLA FEMSA PHILIPPINES v. RICARDO S. MACAPAGAL ET. AL.

G.R. No. 232669, July 29, 2019, PERLAS-BERNABE, J.
FACTS: The thirteen (13) respondents were employed by petitioner Coca-Cola Femsa
Philippines, Inc. as part of the Product Availability Group (PAG). In January 2011, the Company
announced its plan to abolish PAG, together with all the positions under it, including those held
by respondents, and outsource its remaining functions to The Redsystem Company, Inc. (TRCI).
Thereafter, respondents received letters terminating their employment due to redundancy
effective March 1, 2011. Thus, respondents filed a complaint for illegal dismissal, arguing that
the redundancy program was done in bad faith to undermine their security of tenure. They also
alleged that TRCI is not an independent contractor as it is a wholly-owned subsidiary of the
Company.
For its part, the Company denied respondents' claims. It averred that it is engaged in the
business of manufacturing and selling carbonated drinks and other beverage items nationwide
while PAG's work involved coordination with the external distribution channels. To improve
operation efficiency and effectiveness, the Company resolved to outsource all of its distribution
and coordination efforts under PAG to an independent contractor, TRCI. Notices of the
redundancy program were given to the respondents on January 31, 2011 as well as to the DOLE
at least thirty days prior to the effective date of separation. The Company added that it also
gave more than the required separation pay and other benefits to respondents, who in turn
voluntarily executed their respective notarized Deeds of Receipt, Waiver, and Quitclaim. It
stressed that what was declared redundant was its entire logistics operations nationwide, and
in doing so, all positions therein, without exception, were declared redundant.
The LA found that the redundancy program was made in bad faith and held that respondents
were illegally dismissed. Th NLRC reversed the LA's ruling. The CA reversed the NLRC's ruling
and reinstated the LA's Decision.
ISSUE: Whether the redundancy program is valid.
RULING: YES. Redundancy is an authorized cause for termination of employment under Article
29832 (formerly, Article 283) of the Labor Code. It exists when "the services of an employee are
in excess of what is reasonably demanded by the actual requirements of the enterprise."
It can be due to "a number of factors, such as the overhiring of workers, a decrease in the
volume of business or the dropping of a particular line or service previously manufactured or
undertaken by the enterprise." The determination of whether the employees' services are no
longer necessary or sustainable, and therefore, properly terminable for redundancy, is an
18
exercise of business judgment. In making such decision, however, management must not
violate the law nor declare redundancy without sufficient basis.
To ensure that the dismissal is not implemented arbitrarily, jurisprudence requires the
employer to prove, among others, its good faith in abolishing the redundant positions as well as
the existence of fair and reasonable criteria in the selection of employees who will be dismissed
from employment due to redundancy. Such fair and reasonable criteria may include, but are
not limited to: (a) less preferred status, i.e., temporary employee; (b) efficiency; and (c)
seniority.
To establish good faith, the employer must provide substantial proof that the services of the
employees are in excess of what is required of the company. In San Fernando Coca-Cola Rank-
and-File Union v. Coca-Cola Bottlers Philippines, Inc. (San Fernando), the Court ruled that the
phasing out of distribution systems was an exercise of management prerogative and there was
no proof that it was exercised in a malicious or arbitrary manner.
Similarly, in this case, the Court finds that the termination of respondents was due to the
simplification of the distribution systems in the Company, considering that PAG's work primarily
involved coordination for the Company's finished products to reach the distribution channels
for delivery to the customers. Since the Company's operating income still posted negative
figures despite improvement in sales volumes in 2007, management further reviewed the
Company's distribution channels to identify areas where cost may be reduced, as well as
opportunities to enhance operational efficiency. Based on this study, the Company resolved to
abolish all positions under PAG, including those which were previously held by respondents.
Since all PAG positions were abolished, the CA erred in ruling that the Company still needed to
choose who among the employees should be dismissed, to which the fair and reasonable
criteria requisite is pertinent.
Furthermore, the Court finds that the quitclaims executed by respondents are valid. Case law
provides that not all quitclaims are per se invalid or against public policy; they shall be
recognized as valid and binding undertakings where it is shown that the persons making the
waiver did so voluntarily, with full understanding of what they were doing, and the
considerations therefor are sufficient and reasonable, as in this case. Notably, there was no
showing that respondents were forced or tricked into signing the release documents pursuant
to the valid redundancy program. They were likewise not forced to receive amounts less than
what they were entitled to. Indeed, the law steps in to annul quitclaims only where there is
clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms
of the settlement are unconscionable on its face, but neither of these circumstances are
present here.
19
PNOC DEVELOPMENT AND MANAGEMENT CORPORATION (PDMC) v. GLORIA V. GOMEZ

G.R. No. 220526-27, July 29, 2019, REYES, J. JR., J.
FACTS: Gomez used to work as Legal Manager of Petron Corporation (Petron) and availed of
early retirement on April 30, 1994 when the company was privatized. On May 1, 1994, she was
appointed by Filoil Refinery Corporation (Filoil) as its Corporate Secretary and Legal Counsel
with the rank, compensation and benefits she used to enjoy in Petron. Filoil's privatization was
then underway, and appointed Gomez as Administrator of a special task-force comprised of
former employees of Petron who retained their respective ranks, compensation, benefits, and
privileges.
Filoil was reorganized and renamed to PNOC Development and Management Corporation and,
as a result, the task-force was abolished and its members were given termination notices.
Gomez continued to serve as corporate secretary of PDMC in the interim. She was appointed as
Administrator and Legal Counsel of the company. Gomez was due to retire on August 11, 1998
but the company extended her term as Administrator until August 11, 2004.
In the meantime, a new Board of Directors took over, which, removed Gomez from her post as
corporate secretary and questioned Gomez's continued employment as Administrator. While
Gomez presented the appointment letter signed by Ventura, the Board, based on the advice of
its legal department, expressed the view that the term extension in the appointment letter was
ultra vires and believed that Gomez's de facto tenure could be validly terminated.
The Office of the Government Corporate Counsel intimated to the Board that while indeed the
latter did not approve the creation of the position of Administrator, Gomez's incumbency
therein since 1994 was deemed ratified by inaction; however, with respect to the extension of
her term beyond retirement age, the same would have been valid had it been approved by the
Board. While the matter was pending before the Board, Gomez's salary between November 16
and 30, 1999, was withheld. Thus, on December 8, 1999, she filed a complaint for non-payment
of wages, damages and attorney's fees before the Labor Arbiter. She later amended the
complaint to include other money claims as well. On December 29, 1999, the Board resolved to
terminate her services retroactive to the date of her supposed retirement. This development
led to yet another amendment in the complaint to include the charge of illegal dismissal.
The Labor Arbiter dismissed the complaint for lack of jurisdiction based on the notion that the
case involves an intra-corporate dispute falling under the competence of the Securities and
Exchange Commission. The NLRC reversed the Labor Arbiter and directed the remand of the
case for further proceedings. As the merits were being heard for the first time, PDMC brought
its jurisdictional objection before the CA and eventually found its way to this Court in a petition
docketed as G.R. No. 174044.13 In our November 27, 2009 Decision in said case which had
20
already attained finality, we affirmed that Gomez, in her capacity as PDMC Administrator, was
indeed a regular managerial employee whose objection to her termination is properly and
exclusively cognizable by the labor tribunal.
In the meantime, on September 30, 2005, the Labor Arbiter issued a Decision finding Gomez to
have been illegally dismissed, On appeal, the NLRC affirmed in toto the findings and conclusion
of the Labor Arbiter in a Resolution Finding illegal dismissal, the CA dismissed PDMC's petition
for failure to prove a misconduct on the part of Gomez as basis for the claim of loss of trust and
confidence.
ISSUE: Whether Gomez's separation from office was valid
RULING: NO. It bears to stress at the outset that Gomez, as Administrator of PDMC, is a regular
managerial employee whose appointment as such, both original and for the term beyond the
age of retirement, does not require prior Board approval and, therefore, valid and
incontestable. That matter has already been finally settled by the Court in G.R. No. 174044.25
PDMC claims that Gomez was terminated based on loss of trust and confidence and on causes
analogous thereto, under paragraphs (c) and (d), Article 28226 of the Labor Code. It explains
that Gomez's position requires a high degree of trust and confidence in exercising general
supervision over the staff. According to PDMC her extension of office is highly suspected to
have been made only to tie the hands of the new management especially considering that the
appointment letter was issued only weeks before the new Board took office. Based on these
circumstances, it offers the notion that Gomez may no longer be trusted to discharge the duties
of her office under the new leadership.
Gomez decries her termination, simply, as unjustified. She laments the arbitrariness in finding
basis for her dismissal, and points out that PDMC, since the inception of these proceedings, has
not shown substantial evidence to support its claim of loss of trust and confidence. Also, she
stands by the favorable ruling with respect to the monetary awards.
Verily, termination of employment by an employer for just causes under Article 282 of the
Labor Code implies that the employee concerned has committed, or is guilty of, some violation
against the employer - be it misconduct: neglect of duty, breach of trust, or a crime or offense
committed against the employer or his family or representatives. Thus, it can be said that when
the employee's dismissal is based on any of these just causes, it is the employee himself that
initiated the dismissal process by giving a just cause therefor.
Thus, unlike fiduciary rank-and-file employees such as auditors, cashiers and others routinely
handling significant amounts of money or property, a managerial employee against whom an
allegation of loss of trust is made may be validly dismissed on a mere belief that he has
21
breached the employer's trust and confidence. However, such belief must nevertheless have an
objective basis, such as an underlying act on the part of the employee concerned - either a
misconduct or a participation therein - that causes the employer's trust and confidence in him
to wane.
At this juncture, we surmise that the only positive act attributable to Gomez which appears to
have animated PDMC's complaint from the beginning is the fact that she had merely accepted
her extended appointment and entered into the functions of her office immediately thereafter.
Yet for the Court to validate on that basis alone, the claim of loss of trust and confidence -
either as a principal ground for termination or as an analogous cause - would be too far a
stretch, hence, arbitrary and illegal.
First, ordinarily, an illegally dismissed employee is entitled to two distinct reliefs: backwages
and reinstatement. Backwages are generally granted - and rightly in this case - on the ground of
equity, as a form of relief that restores the income lost by reason of the unlawful dismissal, and
intended to restore the earnings that would have accrued to the dismissed employee during
the period of dismissal until it is determined that the termination of employment is for a just
cause. However, the CA correctly ruled out its possibility in the instant case because Gomez's
appointment was effective only until August 11, 2004, which is also why all accruing backwages
were pegged only until that date.
Second, separation pay is awarded when the cause for termination is not attributable to the
employee's fault, as well as in cases of illegal dismissal where reinstatement is no longer
feasible. Here, while reinstatement is indeed not feasible for the reason that the term of
Gomez's extended appointment has already ended, still, separation pay is not viable on logical
considerations. In this regard, it is, thus, logical also for the CA to direct the payment of
retirement benefits still accruing in her favor by the end of her extended term on
August 11, 2004.
Lastly, we do not object to the grant of attorney's fees to Gomez inasmuch as she was impelled
to litigate her case to protect her rights and interests and, indeed, for a protracted period of
time. For this same consideration - and because Gomez has lived her years being deprived of
the fruits of her labor and of her retirement for as long as this labor case has dragged on - we
find to be in order the imposition of interest on all these money awards at the rate of 6% per
annum, consistent with the complementary rulings in Eastern Shipping Lines, Inc. v. Court of
Appeals and Nacar v. Gallery Frames.
22
VICTORIA MANUFACTURING CORPORATION EMPLOYEES UNION v. VICTORIA

MANUFACTURING CORPORATION
G.R. No. 234446, July 24, 2019, A. REYES, JR., J.
FACTS: VMC is a domestic corporation engaged in the textile business. On the other hand,
VMCEU is the sole and exclusive bargaining agent of the permanent and regular rank-and-file
employees within the pertinent bargaining unit of VMC.
Through a letter dated March 14, 2014, VMC sought the opinion of the Bureau of Internal
Revenue (BIR) on the tax implications of the wage structure that was stipulated in the collective
bargaining agreement (CBA) between the company and VMCEU. In response to VCM's letter,
the BIR opined that VMCEU's members were not exempt from income tax, as what they were
earning was above the statutory minimum wage mandated by Wage Order No. NCR-18.8
As a result, VMC withheld the income tax due on the wages of VMCEU's members. VMC and
VMCEU held a grievance meeting to settle various issues, including the company's decision to
withhold income tax from the wages of the union members who were earning the statutory
minimum wage. Unfortunately, the parties failed to resolve the issue.
After failing to reach an amicable settlement before the National Conciliation and Mediation
Board, VMC and VMCEU executed a Submission Agreement, designating AVA Renato Q. Bello to
resolve whether the company properly withheld the income tax due from the union's members,
among other issues.
The VA rendered a Decision in favor of VMCEU, ruling that VMC erroneously withheld income
tax from the wages of the union's members. Aggrieved, VMC sought relief before the CA
through a petition for certiorari. The CA rendered the challenged Decision, reversing the VA's
ruling.
ISSUE: Whether the VA's has jurisdiction over the present case.
RULING: NO. Emanating from the sovereign authority that organizes courts, jurisdiction over
the subject matter is conferred by law. It is determined by the allegations in the complaint
based on the character of the relief sought. Verily, if the relief sought is the payment of a
certain sum of money, the complaint must be filed before the court on which the law bestows
the power to grant money judgments of that amount. If the complaint is filed before any other
23
court, the only power that court has is to dismiss the case. It is axiomatic that a judgment
rendered by a court without jurisdiction over the subject matter produces no legal effect.
The above principles apply analogously to administrative boards and officers exercising quasi-
judicial power, such as VAs constituted under the Labor Code. Relevantly, the Labor Code vests
in VAs the power to hear and decide labor disputes under Art. 261. and Art. 262.
In Honda Cars Philippines, Inc. v. Honda Cars Technical Specialist and Supervisors Union, the
Court ruled that VAs have no competence to rule on the propriety of withholding of tax. These
issues are clearly tax matters, and do not involve labor disputes. To be exact, they involve tax
issues within a labor relations setting, as they pertain to questions of law on the application of
Section 33 (A) of the Tax Code. They do not require the application of the Labor Code or the
interpretation of the [Memorandum of Agreement] and/or company personnel policies.
Since the withholding of tax from employees' salaries is governed by the Tax Code, disputes
involving the propriety or legality of withholding should be submitted to the CIR, the
administrative body vested with the power to interpret tax laws, and not the VA, whose
jurisdiction is limited to labor disputes. After all, quasi-judicial bodies only possess jurisdiction
over matters that are conferred upon them by their enabling statutes.
At this juncture, it should be stated that lack of jurisdiction is a serious defect that may be
raised anytime, even for the first time on appeal, since it is a defense that is not subject to
waiver.
Taking the foregoing into account, it is clear that estoppel will not operate to confer jurisdiction
upon a court, save in the most exceptional of cases. Without a law that grants the power to
hear, try, and decide a particular type of action, a court may not, regardless of what the parties
do or fail to do, afford any sort of relief in any such action filed before it. It follows then that, in
those cases, any judgment or order other than one of dismissal is void for lack of jurisdiction.
This must be the rule since no less than the Constitution provides that it is a function of the
Congress to define, prescribe, and apportion the jurisdiction of courts.
First, lack of jurisdiction was timely raised. The record discloses that (1) the proceedings before
the VA commenced with the execution of the Submission Agreement dated August 7, 2015; and
(2) the case was submitted for resolution on December 22, 2015, when VMC and VMCEU filed
their respective replies. Second, VMC never prayed for affirmative relief.
24
ARLENE A. CUARTOCRUZ v.
ACTIVE WORKS, INC., AND MA. ISABEL E. HERMOSA, BRANCH MANAGER.
G.R. No. 209072, July 24, 2019, JARDELEZA*, J.
FACTS: On June 4, 2007, Arlene A. Cuartocruz (petitioner) was by hired Cheng Chi Ho, a Hong
Kong national, as a domestic helper for a period of two years, with a monthly salary of
HK$3,400.00 and other emoluments and benefits provided under the contract. Respondent
Active Works, Inc. (AWI), a Philippine corporation, is petitioner's agency, and respondent Ma.
Isabel Hermosa is its Branch Manager.
On August 11, 2007, petitioner received a warning letter from her employer, stating that she is
required to improve her attentiveness in performing her work within one month, failing which
the letter shall serve as a written notice of the termination of her employment contract
effective September 11, 2007. However, in a letter dated August 16, 2007, Cheng Chi Ho
informed the Immigration Department of Wangchai, Hong Kong that he is terminating the
contract with petitioner effective immediately for the following reasons: "disobey order (sic),
unmatch the contract which she submit before (sic), [and] refuse to care my baby (sic)."
Petitioner filed a case against her employer before the Minor Employment Claims Adjudication
Board, but it was eventually dismissed and petitioner was repatriated. Petitioner alleged that
while in Manila, AWI offered her ₱15,000.00 as a settlement fee but she declined it, believing
that she is entitled to a higher amount.
Consequently, petitioner filed a complaint before the Labor Arbiter (LA) for illegal dismissal,
payment of unpaid salaries and salaries corresponding to the unexpired portion of the contract
of employment, reimbursement of placement fee and other fees incident to petitioner's
deployment to Hong Kong, and moral and exemplary damages.
The Executive LA found the termination of petitioner's employment contract without notice as
valid and legal, the termination being in accordance with Hong Kong's Employment Ordinance
Chapter 57, Section 9. On appeal, the NLRC nullified and set aside the ELA Decision. The CA
affirmed the NLRC Resolution with modification.
ISSUE: Whether Petitioner was illegally dismissed.
RULING: YES. Philippine law applies in this case. Although the employment contract is
punctuated with provisions referring to Hong Kong law as the applicable law that governs the
various aspects of employment, Hong Kong law was not proved.
Under Philippine law, workers are entitled to substantive and procedural due process before
the termination of their employment. They may not be removed from employment without a
25
valid or just cause as determined by law, and without going through the proper procedure. The
purpose of these two-pronged qualifications is to protect the working class from the employer's
arbitrary and unreasonable exercise of its right to dismiss.
In this case, respondents failed to prove by substantial evidence that there was just or
authorized cause for the termination of petitioner's employment. About a week into her job, or
on August 11, 2007, petitioner received a warning letter from her employer requiring her "to
improve attentiveness on performance within one month. Nonetheless, after five days, the
petitioner's contract was terminated.
Here, no evidence was presented to substantiate the employer's accusations. Where there is no
showing of a clear, valid, and legal cause for the termination of employment, the law considers
the matter a case of illegal dismissal.
Procedural due process requires the employer to give the concerned employee at least two
notices before terminating his employment. The first is the notice which apprises the employee
of the particular acts or omissions for which his dismissal is being sought along with the
opportunity for the employee to air his side, while the second is the subsequent notice of the
employer's decision to dismiss him.
The termination letter expressed concerns that petitioner claimed she had never been
confronted with. She was left in the dark as regards the real reason for the termination of her
employment, and was not given sufficient opportunity to rectify her shortcomings or explain
her side.
Equally repulsive is the fact that petitioner's employer did not furnish her a copy of the August
16, 2007 termination letter, which was submitted to the Immigration Department of Wanchai,
Hong Kong. The provisions in the employment contract and the employer's conduct are
patently inconsistent with the right of security of tenure guaranteed to local or overseas Filipino
workers under the Constitution and the Labor Code. Undeniably, the NLRC properly ruled that
petitioner was illegally dismissed on both substantive and procedural grounds.
Respondents cannot escape liability from petitioner's money claims. Section 10 of RA 8042
provides that the employer and the recruitment or placement agency are jointly liable for
money claims arising from the employment relationship or any contract involving overseas
Filipino workers. If the recruitment or placement agency is a juridical being, the corporate
officers and directors and partners as the case may be, shall themselves be jointly and solidarity
liable with the corporation or partnership for the aforesaid claims and damages. In providing
for the joint and solidary liability of private recruitment agencies with their foreign principals,
RA 8042 precisely affords OFWs with recourse and assures them of immediate and sufficient
payment of what is due them.
26
REY BEN P. MADRIO v. ATLAS FERTILIZER CORPORATION

G.R. No. 241445, August 14, 2019,PERLAS-BERNABE, J.
FACTS: Petitioner was formerly the Area Sales Manager of AFC from May 1, 2008 until he
tendered his resignation in November 2015 which was not approved by the company. At that
time, he also requested for the payment of several monetary benefits, but the same remained
unheeded.
Feeling aggrieved, petitioner, on January 5, 2016, filed a complaint against AFC for the payment
of several monetary benefits, including separation benefits in the amount of P158,400.009
pursuant to AFC's retirement/separation policy. For its part, AFC categorically denied that the
Retirement Plan is the retirement/separation policy it had for its employees. In any event, it
argued that it would be unreasonable for it to pay separation benefits to an employee who was
solely responsible in causing the company a whopping financial loss of P43,023,550.21
attributed to his gross negligence in the handling of uncollected receivables from Richfield Agri-
Supply (RAS). In this regard, AFC averred that the disciplinary proceeding for petitioner's gross
negligence was only deferred out of humane considerations and in light of petitioner's years of
service. It further stressed that petitioner was given the chance to redeem himself by assisting
AFC to recover said amount from the defaulting customer, but he just unceremoniously left the
company without obtaining any clearance or permission from the management.
The LA ruled in favor of petitioner. The NLRC affirmed with modification the LA's ruling by
reducing the amount of the separation benefits from P158,400.00 to P84,150.00. On appeal,
the CA partially set aside the NLRC ruling insofar as the award of separation benefits to
petitioner was concerned.
ISSUE: Whether petitioner shall be granted the award of separation benefits
RULING: NO. Proving the existence of AFC's retirement/separation policy, as well as its
pertinent terms and conditions, is separate and distinct matter from proving the fact that these
terms and conditions have been complied with.
To be sure, the separation benefits under the AFC's company policy is not the separation pay
contemplated under the Labor Code but rather, a special benefit given by the company only to
upstanding employees who have satisfied the following conditions: 1) The employee must
voluntarily resign from the company; 2) The employee must not have a derogatory record; and
3) The employee must meet the minimum number of years in his credited service.
In light of these special conditions, it is fairly apparent that the separation benefits under the
Retirement Plan are not in the nature of benefits incurred in the normal course of AFC's
27
business. In this case, petitioner only submitted a copy of the Retirement Plan as proof of his
entitlement to the separation benefits claimed. However, by and of itself, the said document
only proves what the retirement/separation policy of AFC is. It does not, in any way,
demonstrate that the conditions for entitlement had already been met by the employee.
Most glaring of all is the failure of petitioner to at least, prima facie show that he had no
derogatory record before voluntarily resigning from the company.
Moreover, petitioner's claim for separation benefits appears to be premature. It is undisputed

that petitioner left the company while his separation benefits were still being processed and yet
to be approved by the Retirement Committee pursuant to the "company's normal operating
procedure."
In fine, the Court is unconvinced that petitioner has proven his entitlement to the separation
benefits under AFC's company policy. As such, the CA Decision is affirmed insofar as it set aside
the NLRC's award of separation benefits in favor of petitioner not for the reasons given by the
CA but based on the above discussion.
28
PHILIPPINE TRANSMARINE CARRIERS, INC., AND/OR FURTRANS DENIZCILIK TICARET VE

SANAYI AS v. RAYMOND F. BERNARDO
G.R. No. 220635, August 14, 2019, CARANDANG, J.
FACTS: On January 4, 2012, Raymond F. Bernardo (respondent) was hired as a messboy by

petitioners covered by an Employment Contract duly approved by the Philippine Overseas
Employment Administration (POEA) for a period of nine months. While working onboard the
vessel, he experienced ankle joint pain. Since his condition did not improve after self-
medication, respondent was brought to a portside medical facility in Morocco and was
diagnosed with "Artitis eotosa".
Respondent was medically repatriated and was referred to the company-designated physician,
Dr. Cruz-Balbon, who diagnosed him with "Post Infectious Arthritis: Gouty Arthritis."
From May 25, 2012 to December 17, 2012, respondent was under the medical care and
supervision of and rehabilitation therapy by the company-designated physician. Respondent
claimed that petitioners stopped the treatment despite the fact that his gouty arthritis has not
been fully treated. Because of this, respondent consulted Dr. Ramon Antonio Sarmiento and Dr.
Renato P. Runas (Dr. Runas), an orthopedic specialist. Dr. Runas opined that respondent is
"permanently unfit to return to duty as a seafarer in whatever capacity with a permanent
disability."
On February 5, 2013, respondent filed a case for permanent total disability benefits against
petitioners. Petitioners, on the other hand, claimed that gouty arthritis is not a work-related
condition.
The Labor Arbiter (LA) rendered a decision in favor of respondent. The NLRC reversed the
decision of the LA and ruled that petitioners were able to dispute the presumption of
compensability with the express declaration of Dr. Lim who certified under oath that
respondent's gouty arthritis is not work-related. On May 26, 2015, the CA reversed the decision
of the NLRC and granted respondent's claim for permanent and total disability benefits.
ISSUE: Whether gouty arthritis is a work-related condition and is therefore compensable.
RULING: NO. Respondent's illness is not compensable under the POEA-SEC.
Section 20(A)(4) of the POEA-SEC provides that even those illnesses not listed in Section 32 are
still disputably presumed as work-related. Not having been listed in Section 32, post infectious
arthritis: gouty arthritis, which respondent was diagnosed to be suffering from, is presumed to
be work-related.
29
While the law disputably presumes an illness to be work-related, nevertheless, there is no

similar presumption of compensability accorded to a seafarer. Section 32-A of the POEA-SEC
enumerates the conditions for an occupational disease (and non-listed illness) to be
compensable, namely: (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.
The disputable presumption that a seafarer's sickness is work-related does not mean that he
would only sit idly while waiting for the employer to dispute the presumption. For
compensability, the seafarer is still 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.
In this case, respondent relied on the certifications issued by Dr. Lim, a medical specialist, and
Dr. Cruz-Balbon, company-designated physician, that the cause of gouty arthritis could be one's
high purine diet, genetic predisposition and under excretion of urate. It must be emphasized
here that such certifications came from the doctors employed by petitioners.
In addition thereto, the company-designated physician categorically stated that respondent's

condition is not work-related. It should be noted that the findings of company-designated
physicians are accorded great weight and credence.
In labor cases, a party in whose favor the legal presumption exists may rely on and invoke such
legal presumption to establish a fact in issue. However, when substantial evidence of greater
weight is presented to overcome the prima facie case, it will be decided in favor of the one who
has presented the evidence against the presumption.
The following circumstances namely: (1) relatively young age of respondent; (2) the fact that it
was only his second year as a seafarer; (3) that it was only his first employment contract with
petitioners; (4) the certifications by Dr. Lim and Dr. Cruz-Balbon that respondent's illness is not
work-related; and (5) the list of food provisions for the vessel consisting of fresh and frozen
foods, when taken together, sufficiently overcome the disputable presumption that gouty
arthritis is work-related.
30
SKYWAY O & M CORPORATION v. WILFREDO M. REINANTE

G.R. No. 222233, August 28, 2019, INTING, J.
.
FACTS: Petitioner Skyway O & M Corporation (Skyway) appointed Wilfredo as probationary
employee working as Intelligence Officer. In May 2009, Wilfredo took a vacation leave and filed
an application for sick leave upon the advice of his physician due to hypertension. Skyway
disapproved his application for vacation leave and directed him to report for work to discuss his
on-the-job performance and continued absence without proper authority.
On May 21, 2009, Wilfredo received a pre-termination notice from Skyway for supposedly
failing to meet the pre-performance standards of the company based on the Performance
Appraisal Report submitted by his supervisor. On May 25, 2009, on his last day as probationary
employee, Wilfredo was dismissed. Based on the termination letter, he failed to meet the
performance standards set forth by Skyway. Five days later, Wilfredo secured a clearance
certificate and claimed his terminal pay through an attorney-in-fact.
Meanwhile, Wilfredo filed administrative complaints against Augusto, assailing the latter's
authority to assess his performance, as well as against Skyway for hiring and promoting
unqualified security officers. The parties eventually entered into a compromise
agreement/amicable settlement wherein Wilfredo agreed not to file any case against Skyway
and to withdraw the administrative cases he had filed against its security officers.
Notwithstanding demand, TSMSD failed to comply with the terms and conditions of the
compromise agreement prompting Wilfredo to file a complaint for constructive dismissal, non-
payment of service incentive leave, moral and exemplary damages, and attorney's fees.
The LA rendered a Decision, ordering respondent Skyway O & M Corporation to pay

complainant his backwages, separation pay, pro-rated 13th month pay, moral and exemplary
damages. The NLRC affirmed with modification the disquisition of the LA by deleting the award
of 13th month pay. The CA held that Wilfredo was rehired for the same position as Intelligence
Officer after his fixed term employment had expired; hence, it can be inferred that
management was satisfied with his performance; and that he was qualified and competent for
the job; otherwise, it would not have engaged him as a probationary employee.
ISSUE: Was Wilfredo illegally dismissed?
RULING: YES. A probationary employee is one who is placed on trial by an employer, during
which the latter determines whether or not the former is qualified for permanent employment.
The essence of a probationary period of employment lies primordially in the purpose and
objective of both the employer and employee during such period. On one hand, the employer
observes the fitness, propriety and efficiency of a probationary employee in order to ascertain
31
whether or not such person is qualified for regularization. The latter, on the other hand, seeks
to prove to the former that he or she has the qualifications and proficiency to meet the
reasonable standards for permanent employment.
Though not on the same plane as that of a permanent employee, a probationary employee
enjoys security of tenure. Other than being terminated for a just or authorized cause, a
probationary employee may be dismissed due to his or her failure to qualify in accordance with
the standards of the employer made known to him or her at the time of his or her engagement.
Simply put, the services of a probationary employee may be terminated for any of the
following: (1) a just cause; (2) an authorized cause; and (3) failure to qualify as a regular
employee in accordance with the reasonable standards prescribed by the employer.
Here, the fact that Wilfredo was deliberately given an unmeritorious rating to prevent him from
attaining the status of a regular employee was acknowledged by Augusto himself, Wilfredo's
supervisor. This is corroborated by Domingo T. Hernandez, an employee of Skyway. Both
admitted rendering false and unfounded rating to Wilfredo's performance when, in truth, he
should not have been dismissed from the company. Augusto stated in his affidavit:
Considering that Wilfredo was not dismissed for a just or authorized cause, his dismissal from
employment was illegal. As properly observed by the CA, the termination of his employment
based on his alleged unsatisfactory performance rating was effected merely as a subterfuge
after he discovered the hiring or appointment by Skyway of unqualified security officers.
Skyway argues that the previous settlement between the parties constitutes a valid waiver.
However, it must be stressed that the employee's waiver or quitclaim cannot prevent the
employee from demanding benefits to which he or she is entitled, and from filing an illegal
dismissal case. Waivers or quitclaims are looked upon with disfavor, and are frowned upon for
being contrary to public policy. Unless it can be shown that the person executing the waiver
voluntarily did so, with full understanding of its contents, and with reasonable and credible
consideration, the same is not a valid and binding undertaking. The burden is with the employer
to prove that the waiver or quitclaim was voluntarily executed. Skyway failed to discharge this
burden.
32
AUGORIO A. DELA ROSA v. ABS-CBN CORPORATION

G.R. No. 242875, August 28, 2019, PERLAS-BERNABE, J.
FACTS: In 2002, petitioner was hired by respondent ABS-CBN Corporation (respondent) as a

video editor for the latter's television broadcasting at an hourly rate of P230.00. He was
allegedly rehired repeatedly and continuously for the same position, under purported fixed--
term contracts. In 2013, petitioner admittedly reported for work while intoxicated. This led to
an incident where petitioner placed his hands inside a female co-worker's pants and touched
her buttocks. Thus, petitioner was given a show cause memorandum, to which he submitted an
answer explaining that the alleged incident was only accidental, as he just lost balance and fell
towards said co-worker. Subsequently, administrative hearings were conducted.
On September 1, 2015, respondent served a memorandum to petitioner informing him of his

dismissal. Aggrieved, petitioner filed a complaint for illegal dismissal, underpayment of holiday
pay, non-payment of salary/wages, 13th month pay, separation pay, and night shift differential,
moral and exemplary damages, and attorney's fees against respondent.
Respondent averred that petitioner was not illegally dismissed. It maintained that petitioner
was engaged only for a fixed period. It also claimed that even if petitioner's employment had
not yet expired, the latter was dismissed for a just cause for having been found guilty of serious
misconduct in: (a) reporting for work while intoxicated; and (b) committing lascivious acts
against a female co-worker.
The Labor Arbiter (LA) found petitioner to have been illegally dismissed. The NLRC affirmed the
LA's Decision with modification, deleting the award of moral and exemplary damages.The CA
granted the petition and nullified the findings of the NLRC.
ISSUE: Whether petitioner was illegally dismissed
RULING: YES. Despite the existence of a just cause, the Court finds that respondent failed to
observe the proper procedure in terminating petitioner's employment.
The Court finds that contrary to respondent's postulation, petitioner was not a fixed-term
employee, but rather, a regular employee. Records show that petitioner was engaged by
respondent, through various contracts, as a video editor for the latter's several programs.
While there are other contracts intermittently spanning the years 2014 to 2015, it is
nonetheless clear from the foregoing that petitioner was under the employ of respondent for a
period of at least three (3) years without interruption. His employment contracts during said
period had been repeatedly extended or renewed covering the same position, and involving the
same duties. Case law holds that the repeated engagement under a contract of hire is indicative
33
of the necessity and desirability of the employee's work in the employer's business; and if an
employee's contract has been continuously extended or renewed for the same position, with
the same duties, without any interruption, then such employee is a regular employee.
In sum, the labor tribunals, as affirmed by the CA, correctly characterized petitioner as a
regular, and not a fixed-term, employee. As such, petitioner's employment may be terminated
only for a just or authorized cause, as provided by law, and in accordance with the procedure
for termination provided in the Labor Code.
Misconduct has been held to be an improper or wrong conduct; 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 be considered a valid cause for
dismissal within the meaning of the Labor Code, the misconduct must be of such a grave and
aggravated character and not merely trivial or unimportant.
Based on the records, respondent was able to establish that while waiting for his shift on
August 22, 2013, petitioner reported for work and went to the editing bay while intoxicated.
While there, he tried to hug and kiss a female co-worker, then placed his hands inside her pants
and touched her buttocks.
As a rule, the employer is required to furnish the employee with two (2) written notices before
termination of employment can be effected: a first written notice that informs the employee of
the particular acts or omissions for which his or her dismissal is sought, and a second written
notice which informs the employee of the employer's decision to dismiss him.60 Anent the
second notice, the written notice of termination should indicate that: (a) all circumstances
involving the charge against the employees have been considered; and (b) grounds have been
established to justify the severance of their employment.
In this case, no valid second notice was given to petitioner because while the memorandum
dated September 1, 2015 informed him that he was sanctioned with the penalty of dismissal for
his serious misconduct, the same was not effected considering the expiration of his purported
fixed-term employment contract. Consequently, for not having been furnished the second
notice, which purpose is to inform the employee of his or her termination from employment,
petitioner's right to procedural due process was violated.
Jurisprudence provides that in cases where the dismissals are for a just cause but are
procedurally infirm, the lack of statutory due process should not nullify the dismissal, or render
it illegal, or ineffectual. However, the employer should indemnify the employee for violation of
his statutory rights. The rationale is that the employer should not be compelled to continue
employing a person who is admittedly guilty of misfeasance or malfeasance and whose
continued employment is patently inimical to the employer, as in this case.
34
JULIETA T. VERZONILLA v. EMPLOYEES' COMPENSATION COMMISSION

G.R. No. 232888, August 14, 2019, CAGUIOA, J.
FACTS: Reynaldo I. Verzonilla (Reynaldo) was employed as a Special Operations Officer (SOO) III
in the Quezon City Department of Public Order and Safety since June 1, 1999 until his death on
July 5, 2012. Reynaldo died due to cardiovascular attack while attended the training "on the use
of the Rapid Earthquake Damage Assessment System (REDAS) software" on July 1-6, 2012 in
Tagaytay City. Prior to this, he attended several other seminars. His Discharge Summary/Clinical
Abstract shows that he complained of abdominal pain and chest pain. Records show that
Reynaldo was previously diagnosed with hypertension in 2002.
Thereafter, petitioner Julieta Verzonilla (Julieta), the surviving spouse of Reynaldo, filed a claim
for compensation benefits before the Government Service Insurance System (GSIS) under
Presidential Decree (PD) 626. The GSIS denied the claim of Julieta, stating that based on the
documents submitted, the ailment of Reynaldo was not connected to his work and that no
evidence was found that his duties.
Julieta elevated her claims to the Employees' Compensation Commission (ECC). The ECC
affirmed the decision of the GSIS, noting that while cardiovascular disease is listed as an
occupational disease, it is still subject to the conditions therein set. According to the ECC, Julieta
failed to satisfy these conditions.
Hence, Julieta filed a Petition for Review with the CA. The CA agreed with the ECC that Julieta
failed to prove, by substantial evidence, that the conditions for compensability of
cardiovascular diseases were met or that Reynaldo's risk of contracting the disease was
increased by his working conditions.
ISSUE: Whether Petitioner entitled to avail compensation benefits under PD 626.
RULING: YES. To be entitled to compensation, a claimant must show that the sickness is either:
(1) a result of an occupational disease listed under Annex "A" of the Amended Rules on EC
under the conditions Annex A sets forth; or (2) if not so listed, that the risk of contracting the
disease is increased by the working conditions.
Annex "A" of the Amended Rules on EC lists cardiovascular disease as an "Occupational and
Work-Related Disease" subject to certain conditions. Under PD 626, for the sickness and
resulting disability or death to be compensable, the claimant has the burden of proof to show,
by substantial evidence, that the conditions for compensability is met.
Julieta hinges her claim on paragraphs (a) and (b) of item number 18 of the ECC Board
Resolution. She does not dispute that Reynaldo had a pre-existing hypertension, having been
35
diagnosed with such in 2002. However, she claims that this illness, as well as the abdominal
pain that Reynaldo suffered, was aggravated by the strenuous conditions of his work as SOO III,
which ultimately led to his death.
Indeed, it appears that the CA failed to appreciate whether Reynaldo's case falls under the
paragraphs of Item 18 other than paragraph (c) thereof. Of particular importance is paragraph
(b) which speaks of a situation wherein the strain of work of the employee which caused an
attack was severe and was followed within 24 hours by signs of a cardiac insult. To the Court's
mind, if the CA considered the foregoing, it would have not been so precipitate in dismissing
Julieta's claim.
Julieta makes a valid point that from the evidence presented, substantial proof was shown that
Reynaldo's cardiac arrest falls under, at least, paragraph (b) of item 18. This merely requires
that: 1) the strain of work that brings about an acute attack must be of sufficient severity and 2)
it must be followed within 24 hours by the clinical signs of a cardiac insult. The series of
strenuous activities Reynaldo underwent prior to his heart attack is undisputed. Likewise, that
the cardiac arrest and the resulting death happened within 24 hours from such strain of work is
clearly shown.
There is likewise substantial proof to support that Reynaldo's pre-existing heart disease was
exacerbated by the stresses of his work. Part of Reynaldo's job was to conduct and attend
trainings and seminars and conduct hazard, vulnerability and risk assessments. His job required
him to render several hours of field work and, hence, spend stressful and long hours travelling.
Barely two weeks prior to his death, he attended a two-day out-of-town seminar. He, in fact,
died while in Tagaytay City, on the last day of a five-day seminar. He spent his last living hours
going to five different places and enduring hours of travel time. Upon his return to the hotel, he
had to conduct another lecture and attend a program which ended at about 10:00 p.m. About
three hours thereafter, he suffered the cardiac arrest which took his life.32 Hence, up to his
death, Reynaldo was continuously exposed to stresses of his work which, at least, contributed
to his death.
It is enough that the hypothesis on which the workman's claim is based is probable. Medical
opinion to the contrary can be disregarded especially where there is some basis in the facts for
inferring a work connection. Probability, not certainty, is the touchstone. It is not required that
the employment be the sole factor in the growth, development or acceleration of a claimant's
illness to entitle him to the benefits provided for. It is enough that his employment contributed,
even if to a small degree, to the development of the disease.
In sum, the Court is convinced that Julieta was able to adduce substantial evidence to support
her claims for compensation benefits in relation to her late husband's death.
36
CARISSA E. SANTO v. UNIVERSITY OF CEBU

G.R. No. 232522, August 28, 2019, LAZARO-JAVIER, J.
FACTS: In May 1997, respondent University of Cebu hired petitioner Carissa E. Santo as a full-
time instructor until she got qualified for optional retirement under respondent's Faculty
Manual. In April 2013, she applied for optional retirement, and was approved her application
and computed her optional retirement pay at fifteen (15) days for every year of service per
provisions of the Faculty Manual. She asserted, though, that her retirement pay should be
equivalent to 22.5 days per year of service in accordance with Article 287 of the Labor Code.
Respondent refused to accept her computation. Thus, she initiated the complaint for payment
of retirement benefits under Article 2878 of the Labor Code, damages and attorney's fees
against respondent.
The LA found that respondent's retirement package was less than what Article 287 of the Labor
Code prescribed, i.e., 22.5 days for every year of service. On appeal, the NLRC reversed. It ruled
that Article 287 was not intended to benefit petitioner who voluntarily resigned not to rest in
the twilight years of her life but to actively engage in the practice of the legal profession. The
Court of Appeals affirmed.
ISSUE: Whether the Faculty Manual rather than Article 287 of the Labor Code shall be applied.
RULING: NO. Petitioner's retirement pay should be computed based on Article 287 of the Labor
Code.
Retirement benefits are a form of reward for an employee's loyalty and service to an employer
and are earned under existing laws, Collective Bargaining Agreements (CBA), employment
contracts and company policies.32 It is the result of a bilateral act of the parties, a voluntary
agreement between the employer and the employee whereby the latter, after reaching a
certain age or length of service, agrees to sever his or her employment with the former.
Respondent's claim that its optional retirement benefit is actually a form of separation pay to
qualified employees who wish to resign is belied by its own company policy. This benefit clearly
falls within the category of "Retirement Pay," specifically under "Optional Retirement." For
sure, respondent is precluded from claiming otherwise.
In another vein, the conflict between respondent's own categorization of the benefit as
"retirement pay," on the one hand, and its description of it as "a resignation with separation
pay," on the other, could only be taken against respondent. For settled is the rule that
ambiguities in a contract are interpreted against the party that caused the ambiguity.
37
Too, in controversies between a laborer and his master, doubts reasonably arising from the
interpretation of agreements and writing should be resolved in the former's favor. The State
policy is to extend the doctrine to a greater number of employees who can avail of the benefits
under the law to give maximum aid and protection to labor.
The optional retirement under respondent's Faculty Manual, therefore, should not be taken as
anything else but a retirement benefit within the ambit of Article 287 of the Labor Code.
We are confronted with two (2) retirement schemes here: 1) Article 287 of the Labor Code; and
2) Respondent's Faculty Manual.
Now, comparing the optional retirement benefits under the two (2) retirement schemes, it is
apparent that fifteen (15) days' worth of salary for every year of service provided under
respondent's Faculty Manual is much less than 22.5 days' worth of salary for every year of
service provided under Article 287 of the Labor Code. Obviously, it is more beneficial for
petitioner if Article 287's retirement plan will be applied in the computation of' her retirement
benefits.
The Retirement Pay Law does not bar a retired employee from pursuing a livelihood or
practicing a profession after receiving retirement benefits
38
CELSO S. MANGUBAT, JR. v. DALISAY SHIPPING CORPORATION, WEALTH

SHIPPING LIMITED AND DANNY DADILA
G.R. No. 226385, August 19, 2019, CAGUIOA, J.
FACTS: Petitioner was contracted by the respondents to work as an oiler on board the vessel
M.V. SG Capital for a period of 10 months. On February 28, 2014, complainant, while working,
went out of balance and fell off with his right leg hitting the deck floor. He was repatriated for
medical treatment on March 14, 2014. Petitioner was referred to the company-designated
physician and was diagnosed to have a depressed fracture at the lateral tibial plateau of his
right leg and underwent surgery and thereafter, rehabilitation.
As of August 8, 2014, the company-designated physician noted Petitioner to be fit to work.

Petitioner presented a medical certificate dated September 23, 2014 issued by the San
Geronimo General Hospital in Morong, Rizal indicating that complainant was "treated" thereat
from "July 9, 2014 up to present 9/23/2014" with the remarks that complainant needs further
physical therapy, probably another year of intense therapy, because of muscle atrophy in right
lower extremity. This prompted Petitioner to file a case for disability benefits before the LA.
The LA ruled that petitioner is not entitled to disability benefits. The NLRC affirmed the LA
Decision but directed the payment of financial assistance in the amount of USD7,000.00. The
CA dismissed the petition for lack of merit.
ISSUE: Whether Petitioner is entitled to disability benefits.
RULING: NO. The NLRC and the LA were both correct in ruling that petitioner was fit to work
based on the findings of the company-designated physician and that petitioner failed to prove
that he was entitled to disability benefits.
Section 20(A) of the 2010 Philippine Overseas Employment Administration Standard

Employment Contract28 (POEA-SEC) states that after medical repatriation, the company-
designated physician must assess the seafarer's fitness to work or the degree of his disability.
After this, the seafarer may choose his own doctor to dispute the findings of the company-
designated physician, and if there is conflict, the matter is referred to a third doctor, whose
findings shall be binding on the parties.
Jurisprudence has elaborated on the requirements for the validity and procedure for disputing
the assessment of the company-designated physician. For the company-designated physician's
assessment to be considered valid, it must be timely made and must state the fitness or degree
of disability of the seafarer.
39
Once the company-designated physician has issued the valid assessment, the seafarer may
dispute it by referring to his own doctor. It is required for both the company-designated
physician and the third doctor to arrive at a definite and conclusive assessment of the fitness or
disability rating of the seafarer for their assessment to be considered as valid.
The same standards to determine the validity of the assessment should be the same for the
company-designated physician, seafarer's physician, and the third doctor. Thus, in order for the
seafarer to dispute the assessment of the company-designated physician, the assessment of the
seafarer's doctor should state the seafarer's fitness to work or the disability rating.
Here, it is beyond dispute that the company-designated physician found that petitioner was fit
to work. This was a valid assessment and the seafarer may dispute this by referring to his own
doctor, which he did. Petitioner's doctor, on the other hand, issued a certification that merely
stated that he was "Unfit to work for a year yet. Needs physical therapy because of muscle
atrophy.” The Court finds that the assessment of the seafarer's doctor is not definite because it
failed to state the seafarer's fitness to work or indicate his disability grade. The assessment is
invalid.
40
YUSHI KONDO v. TOYOTA BOSHOKU (PHILS.) CORPORATION, MAMORU MATSUNAGA,

KAZUKI MIURA, AND JOSELITO LEDESMA
G.R. No. 201396, September 11, 2019, JARDELEZA, J..
FACTS: Yushi Kondo (petitioner), a Japanese citizen, applied with and was hired by respondent
Toyota Boshoku Philippines Corporation (Toyota) on September 26, 2007 as Assistant General
Manager for Marketing, Procurement and Accounting. He was assured of different benefits
including the use of a company car. Toyota caused the issuance of petitioner's Alien
Employment Permit (AEP).
When respondent Mamoru Matsunaga (Matsunaga) took over as President of Toyota,

petitioner was transferred to the Production Control, Technical Development and Special
Project department as Assistant Manager. Petitioner allegedly objected to the transfer on the
ground that it is in violation of the terms of his AEP, and admitted having no knowledge, skills,
and experience in production control and technical development. Nonetheless, petitioner
assumed his new post on July 1, 2008.
On September 1, 2008, petitioner was notified that his service car and driver will be withdrawn.
On October 13, 2008, Toyota terminated the services of petitioner's driver. Since petitioner
could not report for work, he considered himself constructively dismissed. On the same day, he
filed a complaint with the NLRC tor constructive dismissal, diminution of benefits, illegal
transfer of department, harassment, and discrimination against Respondents.
Respondents denied petitioner's allegations, arguing that petitioner was entitled to the service
car and driver only for a period of one year, after which he was expected to drive himself to and
from work.
Labor Arbiter held that petitioner was constructively dismissed. The NLRC reversed and set
aside the LA Decision and dismissing petitioner's complaint. The CA denied the Kondo’s appeal.
It held that it is not the function of certiorari proceedings to review the factual findings of the
NLRC, Even if the petition were to be treated as an appeal, the CA held that it is still dismissible.
ISSUE: A. Whether there exists dimunition of benefits in the present case.
B. Whether Kondo was illegally dismissed.
RULING: A. NO. The Court has held that there is diminution of benefits when the following are
present: (1) the grant or benefit is founded on a policy or has ripened into a practice over a long
period of time; (2) the practice is consistent and deliberate; (3) the practice is not due to error
41
in the construction or application of a doubtful or difficult question of law; and (4) the
diminution or discontinuance is done unilateral1y by the employer.
Under the first requisite, the benefit must be based on express policy, a written contract or has
ripened into a practice. Here, the grant of service car and local driver to petitioner was based
neither on express policy or a written contract. It may also not be considered company practice.
To be considered as a regular company practice, the benefit must be characterized by regularity

and voluntary and deliberate intent of the employer to grant the benefit over a considerable
period of time. The burden of proving that the benefit has ripened into practice rests in the
employee.
In this case, petitioner failed to prove that the car and driver benefits were also being enjoyed
by other employees who held positions equivalent to his position, or that the benefits were
given by the company itself with voluntary and deliberate intent. On the contrary, the record
shows that these benefits were granted by Toyota's former President specifically to petitioner
at the time he was hired, in a verbal agreement. As such, the grant of the benefits may be
viewed more as an accommodation given to petitioner by virtue of him being a fellow Japanese
working in a foreign, and presumably unfamiliar, land.
As regards the Caltex card, there is likewise no showing that petitioner's entitlement to the
Caltex card is based on an express policy, a written contract, or company practice. Considering
that petitioner did not sign an employment contract, he can only anchor his claim on company
practice. However, he also failed to prove that the card was being enjoyed by other employees
or officials similarly situated as him, as would indicate Toyota's intention to give the benefit
consistently and deliberately. Hence, petitioner cannot demand continued use of the card.
Granting arguendo that the benefit amounted to company practice, there is essentially no
diminution to speak of. The record bears that the Caltex card was withdrawn by Toyota prior to
the withdrawal of the car and driver benefits. Petitioner did not raise this as an issue, verbally
or in a written memorandum to his superior. Even then, petitioner's gasoline expenses were
subject to reimbursement. Hence, at the end of the day, it was still Toyota that paid for his
gasoline consumption.
B. NO. Constructive dismissal exists where there is cessation of work because continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a demotion
in rank and a diminution in pay. It also exists when continued employment has become so
unbearable because of acts of clear discrimination, insensibility or disdain by the employer, that
the employee has no choice but to resign. What is essential is that there is a lack of
"voluntariness in the employee's separation from employment."
42
Petitioner argues that his transfer from the Marketing, Procurement and Accounting
Department to the Production Control, Technical Development and Special Project Department
was an indication of constructive dismissal because he lacked technical expertise and
experience for the new position. Toyota justified this move as an exercise of management
prerogative which did not entail any change in the salary and benefits being enjoyed by
petitioner, who was expected to exercise the same managerial functions.
Notably, petitioner did not raise any objections to his transfer prior to the filing of the
complaint, nor did he amply demonstrate why he was unsuited for the new job. There was no
proof of any verbal or written opposition to the transfer. In fact, as pointed out by respondents,
he was assigned to the new department on July 1, 2008, but he did not complain of his new
assignment until after more than three months, or on October 13, 2008, when he filed a
complaint with the NLRC. Petitioner did not allege and prove specific facts that would indicate
his inability to function fully in the new department as a result of his lack of expertise, or that
his transfer constituted dear discrimination or harassment. He also did not address Toyota's
assertion that his new function required him merely to oversee the department and carry out
management policies, rather than participate in production and technical development.76
Indeed, the mere fact of petitioner's transfer to the new department does not support his claim
of constructive dismissal.
Even so, the Court does not agree that petitioner abandoned his job. For abandonment to exist,
two requisites must concur: a) the employee failed to report for work or was absent without
valid or justifiable reason; and b) there was a clear intention to sever the employer-employee
relationship manifested by some overt acts. The CA upheld the NLRC's finding that petitioner's
refusal to report for work despite receiving notices from Toyota is tantamount to
abandonment.
Here, it was not established that petitioner was constructively dismissed, much less that
respondents acted in bad faith or in an oppressive or malevolent manner. There is also no
showing that he was not paid his wages. Consequently, he cannot rightfully claim moral and
exemplary damages and attorney's fees.
43
J' MARKETING CORPORATION, ROGELIO U. SOYAO, EVP-GENERAL MANAGER, PEPITO P.

ESTRELLAN, KALIBO BRANCH MANAGER v. FERNANDO S. IGUIZ
G.R. No. 211522, September 04, 2019, CARPIO, J.
FACTS: Respondent Fernando S. Iguiz (Iguiz) was hired as a driver by petitioner J' Marketing
Corporation (JMC). After nine months in JMC's Kalibo Branch, Iguiz was promoted as a
collector/credit investigator. On an audit of Iguiz's customers under his coverage area (Area 7).
According to JMC's credit supervisor, Marlon Sonio’s audit report, Iguiz had an unremitted
collection in the amounts of P15,300 and $29 from 14 customers, without the corresponding
official receipts.
On 8 February 2007, Estrellan issued a memorandum to Iguiz asking him to explain within 24
hours why he should not be reprimanded for loss of trust and confidence. On the same date,
JMC submitted an Administrative Investigation Report, both signed by Estrellan and JMC's
Accounting Supervisor Sianita Nazareta, as witness, but without Iguiz's acknowledgment
signature.
On 12 February 2007, before Iguiz could file an explanation for the memorandum, Iguiz
received another memorandum from Estrellan asking him to sign the administrative
investigation report within 12 hours; otherwise it would mean that Iguiz is waiving his right to
be heard and JMC would be constrained to evaluate his case based on the evidence on hand.
In his reply-memorandum, Iguiz denied the allegation against him. On 7 March 2007, Vangie M.
Tionko, JMC's Personnel Manager, issued a memorandum informing Iguiz that because of (1)
dishonesty for collecting P15,300 and $29 without issuing official receipts, and (2) breach of
trust and confidence, he is terminated from employment on the ground of violation of Article
282, paragraph (c) of the Labor Code.
On 12 March 2007, Iguiz received the memorandum of termination. Aggrieved, Iguiz filed a
Complaint for illegal dismissal with money claims with the NLRC.
The LA dismissed the complaint for lack of merit. The NLRC reversed the decision of the Labor
Arbiter. The CA affirmed the NLRC..
ISSUE: Whether Iguiz was illegally dismissed.
RULING: YES. Under the Labor Code, the dismissal of an employee has a two-fold due process
requirement: one is substantive and the other, procedural. For substantive due process, the
dismissal must be for a just and authorized cause as provided under Articles 282, 283, and 284
44
of the Labor Code; and for procedural due process, the opportunity to be heard and to defend
oneself must be observed.
In administrative and quasi-judicial proceedings, the quantum of evidence required is

substantial evidence. Substantial evidence is the relevant evidence a reasonable mind might
accept as adequate to support a conclusion.
Article 277(b) of the Labor Code contains the procedural due process requirements in the
dismissal of an employee:
The law and the rules provide that the employer must furnish the employee with two written
notices before dismissal from employment: (1) notice to apprise the employee of the particular
acts or omissions for which the dismissal is sought, and (2) subsequent notice to inform him of
the employer's decision to dismiss him. In addition to the notices, the employer must set a
hearing or conference to give the employee an opportunity to present evidence and rebut the
charges against him. The requirement of two notices and a hearing is mandatory; otherwise the
order of dismissal is void.
In the present case, JMC sent Iguiz the first notice - a memorandum dated 8 February 2007.
Iguiz received this notice on 9 February 2007 and he was able to file a written reply on 12
February 2007 denying the allegation. JMC then sent Iguiz another notice - a memorandum
dated 7 March 2007 terminating his employment. Iguiz received the termination notice on 12
March 2007.
At first glance, it seems that JMC complied with the two notice requirement. However, the
succession of events would show that JMC actually railroaded the termination of Iguiz from the
start.
Accordingly, given the illegality of Iguiz's dismissal without just cause and the non-observance
of procedural due process, Iguiz is entitled to reinstatement and backwages as provided in
Article 279 of the Labor Code. However, since reinstatement is no longer feasible, such as in the
case of a clearly strained employer-employee relationship (limited to managerial positions and
contracts of employment predicated on trust and confidence, such as in this case) or when the
work or position formerly held by the dismissed employee simply no longer exists, separation
pay can substitute for reinstatement.
45
GERRY S. MOJICA v. GENERALI PILIPINAS LIFE ASSURANCE COMPANY, INC.

G.R. No. 222455, September 18, 2019, CARPIO, ACTING C.J.
FACTS: Petitioner Gerry S. Mojica (petitioner) used to be a Unit Manager and Associate Branch
Manager of respondent Generali Pilipinas Life Assurance Company, Inc. (respondent). On 28
September 2004, respondent filed a Complaint for collection of sum of money and damages
against petitioner before the RTC. Respondent sought to collect from petitioner the amount of
P514,639.17 representing unpaid monthly drawing allowances, unpaid Health Maintenance
Insurance dues, group insurance premium and other liabilities, plus legal interest from the time
of demand, exemplary damages, attorney's fees and litigation expense.
Respondent averred that petitioner resigned on 1 March 2003. On 6 March 2003, respondent
sent petitioner a letter, accepting petitioner's resignation and demanding payment of
petitioner's outstanding obligations. Respondent alleged that from January 2001 to July 2002,
petitioner drew a total of P660,000 from his monthly drawing allowances, but only repaid
P151,368.95, leaving a balance of P508,631.05. In addition, petitioner had unpaid Health
Maintenance Insurance dues, group insurance premium for hospitalization, and other payables
amounting to P6,008.12.
On the other hand, petitioner asserted that he was an employee of respondent, and not its
agent or independent contractor. Petitioner insisted that as an employee of respondent, he had
no obligation to liquidate the monthly drawing allowances and that he was entitled to the
P40,000 monthly drawing allowance which was not even enough to cover all his expenses in
maintaining respondent's branch office and the recruitment of insurance agents for
respondent. Although petitioner admitted receiving the monthly drawing allowances, petitioner
claimed that he had no obligation to return such allowances since these were his salaries as full
time unit manager.
Petitioner questioned the trial court's jurisdiction and maintained that the National Labor
Relations Commission (NLRC) has jurisdiction because of the existence of an employer-
employee relationship between the parties. Thus, petitioner moved to dismiss the case for lack
of jurisdiction, which the trial court denied for lack of merit. The Court of Appeals, affirmed the
trial court's Orders denying petitioner's motion to dismiss. The Court of Appeals denied
petitioner's appeal, and affirmed with modification the decision of the trial court.
ISSUE: Whether the petitioner is an independent contractor.
RULING: YES. Petitioner is an Independent Contractor, as clearly stipulated in the contractual

agreements entered into between petitioner and respondent.
46
As an independent contractor, petitioner earned through commissions and was not paid a fixed
salary or wage. Petitioner's remuneration on a commission basis is expressly provided under
the Unit Manager's Compensation Schedule which was incorporated in the Unit Manager's
Agreement, and the Associate Branch Manager's Compensation Schedule which formed part of
the Associate Branch Manager's Agreement.
Another factor which militates against the claim of petitioner that he is an employee of
respondent is the latter's lack of control over the means and methods employed by petitioner
in the performance of his duties. Under the four-fold test in determining the existence of an
employer-employee relationship which considers the following elements: (1) the power to hire;
(2) the payment of wages; (3) the power to dismiss; and (4) the power to control, the last is the
most important factor.22 As found by the trial court and the Court of Appeals, petitioner
carried on the business of his unit independently and exercised wide latitude in the conduct of
his business. In fact, as expressly stated in the Unit Manager's Agreement and the Associate
Branch Manager's Agreement, petitioner was "free to exercise his own judgment as to time,
place and means of soliciting insurance."
On the issue of the unpaid monthly drawing allowances, petitioner admits receiving the
monthly drawing allowances but claims that he is not obligated to refund the allowances which
should be considered as his salaries.
Under the Memorandum of Agreement executed by the parties, the monthly drawing
allowance granted to petitioner is "an advance against the Manager's total expected future
override commission earnings over a period of eighteen (18) months or less," and "subject to
meeting specified monthly validation requirements." The Memorandum of Agreement requires
petitioner to repay and validate the monthly drawing allowances by applying his commission
earnings against the monthly drawing allowances.
In this case, petitioner is liable for the P508,631.05 unpaid monthly drawing allowances, which
shall earn the stipulated interest of 12% per annum from the time of extrajudicial demand on 6
March 2003 until full payment.
Furthermore, as found by the trial court and the Court of Appeals, petitioner is also liable for
the unpaid Health Maintenance Insurance dues, group premium for hospitalization, and other
payables amounting to P6,008.12. However, since there is no stipulated interest on these other
payables, such amount due shall earn the prevailing legal interest at the rate of 12% per annum
from the date of extrajudicial demand on 6 March 2003 until 30 June 2013,31 and thereafter at
the rate of 6% per annum from 1 July 2013 until full payment.
47
JEBSENS MARITIME, INC. AND HAPAG-LLOYD AKTIENGESELLSCHAFT

v. RUPERTO S. PASAMBA
G.R. No. 220904, September 25, 2019, REYES, J. JR., J.
FACTS: On November 19, 2009, for and on behalf of its foreign principal, Hapag-Lloyd
Aktiengesellschaft, local manning agency Jebsens Maritime, Inc. (collectively, petitioners) hired
Ruperto S. Pasamba (respondent) as an Able Seaman for a period of six months. On January 24,
2010, respondent started experiencing clogged nose, dizziness, and headache.
As his illness persisted despite medications, respondent consulted an on-shore physician at the
port, of Japan, wherein he was diagnosed with "Sinusitis, Myringitis (both), Vascular Headache,
and Unstable Angina (suspicion)." He was then repatriated.
Respondent reported to petitioners' office and was referred to the company-designated

doctors, who diagnosed Respondent with "Polysinusitis, Hypoplastic Frontal Sinuses, Congested
Turbinates while Mastoid Series showed Bilateral Mastoiditis." And underwent Mastoidectomy
with Tympanoplasty procedures as advised by the company-designated doctors.
On July 9, 2010, the company-designated doctors issued a Certificate of Physical Condition,

declaring respondent "fit for work.” More than a year thereafter, respondent was able to obtain
re-employment also as an Able Seaman with a contract duration of eight months albeit, from
another manning agency and principal.
On July 31, 2012, respondent consulted an independent doctor who diagnosed him to be
suffering from "Moderate Sensorineural Hearing Loss, AD, and Profound Mixed Hearing Loss,
AS." This prompted respondent to claim permanent and total disability benefits against
petitioners.
For their part, petitioners countered that respondent is not entitled to permanent and total
disability benefits because he was already declared fit to work on July 9, 2010. Petitioners
pointed out that the fact that respondent was able to subsequently secure another deployment
as an Able Seaman from another company belies his claims that he is permanently and totally
disabled.
The Labor Arbiter ruled that respondent is not entitled to permanent and total disability
benefits. NLRC reversed and set aside the Labor Arbiter's Decision. The CA affirmed the NLRC's
conclusion that respondent is entitled to permanent and total disability benefits.
ISSUE: Is respondent entitled to permanent and total disability benefits?
48
RULING: NO. The mere inability to work for a period of 120 days does not entitle a seafarer to
permanent and total disability benefits.
In this case, the NLRC and the CA heavily anchored their ruling in favor of respondent's
entitlement to permanent and total disability benefits on the fact of respondent's inability to
work beyond 120 days from repatriation and the company-designated doctors' failure to issue a
final assessment as to his fitness to work or disability grading within the said 120-day period,
citing the case of Crystal Shipping.
The NLRC and the CA failed to consider that respondent underwent a surgery for his left ear on
February 25, 2010 and that almost three months recovery period was needed before
respondent underwent the same procedure for his right ear on May 14, 2010. Respondent's
treatment did not stop after said last surgery, which notably, was on the 99th day after his
repatriation. Records also reveal that five to seven weeks after said surgery, respondent was
still under observation and medication for his full recovery. Clearly, thus, respondent's
treatment necessarily went beyond the 120-day period. Hence, contrary to the NLRC's findings,
the 240-day extension period applies in this case. Notably, the company-designated doctors'
assessment of respondent's fitness to work fell on the 154th day, which is well-within the 240-
day extension.
It is noteworthy that respondent never raised any question as to the company-designated

doctors' findings and declaration of his fitness to go back to work until after two years when he
filed the complaint. In fact, respondent was able to obtain re-employment for the same
position albeit, from a different principal/manning agency.
The NLRC and the CA erred in disregarding such fact merely because said re-employment came
only a year after he was declared fit to work by the company-designated doctors. To be sure,
there was neither allegation nor proof to relate such delay in re-employment to the illness
subject of his repatriation. On the contrary, such delay bolsters the fact that the company-
designated doctors did not err when they declared respondent fit to work after 154 days of
treatment and medication as it shows that even a year after said company-designated doctors'
final assessment, respondent was able to pass the pre-employment medical examination to get
another employment as an Able Seaman from another company. It only demonstrates that the
company-designated doctors successfully treated him of the illness subject of his repatriation,
contrary to his claim.
Further, it took respondent two years and another re-employment before he consulted an
independent doctor to question the company-designated doctors' declaration of his fitness to
work. Such belated assessment issued by the independent doctor cannot prevail over the final
49
assessment made by the company-designated doctors who observed and treated respondent
since his repatriation up to his recovery.
What is more, respondent's failure to comply with the procedure under Section 20(B)(3) of the
POEA-SEC in disputing the company-doctors' final assessment justifies the disregard of the
independent doctor's assessment and reliance upon that of the company-designated doctors.'
If the company-designated doctor declares the seafarer fit to work within the 120 or 240-day
periods, such declaration should be respected unless the doctor chosen by the seafarer and the
doctor selected by both the seafarer and the employer declare otherwise.
In sum, the Labor Arbiter correctly ruled that there is no factual or legal basis for respondent's
entitlement to permanent and total disability benefits.
Anent the award for sickness allowance, the Labor Arbiter, NLRC, and the CA correctly ruled
that respondent is entitled thereto for the entire period of temporary disability (154 days) from
repatriation until the declaration of fitness to work, i.e., from February 5, 2010 to July 9, 2010.
As explained above, the provision under Section 20(B)(3) of the POEA-SEC, which provides that
upon sign off, the seafarer is entitled to sickness allowance equivalent to his basic wage until he
is declared fit to work or the degree of permanent disability has been assessed by the company-
designated physician but in no case shall this period exceed 120 days, should be harmonized
with the provisions of the Labor Code and its IRR which allows the 240-day extension period
under certain circumstances.
Thus, while we deny respondent's claim for permanent and total disability benefits, we are one
with the labor tribunals and the court a quo that he is entitled to the income benefit of
temporary total disability during the period of his treatment, although exceeding beyond the
120-day period but within the 240-day extension, as his condition required further treatment
and observation.46 This is computed from the date of his repatriation on February 5, 2010 until
he was declared fit to work on July 9, 2010.
50
FEATI UNIVERSITY v. ANTOLIN PANGAN

G.R. No. 202851, September 09, 2019, REYES, J. JR., J.
FACTS: On September 17, 1970, FEATI University (petitioner) hired Antolin Pangan (respondent)
as a canteen bookkeeper and was later on promoted as Assistant Cashier and then as University
Cashier. Alleging decline in enrolment for the past 25 years, petitioner offered a voluntary early
retirement program to all its employees to ensure viability and to realign its budgetary
deficiency.
Respondent availed of the early retirement program. On September 1, 2002, respondent

received his retirement pay amounting to P93,140.04 and executed a Release and Quitclaim in
favor of petitioner.
Meanwhile, prior to the approval of respondent's application to avail of the early retirement
program, respondent was re-hired as University Cashier on August 28, 2002. Petitioner re-
assigned respondent as Assistant Program Coordinator of the Graduate Studies on April 15,
2004. On August 6, 2005, respondent was terminated from employment on the ground of
redundancy. According to petitioner, respondent's position became redundant due to the
progressive decline of enrolment in the Graduate Program and as such, the Graduate Program
Coordinator can adequately handle the tasks without a need for an assistant.
Aggrieved, respondent filed a complaint for illegal dismissal and other monetary claims against
petitioner before the Labor Arbiter. The Labor Arbiter ruled in favor of the petitioner. On
appeal, the NLRC reversed and set aside the Labor Arbiter's Decision. The CA, however,
affirmed the NLRC's ruling in its entirety, disposing of petitioner's Petition for Certiorari
ISSUE: The pivotal issue in this case is whether or not respondent was validly dismissed from
employment on the ground of redundancy.
RULING: NO. The determination of whether the employee's services are no longer necessary or
sustainable, and thus, terminable has been recognized to be a management prerogative. The
employer's exercise of such prerogative is, however, not an unbridled right that cannot be
subjected to the court's scrutiny.
Thus, the Court has laid down certain guidelines for the valid dismissal of employees on the
ground of redundancy, to wit: (1) written notice served on both the employee and the
Department of Labor and Employment (DOLE) at least one month prior to the intended date of
termination; (2) payment of separation pay equivalent to at least one month pay or at least one
month pay for every year of service, whichever is higher; (3) good faith in abolishing the
51
redundant position; and (4) fair and reasonable criteria in ascertaining what positions are to be
declared redundant.
To establish good faith, the employer must provide substantial proof that the services of the
employee are in excess of what is needed by the company and that fair and reasonable criteria,
such as but not limited to (a) less preferred status, e.g., temporary employee; (b) efficiency; and
(c) seniority, were used to determine which positions are to be considered redundant or who
among the employees are to be redundated.
Indeed, an employer cannot simply declare that it has become overmanned and dismiss its
employees without adequate proof to sustain its claim of redundancy. In this case, petitioner
merely presented financial audits and enrolment lists to justify respondent's dismissal due to
redundancy. As correctly held by the NLRC and the CA, at best, these pieces of evidence prove
only the fact of financial losses and decline in enrolment. They do not, in any way, prove that
fair and reasonable criteria were used in determining which position is to be declared
redundant or who among the employees is to be redundated.
Petitioner's bare allegations that it conducted a review of its organizational structure and came
up with the decision that respondent's position became redundant cannot be considered
substantial evidence to prove compliance with the above-cited jurispmdential guidelines. Again,
evidence that the alleged review was conducted, as well as the specific criteria used in the
determination of which position or employee should be affected by the cost- cutting measures,
must be presented. Otherwise, the termination of the redundated employee cannot be
sustained.
In sum, while petitioner may have been able to prove decline in enrolment and financial losses,
it severely failed to prove that it utilized fair and reasonable criteria in ascertaining that
respondent's position as Assistant Program Coordinator, as well as his former position as
University Cashier, were redundant and/or that it was necessarily respondent who should be
affected by its cost-cutting measures. Respondent's dismissal on the ground of redundancy,
therefore, cannot be sustained.
Having established that respondent was illegally dismissed and considering the NLRC's finding
that reinstatement is not feasible, respondent is indeed entitled to separation pay equivalent to
his month's salary for every year of service less the P93,140.04 that he received as his supposed
early retirement pay. The award of backwages is also sustained pursuant to Article 294 of the
Labor Code, which substantially states that illegally dismissed employees are entitled to full
backwages, inclusive of allowances and other benefits, computed from the time of their illegal
termination up to the finality of the decision.
52
JERRY BERING TALAUGON v. BSM CREW SERVICE CENTRE PHILS., INC., BERNARD*
SCHULTE SHIPMANAGEMENT LTD. AND DANILO MENDOZA
G.R. No. 227934, September 04, 2019, LAZARO-JAVIER, J.
FACTS: Respondents employed Petitioner as an oiler on board M/T Erika Schulte. During his
employment, he felt dizzy and nauseous. His lower abdomen was painful. He got hospitalized in
Saudi Arabia and diagnosed with "Renal Colic Lumbago post Zoster Neuralgia." He was given
pain medications and advised to be repatriated for further treatment.
On January 18, 2014, he returned to the country and thereafter consulted with company-
designated physician Dr. Richard Olalia. The latter diagnosed him with "Hyperthesia, Ruled out
Hansen's Disease, L4-L5 Disc Protrusion, Disc Dessication" and advised therefor physical
therapy. On April 3, 2014, another company-designated physician Dr. Godfrey Robeniol found a
tumor in his spinal cord. A few days later, he underwent surgery for tumor removal.
After undergoing surgery and physical therapy, he went back to, yet, another company-
designated physician Dr. Gilbert Rañoa. The latter observed that he was still suffering lower
back pain probably due to his lumbar spondylosis. Dr. Rañoa then declared that his illness was
not work related. Dr. Rañoa, nonetheless, offered to give him a disability grading of 11.
He, thereafter, sought the opinion of his personal physician, Dr. Venancio Garduce who
concluded that due to the weakness of his upper extremities, it was impossible for him to be
employed again as seafarer. Dr. Garduce opined he was entitled to a Grade 3 disability rating.
The Labor Arbiter awarded petitioner permanent total disability compensation. The labor
arbiter ruled that the company-designated physicians failed to make a final assessment of
petitioner's condition within 120/240 window period. Petitioner's disability had, therefore,
become total and permanent. On appeal, the NLRC modified the award to partial permanent
disability. The Court of Appeals affirmed the decision of the NLRC.
ISSUE: Is petitioner entitled to permanent total disability benefits?
RULING: YES. Without a final and definitive assessment from the company-designated physician
on petitioner's disability, the same is deemed permanent and total by operation of law.
It is axiomatic that 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. 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. If the company-designated physician fails to give his assessment within the period of 120
53
days with a sufficient justification (e.g. seafarer required further medical treatment or seafarer
was uncooperative), then the period of diagnosis and treatment shall be extended to 240 days.
The employer has the burden to prove that the company-designated physician has sufficient
justification to extend the period. 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.
Based thereon, two (2) requisites must concur for a determination of a seafarer's condition: 1)
an assessment must be issued within the 120/240 window; and 2) the assessment must be final
and definitive.
Here, we agree with the Court of Appeals that the company-designated physician made an
assessment on petitioner's illness within the 120-day period.
Section 20(B) of POEA-SEC20 provides that it is the primary responsibility of a company-

designated physician to determine the disability grading or fitness to work of seafarers. To be
conclusive, however, company-designated physicians' medical assessments or reports must be
complete and definite. Otherwise, the corresponding disability benefits awarded might not be
commensurate with the prolonged effects of the injuries suffered.
Here, Medical Report dated May 15, 2014 contained the following observations: "the prognosis
of returning to (his) sea duties is guarded" and "If patient is entitled to a disability, his
suggested disability grading is Grade 11 - slight rigidity or 1/3 loss of motion of lifting power of
the trunk."
This is hardly the "definite and conclusive assessment of the seafarer's disability or fitness to
return to work" required by law from the company-designated physician. For there was nothing
on record showing that the company designated physician explained in detail the progress of
petitioner's treatment and the approximate period needed for him to fully recover.
At any rate, in disability compensation, it is not the injury which is compensated, but rather it is
the incapacity to work resulting in the impairment of one's earning capacity. Total disability
refers to an employee's inability to perform his or her usual work. It does not require total
paralysis or complete helplessness. Permanent disability, on the other hand, is a worker's
inability to perform his or her job for more than 120 days, or 240 days if the seafarer required
further medical attention justifying the extension of the temporary total disability period,
regardless of whether or not he loses the use of any part of his body.
APOLINARIO Z. ZONIO, JR. v. 88 ACES MARITIME SERVICES, INC., KHALIFA A. ALGOSAIBI

DIVING AND MARINE SERVICES CO., AND JANET A. JOCSON
G.R. No. 239052, October 16, 2019, INTING, J.
54
FACTS: Respondent 88 Aces Maritime Services, Inc. (88 Aces) hired Petitioner Apolinario was as
an "ordinary seaman" to board the vessel MV Algosaibi. After completing Petitioner’s six-month
contract with 88 Aces in August 2010, Apolinario was not repatriated as he directly entered into
a new contract with 88 Aces' foreign principal, Khalifa Algosaibi. However, In April 2012,
Apolinario was repatriated in Manila. On May 8, 2015, he filed a Complaint before the Labor
Arbiter against 88 Aces, Jocson and Khalifa Algosaibi (collectively referred to as respondents)
for the payment of disability benefits, attorney's fees, medical fees, sickness allowance and
moral, exemplary and compensatory damages.
Apolinario alleged that while on board MV Algosaibi in December 2010, he suddenly

experienced dizziness. He was sent to As Salama Hospital in Al-Khobar, Saudi Arabia for two
occasions where he was found to have high glucose and cholesterol, and diabetes mellitus and
dislipedemia, respectively.
He was repatriated to the Philippines on April 11, 2012 but was told by President Janet Jocson
that 88 Aces could not shoulder his medical expenses for his contract has already expired.
Apolinario did not insist anymore and just continued taking the medicine given by the doctor in
Saudi Arabia.
Subsequently, Apolinario felt well and thought that his illness was already cured. However, it
recurred on August 2, 2013. Apolinario consulted two doctors on different occasions. Dr. Joseph
Glenn Dimatatac confirmed his illness as indeed diabetes mellitus, while ted Dr. Rufo Luna, the
Municipal Health Officer of the Municipality of San Jose, declared him to be physically unfit to
continue work due to his hyperglycemia. Consequently, Apolinario demanded from
respondents the payment of his disability benefits, but to no avail.
The Labor Arbiter ruled in favor of Apolinario On January 28, 2016, the NLRC rendered a
granted respondents' Appeal. The CA affirmed the NLRC's Decision and dismissed Apolinario's
Petition.
ISSUE: Is petitioner entitled for permanent and total disability benefits?
RULING: YES. The 2000 POEA-SEC provides that any sickness resulting in disability because of an
occupational disease listed under Section 32(A) of this Contract is deemed to be work-related,
provided the conditions set therein are satisfied. Section 20(B)(4) of the 2000 POEA-SEC, on the
other hand, declares that if the illness, such as diabetes mellitus, is not listed as an occupational
disease under Section 32(A), the ailment is disputably presumed as work-related.
55
The effect of the legal presumption in favor of the seafarer is to create a burden on the part of
the employer to present evidence to overcome the prima facie case of work-relatedness.
Absent any evidence from the employer to defeat the legal presumption, the prima facie case
of work-relatedness prevails.
While the illness is not listed as one of the occupational diseases under Section 32(A) of the
POEA-SEC, the ailment is presumed work-related under Section 20(B)(4) of the contract.
However, other than their bare allegation, respondents did not present a scintilla of proof to
establish the lack of casual connection between Apolinario's disease and his employment as a
seafarer. 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 a seafarer's work conditions caused or at least
increased the risk of contracting the disease.
As earlier stated, respondents herein failed to adduce any contrary medical findings from the
company-designated physician to show that Apolinario's illness was not caused or aggravated
by his working conditions on board the vessel. There was also no showing that Apolinario is
predisposed to the illness by reason of genetics, obesity or old age. Such being the case, this
Court consider that the stress and strains he was exposed to on board contributed, even to a
small degree, to the development of his disease. Inasmuch as, compensability is the
entitlement to receive disability compensation upon a showing that a seafarer's work
conditions caused or at least increased the risk of contracting the disease, We find Apolinario's
disease as compensable at bar.
A seafarer-claimant is mandated a period of three working days within which he should submit
himself to a post-employment medical examination so that the company-designated physician
can promptly arrive at a medical diagnosis. Due to the express mandate on the reportorial
requirement, the failure of the seafarer to comply shall result in the forfeiture of his right to
claim the above benefits.
Nevertheless, while the requirement to report within three working days from repatriation
appears to be indispensable in character, there are some established exceptions to this rule: (1)
when the seafarer is incapacitated to report to the employer upon his repatriation; and (2)
when the employer inadvertently or deliberately refused to submit the seafarer to a post-
employment medical examination by a company designated physician.
56
It is well-settled that a seafarer's cause of action arises upon his disembarkation from the
vessel. As Apolinario's disembarkation from Algosaibi was on April 11, 2012, he had three years
from the date, or until April 11, 2015, to make a claim for disability benefits. Records show that
Apolinario had requested for a SENA before the NLRC as early as March 25, 2015.
Notwithstanding, that Apolinario filed his Complaint before the Labor Arbiter only on May 8,
2015 is of no moment. SENA being a pre-requisite to the filing of a Complaint before the Labor
Arbiter, the date when Apolinario should be deemed to have instituted his claim was when he
instituted his Request for SENA on March 25, 2015. Considering that the expiration of
Apolinario's cause of action was on April 11, 2015, his claim was filed well within the 3-year
prescriptive period.
57
CLARET SCHOOL OF QUEZON CITY v. MADELYN I. SINDAY

G.R. No. 226358, October 09, 2019, LEONEN, J.
FACTS: Respondent Sinday narrated that in April 2011, Respondent Claret engaged her as a
releasing clerk and held this position until July 14, 2011. Before her job as releasing clerk
expired, Sinday applied for work at one (1) of Claret's departments, Claret Technical-Vocational
Training Center (Claretech), and she started her new work as secretary. Sinday claimed that Fr.
Renato B. Manubag (Fr. Manubag), the institution director of Claretech, classified her as a
regular employee under the hon-teaching or non-academic school employees.
However, in May 2013, Claret asked Sinday to sign a Probationary Employment Contract
covering the period of January 16, 2013 to July 15, 2013. When the contract expired, Sinday
was told that her tenure would expire on July 31, 2013. Her supervisor told her that her
dismissal was due to cost-cutting, particularly the need to reduce the employees.
Desperate for work, Sinday continued to work for Claret and was employed on August 1, 2013
as a substitute teacher aide at Claret's Child Study Center. When the permanent teacher aide
returned on October 25, 2013, Sinday stopped working for Claret.
Thus, Sinday filed her Complaint for illegal dismissal, claiming that she had been a regular
employee as she performed various jobs that were usually necessary and desirable in the usual
business of Claret.
On the other hand, Claret denied Sinday's claims averring that she was merely a part-time
fixed-term contractual employee whom the school accommodated because her husband was
its longtime driver. It also argued that Sinday was well aware of her fixed-term employment as
confirmed by her application letters and biodata, which showed her employment's duration.
Claret also pointed, out that Sinday did not regularly work for eight (8) hours a day, five (5) days
a week, her services being required only as needed. It further maintained that while Fr.
Manubag indeed decided to classify her as regular employee, the decision was nonetheless
revoked later due to Claretech's financial difficulties.
The Labor Arbiter found that Sinday was illegally dismissed. On appeal, the NLRC reversed the
Labor Arbiter's Decision. The CA reversed the Labor Arbiter's Decision and found that Sinday
was not illegally dismissed.
ISSUE: Whether or not respondent is illegally dismissed.
RULING: YES. Article 295 of the Labor Code categorizes employees into regular, project,
seasonal, and casual. It further classifies regular employees into two (2) kinds: (1) those
"engaged to perform activities which are usually necessary or desirable in the usual business or
58
trade of the employer"; and (2) casual employees who have "rendered at least one year of
service, whether such service is continuous or broken."
In 1990, the case of Brent recognized another classification of employment: fixed-term

employment. There, this Court ruled that fixed-term employments are valid under both the Civil
Code and the Labor Code. Thus, the existence of a contract indicating a fixed term does not
preclude regular employment. This Court has held that our ruling in Brent is the exception
rather than the general rule, and a fixed-term employment is recognized as valid only under
certain circumstances, particularly when a fixed-term is an essential and natural appurtenance.
As the facts bare, respondent's whole family depended on petitioner. Her husband was the
school's longtime driver; their children, its scholars. Respondent is a high school graduate
whose ordinary qualifications compelled her to accept the various positions offered by
petitioner. Given these circumstances, respondent was not in a position to bargain on the terms
of her employment. It was a grave error for the National Labor Relations Commission to find no
moral dominance merely because both parties benefitted from the fixed-term employment.
There is no genuine freedom to contract when a fixed-term employment is used as a vehicle to

exploit the economic disadvantage of workers like respondent. Plain wage earners should not
be faulted for tolerating jobs they desperately need. The conclusion of the National Labor
Relations Commission that respondent dealt with petitioner in more or less equal terms is
nothing short of callousness to respondent's predicament.
Even if this Court gives credence to petitioner's allegations, respondent's dismissal is still illegal
for petitioner's failure to comply with due process requirements.
The employer has the burden of proof to show that an employee's dismissal was for a just or
authorized cause, and that the dismissal was not illegal. Unfortunately for petitioner, it failed to
discharge this burden.
No notice was served on respondent informing her of the grounds of her termination. She was
not given the opportunity to be heard. Without complying with procedural due process
requirements, petitioner could not have validly terminated respondent's services. Since the
termination of respondent's employment was rendered without regard to due process, this
Court finds respondent to have been illegally dismissed.
59
ERNESTO P. GUTIERREZ, PETITIONER, v. NAWRAS MANPOWER SERVICES, INC., AL-

ADHAMAIN CO. LTD., AND ELIZABETH BAWA
G.R. No. 234296, November 27, 2019, CARANDANG, J.
FACTS: Petitioner was hired by respondent NAWRAS Manpower Services, Inc. (NAWRAS) to
work as respondent Al Adhamain Co. Ltd.'s (Al-Adhamain) "driver vehicle road" in Saudi Arabia
for two years. Upon arrival, petitioner claimed that he was initially placed on floating status. He
received his first salary only in November 2013 and received two months' worth of salary on
December 2, 2013. On February 15, 2014, the workshop supervisor informed petitioner that he
would be transferred to another site and was made to report to Al-Adhamain's administrator.
At the administrator's office, he was only given a clearance form. In a meeting with Al-
Adhamain's owner, petitioner was told that his contract would be terminated and he would be
repatriated as soon as petitioner completes his clearance. Petitioner then called NAWRAS about
the pre-termination of his contract but was refrained from filing a complaint with the Philippine
Overseas Labor Office in order to allow NAWRAS to talk to Al-Adhamain. Petitioner thus
proceeded to submit the requirements for his clearance in the last week of February 2014. On
March 15, 2014, petitioner was given his remaining salary (sans 1-month salary) and a refund of
his two months' salary bond. He was then told to book his own flight back to the Philippines
and that he would be reimbursed later on. However, of the SR3,100.00 that he spent for the
airfare, Al-Adhamain's owner only reimbursed him for SR2,000.00.
Upon repatriation, petitioner filed a complaint for actual illegal dismissal with claims for
underpaid overtime pay, unpaid salaries, and transportation expenses, termination pay,
damages, and attorney's fees against respondents.
Respondents averred that petitioner was validly dismissed because of his poor performance.
Petitioner was thus transferred to a different site to afford him a chance to change his working
attitude. Despite extending several opportunities for petitioner to improve, petitioner opted to
request for his last salary, benefits, termination pay, and return ticket. Lastly, respondents
alleged that they complied with the notice and hearing requirement before terminating
petitioner's employment.
The LA found that petitioner was illegally dismissed. The NLRC affirmed the LA's Decision in
toto. The CA likewise affirmed the tribunal's finding of illegal dismissal.
ISSUE: Whether Petitioner is entitled to salary equivalent to the unexpired portion of the
contract.
RULING: YES. The CA incorrectly reduced the award for petitioner's salary to SR13,800.00. In
Sameer, this Court struck down the phrase "or for three (3) months for every year of the
unexpired term, whichever is less" under Section 7 of R.A. 10022 because the same phrase was
60
already declared unconstitutional in R.A. 8042 or the Migrant Workers and Overseas Filipinos
Act of 1995. Petitioner is, thus, entitled to "his salaries for the unexpired portion of his
employment contract" - the operative clause of Section 7. As such, the LA's computation of
SR40,250.00 shall be reinstated.
This Court is more inclined to believe that petitioner was able to substantiate his claim of
paying SR3,100.00 for his airplane ticket. Aside from the fact that respondents kept silent on
the matter in their appeal before the NLRC, the NLRC pointed out that petitioner presented a
ticket receipt as proof that petitioner paid for the airplane ticket. This is bolstered by the LA's
findings that respondents failed to present any proof of payment for the ticket. A reading of the
CA's decision, likewise, reveals that respondents failed to present any proof to substantiate
their claim that they paid for petitioner's ticket. As such, it is proper to reinstate the LA and
NLRC's order for respondents to reimburse petitioner the excess SR1,100.00 payment.
61
PASAY CITY ALLIANCE CHURCH/CAMACOP/REV. WILLIAM CARGO v. FE BENITO

G.R. No. 226908, November 28, 2019, REYES, J. JR., J.
FACTS: Petitioner Pasay City Alliance Church (PCAC) is one of the local churches of its co-
petitioner, Christian and Missionary Alliance Churches of the Philippines (CAMACOP), a religious
society registered with the Securities and Exchange Commission.
Respondent Fe P. Benito (Benito) is a licensed Christian Minister of CAMACOP and served as

PCAC's Head of Fellowship and Discipleship. In 2005, Benito was appointed Head of PCAC's
Membership and Evangelism Ministry, which was renamed Pastoral Care and Membership in
2009. Benito served without a written contract. Pastoral Care and Membership is under the
supervision of the Church Ministry Team (CMT) and co-petitioner Reverend William Cargo (Rev.
Cargo).
The present controversy stemmed from CAMACOP and PCAC's policy requiring pastors or
ministers without written contracts to tender a courtesy resignation every year. The policy is
expressed in Article VII, Section 3(2) of CAMACOP's Amended Local Church Administrative and
Ministry Guidelines, Pastors who are not reappointed to their previous posts may reapply, in
which case, they are assigned to another position, local church or specialized ministry.
Notwithstanding the adoption and ratification of this policy by CAMACOP's member
congregations in 2005, the practice of requiring courtesy resignations in PCAC began
implementation only in 2009, after Rev. Cargo assumed as Senior Pastor or during his
leadership.
In compliance, Benito tendered her courtesy resignation as Head of Pastoral Care and
Membership on January 30, 2011. The CMT reappointed Benito to the same position for
another year. When the CMT convened the following year, or on February 12, 2012, it then
decided not to reappoint Benito and recommended that she reapply to a more suitable
position, the decision not to extend Benito's term was not immediately pursued by the CMT,
and Benito held the post for another year. Finally, Benito was informed, through a letter dated
December 15, 2013, of the CMT's decision to uphold its February 12, 2012 recommendation to
the District Ministry Supervisor regarding the non-extension of her engagement as PCAC's Head
of Pastoral are and Membership. Aggrieved, Benito filed a complaint for illegal dismissal,
damages and attorney's fees before the Labor Arbiter.
In response, PCAC questioned the Labor Arbiter's jurisdiction and asserted that Benito's
vocation and ministry are not governed by the Labor Code, but by CAMACOP's Local Church
Administrative and Ministry Guidelines and its By-Laws.
62
Resolving the complaint, the Labor Arbiter ruled that an employment relationship existed
between the parties and concluded that Benito was illegally dismissed due to her involuntary
resignation and the lack of evidence to justify non-renewal of her appointment. On appeal,
however, the NLRC overturned the Labor Abiter's Decision. The CA subsequently denied
petitioners' appeal.
ISSUE: Whether or not the court of appeals erred in declaring that the "termination" of
Respondent Fe Benito by Petitioner PCAC is not n "ecclesiastical affair" but instead a severance
of an employer-employee relationship over which the Labor Arbiter has jurisdiction
RULING: NO. In our jurisdiction, we hold the Church and the State to be separate and distinct
from each other. Likewise, it has been held by this Court that the mere fact that a termination
dispute involves a church and its religious minister does not ipso facto clothe a case with
religious significance.
At the center of the present controversy is the enforcement of a religious denomination's

internal rules in the governance of its member churches. Petitioners' contention that there was
no dismissal to speak of and the matter concerns their right to transfer or reassign one of their
licensed ministers is well taken. We find the claimed right to be infused with religious color
because it bears down on the relationship of a church and its members in faith-based matters.
If a church or religious association has the sole prerogative to exclude members perceived to be
unworthy in light of its doctrinal standards, all the more does it have sole prerogative in
determining who are best fit to minister to its members in activities attached with religious
significance.
Guided by the foregoing, we hold that the termination of a religious minister's engagement at a
local church due to administrative lapses, when it relates to the perceived effectivity of a
minister as a charismatic leader of a congregation, is a prerogative best left to the church
affected by such choice. If a religious association enacts guidelines that reserve the right to
transfer or reassign its licensed ministers according to what it deems best for a particular
congregation, ministry or undertaking in pursuit of its mission, then the State cannot validly
interfere.
63
JHEROME G. ABUNDO v. MAGSAYSAY MARITIME CORPORATION, GRAND CELEBRATION

LDA AND/OR MARLON ROÑO
G.R. No. 222348, November 20, 2019, INTING, J.
FACTS: On April 25, 2012, the petitioner was engaged by the respondents as Able Seaman for
eight months. On December 15, 2012, while the petitioner was securing a lifeboat, a metal
block snapped and hit his right forearm. First aid was immediately administered on the
petitioner at the ship's infirmary. Then, the petitioner was sent to a hospital in Brazil. In the
hospital, a posterior splint was applied on the affected area to immobilize it and prevent further
injury.
Petitioner was medically repatriated on January 7, 2013. Upon arrival, the petitioner was
referred to a company-designated physician, and it was revealed that Petitioner sustained an
overriding fracture. Subsequently, the petitioner underwent a treatment procedure for open
reduction and internal fixation with plate replacement and screws of the fractured right distal
radius. After his discharge from the hospital, the petitioner was then made to undergo
physiotherapy to improve the function of his right arm.
Dr. Esther G. Go (Dr. Go), the company-designated doctor, issued an interim assessment of
Grade 10 disability which was noted by the company medical coordinator, Dr. Robert D. Lim
(Dr. Lim). Further, on April 26, 2013, Dr. Ramon Lao (Dr. Lao), a company surgeon, suggested a
Grade 10 disability due to ankylosed wrist.
Meanwhile, the petitioner sought an independent doctor, Dr. Rogelio P. Catapang (Dr.
Catapang), an orthopaedic surgery and traumatic flight surgeon .
With these findings, the petitioner demanded from the respondents the maximum benefit
under the Philippine Overseas Employment Administration-Standard Employment Contract
(POEA-SEC) and claimed to be suffering from permanent disability. Instead of granting
permanent disability benefits, the respondents offered US$10,075.00, an amount equivalent to
a Grade 10 disability. As a result, the petitioner filed a labor complaint against the respondents
seeking the payment of sickness allowance, permanent and total disability benefits, moral and
exemplary damages, and attorney's fees.
The Labor Arbiter ruled in favor of the petitioner. NLRC affimed the Labor Arbiter's
ratiocination. The CA granted the petition and reversing the NLRC's ruling.
ISSUE: Whether the petitioner is entitled to permanent and total disability benefits.
64
RULING: YES. To arrive at a judicious resolution of the present controversy, this Court deemed
it proper to apply: a) Section 20(A)(3) of the POEA-SEC; b) Article 198 [192](c)(1), Chapter VI,
Title II, Book IV of the Labor Code; and c) the Amended Rules on Employee Compensation
(AREC) implementing Title II, Book IV of the Labor Code.
There is no question that the referral to a third doctor as provided in Section 20(A)(3) of the
POEA-SEC is mandatory in case there are disagreements made by the company-designated
physician and the seafarer's chosen physician as to the seafarer's medical condition. This Court
reiterated the settled rule that the referral to a third doctor is mandatory, and that the
seafarer's failure to abide thereby is a breach of the POEA-SEC which makes the assessment of
the com any-designated physician final and binding.
However, our jurisprudence is replete with cases which pronounce that before a seafarer
should be compelled to initiate referral to a third doctor, there must first be a final an
categorical assessment made by the company-designated physician as to the seafarer's
disability within 120/240-day period. Otherwise, the seafarer shall be considered permanently
disabled by operation flaw.
Records reveal that petitioner remained incapacitated to resume sea duties even after the
company-designated doctor evaluated his medical condition. This means that the petitioner
had to still undergo medical treatment even after being seen by the company-designated
physician. Obviously, even after the lapse of the maximum 240-day period there was still no
final assessment made by the company-designated doctor as to the petitioner's disability. With
Dr. Go's failure to issue a final and definite assessment of petitioner's condition within the 240-
day period, petitioner was thus deemed totally and permanently disabled. It is apparent that
petitioner's disability and incapacity to resume working continued for more than 240 days.
Consequently, the absence of a final assessment by the company designated physician makes
the rule on third-doctor-referral inapplicable in the instant case. The failure of the company-
designated physician to issue a final assessment and disability grading within the 240-day
period made the petitioner's disability total and permanent even without evaluation by a third
doctor. Evidently, there is no need for the petitioner to initiate the referral to a third doctor for
him to be entitled to permanent disability benefits.
The CA should have widened its spectrum in deciding the case and applied the Labor Cod
provisions on disability benefits. Applying the 2010 POEA-SEC, the Labor Code provisions on
permanent disability and the AREC vis-a-vis the several jurisprudence concerning seafarer's
disability compensation, this Court holds that the petitioner is, by operation of law,
permanently disabled to work as a seafarer.
65
MAGSAYSAY MARITIME CORPORATION, PRINCESS CRUISE‘ LINES LTD.,

and/or GARY M. CASTILLO, v. ALLAN F. BUICO
G.R. No. 230901, December 5, 2019, CAGUIOA, J.
FACTS: Petitioner Magsaysay Maritime Corporation, in behalf of its principal, Petitioner Princess
Cruise Lines Ltd., hired respondent Allan F. Buico as Second Pantryman aboard the vessel Star
Princess. While on board, Buico met an accident which caused him an injury on his right leg and
ankle. First aid treatment was initially given to Buico and he was thereafter transferred to a
hospital in Canada where he underwent an Open Reduction Internal Fixation surgery
procedure. Thereafter, he was repatriated to the Philippines where the company-designated
physician initially diagnosed Buico to have “s/p ORIF for Fracture, lateral and posterior
malleolus with talar shift, right.” All in all, Buico underwent therapy for a total of 36 sessions
starting August 19, 2014 until November 28, 2014 as show by his certificate of attendance.
On October 11, 2014 and November 15, 2014, the company-designated physician issued an
Interim Disability Grading, assessing Buico’s disability at Grade 10. Subsequently, the company-
designated physician gave a Final Medical Report and a Disability Grading of Grade 10 disability
in accordance with POEA-SEC.
Buico consulted his own physician who diagnosed him unfit to perform sea duty in whatever
capacity with a permanent disability status. On March 13, 2015, Buico then filed a Complaint
with the LA against petitioners for permanent and total disability benefits. In their defense,
petitioners essentially made the following arguments: Buico was not entitled to permanent and
total disability benefits because the company-designated physician had already assessed his
disability at Grade 10 pursuant to the POEA-SEC.
The LA ruled in favor of Buico. However, the NLRC reversed the decision of the LA. The CA
affirmed the ruling of NLRC.
ISSUE: Is Buico entitled to the award of total and permanent disability benefits?
RULING: NO. Buico is not entitled to the award of total and permanent disability benefits.
Since Buico was employed in 2013, the procedure to be observed in claiming disability benefits
is outlined in Section 20 (A) of the 2010 POEA-SEC. Pursuant to said provision, when a seafarer
suffers a work-related injury, the employer is obligated to refer the seafarer to a company-
designated who has to arrive at a definite assessment of the seafarer’s fitness or degree of
disability within the period of 120 days from repatriation. However, if there is no definitive
declaration because the seafarer required further medical attention, then the period may be
extended up to a maximum of 240 days, subject to the right of the employer to declare within
this period that a permanent partial or total disability already exists.
66
In the case at bar, while the company-designated physician had issued both the Final Medical
Report and Disability Grading on December 1, 2014 – beyond the initial 120-day period from
repatriation which ended on November 6, 2014 – there was sufficient justification for such
failure to give a timely medical assessment and to extend the period of diagnosis and treatment
because Buico had required further medical treatment. As found by the CA, Buico had
religiously undergone therapy from August 19, 2014 until November 18, 2014. The Final
Medical Report and Disability Grading was thus timely issued by the company-designated
physician within the extended 240-day period which ended on March 6, 2015.
Records of the case show that the findings of the company-designated physician as to Buico’s
disability were final, accurate, and precise, especially since there was a specific disability
grading and since it stated that there was no other treatment intervention indicated for Buico.
It is likewise noteworthy that the disability grading given by the company-designated physician
was a result of several months of diagnosis and treatment. In fact, this Grade 10 disability rating
was already given to Buico at least twice as an interim disability grading, thereby further
lending credence to the assessment given by the company-designated physician.
As stated in jurisprudence, in case of non-observance by the seafarer of the third doctor

referral provision in the contract, the employer can insist on the company-designated
physician’s assessment even against the contrary opinion by another doctor, unless the
seafarer expresses his disagreement by asking for a referral to a third doctor who shall make a
determination and whose decision shall be final and binding on the parties. Securing a third
doctor’s opinion is the duty of the seafarer, who must actively or expressly request for it.
In the instant case, after the company-designated physician gave a final Grade 10 disability
assessment, Buico consulted his own physician who opined that he was unfit to perform sea
duty in whatever capacity with a permanent disability status. Thereafter, Buico filed a
complaint against his employers without first expressly requesting the company for the referral
of the matter to a third doctor.
This failure by Buico to comply with the requirement of referral to a third doctor is tantamount
to a violation of terms under the POEA-SEC. Consequently, without a binding third-party
opinion, the final, accurate and precise findings of the company-designated doctor physician
prevail over the conclusion of the seafarer’s personal doctor. Thus, the LA had correctly
awarded Grade 10 disability benefits to Buico based on the disability grading given by the
company-designated physician.
67
PACIFIC METALS CO., LTD. VS. EDGAR ALLAN TAMAYO, ERMAN MINERALS, INC., AND
ENRIQUE FERNANDEZ
G.R. NO. 226920, December 5, 2019, Lazaro-Javier J.
FACTS: Petitioner Pacific Metals Co. Ltd. (PAMCO) engaged the services of respondent Edgar
Allan Tamayo, for a two-month employment contract which was later on extended for another
two months.
Tamayo was designated manager for the ERAMEN/PAMCO Exploration Project. As such, he was
in charge of preparing the project reports and updates, and budget requests for approval of
Fernandez. There is no showing, however, that Tamayo’s engagement with the
ERAMEN/PAMCO Exploration Project was covered by an employment contract.
Subsequently, Tamayo was informed that his services as exploration manager was terminated
effective December 31, 2011 in view of the completion of the exploration aspect of the project.
For clearance purposes, Tamayo was requested to submit his Final Exploration Report and to
turn-over the complete database of the Exploration Project, as well as all other documents,
supplies, and equipment which were still in his custody.
In response, Tamayo sent an email to ERAMEN/Fernandez to clarify the requirements for his
clearance and to inform the company that he was waiving his last salary to cover office items
which may have been lost. In the said emails, he informed PAMCO’s Okamura and ERAMEN’s
Fernandez that he intended to file a complaint before the NLRC unless his demands were
granted by the company, such as payment of backwages, termination of some administrative
personnel, moral and professional damages, and other terms and conditions to protect his
future professional and moral interest.
On December 12, 2012, Tamayo filed a complaint for illegal dismissal against PAMCO and
ERAMEN. PAMCO argued that Tamayo cannot claim to be its regular employee because it was
clear in the service contract that he was hired as a consultant. Tamayo, thus, cannot demand
payment for services he no longer rendered, more so, if he sought to collect the same under
the guise of being illegally dismissed. Further, due process was observed in Tamayo’s
termination.
The Labor Arbiter ruled that Tamayo was not a regular employee but a project employee. The
NLRC affirmed the LA’s decision. However, the CA reversed the said ruling and held that
Tamayo was a regular employee who was illegally dismissed.
ISSUE: Is Tamayo a regular employee?
RULING: YES. Tamayo is a regular employee of PAMCO, for he performs work that is usually
necessary and desirable to PAMCO’s business.
68
The principal test to determine if one is a project employee is whether such employee had been
assigned to carry out a specific project or undertaking, the duration and scope of which is
specified at the time such employee was engaged for the project. This is clear from Article 280
of the Labor Code which distinguishes a project employee from a regular employee.
The lack of an employment contract would not hinder the determination of the status of
Tamayo’s employment. For while the appropriate evidence showing that a person is a project
employee pertains to the employment contract specifying the project and its duration; the
existence of such contract is not always conclusive of the nature of one’s employment.
Based on Article 295 of the Labor Code, one is deemed a regular employee if one: a) had been
engaged to perform tasks which are usually necessary or desirable in the usual business or
trade of the employer, unless the employment is one for a specific project or undertaking or
where the work is seasonal and for the duration of a season; or b) has rendered at least one
year of service, whether such service is continuous or broken, with respect to the activity for
which he is employed and his employment continues as long as such activity exists.
To accomplish the process of the nickel ore importation, PAMCO must rely on the expertise of a
geologist, which Tamayo is, with knowledge of Philippine soil and its rich sources of minerals.
The tasks ordinarily performed by a geologist, therefore, are necessary to the business which
PAMCO was engaged in.
69
RAMON R. MAGADIA v. ELBURG SHIPMANAGEMENT PHILIPPINES, INC. AND ENTERPRISES

SHIPPING AGENCY SRL
G.R. No. 246497, December 5, 2019, LAZARO-JAVIER, J.
FACTS: On September 20, 2013, respondents hired petitioner as messman to work on board
MV FD Honorable for a period of nine (9) months. On May 19, 2014, while on board,
Petitioner’s shoulder hit the steel railings and his body rammed against the floor. He was
immediately administered first aid and brought to a hospital in Rio de Janeiro. He had an x-ray
on his spine and pelvis and got diagnosed with “Herniated Nucleus Pulposus, Lumbosacral
Vertebrae.
On May 23, 2014, he got repatriated to Manila and reported to the company-designated
physician for examination and treatment. After undergoing an MRI test, company-designated
physician Dr. William Chuasuan, Jr. diagnosed him with “L4-L5 and LS-S1 Disc Dessication; Left
Forearm Confusion.” He was recommended for physical therapy. On September 24, 2014, the
company-designated physician issued petitioner an initial disability grading of 11 after he found
that petitioner’s trunk was “within functional range.
Petitioner, thereafter, continued with his treatment and therapy. On January 6, 2015, the
company-designated physician assessed his condition as resolved and stopped his treatment.
His back pain, however, persisted. Thus, he sought the opinion of another physician, Dr. Misael
Jonathan A. Ticman. In his Disability Report Dr. Ticman recommended Permanent Disability and
unfit to work as a seaman in any capacity.
Consequently, he demanded from respondents payment of full disability benefits, but to no

avail. Respondent’s aver that the company-designated physician assessed petitioner’s disability
as Grade 11. Petitioner was, therefore, only entitled to partial permanent disability benefits.
Labor Arbiter granted petitioner’s claim for permanent and total disability benefits. The NLRC
however, modified the ruling of LA and declared that petitioner was only entitled to partial
disability benefits. On petitioner’s appeal by certiorari, the Court of Appeals affirmed.
ISSUE: Is petitioner entitled to permanent total disability benefits?
RULING: YES. Petitioner's disability is deemed permanent and total by operation of law in the
absence of a final and definitive assessment from the company-designated physician.
Two (2) requisites must concur for a determination of a seafarer’s medical condition: 1) an
assessment must be issued within the 120/240 window, and 2) the assessment must be final
and definitive.
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Here, petitioner was repatriated on May 23, 2014. After undergoing medical treatment, the
company-designated physician issued an interim Grade 11 disability on September 24, 2014.
Petitioner’s back pain persisted which required him to continue with his medical treatment. Per
Medical Report dated October 3, 2014, the company-designated physician issued petitioner a
final disability grading of 11, 133 days since he got evaluated. Indeed, the diagnosis was laid
down within the extended period of 240 days. But the case does not stop here. The rules also
require that the company- designated physician’s assessment on a seafarer’s illness be final and
definitive.
Section 20(B) of POEA-SEC2’ provides that it is the primary responsibility of a company-

designated physician to determine the disability grading or fitness to work of seafarers. To be
conclusive, however, company- designated physicians' medical assessments or reports must be
complete and definite. A final and definite disability assessment is necessary in order to truly
reflect the true extent of the sickness or injuries of the seafarer and his or her capacity to
resume work as such. Otherwise, the corresponding disability benefits awarded might not be
commensurate with the prolonged effects of the injuries suffered.
Here, the Medical Report dated October 3, 2014 contained the following observations: “The
specialist opines that [the] patient [had] already reached maximum medical treatment. If [the]
patient is entitled to disability, his final disability grading is Grade 11 — loss of 1/3 lifting power
of the trunk.
There was nothing on record showing that the company-designated physician explained in
detail the progress of petitioner's treatment and the approximate period needed for him to
fully recover. Instead, the medical report merely stated that petitioner suffered a disability
grading of 11 and that he had reached maximum medical care. Clearly, this is hardly the
“definite and conclusive assessment of the seafarer’s disability or fitness to return to work”
required by law from because petitioner, in fact, returned to the company-designated physician
and underwent further therapy which lasted for almost more than three (3) months or until
January 6, 2015.
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AUTOMATIC APPLIANCES INC., SAMSON F. LIM, CORNELIO P. BUENAVENTURA AND

CHRISTINE PONTILLAS V. FRANCIA B. DEGUIDOY
G.R. No. 228088, December 4, 2019, REYES, A., JR., J.
FACTS: Respondent Deguidoy was hired by Petitioners as a regular Sales Coordinator in AAI’s
Cubao Branch. In 2013, AAI suffered a decline in its sales and experienced economic difficulties.
It implemented cost-cutting measures, which included closing some of its branches. In line with
the closure of its branches, it reshuffled and re-assigned its personnel to the remaining
operating branches. As a result, Deguidoy was reassigned from the Cubao branch to the
Tutuban Branch. She accepted her reassignment.
However, while at the Tutuban Branch, Deguidoy failed to reach her sales quota. In August
2013, the manager of the Tutuban Branch wrote AAI notifying the management about
Deguidoy's poor work performance and to request for additional personnel. During the
investigation conducted, it was discovered that she incurred 29 days of unexplained absences
from March to August 2013, in addition to her low sales output.
AAI issued Attendance Infraction Memos dated August 27, 2013 and an Inefficiency and Gross
Negligence Memo of even date. Deguidoy was placed under one-month suspension. She
accepted the suspension and apologized for her faults. When she returned for work, she was
verbally informed of her intended transfer to the Ortigas branch. She left during lunch break
and never returned. She likewise ignored two notices to explain her failure to report to work.
Unbeknownst to AAI, Deguidoy already filed an illegal dismissal case against the former.
The Labor Arbiter dismissed Deguidoy's complaint for illegal dismissal based on its finding that
Deguidoy was not terminated, but was simply being transferred to another branch. The NLRC
Reversed and set aside the ruling of the LA, and held that Deguidoy was constructively
dismissed. The CA affirmed NLRC’s ruling.
ISSUE: Whether Deguidoy was constructively dismissed by AAI.
RULING: NO. The tenurial security shall not grant the employees a vested right to their desired
position, rather, management possesses the right to regulate all aspects of employment
relating to the employees' work assignment and working methods.
Particularly, under the doctrine of management prerogative, an employer possesses the

inherent right to regulate, according to its "own discretion and judgment, all aspects of
employment, including hiring, work assignments, working methods, the time, place and manner
of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal,
and recall of employees." This wide sphere of authority to regulate its own business may only
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be curbed by the limitations imposed by labor laws and the principles of equity and substantial
justice.
In the instant case, the intended transfer did not involve a demotion in rank or diminution in
pay, salaries and benefits. Deguidoy was simply asked to transfer to a different location where
she will be occupying the same position and performing the same functions. Equally important,
the decision to transfer Deguidoy came after a painstaking evaluation of her performance at the
Tutuban branch. This was spurred by a letter sent by Pontillas reporting Deguidoy's dismal
performance at work. Because of the latter's inability to cope with the demands of her work,
Pontillas even requested for additional staff who could carry Deguidoy's load. Surely, an
additional complement would have been unnecessary if Deguidoy was able to perform her
work adequately.
It becomes all too apparent that AAI's decision to transfer Deguidoy to the Ortigas branch was
triggered by the need to streamline its operations. The Tutuban branch needed manpower,
whose functions Deguidoy could not fulfill. Meanwhile, the Ortigas branch was frequented by
lesser customers, and was in need of additional personnel, for which Deguidoy could
adequately respond. In fact, the re-assignment was viewed as a means to aid her increase her
sales target. The records are also bereft of proof that Deguidoy was discriminated against.
Deguidoy was merely one of the many employees transferred due to streamlining of
operations. She was never singled out.
Moreover, neither did AAI act with disdain against Deguidoy. On the contrary, it even sought
ways to help improve her performance at the Tutuban branch. The management called
Deguidoy's attention to discuss the reasons behind her dismal sales performance. Instead of
imposing sanctions, the management even offered to give her counseling.
The Court does not agree with Deguidoy's claim that her transfer was a ploy to "ease her out"
of the company. It bears stressing that although the Ortigas branch closed on November 26,
2013, what matters is that at the time the intended transfer was proposed to Deguidoy, the
branch was still fully operational and in need of additional personnel.
Furthermore, said allegation that AAI was scheming to rid itself of Deguidoy's services, aside
from being unsubstantiated, was disproved by the former's continuous efforts to call Deguidoy
back to work. In fact, when given several notices to return to work, Deguidoy intimated that she
was not yet ready to return. Instead, she filed for a vacation leave from May 16 to 20, 2016.
Seemingly, it was actually Deguidoy who continuously and contumaciously refused to abide
bythe notices and orders sent by AAI. Based on the foregoing, it is all too apparent that
Deguidoy was not constructively dismissed.
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TELUS INTERNATIONAL PHILIPPINES, INC. and MICHAEL SY v. HARVEY DE GUZMAN,.

G.R. No. 202676, December 4, 2019, HERNANDO, J.
FACTS: Telus asserted that it first hired respondent Harvey De Guzman (De Guzman) sometime
in September 2004 as Inbound Sales Associate. His last post prior to the controversy was Senior
Quality Analyst for DELL After Point of Sale (DELL, APoS). On August 2, 2008, Telus received an
escalation complaint® from Jeanelyn Flores (Flores), Team Captain of DELL APoS, charging De
Guzman of disrespect and ridicule towards a person.
Acting on the complaint of Flores, Telus issued a Due Process form to De Guzman in violation of
Section 2, Disorderly Conduct, Items 60 and 61 of Telus’ Code of Conduct. De Guzman was
placed on preventive suspension and was directed to submit a written explanation to answer
the charges to which De Guzman complied. After the administrative hearing, De Guzman’s
preventive suspension was lifted after finding De Guzman innocent of the offenses charged.
However, Telus decided to transfer De Guzman to another “practice”. On August 21, 2008, a
day after his transfer was confirmed, De Guzman file for vacation leave until September 26,
2008. De Guzman was then scheduled for profile interviews twice but he failed to show up.
Telus sent De Guzman a Return to Work Order dated October 13, 2008. Later on, Telus found
out that as early as September 15, 2008, De Guzman already filed a complaint for constructive
dismissal with monetary claims before the NLRC notwithstanding that he was still on paid
vacation leave and was receiving all benefits during the said period. Due to De Guzman’s refusal
to return to work, he was then placed on floating status.
The Labor Arbiter found Telus guilty of constructively dismissing De Guzman. NLRC, however,
overturned the ruling of Labor Arbiter. On appeal, the CA affirmed the ruling of the Labor
Arbiter and overturned the decision of NLRC.
ISSUE: Was De Guzman constructively dismissed?
RULING: YES. The series of acts by the company seriously flouted De Guzman's right as a
tenured employee. The series of actions done by Telus manifests that De Guzman was
terminated in disguise and such actions amount to constructive dismissal.
The conclusion is all too clear that Telus fostered a working environment that was hostile,
discriminatory, unreasonable, and inequitable that naturally compelled De Guzman to give up
his employment thereat to avoid the difficulties he had to face just to keep his employment.
The actions of Telus show that De Guzman was actually subsequently penalized with a much
graver consequence than the supposed preventive suspension that he had undergone.
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If at all, Telus conveniently used "management prerogative" to mask its adverse actions and
washed its hands by conveniently claiming that it timely lifted the preventive suspension of De
Guzman. It should be noted that a mere desire to reinstate an employee to his/her former
position does not satisfy the requirement of the law. Such cannot amount to substantial
compliance on the part of the employer nor will it effectively negate the idea that the employee
was not being dismissed after the period of preventive suspension.
As to the validity of transfer and floating status vis-á-vis management prerogative, while it
maybe argued that the nature of the call center business is such that it is subject to seasonal
peaks and troughs because of client pullouts, changes in clients' requirements and demands,
and a myriad other factors, still, the necessity to transfer De Guzman to another
practice/account does not depend on Telus' third party client/contracts. When the controversy
arose, Telus had several clients in its roster to which it can easily assign De Guzman as Quality
Analyst without any hindrance.
Telus did not provide any valid justification or presented proof that there was indeed a deficit
of account that bars the immediate transfer of De Guzman or that the company was sustaining
losses that would justify placing De Guzman on floating status. Hence, the unwarranted acts of
Telus evidently constitute proof of the constructive dismissal of De Guzman. To say that Telus
merely exercised its rights and that any inconvenience or injury that De Guzman may have
suffered resulted merely in damnum absque injuria which cannot legally give rise to a cause of
action for constructive dismissal, is abhorrent considering the fact that his being placed on a
"floating status" without valid reasons violated his security of tenure and resulted in
unfavourable economic consequences to De Guzman.
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EDITHA SALINDONG AGAYAN v. KITAL PHILIPPINES CORP., RICARDO CONSUNJI III and
JOCELYN CAVANEYRO
G.R. No. 229703, December 4, 2019, Inting, J.
FACTS: Private Respondent Kital Philippines Corporation (“Kital”) is a domestic corporation in

the business of importing and exporting telecommunications, medical, cosmetic, and dental
equipment, among others. Private Respondents Ricardo Consunji II (“Consunji”) and Jocelyn
Cavaneyro (“Cavaneyro”) are the President of Kital and Head of Accounting, respectively.
Records show that Petitioner was hired by Kital on 30 March 2011 to work as the Head of
Telecommunications. Petitioner averred that, sometime in 2014, she received information of
anomalies and dishonesty committed by Cavaneyro, and reported her findings to Consunji for
verification, but the same was not acted upon. Thereafter, Consunji’s behavior became irritable
as he would shout at and bully Petitioner. Subsequently, the working relationships between
Petitioner and Consunji and Cavaneyro worsened. Petitioner expressed her concerns via e- mail
to the foreign principal of Kital, a certain Mr. Kuti Mor, and explained that Consunji had
assaulted her and threatened her in the office. Eveniually, petitioner was served a notice to
explain and demanded to vacate the company premises.
On 22 August 2014, Private Respondents sent Petitioner a notice inforrning her of the decision
to impose preventive suspension of thirty (30) days, charging her with several violations of
company policy, directing her to explain why she should not be subjected to disciplinary action
in view of the foregoing incidents, and notifying her of a hearing to-be held on 29 August 2014.
Petitioner submitted her response on 27 August 2014, but did not attend the scheduled
-hearing. Subsequently, on 08 September 2014. a Notice of Termination was issued against
Petitioner.
Petitioner claimed that she was illegally dismissed from employment without just cause due to
Private Respondents’ disdain for her. Additionally, Petitioner did not breach the trust and
confidence reposed on her. For their part, Private Respondents countered that Petitioner
committed several infractions in the course of her employment.
Labor Arbiter dismissed petitioner’s complaint for illegal dismissal for lack of merit. The NLRC
modified the Labor Arbiter’s Decision, dismissing the appeal of Petitioner. The CA likewise
affirmed the NLRC.
ISSUE: Was Petitioner illegally dismissed?
RULING: NO. The Court ruled that the finding that petitioner’s dismissal was valid has legal
basis and is supported by the evidence on record and jurisprudence.
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The two-fold requirements for a valid dismissal are the following: (1) dismissal must be for a
cause provided for in the Labor Code, which is substantive; and (2) the observance of notice
and hearing prior to the employee’s dismissal, which is procedural.'
Petitioner committed willful disobedience and breach of trust which are just causes for
dismissal under the Labor Code. Willful disobedience requires the concurrence of the following:
a) the employee’s assailed conduct has been willful or intentional; b) the willfulness being
characterized by a “wrongful and perverse attitude;” and c) the order violated must have been
reasonable, lawful, made known to the employee and must pertain to the duties which he had
been engaged to discharge.
Indeed, petitioner’s refusal to provide Consunji the names of the RMs is not justified. Consunji,
as the CEO, had every right to obtain this kind of information from petitioner, especially, as the
latter herself admits that these RMs are non-employees of Kital. The RMs are actually from
different companies, but, nevertheless, maintain a close association with Kital.
As regards loss of trust and confidence, for there to be a valid dismissal, the breach of trust
must be willful, ie, it must be done intentionally, knowingly, and purposely, without justifiable
excuse. In a dismissal based on this ground, the premise is that the employee concerned holds
a_ position of trust and confidence. It is the breach of this trust that results in the employer’s
loss of confidence in the employee.
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DEL MONTE FRESH PRODUCE (PHIL.), INC. v. REYNALDO P. BETONIO

G.R. No. 223485, December 4, 2019, INTING J.
FACTS: On September 1, 2008, Betonio was employed by DMFPPI as its Manager for Port
Operations and was promoted as Senior Manager. Beginning April 2010, the Human Resource
(HR) Department of DMFPPI received reports/complaints about Betonio’s inefficiencies in the
operation of the port. The reports/complaints came from the managers and directors of
different departments of DMFPPI, the market of Del Monte International in Japan, and the local
growers of DMFPPI.
Through a Show Cause Memo dated June 21, 2010, Betonio was charged with gross and
habitual neglect of duties, and breach of trust and confidence. Betonio was required to explain
the 12 infractions he allegedly committed. In his response to the Show Cause Memo, Betonio
explained point by point the infractions lev cle against him, and denied having failed to execute
his duties with utmost diligence.
On July 1, 2010, a meeting was conducted by the Administrative Comniittee wherein Betonio
was made to explain the charges against him. The Administrative Committee found Betonio
inefficient in the management and operation of the port, it opined that his lapses were not
enough for his dismissal. As such, the committee recommended that the charges against
Betonio be dismissed. Despite the Administrative Committee’s recommendation, a Notice of
Disciplinary Action dated July 21, 2010 was issued by the top management, terminating
Betonio’s employment on the ground of gross and habitual neglect of duties and breach of trust
and confidence.
On August 11, 2010, Betonio filed before the Labor Arbiter (LA) a Complaint’ for illegal dismissal
with money claims.
The Executive LA ruled in favor of Betonio. The NLRC reversed the LA’s Decision, and ruled in
favor of DMFPPI. Betonio filed a Motion for Reconsideration of the NLRC’s Decision. Pending
resolution of his motion, the case was re-raffled to Comunissioner Sarmen, as the new ponente
of the case.
In a Resolution'® dated November 20, 2012, the NLRC reversed itself and reinstated the ruling
of the LA in favor of Betonio. DMEFPPI moved for a reconsideration but it was denied.
Aggrieved, DMFPPI filed a Petition for Certiorari with prayer for Preliminary Injunction and
Temporary Restraining Order before the CA, the CA granted DMFPPI’s application for TRO.
ISSUE: Whether Betonio was illegally dismissed.
78
RULING: YES. The Court agrees with the findings and conclusion of the NLRC that Betonio’s
dismissal from employment on the ground of loss of trust and confidence was valid. However,
although there was a just cause for Betonio’s dismissal, he was not afforded procedural due
process.
It is well-settled that to justify a valid dismissal based on loss of trust and confidence, the
concurrence of two conditions must be satisfied: (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. These two requisites are present in this case.
Anent the first requisite, it should be noted that Betonio was the Senior Manager for Port
Operations of DMFPPI. In charge of the operations at the port, he was required to ensure that
the correct volume and pack type of bananas were promptly and accurately loaded on the
vessels for specific market destinations. Betonio, as the Senior Manager for Port Operations of
DMFPPI, was expected to be always on top of any situation that may occur at the port. Such
intricate position undoubtedly required the full trust and confidence of DMFPPI. Indubitably,
Betonio, held a position of trust and confidence in the company.
As to the second requisite, the degree of proof required in proving loss of trust and confidence
differs between a managerial employee and a rank and file employee. In Lima Land, Inc., et al.
v. Cuevas, the Court distinguished between managerial employees and rank-and-file personnel
insofar as terminating them on the basis of loss of trust and confidence.
Under the internal rules of DMFPPI, the administrative committee will first come up with a
recommendatory report on the case of Betonio; that if the top management disagrees with the
committee's recommendation, they will reconvene to discuss the decision to be adopted. While
the administrative committee found Betonio to be inefficient and ineffectual in the operation of
the port, it opined that his lapses were not enough for his dismissal. Consequently, the top
management disagreed to the administrative committee's recommendation. However, instead
of reconvening with the administrative committee to discuss the final decision to be adopted on
Betonio's case, DMFPPI unilaterally proceeded to terminate Betonio's employment. This
deprived Betonio of his last chance to be heard by DMFPPI.
Following the prevailing jurisprudence on the matter, if the dismissal is based on a just cause,
then the noncompliance with the procedural due process should not render the termination
from employment illegal or ineffectual. Instead, the employer must indemnify the employee in
the form of nominal damages. The law and jurisprudence allow the award of nominal damages
in favor of an employee in a case where a valid cause for dismissal exists but the employer fails
to observe due process in dismissing the employee.
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PAPERTECH INC. v. JOSEPHINE P. KATANDO

G.R. No. 236020, January 08, 2020, CARANDANG, J.
FACTS: On June 6, 1996, Papertech hired Katando as a machine operator. In 2007, Katando and
other employees of Papertech filed a Petition for Certification Election. They conducted a picket
in the company on February 28, 2008. This prompted Papertech to file a Complaint for Illegal
Strike against Katando and the other participants in the picket and prayed that the participants
be declared to have lost their employment. Papertech lost in the said case.
On December 14, 2013, Katando received a memorandum from Papertech stating that she will
be transferred to its Makati office. The memorandum states that she will still be under the
same employment terms and conditions but will be tasked to clean the area. Katando received
another memorandum asking her to explain why she should not be subjected to disciplinary
action for her refusal to transfer to the Makati office. Papertech sent Katando a memorandum
on Dcember 26, 2013 imposing a seven-day suspension upon her for her disrespectful
behaviour to her fellow employees and officials of the company .
Katando served her suspension. However, she was suspended yet again for one week for her
disobedience or refusal to transfer as directed. Katando then filed a complaint for illegal
suspension before the NLRC.
Papertech issued a memorandum dated February 6, 2014 to Katando reiterating her transfer to
its Makati office. Thereafter, Papertech issued a notice to Katando requiring her to explain
within 48 hours why she refused to receive the February 6, 2014 memorandum. Katando
submitted her explanation.
Papertech issued another notice to Katando on February 17, 2014 directing her to explain why
she should not be administratively charged for refusing to transfer to its Makati office. Despite
submitting her explanation, Papertech issued a notice on February 24, 2014 dismissing Katando
for her insubordination. Katando filed a complaint for illegal dismissal, moral and exemplary
damages, and attorney's fees against Papertech and its Chairman of the Board of Directors,
Alexander Wong, and Human Resource Manager Joan M. Balde.
On May 26, 2014, Labor Arbiter Rosalina Maria O. Apita-Battung issued a Decision[29] finding
that Katando 's suspension was illegal. The NLRC denied the partial appeal but ordered
Papertech to pay Katando her backwages from the time that she was illegally dismissed on
February 25, 2014 until the finality of its decision, and separation pay computed at one month
pay for every year of service up to the finality of the decision. The CA granted Katando's
petition and ordered Papertech to immediately reinstate her to her previous position without
loss of seniority rights in addition to the award of backwages.
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ISSUE: Whether the CA erred in ordering the reinstatement of Katando instead of granting her
separation pay.
RULING: YES. The doctrine of strained relations was first introduced in the case of Balaquezon
Employees & Workers Transportation Union v. Zamora, where the Court awarded backwages as
severance pay based on equity. The Court explained, "this means that a monetary award is to
be paid to the striking employees as an alternative to reinstatement which can no longer be
effected in view of the long passage of time or because of the "realities of the situation ."
After Balaquezon, the Court further expounded on the doctrine of strained relations in the case
of Globe-Mackay Cable and Radio Corp. v. National Labor Relations Commission, wherein We
discussed the following considerations in applying the doctrine of strained relations: (1) the
employee must occupy a position where he or she enjoys the trust and confidence of his or her
employer; (2) it is likely that if reinstated, an atmosphere of antipathy and antagonism may be
generated as to adversely affect the efficiency and productivity of the employee concerned; (3)
it cannot be applied indiscriminately because some hostility is invariably engendered between
the parties as a result of litigation; and (4) it cannot arise from a valid and legal act of asserting
one's right. After Globe-Mackay, We clarified that the doctrine cannot apply 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. In addition,
strained relations between the parties must be proven as a fact.
Although Katando does not occupy a position of trust and confidence as a machine operator,
the circumstances of this case nonetheless calls for the application of the doctrine of strained
relations. It is true that litigation between the parties per se should not bar the reinstatement
of an employee. However, as observed by the NLRC, this is not the only case involving
Papertech and Katando. They have been in conflict since 2008, or for 11 years now. Similarly,
the protracted litigation between the parties here sufficiently demonstrate that their
relationship is strained. It is notable that Papertech has not even bothered to appeal the ruling
of the Labor Arbiter, and even stated that "in order not to prolong the proceedings, and for
both parties to peacefully move on from this unwanted situation, Papertech is willing to pay the
judgment award of separation pay." Clearly, Papertech does not want Katando back as its
employee.
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PRIME STARS INTERNATIONAL PROMOTION CORPORATION AND RICHARD PERALTA v.

NORLY M. BAYBAYAN AND MICHELLE V. BELTRAN
G.R. No. 213961, January 22, 2020, Inting J.
FACTS: Prime Stars is a local recruitment agency with Taiwan Wacoal Co., Ltd., (Wacoal) and
Avermedia Technologies Inc. (Avermedia) as foreign principals. Peralta is one of the officers of
Prime Stars.
Norly M. Baybayan (Baybayan) was deployed by Prime Stars to Wacoal on June 12, 2007 for a
contract period of 24 months or two years, with a monthly salary of NT$15,840.00 per month.
However, he was only paid NT$9,000.00 a month. He returned to the Philippines upon finishing
his contract. He then instituted a complaint for underpayment of salaries and the
reimbursement of his transportation expenses against petitioners
On the other hand, Michelle V. Beltran (Beltran) was likewise recruited by Prime Stars and was
deployed to Avermedia. Her contract duration was for two years with a monthly salary of
NT$17,280.00.7 She was deployed on June 22, 2008. After a year, her service were abruptly and
unceremoniously terminated by her supervisor and was immediately repatriated to the
Philippines on July 3, 2009.
Beltran then instituted a complaint for illegal dismissal and sought for the payment of the
unexpired portion of her contract, the refund of her placement fee, repatriation expenses, plus
damages and attorney’s fees against herein petitioners.
The complaints of Baybayan and Beltran (collectively, respondents) were then consolidated.
Petitioners denied that Baybayan was underpaid as his payslips for the months of March and
April 2009 indicated that he received a monthly salary of NT$17,280.00 during his employment
with Wacoal. Petitioners explained that Baybayan signed an Addendum to the Employment
Contract (Addendum), which authorized the deduction of the amount of NT$4,000.00 as
payment for his monthly food and accomodation. With respect to Beltran, petitioners
contended that it was Beltran who voluntarily preterminated her contract for personal reasons.
According to petitioners, Beltran approached the management and expressed her intent to
return to the Philippines as evidenced by her handwritten statement which she duly signed on
July 4, 2009.
In Beltran’s Reply,’ she countered that she signed the pretermination agreement under duress
since she was helpless in a foreign country, and was afraid that her refusal might endanger her
status, liberty, and limbs.’
The Labor Arbiter (LA) dismissed the consolidated cases for lack of merit. The NLRC reversed
and set aside the findings of the LA and ruled in favor of respondents. The CA dismissed the
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petition filed by petitioners in the absence of any justifiable reason to reverse the factual
findings and conclusions of law of the NLRC as supported by substantial evidence.
ISSUE: Whether the CA erred in holding petitioners liable for respondents’ money claims
pursuant to their contracts of employment.
RULING: NO. The Court, holding Beltran to have been illegally dismissed, ruled that Beltran’s
alleged voluntary execution of the Mutual Contract Annulment Agreement and the Worker
Discontinue Employment Affidavit to support their claim that Beltran voluntarily preterminated
her contract is unavailing considering that the filing of the complaint for illegal dismissal is
inconsistent with resignation.
The Court likewise held that Baybayan and Beltran are entitled to salary differentials and refund
of transportation expenses. Paragraph (i) of Article 34 of the Labor Code of the Philippines
prohibits the substitution or alteration of employment contracts approved and verified by the
Department of Labor and Employment (DOLE) from the time of the actual signing thereof by
the parties up to and including the period of expiration of the same without the approval of the
DOLE.
Furthermore, Republic Act No. (RA) 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, explicitly prohibits the substitution or alteration to the prejudice
of the worker of employment contracts already approved and verified by the DOLE from the
time of actual signing thereof by the parties up to and including the period of the expiration of
the same without the approval of the DOLE.
The Addendum, absent the approval of the POEA, is not valid and executory as against
respondents. The clear and categorical language of the law likewise imposes upon foreign
principals minimum terms and conditions of employment for land-based overseas Filipino
workers, which include basic provisions for food, accommodation and transportation. The
licensed recruitment agency shall also, prior to the signing of the employment contract, inform
the overseas Filipino workers of their rights and obligations, and disclose the full terms and
conditions of employment, and provided them with a copy of the POEA- approved contract, to
give them ample opportunity to examine the same.
The Court also ruled that Peralta is jointly and severally liable with Prime Stars under Section 10
of RA 8042. The law mandates solidary liability among the corporate officers,directors, partners
and the corporation or partnership for any claims and damages that may be due to the
overseas workers.
83
MICHAEL ADRIANO CALLEON v. HZSC REALTY CORPORATION,

JOHN LEANLON P. RAYMUNDO, EMERSON D. ANGELES, LLOYD T. ISON,
SHERWIN ODONO, LEMUEL D. VENZON, and RONALD F. CALING
G.R. No. 228572, January 27, 2020, PERLAS-BERNABE, J.
FACTS: The controversy arose from a labor case for illegal dismissal, non-payment of salary, 13 th
month pay and separation pay, as well as non-payment of moral and exemplary damages and
attorney’s fees filed by respondents against HZSC Realty Corporation (Company) and the latter’s
President, herein petitioner for the Company’s failure to rehire respondents six (6) months after
the temporary shutdown of it business operation owing to business losses.
The LA found the Company (HZSC) and petitioner guilty of illegal (constructive) dismissal for the
Company’s failure to comply with the procedural requirements set forth in Art.288 (now Article
298) of the Labor Code. On appeal, the NLRC dismissed the petition filed by the Company and
petitioner. The CA dismissed the same for failure to comply with certain required contents and
documents which should accompany the petition. The motion for reconsideration (MR) was
also denied by the CA.
ISSUE: Whether or not the CA erred in dismissing the motion for reconsideration for having been
belatedly filed.
RULING: Section 2, Rule 13 of the Rules of Court (Rules) provides that “[i]f any party has
appeared by counsel, service upon him shall be made upon his counsel or one of them, unless
service upon the party himself is ordered by the court.” Thus, even if a party represented by
counsel has been actually notified, said notice is not considered notice in law.“ The reason is
simple — the parties, generally, have no formal education or knowledge of the rules of
procedure, specifically, the mechanics of an appeal or availment of legal remedies; thus, they
may also be unaware of the rights and duties of a litigant relative to the receipt of a decision.
More importantly, it is best for the courts to deal only with one person in the interest of orderly
procedure — either the lawyer retained by the party or the party him/herself if [he/she] does
not intend to hire a lawyer.”
In the case at bar, a copy of the September 23, 2016 Resolution was sent to Atty. Santos at his
registered address in Meycauayan, Bulacan through registered Letter No. BDN-2291.78 On
November 8, 2016, the CA sent a tracer to the Postmaster of Meycauyan, Bulacan directing him
to inform the court of the exact date when the said letter was delivered to and received by the
addressee. However, prior to the receipt of the Postmaster’s reply, the CA already issued its
assailed November 28, 2016 Resolution denying petitioner’s motion for reconsideration for
having been belatedly filed, apparently reckoning the same from petitioner’s receipt of his
personal notice of the September 23, 2016 Resolution on October 5, 2016.
84
Accordingly, there is a need to remand the case to the CA to resolve the motion for
reconsideration on the merits. Notably, petitioner had submitted, together with the said
motion, an Amended Petition for Certiorari which he claims to have already rectified the
procedural deficiencies cited by the CA in its September 23, 2016 Resolution. In view thereof,
the other issues raised in this petition which involve mixed questions of fact and law on the
substantive merits of the petition should properly be addressed to and resolved by the CA.
Finally, considering that petitioner raises as an issue the propriety of the order adjudging him
solidarily liable with the non-operating respondent, HZSC, for the individual respondents’
money claims, which is yet to be resolved by the CA, the TRO issued by the Court on January 25,
2017 enjoining the NLRC from implementing its June 30, 2016 Decision and August 31, 2016
Resolution stands until further orders from the Court.
85
JOLLY D. TEODORO v. TEEKAY SHIPPING PHILIPPINES, INC.

GR. No. 244721, February 5, 2020, PERLAS-BERNABE, J.:
FACTS: On February 17, 2015, petitioner was hired as Chief Cook by respondent Teekay
Shipping Philippines, Inc. (TSPI), for its principal, Teekay Shipping Limited (TSL), on board the
vessel M.T. Al Marrouna for a period of eight (8) months, with such being covered by a Contract
of Employment and a Collective Bargaining Agreement (CBA) between TSPI, on behalf of TSL,
and the Philippine Seafarers’ Union (PSU) - ALU TUCP.
After undergoing the required pre-employment medical examination, petitioner was declared
fit for duty by the company- designated physician notwithstanding the former’s declaration of
Dyslipidemia and diabetes mellitus. For this reason, petitioner was made to sign an “Affidavit of
Undertaking” relative to his health condition before boarding the vessel on March 14, 2015.
Because of the sudden extreme changes in temperature from the upper deck to the freezer
during the hauling and storage process, petitioner experienced a fever-like symptom with body
pain and blindness in his left eye the following day. He was brought to a hospital in India where
he was diagnosed with “Left Eye Endophthalmitis with Orbital Cellulitis;” subsequently, he was
repatriated on July 10, 2015 for further medical treatment.
Upon arrival in Manila, petitioner was referred to a company- designated physician at the Ship
to Shore Medical Assist and his condition was confirmed. It was found that the petitioner’s eye
condition may have been triggered by his diabetes mellitus which, in addition to lack of sleep or
inadequate rest, impaired his immune system, thus, making his body susceptible to infections.
Hence, it was not work-related. Moreover, petitioner’s visual prognosis and recovery were
found to be poor due to the permanent loss of vision in one eye despite medications, and as
such, he was declared to be unfit for further sea duties. The company-designated physician
declared petitioner to have already reached his maximum medical improvement aime
Suggested a disability rating of Grade 7 or total loss of vision in one eye.
Considering that there was permanent loss of vision in his left eye resulting in his unfitness to
work as declared by his attending specialist, and since he was no longer advised by TSPI to
return for further consultations. Petitioner demanded from TSPI the payment of disability
benefits pursuant to the CBA, which the latter refused. This prompted petitioner to raise his
grievance before the Philippine Seafarers’ Union, which likewise resulted in a deadlock.
Consequently, petitioner filed a complaint for disability benefits against TSPI, its President Alex
N. Verchez (Verchez), and its foreign principal, TSL, with the NCMB, DOLE.
The PVA ruled in favor of Petitioner, ordering TSPI, Verchez, and TSL to jointly and severally pay
him US$89,100.00 representing total and permanent disability benefits, as well as ten percent
86
(10%) attorney’s fees. The CA partly granted TSPI’s petition declaring petitioner entitled to
partial and permanent disability benefits only, or Grade 7 disability as assessed by the
company-designated physician, and deleted the award of attorney’s fees.
ISSUE: Whether or not the CA committed reversible error in awarding petitioner partial and
permanent disability benefits only and in deleting the award of attorney’s fees.
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. The
pertinent statutory provisions are Articles 197 to 199 of the Labor Code in relation to Section 2
(a), Rule X of the Rules implementing Title II, Book IV of the said Code, while the relevant
contracts are the POEA-SEC, which is a standard set of provisions that is deemed incorporated
in every seafarer’s contract of employment; the parties’ CBA, if any; and the employment
agreement between the seafarer and his employer.
In this case, petitioner entered into a contract of employment with TSPI in accordance with the
2010 POEA-SEC which, as borne from the records, was covered by an overriding IBF-PSU TCC
Agreement’ (CBA) that was effective from February 20, 2014 to February 19, 2016. During the
course of his employment and while in the performance of his duties on board the vessel M.T.
Al Marrouna, petitioner complained of sudden blindness in his left eye, among others. He was
later diagnosed to have Left Eye Endophthalmitis with Orbital Cellulitis that caused his
repatriation on July 10, 2015, or during the effectivity of the CBA, and resulted to permanent
loss of vision in one eye which rendered him unfit for further sea duties.
Under Section 20 (A) of the 2010 POEA-SEC, the employer shall be liable for disability benefits
nly when the seafarer suffers from a workrelated injury or illness during the term of his
ontract. 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.” Here, while
petitioner’s diagnosed condition is not among the listed occupational diseases under Section
32-A of the 2010 POEA-SEC, Section 20 (A) (4) nonetheless states that “[t]hose illnesses not
listed in Section 32 of this Contract are disputably presumed as work-related.” Thus, the burden
is on the employer to disprove the work-relatedness, failing which, the disputable presumption
that a particular injury or illness that results in disability is work-related stands. Unfortunately,
the said presumption was not overturned by TSPI. Moreover, the Grade 7 disability rating
assessment by the company-designated physician negates any claim that the non-listed illness
is not work-related.”
Total disability refers to an employee’s inability to perform his or her usual work. It does not
require total paralysis or complete helplessness. Permanent disability, on the other hand, is a
87
worker’s inability to perform his job for more than 120 days or 240 days, if the seafarer
required further medical attention justifying the extension of the temporary total disability
period, regardless of whether or not he loses the use of any part of his body.
88
MICHAEL ANGELO T. LEMONCITO v. BSM CREW SERVICE CENTRE

PHILIPPINES, INC./BERNARD SCHULTE SHIPMANAGEMENT (ISLE OF MAN LTD.)
G.R. No. 247409, FEB 3 2020, LAZARO-JAVIER, J.
FACTS: On July 16, 2015, respondent BSM Crew Service Centre Philippines, Inc. (BSM), on
behalf of its principal respondent Bernard Schulte Shipmanagement (BSS), hired petitioner
Michael Angelo Lemoncito as a motor man for a duration of nine (9) months. Petitioner was
covered by the collective bargaining agreement (CBA) between International Maritime
Employees’ Council and Associated Marine Officers’ and Seamen’s Union of the Philippines.
While on board, petitioner complained of fever and cough productive of whitish phlegm and
throat discomfort. His blood pressure reached 173/111, for which he was given medication. On
February 22, 2016, he was medically repatriated. On February 26, 2016, he was referred to the
Marine Medical Services under the care of company-designated doctors Percival Pangilinan and
Dennis Jose Sulit. After a series of tests, he was diagnosed with lower respiratory tract infection
and hypertension. On July 1, 2016, the company-designated doctors issued their final report
where they noted that petitioner had been previously cleared of his lower respiratory tract
infection and that his hypertension was responding to medication.
Disagreeing with conclusions of the company-designated doctors, petitioner consulted Dr.

Antonio Pascual, who issued a Medical Report dated September 12, 2016. Dr. Pascual certified
that petitioner is “unfit to work as a seaman.”
On the basis of Dr. Pascual’s certification, petitioner invoked the grievance procedure embodied
in the CBA and lodged a complaint for total permanent disability benefits, sickness allowance,
damages and attorney’s fees before the Panel of Voluntary Arbitrators.
The Panel of Voluntary Arbitrators found petitioner to be totally and permanently disabled. The
Court of Appeals reversed the same and held that the findings of the company-designated
doctors were more credible and petitioner failed to prove by substantial evidence that he was
totally and permanently disabled.
ISSUE: Can petitioner be declared as totally and permanently disabled by reason of his
hypertension?
RULING: YES. After undergoing a pre-employment medical examination (PEME), petitioner was
declared fit to work and was permitted to board MV British Ruby on July 22, 2015. Although a
PEME is not expected to be an in-depth examination of a seafarer's health, still, it must fulfill its
purpose of ascertaining a prospective seafarer’s capacity for safely performing tasks at sea.
Thus, if it concludes that a seafarer, even one with an existing medical condition, is “fit for sea
89
duty,” it must, on its face, be taken to mean that the seafarer is well in a position to engage in
employment aboard a sea vessel without danger to his health.
In the final Medical Report of the company-designated doctors , there was no categorical statement
that petitioner is fit or unfit to resume his work as a seaman. It simply stated: a) petitioner was
previously cleared of his lower respiratory tract infection; b) petitioner’s blood pressure is
adequately controlled with medications; and c) petitioner was cleared cardiac wise as of July 1,
2016. In other words, this assessment is incomplete, nay, inconclusive. In fact, this medical
report leaves more questions than answers.
Undoubtedly, the Medical Report dated July 1, 2016 is not omplete and adequate, therefore, it
must be ignored. To repeat, without a valid final and definitive assessment from the company-
designated doctors within the 120/240-day period, as in this case, the law already steps in to
consider a seafarer’s disability as total and permanent. By operation of law, therefore,
petitioner is already totally and permanently disabled. Besides, jurisprudence grants permanent
total disability compensation to seafarers, who suffered from either cardiovascular diseases or
hypertension, and were under the treatment of or even issued fit to-work certifications by
company-designated doctors beyond 120 or 240 days from their repatriation.
90

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JULY 2019 – FEB 2020

DOLE V. KENTEX MANUFACTURING CORPORATION 3

MARINO B. DAANG v. SKIPPERS UNITED PACIFIC, INC 8

THE PENINSULA MANILA v. EDWIN A. JARA 10

DOMINIC INOCENTES v. RSCI 12

EFREN J. JULLEZA v. ORIENT LINE PHILIPPINES, INC. 14

HAYDEN KHO, SR. v. DOLORES G. MAGBANUA ET. AL 16

COCA-COLA FEMSA PHILIPPINES v. RICARDO S. MACAPAGAL ET. AL. 18

PDMC v. GLORIA V. GOMEZ 20

VICTORIA MANUFACTURING CORPORATION EMPLOYEES UNION v. VICTORIA MANUFACTURING

ARLENE A. CUARTOCRUZ v.ACTIVE WORKS, INC. 25

REY BEN P. MADRIO v. ATLAS FERTILIZER CORPORATION 27

PHILIPPINE TRANSMARINE CARRIERS, INC. v. RAYMOND F. BERNARDO 29

SKYWAY O & M CORPORATION v. WILFREDO M. REINANTE 31

AUGORIO A. DELA ROSA v. ABS-CBN CORPORATION 33

JULIETA T. VERZONILLA v. EMPLOYEES' COMPENSATION COMMISSION 35

CARISSA E. SANTO v. UNIVERSITY OF CEBU 37

CELSO S. MANGUBAT, JR. v. DALISAY SHIPPING CORPORATION 39

YUSHI KONDO v. TOYOTA BOSHOKU (PHILS.) CORPORATION 41

J' MARKETING CORPORATION v. FERNANDO S. IGUIZ 44

GERRY S. MOJICA v. GENERALI PILIPINAS LIFE ASSURANCE COMPANY, INC. 46

JEBSENS MARITIME, INC. v. RUPERTO S. PASAMBA. 48

FEATI UNIVERSITY v. ANTOLIN PANGAN. 51

JERRY BERING TALAUGON v. BSM CREW SERVICE CENTRE PHILS., INC. 53

APOLINARIO Z. ZONIO, JR. v. 88 ACES MARITIME SERVICES, INC. 55

CLARET SCHOOL OF QUEZON CITY v. MADELYN I. SINDAY 58

ERNESTO P. GUTIERREZ v. NAWRAS MANPOWER SERVICES, INC., 60

PASAY CITY ALLIANCE CHURCH v. FE BENITO 62

JHEROME G. ABUNDO V. MAGSAYSAY MARITIME CORPORATION 64

MAGSAYSAY MARITIME CORPORATION v. ALLAN F. BUICO 66

PACIFIC METALS CO., LTD. VS. EDGAR ALLAN TAMAYO, 68

RAMON R. MAGADIA v. ELBURG SHIPMANAGEMENT PHILIPPINES, INC. 70

AUTOMATIC APPLIANCES INC. V. FRANCIA B. DEGUIDOY 72

TELUS INTERNATIONAL PHILIPPINES, INC. v. HARVEY DE GUZMAN.. 74

EDITHA SALINDONG AGAYAN v. KITAL PHILIPPINES CORP 76

DEL MONTE FRESH PRODUCE (PHIL.), INC. v. REYNALDO P. BETONIO 78

PAPERTECH INC. v. JOSEPHINE P. KATANDO 80

PRIME STARS INTERNATIONAL PROMOTION CORPORATION v. NORLY M. BAYBAYAN 82

MICHAEL ADRIANO CALLEON v. HZSC REALTY CORPORATION 84

JOLLY D. TEODORO v. TEEKAY SHIPPING PHILIPPINES, INC. 86

MICHAEL ANGELO T. LEMONCITO v. BSM CREW SERVICE CENTRE 89

DEPARTMENT OF LABOR AND EMPLOYMENT V. KENTEX MANUFACTURING CORPORATION

ISSUE: Whether Ong should be held liable

Meanwhile, Daang sought re-employment with respondents. He executed a waiver freeing

THE PENINSULA MANILA and SONJA VODUSEK v.

ISSUE: Was Jara illegally dismissed?

We are not convinced.

DOMINIC INOCENTES, JEFFREY INOCENTES, JOSEPH CORNELIO AND REYMARK CATANGUI v.

ISSUE: Whether the petitioners were illegally dismissed.

In this case, to ascertain whether petitioners were project employees, as claimed by

EFREN J. JULLEZA v. ORIENT LINE PHILIPPINES, INC., ORIENT NAVIGATION

ISSUE: Whether Petitioner is entitled to permanent total disability benefits.

Petitioner's injury was not a result of an accident.

HAYDEN KHO, SR. v. DOLORES G. MAGBANUA ET. AL.

COCA-COLA FEMSA PHILIPPINES v. RICARDO S. MACAPAGAL ET. AL.

ISSUE: Whether the redundancy program is valid.

PNOC DEVELOPMENT AND MANAGEMENT CORPORATION (PDMC) v. GLORIA V. GOMEZ

ISSUE: Whether Gomez's separation from office was valid

VICTORIA MANUFACTURING CORPORATION EMPLOYEES UNION v. VICTORIA

ISSUE: Whether Petitioner was illegally dismissed.

REY BEN P. MADRIO v. ATLAS FERTILIZER CORPORATION

ISSUE: Whether petitioner shall be granted the award of separation benefits

Moreover, petitioner's claim for separation benefits appears to be premature. It is undisputed