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FIL-PRIDE SHIPPING COMPANY, INC., et al. VS. EDGAR A.

BALASTA
G.R. No. 193047. March 3, 2014, (DEL CASTILLO, J.)
Respondent Edgar A. Balasta was hired by petitioner Fil-Pride Shipping Company and
was assigned as Able Seaman onboard M/V Eagle Pioneer. Sometime in August and September
2005, while aboard M/V Eagle Pioneer, respondent experienced chest pains, fatigue, and
shortness of breath. He was examined by a physician in Gangyou Hospital in Tianjin, China, and
was diagnosed as having myocardial ischemia and coronary heart disease. He was declared unfit
for duty and was recommended for repatriation. Respondent filed a claim for permanent
disability benefits with petitioner but the latter denied the same. On February 10, 2006,
respondent filed against the petitioners a complaint for the recovery of disability benefits, illness
allowance, and reimbursement of medical expenses, damages and attorneys fees. It appears
from the record that on February 24, 2006, respondent underwent coronary artery bypass graft
surgery. He then continued his treatment with Dr. Cruz, who for his part continued to diagnose
respondent with severe coronary artery disease. Petitioners, on the other hand, stated and argued
in their Position Paper and Reply that respondent filed a labor complaint even before the
company-designated physician, Dr. Cruz, could complete his examination and treatment of
respondents condition, which thus prompted them to deny his claim for disability benefits;
ISSUE:
WON respondents illness is compensable as it is work-connected and constitutes an
occupational disease under the POEA Contract Standard Terms and Conditions Governing the
Employment of Filipino Seafarers on Board Ocean-Going Vessels

HELD:
YES. In several cases, cardiovascular disease, coronary artery disease, as well as other
heart ailments were held to be compensable.
Likewise, petitioners failed to refute respondents allegations in his Position Paper that in
the performance of his duties as Able Seaman, he inhaled, was exposed to, and came into direct
contact with various injurious and harmful chemicals, dust, fumes/ emissions, and other irritant
agents; that he performed strenuous tasks such as lifting, pulling, pushing and/or moving
equipment and materials on board the ship; that he was constantly exposed to varying
temperatures of extreme hot and cold as the ship crossed ocean boundaries; that he was exposed
as well to harsh weather conditions; that in most instances, he was required to perform overtime
work; and that the work of an Able Seaman is both physically and mentally stressful. It does not
require much imagination to realize or conclude that these tasks could very well cause the illness
that respondent, then already 47 years old, suffered from six months into his employment
contract with petitioners. The following pronouncement in a recent case very well applies to
respondent. His constant exposure to hazards such as chemicals and the varying temperature, like
the heat in the kitchen of the vessel and the coldness outside, coupled by stressful tasks in his
employment caused, or at least aggravated, his illness. It is already recognized that any kind of
work or labor produces stress and strain normally resulting in wear and tear of the human body.

Notably, it is a matter of judicial notice that an overseas worker, having to ward off
homesickness by reason of being physically separated from his family for the entire duration of
his contract, bears a great degree of emotional strain while making an effort to perform his work
well. The strain is even greater in the case of a seaman who is constantly subjected to the perils
of the sea while at work abroad and away from his family.
VETYARD TERMINALS & SHIPPING SERVICES, INC. /MIGUEL S. PEREZ,
SEAFIX, INC. vs. BERNARDINO D. SUAREZ
G.R. No. 199344. March 5, 2014, (ABAD, J.)

Petitioners Vetyard Terminals and Shipping Services, Inc., Miguel S. Perez, and Seafix, Inc.
hired respondent Bernardino D. Suarez to work as Welder/Fitter for 12 months on board MV
"1st Lt. Baldomero Lopez" at US$392 per month. Suarez began to work but was repatriated
home four months later in May 2007.
When examined at the Medical City, respondent Suarez was found to be suffering from posterior
cataract and pseudophakia.
On the next day, Dr. Victor Caparas examined him anew and gave a more specific diagnosis:
"right eye-posterior subscapsular cataract" and "left eye-pseudophakia, posterior capsule
opacification." The doctor issued a certification that respondents ailment, which commonly
occurs after cataract operation, is not associated with his claim that paint injured an eye while he
was working on board the vessel. Then he signed after a debriefing a release and quitclaim in
favor of the Company.
Thereafter, respondent filed against the Company a complaint for total and permanent
disability benefits, sickness allowance, and reimbursement of medical expenses, alleging
that he was painting the vessel's ceiling when paint accidentally hit his eye for which he
suffered pain. He claimed that he afterwards experienced blurred vision, yet the Company
refused to give him medical and financial assistance. The petitioner contended that the
respondent was not entitled to disability benefits since his illness was not work-related
and he deliberately concealed a prior cataract operation.
ISSUE: Is Suarez entitled to disability benefits?
RULING:
NO. Suarez did not present substantial proof that his eye ailment was workrelated. Suarez had been diagnosed to suffer from posterior subscapsular cataract on his
right eye and pseudophakia, and posterior capsule opacification on his left eye. For these
to be regarded as occupational diseases, Suarez had to prove that the risk of contracting
the disease was increased by the conditions under which he worked.

The contractual liability of an employer to pay disability benefits to a seafarer who


suffers illness or injury during the term of his contract is governed by Section 20 (B) (6)
of the Philippine Overseas Employment Administration-Standard Employment Contract
(POEA-SEC):
SECTION 20.COMPENSATION AND BENEFITS.
xxx xxx xxx
B.COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS
The liabilities of the employer when the seafarer suffers work-related injury or illness
during the term of his contract are as follows:
xxx xxx xxx
(6.) In case of permanent total or partial disability of the seafarer caused by either
injury or illness the seafarer shall be compensated in accordance with the schedule of
benefits enumerated in Section 32 of this Contract. Computation of his benefits arising
from an illness or disease shall be governed by the rates and rules of compensation
applicable at the time the illness or disease was contracted.
Based on the above, an injury or illness is compensable when, first, it is work-related and,
second, the injury or illness existed during the term of the seafarer's employment
contract. Section 32 (A) of the 2000 POEA Amended Standard Terms and Condition
further provides that for an occupational disease and the resulting disability to be
compensable, the following need to be satisfied: (1) the seafarer's work must involve the
risks described; (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 evidence must be real and substantial, and not merely apparent. It must constitute a
reasonable basis for arriving at a conclusion that the conditions of his employment caused
the disease or that such conditions aggravated the risk of contracting the illness.
Here, Suarez did not present substantial proof that his eye ailment was work-related.
Other than his bare claim that paint droppings accidentally splashed on an eye causing
blurred vision, he adduced no note or recording of the supposed accident. Nor did he
present any record of some medical check-up, consultation, or treatment that he had
undergone. Besides, while paint droppings can cause eye irritation, such fact alone does
not ipso facto establish compensable disability. Awards of compensation cannot rest on
speculations or presumptions; Suarez must prove that the paint droppings caused his
blindness.
The SC accepted the findings of Dr. Caparas, the company-designated physician, that it
was cataract extraction, not paint droppings that caused Suarez's ailment. The definitions
of the imputed medical conditions plainly do not indicate work-relatedness.
Thus, posterior subscapsular cataract is the most common abnormality affecting the lens
epithelium. Such illness may be age-related or occur as a complication of other

conditions such as intraocular inflammation, steroid administration, vitreoretinal surgery,


and trauma and may also be related to irradiation and systemic conditions such as
diabetes mellitus. Pseudophakia indicates presence of artificial intraocular lens (IOL)
replacing normal human lens and posterior capsule opacification is the most frequent
complication of cataract surgery. By their nature, these ailments are more the result of
eye disease than of one's kind of work.
Besides, even if the Court were to assume that Suarez's eye ailment was work-related, he
still cannot claim disability benefits since he concealed his true medical condition. The
records show that when Suarez underwent pre-employment medical examination
(PEME), he represented that he was merely wearing corrective lens. He concealed the
fact that he had a cataract operation before. He told the truth only when he was being
examined at the Medical City sometime in 2007. This willful concealment of a vital
information in his PEME disqualifies him from claiming disability benefits pursuant to
Section 20 (E) of the POEA-SEC which provides that "a seafarer who knowingly
conceals and does not disclose past medical condition, disability and history in the preemployment medical examination constitutes fraudulent misrepresentation and shall
disqualify him from any compensation and benefits."

South East International Rattan, Inc. and/or Estanislao Agbay Vs. Jesus Coming
G.R. No. 186621. March 12, 2014
FACTS:
On November 3, 2003, respondent Jesus J. Coming filed a complaint for illegal dismissal,
underpayment of wages, non-payment of holiday pay, 13th month pay and service incentive
leave pay, with prayer for reinstatement, back wages, damages and attorneys fees.
Respondent alleged that he was hired by petitioners as Sizing Machine Operator on March 17,
1984. His work schedule is from 8:00 a.m. to 5:00 p.m. Initially, his compensation was on
pakiao basis but sometime in June 1984, it was fixed at P150.00 per day which was paid
weekly. In 1990, without any apparent reason, his employment was interrupted as he was told
by petitioners to resume work in two months time. Being an uneducated person, respondent
was persuaded by the management as well as his brother not to complain, as otherwise
petitioners might decide not to call him back for work.
Fearing such consequence, respondent accepted his fate. Nonetheless, after two months he
reported back to work upon order of management.
Despite being an employee for many years with his work performance never questioned by
petitioners, respondent was dismissed on January 1, 2002 without lawful cause.
He was told that he will be terminated because the company is not doing well financially and that
he would be called back to work only if they need his services again. Respondent waited for
almost a year but petitioners did not call him back to work.
On their part, petitioners denied having hired respondent. That is, petitioners denied that
respondent was their employee.
ISSUE: WON employer-employee relationship exists?
HELD:
YES.
To ascertain the existence of an employer-employee relationship jurisprudence has invariably
adhered to the four-fold test, to wit:

(1) The selection and engagement of the employee;


(2) The payment of wages;
(3) The power of dismissal; and
(4) The power to control the employees conduct, or the so-called control test.
In resolving the issue of whether such relationship exists in a given case, substantial evidence
that amount of relevant evidence which a reasonable mind might accept as adequate to justify a
conclusion is sufficient.
Although no particular form of evidence is required to prove the existence of the relationship,
and any competent and relevant evidence to prove the relationship may be admitted, a finding
that the relationship exists must nonetheless rest on substantial evidence.
In this case, petitioner denied the EER by arguing that respondent was not reported as their
employee in SSS and respondents name does not appear in the payrolls and in pay envelope
records.
In Tan v. Lagrama, the Court held that the fact that a worker was not reported as an employee to
the SSS is not conclusive proof of the absence of employer-employee relationship. Otherwise,
an employer would be rewarded for his failure or even neglect to perform his obligation.36Nor
does the fact that respondents name does not appear in the payrolls and pay envelope
records submitted by petitioners negate the existence of employer-employee relationship.
For a payroll to be utilized to disprove the employment of a person, it must contain a true and
complete list of the employee.37 In this case, the exhibits offered by petitioners before the
NLRC consisting of copies of payrolls and pay earnings records are only for the years 1999 and
2000; they do not cover the entire 18-year period during which respondent supposedly worked
for SEIRI.

RAUL C. COSARE VS. BROADCOM ASIA, INC., ET AL.


G.R. No. 201298. February 5, 2014

FACTS:
The case stems from a complaint4 for constructive dismissal, illegal suspension and monetary
claims filed with the National Capital Region Arbitration Branch of the National Labor Relations
Commission (NLRC) by Cosare against the respondents.
Cosare claimed that sometime in April 1993, he was employed as a salesman by Arevalo, who
was then in the business of selling broadcast equipment needed by television networks and
production houses. In December 2000, Arevalo set up the company Broadcom, still to continue
the business of trading communication and broadcast equipment. Cosare was named an
incorporator of Broadcom, having been assigned 100 shares of stock with par value of P1.00 per
share.5 In October 2001, Cosare was promoted to the position of Assistant Vice President for
Sales (AVP for Sales) and Head of the Technical Coordination, having a monthly basic net
salary and average commissions of P18, 000.00 and P37, 000.00, respectively.
Sometime in 2003, Alex F. Abiog (Abiog) was appointed as Broadcoms Vice President for
Sales and thus, became Cosares immediate superior. On March 23, 2009, Cosare sent a
confidential memo7 to Arevalo to inform him of the following anomalies which were allegedly
being committed by Abiog against the company: (a) he failed to report to work on time, and
would immediately leave the office on the pretext of client visits; (b) he advised the clients of
Broadcom to purchase camera units from its competitors, and received commissions therefor; (c)
he shared in the under thetable dealings or confidential commissions which Broadcom
extended to its clients personnel and engineers; and (d) he expressed his complaints and disgust
over Broadcoms uncompetitive salaries and wages and delay in the payment of other benefits,
even in the presence of office staff. Cosare ended his memo by clarifying that he was not
interested in Abiogs position, but only wanted Arevalo to know of the irregularities for the
corporations
sake.
Apparently, Arevalo failed to act on Cosares accusations. Cosare claimed that he was instead
called for a meeting by Arevalo on March 25, 2009, wherein he was asked to tender his
resignation in exchange for financial assistance in the amount of P300, 000.00. Cosare refused

to comply with the directive, as signified in a letter9 dated March 26, 2009 which he sent to
Arevalo.

ISSUE:
Whether or not Cosare was constructively and illegally dismissed from employment by
the respondents
HELD: YES.
Given the circumstances, the Court agrees with Cosares claim of constructive and illegal
dismissal.
Constructive dismissal occurs when there is cessation of work because continued employment
is rendered impossible, unreasonable, or unlikely as when there is a demotion in rank or
diminution in pay or when a clear discrimination, insensibility, or disdain by an employer
becomes unbearable to the employee leaving the latter with no other option but to
quit. In Dimagan v. Dacworks United, Incorporated, it was explained that:
The test of constructive dismissal is whether a reasonable person in the employees position
would have felt compelled to give up his position under the circumstances. It is an act amounting
to dismissal but is made to appear as if it were not. Constructive dismissal is therefore
a dismissal in disguise. The law recognizes and resolves this situation in favor of employees in
order to protect their rights and interests from the coercive acts of the employer.
It is clear from the cited circumstances that the respondents already rejected Cosares continued
involvement with the company. Even their refusal to accept the explanation which Cosare tried
to tender on April 2, 2009 further evidenced the resolve to deny Cosare of the opportunity to be
heard prior to any decision on the termination of his employment. The respondents allegedly
refused acceptance of the explanation as it was filed beyond the mere 48hour period which they
granted to Cosare under the memo dated March 30, 2009. However, even this limitation was a
flaw in the memo or notice to explain which only further signified the respondents
discrimination, disdain and insensibility towards Cosare, apparently resorted to by the
respondents in order to deny their employee of the opportunity to fully explain his defenses and
ultimately, retain his employment.

MACARTHUR MALICDEM and HERMENIGILDO FLORES v. MARULAS


INDUSTRIAL CORPORATION and MIKE MANCILLA
G.R. No. 204406, 26 February 2014, THIRD DIVISION (Mendoza, J.)
Yearly renewal of employment contracts constitutes as a regularized employee provided that
their work is vital, necessary and indispensable to the usual business or trade of the employer.
MACARTHUR MALICDEM and HERMENIGILDO FLORES were hired by
MARULAS as extruder operators in 2006 for a period of 1 year. After the expiration of their
contract and every year thereafter, they would sign a Resignation/Quitclaim contract, and a day
after, they would enter into another employment contract with Marulas. However, in 2010,
Flores and Malicdem were terminated after instructed to sign a paper for completion of work.
The plaintiffs filed a case for illegal dismissal but Marulas claims that they were fixedterm employees for a specific work. The Labor Arbiter favored Marulas claiming that there were
no illegal dismissals but made them pay wage differentialsP20,111.26 for Malicdem and
P18,440.50 for Flores. NLRC denied the plaintiffs petition and CA denied any claims for illegal
dismissal.
ISSUE:
Whether or not Malicdem and Flores were illegally dismissed.
HELD:
Both Malicdem and Flores should be considered as regular employees thus they were
illegally dismissed when they were instructed not to report for work after signing the
Resignation/Quitclaim contract.
The employment contract was denominated Project Employment Agreement which
stipulates a probationary period of 6 months. Moreover, after reaching the standards of the
company within the period, they shall be considered as project employees within the remaining
period of their contracts.
Article 281 of the Labor Code stipulates that if an employee is allowed to work after the
probation period, he shall be considered as a regular employee. The test to determine whether
employment is regular or not is the reasonable connection between the particular activity

performed by the employee in relation to the usual business or trade of the employer. If the
employee has been performing the job for at least 1 year, even if the performance is not
continuous or merely intermittent, the law deems the repeated and continuing need for its
performance as sufficient evidence of the necessity, if not indispensability of the activity to the
business.
Marulas cannot use the expiration of their contract as a defense since the yearly renewal
of the contract is a strategy to avoid employment benefits such as security of tenure. Considering
that the plaintiffs were regular employees, the court held that the former were dismissed without
just or authorized causes. Under Article 279 of the Labor Code, an employee who is unjustly
dismissed from work shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld from him up to the
time of his actual reinstatement.

T & H SHOPFITTERS CORPORATION/GIN QUEEN CORPORATION, et al. v. T & H


SHOPFITTERS CORPORATION/QUEEN WORKERS UNION, et al.
G.R. No. 191714, 26 February 2014, THIRD DIVISION (Mendoza, J.)
The interference of the management and campaigning against the formation of the union violates
the constitutional right of employees which constitutes Unfair Labor Practice.
Officers and members of THS-GQ union filed a complaint for Unfair labor Practice by
way of union busting and illegal lockout against T&H Shopfitters Corporation and Gin Queen
Corporation before the Labor Arbiter.
To improve the working conditions of employees, respondents and the employees of the
sole corporation had a formal meeting to discuss the formation of a union. A day after the
meeting, 17 employees were barred from entering the factory premises purportedly because of its
expansion. Afterwards, the 17 employees were repeatedly ordered to go on forced leave due to
the unavailability of work.
After issuing a certificate of registration by DOLE, members of the union were not given
regular work assignments while subcontractors were continuously hired to perform their
functions. The petitioner and the union had an agreement to give priority to regular employees
however the former never complied with their commitment.
On 2004, Director Huang for Gin Queen informed the employees of its relocation. Later
on, members of the union were forced to work as grass cutters in the grassland where the
company is to relocate. Due to these circumstances, the employees did not report to work which
prompted their suspension. Moreover, the members of the union were excluded from the field
trip sponsored by the petitioners. During the trip ANGEL MADRIAGA campaigned against the
union in the forthcoming certification election. Because of this, the votes for no union
prevailed.
A week after the certification election, the union members were retrenched. Gin Queen
claims that retrenchment was necessary since there was a decrease in orders from its customers.
Moreover, they claim that the relocation was a result of the expiration of a lease agreement with
the lessor and considering that the new site was bare, Gin Queen offered work to employees on
rotational system.
ISSUE:

Whether or not Gin Queen Corporation is liable for Unfair Labor Practices.
HELD:
The campaign against the formation of the union violates the right of the employees to selforganize thus constitutes Unfair labor Practices.
Article 256 of the Labor Code explains that Unfair Labor Practices violates the
constitutional rights of employees to self organize to bargain in an equal footing with the
employer. ULP must be strictly be related to the employees right to self-organize.
When the petitioner sponsored a field trip to non-union members reeks of interference on
the part of the petitioner. The statement made by Angel Madriaga interfered with the employees
right to self-organize.

ALPHA SHIP MANAGEMENT CORPORATION et al. v. ELEOSIS CALO


G.R. No. 192034, 13 January 2014, SECOND DIVISION (Del Castillo, J.)
Presumption of permanent disability arises after the statutory period of 120 or 240-day period to
declare an employee fit for work.
BEOSIS CALO is an employee of Alpha Ship Management Corp, (Alpha), JUNEL
CHAN and their foreign principal, CHUO-KAIUN COMPANY LIMITED (CKCL). Calo was
later on transferred to CKCLs vessel as Chief Cook on board. When the ship was in Shanghai,
China, Calo was diagnosed with urinary tract infection and renal colic. Later on when they were
in Chile, Calo was found to have kidney problems and urinary tract infection. Due to these
circumstances, he was declared fit for work on light duty basis.
When the ship reached to Japan, Calo was diagnosed with suspected renal and/or ureter
calculus. Due to its severity, he was declared unfit for work. Accordingly, Calo was repatriated
and was refereed to Dr. Cruz, the company-designated physician, for medical examination.
Accordingly, Calo was diagnosed with a stone in his left kidney. Dr. Cruz claims that Calos
health was improving with the given medication. However, feeling otherwise, Calo consulted Dr.
Vicaldo who claims that Calo was unfit fot work and that the illness was caused by Calos work
as seaman.
The Labor Arbiter ruled that Calo suffered permanent disability entitling him for
disability benefits. NLRC reversed the decision arguing that it permanent disability should be
determined by Dr. Cruz who was the company-designated physician and not Dr. Vicaldo. CA
sought the reversal of the Cecision of the NLRC, arguing that Dr. Cruzs findings are not
conclusive.
ISSUE:
Whether or not Calo is entitled to disability benefits.
HELD:
Calo is entitled to disability benefits. The treatment to Calos illness lasted for more than a
year, or the statutory period of 120 or 240-day period provided for by the Labor Code. A
day later than the statutory period raises the presumption that the employee is
permanently disabled.
Permanent total disability, provided for by the Labor Code, is the temporary total
disability for more than 120 days except as provided for in the Rules. However, this is not the
sole basis for determining employees rights as regards work-related injury, illness or death.

An employees disability becomes permanent and total when so declared by the


company-designated physician, or, in case of absence of such a declaration either of fitness or
permanent total disability, upon the lapse of the 120 or 240-day treatment period. Calo was
repatriated on October 12, 2004 and underwent treatment until October 14, 2005. The period was
over 1 year which is more than the statutory 120 or 240-day period. During the 1 year period, Dr.
Cruz did not make any conclusive findings that Calo was fit for work.

UNIVERSAL ROBINA SUGAR MILLING CORPORATION and RENE CABATI v.


FERDINAND ACIBO, et al.
G.R. No. 186439, 15 January 2014, SECOND DIVISION (Brion, J.)
The period denominated in the contract of employment is not the basis in determining whether
an employee is seasonal or regular.
FERDINAND ACIBO, et al. were employees of UNIVERSAL ROBINA SUGAR
MILLING CORPORATION (URSUMCO). Acibo, et al. signed contracts of employment for a
given period and after its expiration, URSUMCO repeatedly hired these employees to perform
the same duties and obligations.
Acibo, et al. filed a complaint before the Labor Arbiter for regularization however it was denied
because the LA argued that they were seasonal employees. Seven of the 22 complainants filed an
appeal to the NLRC. The latter reversed the LAs ruling claiming that they were regular
employees. The CA affirmed NLRCs decision but excluded the Acibo, et al. from monetary
benefits under the CBA.
ISSUE:
Whether or not Acibo, et al. are regular employees of URSUMCO.
HELD:
Plantation workers or mill employees only work on seasonal basis. This, however, does not
exclude them from the benefits of regularization. Being in such nature, Acibo, et al. are
considered to be regular employees.
Regular employment means that there was an arrangement between the employee and the
employer that the former will be engaged to perform activities which are necessary or desirable
to the usual business or trade of the latter. On the other hand, a project employment is an
arrangement for a specific project or undertaking whose termination is determined by the
completion of the project.
The nature of the employment does not depend solely on the will or word of the employer
or on the procedure for hiring and the manner of designating the employee. Rather, the nature of
the employment depends on the nature of the activities to be performed by the employee,
considering the nature of the employers business, the duration and scope to be done.
Accordingly, Acibo, et al. are neither project nor seasonal employees.

Acibo, et al. were made to perform tasks that does not pertain to milling operations of
URSUMCO. However, their duties are regularly and habitually needed in URSUMCOs
operation. Moreover, they were regularly and repeatedly hired to perform the same tasks. Being
repeatedly hired for the same purpose makes them regularized employees.
The plantation workers or the mill employees do not work continuously for 1 whole year
but only for the duration of the growing or the sugarcane or the milling season. Their seasonal
work, however, does not detract from considering them in regular employment.

INC SHIPMANAGEMENT, INC. CAPTAIN SIGFREDO E. MONTERROYO


AND/OR INTERORIENT NAVIGATION LIMITED VS. ALEXANDER L.
MORADAS
G.R. NO. 178564. JANUARY 15, 2014
The prevailing rule under Section 20 (B) of the 1996 POEA-SEC on compensation and
benefits for injury or illness was that an employer shall be liable for the injury or illness
suffered by a seafarer during the term of his contract

FACTS:
On July 17, 2000, respondent was employed as wiper for the vessel MV Commander
(vessel) by petitioner INC Shipmanagement, Inc. for its principal, petitioner Interorient
Navigation, Ltd. (petitioners), for a period of 10 months, with a basic monthly salary of
US 360.00, plus benefits.
On October 13, 2000, respondent claimed that while he was disposing of the garbage in
the incinerator room of the vessel, certain chemicals splashed all over his body because
of an explosion. He was sent to the Burns Unit of the Prince of Wales Hospital on the
same day wherein he was found to have suffered deep burns. Eventually, upon his own
request, respondent was sent home.
On October 21, 2000, he was admitted to the St. Lukes Medical Center. Subsequently,
he was diagnosed to have sustained "thermal burns, upper and lower extremities and
abdomen, 2-3, 11% for which he underwent debridement. He was referred to a physical
therapist for his subsequent debridement through hydrotherapy. On November 10, 2000,
the attending physician, Dr. Natalio G. Alegre II, reported that the respondents thermal
burns were healing well and that they were estimated to fully heal within a period of 3 to
4 months.
Claiming that the burns rendered him permanently incapable of working again as a
seaman, respondent demanded for the payment of his full disability benefits under
Section 20 (B) in relation to Sections 30 and 30-A of the Philippine Overseas
Employment Agency (POEA) Standard Employment Contract (POEA-SEC), in the
amount of US$60,000.00, which petitioners refused to heed. Thus, respondent filed a
complaint against petitioners for the same, seeking as well moral and exemplary
damages, including attorneys fees.
In their position paper, petitioners denied respondents claims, contending that his injury
was self-inflicted and, hence, not compensable under Section 20 (D) of the POEA-SEC.
They denied that the vessels incinerator exploded and claimed that respondent burned

himself by pouring paint thinner on his overalls and thereafter set himself on fire. They
averred that he was led to commit such act after he was caught last October 10, 2000
stealing the vessels supplies during a routine security inspection conducted by Captain
Bodo Wirth (Captain Wirth) where respondent was informed that he was to be dismissed.

ISSUE:
WON respondent is entitled to compensation and benefits for injury or illness he suffered

HELD: NO.
The prevailing rule under Section 20 (B) of the 1996 POEA-SEC on compensation and
benefits for injury or illness was that an employer shall be liable for the injury or illness
suffered by a seafarer during the term of his contract. There was no need to show that
such injury was work-related except that it must be proven to have been contracted
during the term of the contract. The rule, however, is not absolute and the employer may
be exempt from liability if he can successfully prove that the cause of the seamans injury
was directly attributable to his deliberate or willful act as provided under Section 20 (D)
thereof, to wit:
D. No compensation shall be payable in respect of any injury, incapacity, disability or
death of the seafarer resulting from his willful or criminal act, provided however, that the
employer can prove that such injury, incapacity, disability or death is directly attributable
to seafarer.
Hence, the onus probandi falls on the petitioners herein to establish or substantiate their
claim that the respondents injury was caused by his willful act with the requisite
quantum of evidence. In labor cases, as in other administrative proceedings, only
substantial evidence or such relevant evidence as a reasonable mind might accept as
sufficient to support a conclusion is required.
Records bear out circumstances which all lead to the reasonable conclusion that
respondent was responsible for the flooding and burning incidents.
Respondents version that the burning was caused by an accident is hardly supported by
the evidence on record.

Philippine Carpet Manufacturing Corporation, Pacific Carpet Manufacturing Corporation


et al. Vs. Ignacio B. Tagyamon, et al. G.R. No. 191475, December 11, 2013 THIRD
DIVISION (Peralta, J.)
Where the claim was filed within the four year statutory period, recovery therefore cannot be
barred by laches. Courts should never apply the doctrine of laches earlier than the expiration of
time limited for the commencement of actions at law.
Philippine Carpet Manufacturing Corporation implemented a retrenchment and voluntary
retirement programs that affected herein corporations employees. Tagyamon, Luna, Badayos,
Dela Cruz, and Comandao of retrenchment program and Marcos, Ilao, Nemis of Voluntary
retirement program. However, respondents claimed they were aggrieved by PCMCs decision to
terminate their employment belying that the company suffered loss of money and filed separate
complaints for illegal dismissal against PCMC. PCMC claimed that they availed of the
companys voluntary retirement program and voluntary executed their respected deeds of
release, waiver and quitclaim. It also defended its decision to terminate the services of the
employees being a necessary management prerogative and that there was an authorized cause for
dismissal. It also stressed that respondents belatedly filed their complaint as they allowed almost
three years to pass making the principle of laches applicable. The Labor Arbiter rendered a
decision dismissing the case for lack of merit and sustained by the NLRC. The Court of Appeals
reversed the decision of the Labor Arbiter and NLRC, refusing to apply the principle of laches
citing the courts decision in the Philcea case.

ISSUE:
Whether the acceptance of separation pay and voluntary execution of deeds of release, quitclaim
bars employees from filing illegal dismissal and whether the principle of laches is applicable in
the present case.
RULING:
As a rule, deeds of release and quitclaim cannot bar employees from demanding benefits to
which they are legally entitled or from contesting the legality of their dismissal. The acceptance
of those benefits would not amount to estoppel. To excuse respondents from complying with the
terms of their waivers, any one of the following grounds must exist: (1) the employer used fraud
or deceit in obtaining the waivers; (2) the consideration the employer paid is incredible and
unreasonable; or (3) the terms of the waiver are contrary to law, public order, public policy,
morals, or good customs or prejudicial to a third person with a right recognized by law. The
Court concluded that the instant case falls under the first situation.
As the ground for termination of employment was illegal, the quitclaims are deemed illegal
because the employees consent had been vitiated by mistake or fraud. The law looks with
disfavor upon quitclaims and releases by employees pressured into signing by unscrupulous
employers minded to evade legal responsibilities. The circumstances show that petitioners

misrepresentation led its employees, specifically respondents herein, to believe that the company
was suffering losses which necessitated the implementation of the voluntary retirement and
retrenchment programs, and eventually the execution of the deeds of release, waiver and
quitclaim. The amounts already received by respondents as consideration for signing the releases
and quitclaims, however, should be deducted from their respective monetary awards.
The court refused to apply the principle of laches, because the case was instituted prior to the
expiration of prescriptive period set by law which is 4 years. It stressed that said principle cannot
be invoked earlier than the expiration of the prescriptive period.

Rexie A. Hormillosa vs. Coca-Cola Bottlers Phils. Inc.


G.R. No. 198699. October 9, 2013
FACTS:
On November 1, 1996, Petitioner Hormillosa was employed as a route salesman by CocaCola Bottlers Phils., Inc. (CBPI). His duties included, selling CBPIs soft drink products,
either on cash or on credit basis; receiving payments from proceeds of the sale or
payments of past due or current accounts; issuing sales invoices; and receiving empty
bottles and cases of soft drinks (empties).
Concerning the sales invoices, he was authorized to issue them on a cash and credit basis.
He prepared the invoices stating the names of the customers, the quantity and kind of
merchandise purchased, and the corresponding amounts. He was required to make the
customers sign the invoices, especially in cases they were on credit basis, and leave
copies with them. The invoices were then submitted to the Finance Department for
accounting and auditing.
Due to their delicate position, route salesmen, like Hormillosa, were given a handbook
entitled, CCBPI Employee Code of Disciplinary Rules and Regulations. This set of rules
and regulations served as their guide in the performance of their duties. Hormillosa
received his copy.
Sometime in the early part of 1999, the then CBPI District Sales Supervisor, Raul S.
Tiosayco III (Tiosayco), conducted a verification and audit of the accounts handled by
Hormillosa. He discovered transactions in violation of CCBPI Employee Code of
Disciplinary Rules and Regulations, specifically "Fictitious sales transactions;
Falsification of company records/data/documents/invoices/reports; fictitious issuances of
TCS/COL (Temporary Credit Sales/Container on Loan); non-issuance or mis-issuance of
invoices and receipts as well as commercial documents to dealers; forgery; misuse, abuse
or defalcation of funds form market development program." On March 8, 1999, Tiosayco
issued a memorandum to Hormillosa informing him that he was being placed on
grounded status and would be subjected to an investigation.
On March 16, 1999, Hormillosa was issued another memorandum directing him again to
report on March 19, 1999. It contained a warning that failure on his part to appear on the
said date would be deemed a waiver of his right to be heard and his case would be
submitted for resolution based on the evidence of CBPI. Hormillosa again moved for the
postponement of the investigation.
On March 17, 1999, Tiosayco issued another memorandum giving Hormillosa until
March 20, 1999 to submit his written explanation on his alleged violations but the latter

did not heed it. Instead, he sent Tiosayco a letter11informing him that the investigation
was already "moot and academic" on the pretense that he had already filed a case against
CBPI for Unfair Labor Practice (ULP).
On March 22, 1999, Tiosayco submitted his findings and recommendations to the
Regional Sales Manager, proposing the termination of Hormillosa. CBPI gave credence
to the report and approved his recommendation.
ISSUE: WON Hormillosa was illegally dismissed
HELD:
NO.
Article 282 of the Labor Code enumerates the just causes for the termination of
employment of an employee by the employer, to wit:
Art. 282. Termination by employer. An employee may terminate an employment for
any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his employer
or any immediate member of his family or his duly authorized representative; and
(e) Other causes analogous to the foregoing.
The rule is that, in labor cases, substantial evidence or such relevant evidence as a
reasonable mind might accept as sufficient to support a conclusion is required. The CA
was correct when it ruled that Hormillosas employment was validly terminated under
paragraph (c) of the above provision. There was substantial evidence to justify his
dismissal.

MZR INDUSTRIES, MARILOU R. QUIROZ AND LEA TIMBAL VS. MAJEN


COLAMBOT
G.R. NO. 179001. AUGUST 28, 2013

FACTS:
On February 8, 2000, petitioner Marilou Quiroz, Owner and Vice-President for Finance
and Marketing of MZR, hired respondent Majen Colambot (Colambot) as messenger.
Colambot's duties and responsibilities included field, messenger and other liaison work.
However, beginning 2002, Colambot's work performance started to deteriorate.
Petitioners issued several memoranda to Colambot for habitual tardiness, negligence, and
violations of office policies.
He was also given written warnings for insubordination committed on August 27, 2003
and September 11-12, 2003; on September 16, 2003 for negligence caused by careless
handling of confidential office documents; on September 22, 2004 for leaving his post
without proper turnover; and, on October 4, 2004 for insubordination. Petitioners claimed
that despite written warnings for repeated tardiness and insubordination, Colambot failed
to mend his ways. Hence, in a Memorandum dated October 25, 2004 issued by petitioner
Lea Timbal (Timbal), MZR's Administrative Manager, Colambot was given a notice of
suspension for insubordination and negligence.
Again, in a Memorandum dated November 25, 2004, Colambot was suspended from
November 26, 2004 until December 6, 2004 for insubordination. Allegedly, Colambot
disobeyed and left the office despite clear instructions to stay in the office because there
was an important meeting in preparation for a very important activity the following day.
Petitioners claimed they waited for Colambot to report back for work on December 7,
2004, but they never heard from him anymore. Later, petitioners were surprised to find
out that Colambot had filed a complaint for illegal suspension, underpayment of salaries,
overtime pay, holiday pay, rest day, service incentive leave and 13th month pay. On
December 16, 2004, the complaint was amended to illegal dismissal, illegal suspension,
and underpayment of salaries, holiday pay, service incentive pay, 13th month pay and
separation pay.

For his part, Colambot narrated that he worked as a messenger for petitioners since
February 2000. That on November 2004, he was directed to take care of the processing of

a document in Roxas Boulevard, Pasay City. When he arrived at the office around 6 to 7
o'clock in the evening, he looked for petitioner Quiroz to give the documents. The latter
told him to wait for her for a while. When respondent finally had the chance to talk to
Quiroz, she allegedly told him that she is dissatisfied already with his work performance.
Afterwards, Colambot claimed that he was made to choose between resigning from the
company or the company will be the one to terminate his services. He said he refused to
resign. Colambot alleged that Quiroz made him sign a memorandum for his suspension,
from November 26 to December 6, 2004. After affixing his signature, Quiroz told him
that effective December 7, 2004, he is already deemed terminated. Later, on December 2,
2004, respondent went back to the company to look for Timbal to get his salary. He
claimed that Timbal asked him to turn over his company I.D.
Petitioners, however, insisted that while Colambot was suspended due to insubordination
and negligence, they maintained that they never terminated Colambot's employment.
They added that Colambot's failure to report for work since December 7, 2004 without
any approved vacation or sick leave constituted abandonment of his work, but they never
terminated his employment. Petitioners further emphasized that even with Colambot's
filing of the complaint against them, his employment with MZR has not been terminated.
ISSUE: WON Colambot can claim benefits due to the alleged illegal dismissal
HELD: NO.
While the Court recognize the rule that in illegal dismissal cases, the employer bears the
burden of proving that the termination was for a valid or authorized cause, in the present
case, however, the facts and the evidence do not establish a prima facie case that the
employee was dismissed from employment. Before the employer must bear the burden of
proving that the dismissal was legal, the employee must first establish by substantial
evidence the fact of his dismissal from service. If there is no dismissal, then there can be
no question as to the legality or illegality thereof.
In the present case, other than Colambot's unsubstantiated allegation of having been
verbally terminated from his work, there was no evidence presented to show that he was
indeed dismissed from work or was prevented from returning to his work. In the absence
of any showing of an overt or positive act proving that petitioners had dismissed
respondent, the latter's claim of illegal dismissal cannot be sustained as the same would
be self-serving, conjectural and of no probative value.

INTEGRATED MICROELECTRONICS, INC. (IMI) VS ADONIS A. PIONILLA


G.R. NO. 200222, AUGUST 28, 2013
FACTS:
Petitioner IMI employed respondent Adonis Pionilla as one of its production worker.
Pionilla was later on dismissed for violating company rules and regulations which prohibits
lending one's ID since the same is considered a breach of its security rules. It was reported that
Pionilla was seen escorting a lady to board the company shuttle bus at a terminal, and that the
lady was wearing a company ID which serves as a free pass for shuttle bus passengers even if
she was just a job applicant at IMI. Pionilla admitted that he lent his ID to the lady who turned
out to be his relative. It was also admitted by Pionilla that at the time of the incident, he had two
Ids in his name as he lost his original ID but was able to secure a temporary ID later on. As
Pionilla and his relative were about to board the shuttle bus, they were both holding separate Ids,
both in his name. The day after the incident, Pionilla received a notice requiring him to explain
the incident and a committee was subsequently formed to investigate the matter. Subsequently
IMI found Pionilla guilty and was dismissed from service.

ISSUE: Whether or not Pionilla was illegally dismissed and hence entitled to reinstatement and
full back wages

RULING:

An illegally dismissed employee is entitled to either reinstatement, if viable or separation pay if


reinstatement is no longer viable and backwages. In certain cases, however, the Court has
ordered reinstatement of the employee without backwages considering the fact that (1) the
dismissal of the employee would be too harsh a penalty and, (2) the employer was in good faith
in terminating the employee.

The Court observed that: (a) the penalty of dismissal was too harsh of a penalty to be imposed
against Pionilla for his infractions; and (b) IMI was in good faith when it dismissed Pionilla as
his dereliction of its policy on ID usage was honestly perceived to be a threat to the company's
security. In this respect, since these circumstances trigger the application of the exception to the
rule on backwages, the Court finds it proper to accord the same disposition and consequently
directs the deletion of the award of back wages in favor of Pionilla, notwithstanding the illegality
of the dismissal.

MARIA LOURDES D. CASTELLS AND SHALIMAR CENTI-MANDANAS VS. SAUDI


ARABIAN AIRLINES (SAUDIA)
G.R. NO 188514, AUGUST 28, 2013

FACTS:
Petitioner Maria Lourdes D. Castells and Shalimar Centi-Mandanas were two of the 10 flight
attendants of SAUDIA who were issued a memo transferring them from Manila to Jeddah, Saudi
Arabia due to operational requirements. Centi-Mandanas complied with the transfer order
while Castells did not.

Upon Centi-Mandanas' arrival at Jeddah, she was told that her contract would no longer be
renewed and was asked to sign a pre-typed resignation letter. On the part of Castells, she alleged
that her non-compliance with the transfer order, she felt that she was being forced to resign.
Castells and Centi-Mandanas, along with a co-flight attendant Maria Bilbao filed a complaint for
illegal dismissal against SAUDIA.They alleged that they have been hearing stories that Jeddahbased flight attendants aged 39 to 40 years old (the same as them) were already processing their
respective resignations and that he transfer order was made so that they would be terminated
upon their arrival in Jeddah. For their defense, SAUDIA maintained that the resignations were
intelligently and voluntarily made.

The Labor Arbiter (LA) held SAUDIA guilty of illegal dismissal and ordered to pay each of the
petitioners and Bilbao full backwages. Upon appeal to the NLRC, the LA's decision was
reversed and set aside and thereby dismissed the complaint against SAUDIA. Consequently,
petitioners and Bilbao filed their respective motions for reconsideration which were all denied,
hence they elevated the matter to the CA.

With the CA, a Motion for Extension to file a Petition for Certiorari was filed within which to
file the subject petition. The said motion was granted and the parties filed their petitions to the
CA, and the latter admitted the same. However SAUDIA filed a Motion for Reconsideration
primarily contending that the filing of an extension of time to file a petition for certiorari is no
longer allowed. The CA reconsidered its earlier resolution and granted SAUDIA's motion, hence
it considered the case closed and terminated.

ISSUE:
Whether or not the CA correctly refused admission of the subject petition and
considered the cased closed and terminated, and that the strict procedural rules admits of an
exception?

RULING:

It is well settled that procedural rules should be treated with utmost respect and due regard, since
they are designed to facilitate the adjudication of cases to remedy the worsening problem of
delay in the resolution of rival claims and in the administration of justice. From time to time,
however, the Court has recognized exceptions to the strict application of such rules, but only for
the most compelling reasons where stubborn obedience to the Rules would defeat rather than
serve the ends of justice.

Despite the rigid wording under Rule 65 of the Rules of Court as amended, which now disallows
an extension of the 60day reglementary period to file a petition for certiorari Courts may
nevertheless extend the same, subject to its sound discretion (as one of the recognized exceptions
to the strict application of the Rules).

Sea Power Shipping Inc., and/or Bulk Carriers Limited and Special Maritime Enterprises,
and M/V Magellan vs Nenita P. Salazar, on behalf of deceased Armando L. Salazar
G.R. No. 188595, August 28, 2013
FACTS:

Armando Salazar was employed as an Able Seaman by petitioner Sea Power Shipping
Enterprises Inc. on behalf of its principal, Atlantic Bulk Carriers Limited. At the time of his
employment he had already passed his pre-employment medical examination and had been
declared fit to work.

Armando boarded the M/V Magellan and after the end of his contract he returned to our shores.
However, two days after, he was taken to a hospital where he was confined in the ICU for three
days. According to medical reports, he suffered from pneumonia, and because of such
confinement he was unable to see the agency's physician for a post-employment medical
examination (PEME) that was supposed to be conducted within 72hours from his repatriation.
Nevertheless on the 7th or 8th day of Armando's confinement, Salazar informed petitioners of her
husband's condition and even asked them for the proceeds of the insurance.

The agency denied Salazar's claims. It reasoned that without the requisite PEME his
beneficiaries could not avail themselves of the sickness allowance. Later on Armando's condition
worsened and he checked in and out of hospitals, he was diagnosed of having lung cancer and
after six months he died.

Salazar instituted a collection suit against petitioners for medical expenses, burial expenses,
compensation and death benefits, and minor child's allowance for their daughter.

ISSUE: Whether or not Salazar is entitled to illness benefits and death benefits?

RULING:

The Court granted the claim for illness benefits. Admittedly, Armando did not report for PEME,
however for a person who's terminally ill, it is understandable, as he is physically incapacitated
to do it. The Court explained that while it may be true that there was no record to prove that
Armando was ill while on board the vessel as there was no report of any illness on his part, nor
did he ask for medical attention during the term of his contract, medical history and human
experience would show that lung cancer does not just develop in one day or much less, develop
that fast, hence it was inferred that his lung cancer was contracted during his service.

However the Court did not grant the death benefits to Salazar as there was absent any semblance
of causation, it cannot be inferred that the death of Armando after the term of his contract is
compensable, if the inference is based solely on circumstance that he was confined within two
days and died within six months after his repatriation. There was no substantial evidence to
support the claim for compensation and death benefits. As ruled by the Court in Gabunas, Sr. v.
Scanmar Maritime Services Inc., citing Government Service Insurance System v. Cuntapay,
claimants in compensation proceedings must show credible information that there is probably a
relation between the illness and the work. Probability, and not mere possibility, is required;
otherwise the resulting conclusion would proceed from deficient proofs.

NATHANIEL DONGON v. RAPID MOVERS AND FORWARDERS CO. INC. ET AL.


G.R. No. 163431, August 28, 2013, First Division (Bersamin, J.)
The prerogative of the employer to dismiss an employee on the ground or willful
disobedience to company policies must be exercised in good faith and with due regard to the
rights of labor.
Natahniel Dongon was dismissed from Rapid Movers and Forwarders Co. Inc.
due to willful disobedience. Dongon is a fromer truck helper leadman. Dongons area of
assignment is in Tanduay Otis Warehous where Dongon and his driver Vicente Villaruz tried to
get some goods to be distributed to their clients. To get the clearance for the release of the goods,
Dongon lent his ID card to Villaruz. However, the security guard, who saw the misrepresentation
committed by Dongon and Villaruz, accosted them and reported the matter to the management of
Tanduay. Now, Dongon is claiming that he is illegally dismissed from his work.
Dongon claims that his dismissal was a penalty too harsh and disproportionate to his
supposed violation; and that his dismissal was inappropriate due to the violation being his first
infraction that was even committed in good faith and without malice. On the other hand, Rapid
Movers claims they rightly exercised its prerogative to dismiss petitioner because he violated the
Companys Manual of Discipline which amounted to willful disobedience. The Labor Arbiter
dismissed the complaint and agrees with the contention of Rapid Movers. On appeal, the NLRC
reversed the decision of the Labor Arbiter. The Court of Appeals affirmed the decision of the
NLRC.
ISSUE: Is the dismissal of Dongon on the ground of willful disobedience to the company
regulation lawful?
RULING: Dongon was not guilty of willful disobedience; hence, his dismissal was illegal.
The Supreme Court ruled the disobedience attributed to Dongon could not be justly
characterized as willful within the contemplation of Article 296 of the Labor Code. Willfulness
must be attended by a wrongful and perverse mental attitude rendering the employees act
inconsistent with proper subordination.
Dongon neither benefitted from it, nor thereby prejudiced the business interest of
Rapid Movers. His explanation that his deed had been intended to benefit Rapid Movers was
credible. There could be no wrong or perversity on his part that warranted the termination of his

employment based on willful disobedience and considering also that he had rendered seven long
unblemished years of service to Rapid Movers, his dismissal was plainly unwarranted.
Moreover, the Supreme Court reiterated an employer is given a wide latitude of
discretion in managing its own affairs. The broad discretion includes the implementation of
company rules and regulations and the imposition of disciplinary measures on its employees. But
the exercise of a management prerogative like this is not limitless, but hemmed in by good faith
and a due consideration of the rights of the worker.

PNOC ENERGY DEVELOPMENT CORPORATION, ETAL. v.JOSELITO L.


ESTRELLA
G.R. No. 197789, July 8, 2013, Second Division (Perlas-Bernabe, J.)
Not every form of misconduct can be considered as a just cause for termination. The law
explicitly qualifies that the misconduct must be both serious and made in connection with the
employees work.
Joselito Estrella was dismissed from PNOC-Energy Development Corporation (PNOCEDC) due to serious misconduct and willful acts of dishonesty, consisting of his alteration and/or
tampering of lessors bids, acceptance of disqualified bids, manipulation of bid summary, and
extortion. Estrellas duties included initiating and handling the terms and conditions for the
bidding of heavy and support equipment rentals for PNOC-EDCs project locations, and
evaluating and recommending bid contracts for management approval. Now, Estrella is claiming
that he was illegally dismissed.
Estrellas admitted the alteration but explained that he did so in order to reflect the results
of a second inspection he conducted which he found necessary. He also denied extorting free
cables from the bidders. Moreover, for the disqualified bids, he accepted the bidder with the
lower rate than the other which did not cause undue injury or damage to PNOC-EDC, but rather,
was more advantageous to it. On the other hand, PNOC-EDC impute that Estrella used his
position and authority to exert undue pressure on the bidders to give in to his personal demands,
and in the process, tainted the integrity of PNOC-EDCs bidding process.
The Labor Arbiter ruled that Estrella to have been illegally dismissed. Also, the Labor
Arbiter held that Estrellas infractions were not major violations but only minor ones which did
not merit the penalty of dismissal. The NLRC affirmed the decision of the Labor Arbiter in toto.
The Court of Appeals affirmed the decision of the NLRC.
ISSUE: Is Estrellas dismissal from PNOC-EDC lawful?
RULING: No, Estrellas dismissal is unlawful thus Estrella is illegally dismissed from his work.
As reiterated in Cosmos Bottling Corp. v. Fermin, the Supreme Court clarified that not every
form of misconduct can be considered as a just cause for termination. The law explicitly qualifies
that the misconduct must be both serious and made in connection with the employees work.
In this relation, it is well to stress that the employer bears the burden of proving, through
substantial evidence, that the aforesaid just cause or any other valid cause for that matter forms
the basis of the employees dismissal from work. In this case, PNOC-EDC failed to prove such.
While Estrella himself admitted that he did alter the bid from three (3) vehicles to one (1) in the
Bid Summary, he provided a reasonable excuse therefor that is, he only did so to reflect the

results of his second inspection where he found that only one vehicle was available for lease.
Besides, as it turned out, the alleged alterations did not appear in the final copy of the Bid
Summary, negating any complications on the companys bidding process. Thus, for these
reasons, it cannot be gainsaid that Estrellas mistake, if any, hardly qualifies as serious
misconduct as contemplated by law, denying his employers right to dismiss him based on the
same.

CAMILO A. ESGUERRA v. UNITED PHILIPPINES LINES, INC., ET AL.


G.R. No. 199932, July 3, 2013, First Division (Reyes, J.)
In disability claims, the employee bears the onus to prove by substantial evidence his own
positive assertions.
United Philippines Lines, Inc. (UPLI), a Philippine-registered manning agency, hired
Camilo Esguerra to work as a fitter on board their vessel. While Esguerra was welding wedges
inside the vessel, a manhole cover accidentally fell and hit him on the head. The impact of the
blow caused him pain on his neck and shoulders.
Esguerra consulted UPLIs accredited physician and he was advised to undergo physical
therapy. Alleging that despite undergoing medical treatment and physical therapy sessions, his
injuries did not heal and instead, his condition deteriorated, Esguerra filed before the Labor
Arbiter a complaint for permanent disability benefits against UPLI based on the CBA between
him and UPLI.
The accredited physicians of UPLI classified his disability as Grade 8. Also, the UPLI
based the claim of Esguerra to be governed by the POEA-SEC because the CBA was only
limited only to radio officers, chief stewards, electricians and electro technicians under which the
Esguerra cannot be categorized. Unconvinced of the final assessment made by UPLIs
physicians, Esguerra consulted an independent physician who, after examination, classified his
injury as Grade 1 disability. The physician pronounced the Esguerra permanently unfit for seafaring duty in a medical certificate. The Labor Arbiter ruled that the injury suffered by Esguerra
is grade 1 disability, permanent and total disability. The NLRC affirmed the decision of the
Labor Arbiter. The Court of Appeals reversed the decision the NLRC and sustained the final
assessment of UPLIs physicians assigning Grade 8 disability and the claim of disability benefits
is governed by POEA-SEC.
ISSUE:
correct?

Is the injury of Esguerra as pronounced as grade 8 disability by UPLIs physician

Is the claim of disability benefits of Esguerra governed by POEA-SEC?


RULING: The pronouncement of UPLIs physician is not correct. Esguerras injury should be
classified as permanent and total disability (Grade 1 disablity). The uncertain effect of further
treatment intimates nothing more but that the injury sustained by the petitioner bars him from
performing his customary and strenuous work as a seafarer/fitter. As such, he is considered
permanently and totally disabled.

The Supreme Court also ruled that the award of permanent disability benefits shall be
governed by the POEA-SEC. In this case, Esguerra failed to proffer credible and competent
evidence of his claim for superior disability benefits based on the CBA. The CBA as his basis for
claiming superior disability benefits was already expired thus outside Esguerras employment.
GILDA C. FERNANDEZ AND BERNADETTE A. BELTRAN vs.NEWFIELD STAFF
SOLUTIONS, INC. /ARNOLD "JAY" LOPEZ, JR.
G.R. No. 201979, July 10, 2013

FACTS:
Respondent Newfield Staff Solutions, Inc. (Newfield) hired Fernandez and Beltran, as Recruitment
Manager and Recruitment Specialist, respectively. It was provided in the employment agreement that
Fernandez will receive a loyalty bonus and life insurance upon reaching six months of employment with
Newfield. Petitioners guaranteed to perform their tasks for six months and breach of this guarantee would
make them liable for liquidated damages. It was further provided in their employment agreements that if
they want to terminate their employment agreements after the "guaranteed period of engagement," they
should send a written notice 45 days before the effective date of termination.
Newfields General Manager, asked petitioners to come to his office and terminated their employment on
the ground that they failed to perform satisfactorily. He ordered them to immediately turn over the records
in their possession to their successors.
Fernandez filed a complaint for illegal dismissal.
Newfield alleged that Fernandez and Beltran signed fixed-term employment agreements where they
agreed to perform their tasks for six months. They also agreed to give a written notice 45 days in advance
if they want to terminate their employment agreements. But they never complied with their undertakings.
Three weeks after working for Newfield, Fernandez and Beltran did not report for work. Hence, Newfield
declared them absent without official leave (AWOL) and terminated her employment on the ground
of breach of contract. Newfield also claimed that no evidence shows or even hints that petitioners were
forced not to report for work. Petitioners simply no longer showed up for work.
Fernandez and Beltan averred in their verified position paper that Lopez, Jr. fired them, told them that it
was their last day and ordered them to turn over the records to their successors.
ISSUE: 1) Whether or not Fernandez and Beltran are fixed-term employees.
2) Whether or not Fernandez and Beltran abandoned their works.
HELD:

The Supreme Court clarify first that Fernandez and Beltran employment agreements are not fixed-term
contracts for six months because they become entitled to a loyalty bonus and life insurance upon
reaching six months of employment with Newfield. Fernandez and Beltran merely guaranteed to perform
their tasks for six months and failure to comply with this guarantee makes them liable for liquidated
damages.
Fernandez are not fixed-term employees but probationary employees. Newfield even admitted that
Beltran was hired as probationary Recruitment Specialist. A probationary employee may be terminated
for a just or authorized cause or when he fails to qualify as a regular employee in accordance with
reasonable standards prescribed by the employer.
Abandonment is a form of neglect of duty, one of the just causes for an employer to terminate an
employee. For abandonment to exist, two factors must be present: (1) the failure to report for work or
absence without valid or justifiable reason; and (2) a clear intention to sever the employer-employee
relationship, with the second element as the more determinative factor being manifested by some overt
acts.
Since both factors are not present, petitioners are not guilty of abandonment. One, petitioners were absent
because Lopez, Jr. had fired them. Thus, we cannot fault them for refusing to comply with the return-towork letters and responding instead with their demand letters. Two, petitioners protest of their dismissal
by sending demand letters and filing a complaint for illegal dismissal with prayer for reinstatement
convinces us that petitioners have no intention to sever the employment relationship. Employees who take
steps to protest their dismissal cannot logically be said to have abandoned their work. A charge of
abandonment is totally inconsistent with the immediate filing of a complaint for illegal dismissal. The
filing thereof is proof enough of ones desire to return to work, thus negating any suggestion of
abandonment.
The Supreme Court therefore agrees that Fernandez and Beltran were illegally dismissed since there is no
just cause for their dismissal.

FIRST PHILIPPINE INDUSTRIAL CORPORATION, vs. RAQUEL M. CALIMBAS AND LUISA


P. MAHILOM
G.R. No. 179256, July 10, 2013

FACTS:
Private respondent First Philippine Industrial Corporation (FPIC) is a domestic corporation primarily
engaged in the transportation of petroleum products by pipeline. Upon the other hand, petitioners Raquel
Calimbas and Luisa Mahilom were engaged by De Guzman Manpower Services ("DGMS") to perform
secretarial and clerical jobs for FPIC. DGMS is engaged in the business of supplying manpower.
FPIC informed Calimbas and Mahilom that their services to the company would no longer be needed as a
result of the "Pace-Setting" Study conducted by an outside consultant.
Despite having executed the said quitclaims, the Calimbas and Mahilom still filed a Complaint against
FPIC for illegal dismissal and for the collection of monetary benefits, damages and attorneys fees,
alleging that they were regular employees of FPIC after serving almost five (5) years, and that they were
dismissed without cause.
Upon the other hand, FPIC insisted that their true employer was DGMS considering that the petitioners
were hired by DGMS and assigned them to the Company to render services based on their Contract; that
they received their wages and other benefits from DGMS; and that they executed quitclaims in favor of
DGMS. Also, FPIC submitted that the termination of the petitioners employment with their employer,
DGMS, was valid and lawful since they executed quitclaims with their employer.
ISSUES:
(1) Whether Calimbas and Mahilom are employees of FPIC;
(2) Whether Calimbas and Mahilom were lawfully dismissed from their employment.
HELD:
The Supreme Court ruled that Calimbas and Mahilom are FPICs employees and that DGMS is engaged
in labor-only contracting.
There is "labor-only" contracting where the person supplying workers to an employer does not have
substantial capital or investment in the form of tools, equipment, machineries, work premises, among

others, and the workers recruited and placed by such person are performing activities which are directly
related to the principal businessof such employer. In such cases, the person or intermediary shall be
considered merely as an agent of the employer who shall be responsible to the workers in the same
manner and extent as if the latter were directly employed by him.
DGMS has not shown any serious and cogent reason to disregard the ruling in the aforementioned case.
Records likewise reveal that DGMS has no substantial equipment in the form of tools, equipment and
machinery. As a matter of fact, respondents were using office equipment and materials owned by
petitioner while they were rendering their services at its offices.
Second, petitioner exercised the power of control and supervision over the respondents. It is axiomatic
that the test to determine the existence of independent contractorship is whether one claiming to be an
independent contractor has contracted to do the work according to his own methods and without being
subjected to the control of the employer, except only to the results of the work. Obviously, on this score
alone, petitioner cannot rightly claim that DGMS was an independent job contractor inasmuch as
respondents were subjected to the control and supervision of petitioner while they were performing
their jobs."
All told, an employer-employee relationship exists between petitioner and respondents. And having
served for almost five years at petitioners company, respondents had already attained the status of regular
employees.
As to the second issue, i.e., whether respondents were lawfully dismissed from their employment, this
Court rules in the negative.
Recently, in Skippers United Pacific, Inc. v. Daza, this Court held that for a workers dismissal to be
considered valid, it must comply with both procedural and substantive due process, viz.:
For a workers dismissal to be considered valid, it must comply with both procedural and substantive due
process. The legality of the manner of dismissal constitutes procedural due process, while the legality of
the act of dismissal constitutes substantive due process.

UNIVERSAL ROBINA CORPORATION AND LANCE Y. GOKONGWEI v. WILFREDO Z.


CASTILLO
G.R. No. 189686, July 15, 2013

FACTS:
Respondent Wilfredo Z. Castillo (Castillo) was hired by petitioner Universal Robina Corporation (URC)
as a truck salesman on 1983. He rose from the ranks and became a Regional Sales Manager, until his
dismissal on 2006 for just cause, specifically, loss of trust and confidence under Art.282. He was found to
have accepted gift checks from a supplier. The Labor arbiter ruled that there was illegal dismissal. NLRC
reversed the decision.CA affirmed the NLRC decision but awarded Castillo with separation pay as a form
of equitable relief.
URC raises the lone argument if an employees act or violation of the companys code constitutes serious
misconduct or is reflective of lack of moral character, then the employer is not required to give the
dismissed employee financial assistance or separation. URC maintains that respondents acts of signing
blank Charge Invoices without any authority and receiving of GCs for his personal benefit clearly
constitute serious misconduct which preclude an award for separation pay.

Castillo stresses that based on the tenor of the termination letter, he was never dismissed on the ground of
gross misconduct. Respondent concedes that at most, he may have committed simple negligence. He
reiterates that he did not commit any act constituting serious misconduct nor does it reflect any
deterioration in his moral character.

ISSUE:
Whether or not a validly dismissed employee is entitled to separation pay.

HELD:
The leading case of Philippine Long Distance Telephone Co. v. NLRC enunciated the ruling that

separation pay as a measure of social justice is allowed in those instances where the employee is validly
dismissed for causes other than serious misconduct or those reflecting on his moral character. The case
of Toyota Motor Phils. Corp. Workers Association (TMPCWA) v. NLRC expanded the doctrine laid down
in PLDT by adding dismissals other than those under Art. 282 of the Labor Code, like willful
disobedience, gross and habitual neglect of duty, fraud or willful breach of trust, and commission of a
crime against the employer or his family which would preclude award of separation pay.
Central Philippines Bandag Retreaders, Inc. cautioned labor tribunals in indiscriminately awarding
separation pay as a measure of social justice.

In Bank of the Philippine Islands v. NLRC and Arambulo, the Supreme Court ruled that an employee who
has been dismissed for a just cause under Article 282 of the Labor Code is not entitled to separation
pay.

The complainant therein was likewise dismissed on the ground of loss of trust and

confidence. Applying that rule to the instant case, we here hold that respondent is not entitled to
separation pay.

ZUELLIG PHARMA CORPORATION vs. ALICE M. SIBAL et al.


G.R. No.173587, July 15, 2013

FACTS:

Petitioner Zuellig Pharma Corporation (Zuellig) is a domestic corporation engaged in the manufacture
and distribution of pharmaceutical products. Respondents Sibal et al. (36 in all), on the other hand, were
the employees of Zuellig at its Syntex Division.
Roche Philippines, Inc. (Roche) purchased Syntex and took over from Zuellig the distribution of Syntex
products. Consequently, Zuellig closed its Syntex Division and terminated the services of respondents due
to redundancy. They were properly notified of their termination and were paid their respective separation
pay in accordance with the Collective Bargaining Agreement (CBA) for which Sibal et al. individually
signed Release and Quitclaim in full settlement of all claims arising from their employment with Zuellig.
Controversy arose when respondents filed Complaints for payment of retirement gratuity and monetary
equivalent of their unused sick leave on top of the separation pay already given them Sibal et al. claimed
that they are still entitled to retirement benefits and that their receipt of separation pay and execution of
Release and Quitclaim do not preclude pursuing such claim.
Zuellig insists that CBA prohibits the recovery of both retirement gratuity and severance pay.

ISSUE:
1.) Whether or not Sibal et al. is entitled to retirement gratuity and monetary equivalent of the unused
sick leave.
2.) Whether or not the Release and Quitclaim signed by Sibal et al. is valid and binding.

HELD:
The CBA does not allow recovery of both separation pay and retirement gratuity. As the law between the
parties, the CBA must be strictly complied with.

It is a familiar and fundamental doctrine in labor law that the CBA is the law between the parties and they
are obliged to comply with its provisions. In Honda Phils., Inc. v. Samahan ng Malayang Manggagawa
sa Honda this Court elucidated as follows:

A collective bargaining agreement [or CBA] refers to the negotiated contract between a legitimate labor
organization and the employer concerning wages, hours of work and all other terms and conditions of
employment in a bargaining unit. As in all contracts, the parties in a CBA may establish such stipulations,
clauses, terms and conditions as they may deem convenient provided these are not contrary to law,
morals, good customs, public order or public policy. Thus, where the CBA is clear and unambiguous, it
becomes the law between the parties and compliance therewith is mandated by the express policy of the
law.
The Release and Quitclaim executed by each of the respondents remains valid.

It is true that quitclaims executed by employees are often frowned upon as contrary to public policy. But
that is not to say that all waivers and quitclaims are invalid as against public policy. Quitclaims will be
upheld as valid if the following requisites are present: "(1) the employee executes a deed of quitclaim
voluntarily; (2) there is no fraud or deceit on the part of any of the parties; (3) the consideration of the
quitclaim is credible and reasonable; and, (4) the contract is not contrary to law, public order, public
policy, morals or good customs or prejudicial to a third person with a right recognized by law."

In this case, there is no showing that Zuellig coerced or forced respondents to sign the Release and
Quitclaim. For which reason, they have remised, released and discharged Zuellig. It is only where there is
clear proof that the waiver was wangled from an unsuspecting or gullible person, or the terms of
settlement are unconscionable on its face, that the law will step in to annul the questionable transaction.
But where it is shown that the person making the waiver did so voluntarily, with full understanding of
what he was doing, and the consideration for the quitclaim is credible and reasonable, the transaction
must be recognized as a valid and binding undertaking.

JESSIE G. MARTINEZ, Petitioner, vs. CENTRAL PANGASINAN ELECTRIC


COOPERATIVE, INC. (CENPELCO), Respondent.
G.R. No. 192306, July 15, 2013

Martinez's failure to properly account for his shortage of such a significant amount is enough
reason for CENPELCO to lose trust and confidence in him.
FACTS:
On April 25, 2002, Martinez had a shortage in the amount of P44, 846.77. On June 30
2002, the Companys Grievance Committee, submitted its report recommending Martinezs
termination from employment as well as the filing of the appropriate case in court. On November
26, 2002, Martinez was dismissed from service. Labor Arbiter (LA) ruled Martinezs dismissal
illegal.
LA opined that there is no ascribable offense against Martinez which may constitute the charges
of misappropriation and loss of confidence against him.
NLRC reversed the LAs ruling, declaring Martinezs dismissal valid. The CA affirmed the
NLRCs ruling.
ISSUE: Whether Martinezs dismissal on the ground of loss of trust and confidence is valid.

HELD:
Yes. To validly dismiss an employee on the ground of loss of trust and confidence under
Article 296(c) of the Labor Code, the following guidelines must be observed: (1) the employee
concerned must be holding a position of trust and confidence; and (2) there must be an act that
would justify the loss of trust and confidence.
Anent the first requisite, it is noteworthy to mention that there are two classes of positions of
trust, namely: (1) managerial employees whose primary duty consists of the management of the
establishment in which they are employed or of a department or a subdivision thereof, and to
other officers or members of the managerial staff; and (2) fiduciary rank-and-file employees such
as cashiers, auditors, property custodians, or those who, in the normal exercise of their functions,

regularly handle significant amounts of money or property. These employees, though rank-andfile, are routinely charged with the care and custody of the employers money or property, and
are thus classified as occupying positions of trust and confidence. Being an employee tasked to
collect payments and remit the same to CENPELCO, Martinez belongs to the latter class and
thus, occupies a position of trust and confidence.
Anent the second requisite, the audit report conducted on Martinez's cash count revealed that he
had a shortage in the amount of P44, 846. 77 in his remittance for April 25, 2002. When asked to
explain such shortage, Martinez not only admitted the same but even tried to exculpate himself
from liability by attempting to offset said shortage with his alleged overage on April 23, 2002 in
the amount ofP45, 682.58. The Court agrees with the CA that this practice should never be
countenanced because it would allow the employees to patch up inaccuracies or even their own
wrongdoings and thus, the true revenues or losses of the company will never be correctly
identified. Verily, this irregular practice would be detrimental to the interests of the employer
whose bread and butter depends solely on realized profits. Perforce, Martinez's failure to
properly account for his shortage of such a significant amount is enough reason for CENPELCO
to lose trust and confidence in him.

ZUELLIG FREIGHT AND CARGO SYSTEMS, Petitioner, v.NATIONAL LABOR


RELATIONS COMMISSION AND RONALDO V. SAN MIGUEL, Respondents.
The mere change in the corporate name is not considered under the law as the creation of a new
corporation; hence, the renamed corporation remains liable for the illegal dismissal of its
employee separated under that guise.
FACTS:
In January 1994, Rolando San Miguel and other employees of Zeta were informed that
Zeta would cease operations, and that all affected employees, including him, would be separated;
that by letter dated February 28, 1994, Zeta informed him of his termination effective March 31,
1994; that he reluctantly accepted his separation pay subject to the standing offer to be hired to
his former position by petitioner; and that on April 15, 1994, he was summarily terminated,
without any valid cause and due process.
On its part, petitioner countered that San Miguels termination from Zeta had been for a cause
authorized by the Labor Code; that its non-acceptance of him had not been by any means
irregular or discriminatory.
Labor Arbiter Francisco A. Robles rendered a decision holding that San Miguel had been
illegally dismissed.
NLRC issued a resolution on April 4, 2001, affirming the decision of the Labor Arbiter.
ISSUE:
WON amendments of the articles of incorporation of Zeta to change the corporate name
to Zuellig Freight and Cargo Systems, Inc. produced the dissolution of the former as a
corporation.
HELD:
No. Zeta and petitioner remained one and the same corporation. The change of name did
not give petitioner the license to terminate employees of Zeta like San Miguel without just or
authorized cause. The situation was not similar to that of an enterprise buying the business of
another company where the purchasing company had no obligation to rehire terminated

employees of the latter. Petitioner, despite its new name, was the mere continuation of Zetas
corporate being, and still held the obligation to honor all of Zetas obligations, one of which was
to respect San Miguels security of tenure. The dismissal of San Miguel from employment on the
pretext that petitioner, being a different corporation, had no obligation to accept him as its
employee, was illegal and ineffectual.

THE PROVINCIAL GOVERNMENT OF CAMARINES NORTE, represented by


GOVERNOR JESUS O. TYPOCO, JR., Petitioner,vs.BEATRIZ O.
GONZALES, Respondent.
G.R. No. 185740
July 23, 2013
"A permanent employee remains a permanent employee unless he is validly terminated"

FACTS:
Gonzales was originally issued a permanent appointment. Subsequently, she was
administratively charged and found guilty of gross insubordination for which she was meted the
penalty of six months suspension. After serving her suspension, the CSC directed the Provincial
Government to reinstate her. Eventually, on October 10, 2000, the Provincial Government
informed the CSC that it will reinstate Gonzales effective the following day, October 11, 2000,
but would dismiss her for lack of confidence the next day, October 12, 2000, on the premise that
her position had already become primarily confidential by virtue of the LGC.
ISSUE:
WON Gonzales dismissal was without cause and effected without due process of law,
hence illegal.
HELD:

Yes. Records show that Gonzales was administratively charged with, and found guilty of,
insubordination. She was meted the penalty of six months suspension which she served.
Thereafter, she was dismissed from the service based on the same set of factual circumstances
for which she was charged and eventually suspended. Notably, she was informed of her
"reinstatement" on the same day she was notified of her dismissal supposedly for lack of
confidence. Otherwise stated, by virtue of the letter dated October 10, 2000, Gonzales was
informed of her reinstatement effective October 11, 2000. But even before she could expel a sigh
of relief, the next paragraph of the same letter already notified her of her termination effective
the following day, October 12, 2000.

In the case of Civil Service Commission v. Javier, the Supreme Court concluded that the position
of a Corporate Secretary in a Government Owned and Controlled Corporation (GOCC) which at
that time was classified as a permanent career position, is primarily confidential in nature. In
recognizing the effect of such declaration on the tenure of corporate secretaries appointed under
a permanent status, the Court elucidated:
The Court is aware that this decision has repercussions on the tenure of other corporate
secretaries in various GOCCs. The officers likely assumed their positions on permanent career
status, expecting protection for their tenure and appointments, but are now re-classified as
primarily confidential appointees. Such concern is unfounded, however, since the statutes
themselves do not classify the position of corporate secretary as permanent and career in nature.
Moreover, there is no absolute guarantee that it will not be classified as confidential when a
dispute arises. As earlier stated, the Court, by legal tradition, has the power to make a final
determination as to which positions in government are primarily confidential or otherwise.
Thus, had there been a prior classification by statute or determination by the Court of the
position of Corporate Secretary as a permanent career position, permanent appointees thereto
could expect protection for their tenure and appointments. In the instant case, a prior
determination by the Court that the Provincial Administrator position is a permanent career
position exists by virtue of Laurel. This was made at the time Gonzales had already assumed a
completed appointment as a Provincial Administrator under a permanent status. Clearly, said
judicial determination afforded Gonzales the protection for her tenure and appointment. The
security of tenure of a permanent employee already attached to her, hence, she cannot be
removed from office for a cause not provided by law for removing a permanent appointee and
without due process of law.

JEREME G. VILLANUEVA, SR. VS. BALIWAG NAVIGATION, INC.


G.R. NO. 206505. JULY 24, 2013

Facts:
Petitioner was employed as bosun by respondent after the former was subjected to preemployment medical examination. The examination declared that petitioner was fit to work
although the report indicated that he had a heart disease. Upon expiration of his contract,
petitioner was repatriated back to the Philippines. On his return to the Philippines, Centerpoint
Medical Services traced his medical history and was then declared unfit to work. This prompted
the petitioner to seek for disability benefits but respondent denied the same. The respondent
contended that petitioner was repatriated not for medical reasons but for the termination of his
contract. Respondent further contended that the petitioner disembarked without any known
illness and if he has in fact acquired illness, it is not compensable because it was contracted
outside his employment.

Issue:
W/N the petitioner has legal action against respondent in seeking for disability benefits?

Ruling:
The Supreme Court find undisputed that the petitioner was repatriated for finished contract, not
for medical reasons. While the petitioners heart disease was considered as occupational,
petitioner failed to satisfy by substantial evidence the condition laid down in the contact that if
the said ailment was known to have been present during employment, there must be proof than
an acute exacerbation was clearly precipitated by the unusual strain brought about by the nature
of his work.

POLYMER RUBBER CORPORATION AND JOSEPH ANG VS. BAYOLO


SALAMUDING
G.R.NO. 185160. JULY 24, 2013

Facts:
Respondents were employees of petitioner, Polymer Rubber Corporation, who were dismissed
after allegedly committing irregularities against the latter. The respondents filed a complaint
against the petitioner for ULP, illegal dismissal and non-payment of overtime services.

The decision rendered the petitioner liable to the respondents. It was also adjudged that Joseph
Ang, Polymers Director, was held jointly and severally liable with Polymer, for the payment of
back wages and other monetary claims.

Issue:
W/N the Director of Corporation could be held personally liable for corporate obligations?

Ruling:
The Supreme Court held that to hold a director or officer of a corporation personally liable for
corporate obligations, two requisites must concur:

1. It must be alleged that the director assented to patently unlawful acts of the corporation or
that the officer was guilty of gross negligence or bad faith

2. There must be proof that the officer acted in bad faith


The Supreme Court further held that a corporation being a juridical entity, may act only through
its directors, officers and employees. Obligations incurred by them, acting as such corporate
agents are not theirs but the direct accountabilities of the corporation they represent.

PHILMAN MARINE AGENCY INC. VS. ARMANDO S. CABANBAN


G.R. NO. 186509. JULY 29, 2013

Facts:
Respondent entered into a 9-month contract of employment with the petitioner. The former was
subjected to pre-employment medical examination and was declared fit to sea service. On
October 14, 2002, he was deployed for work. On February 9, 2003, while on board, he
experienced chest pain and was brought to hospital. He was repatriated to the Philippines on
February 10, 2003 and arrived thereat on February 23, 2003. Upon close monitoring, the
physician declared respondent fit to work on May 12, 2003.

Despite the physicians declaration of fit to work, respondent did not heed such and instead file
a complaint against petitioner for disability compensation benefit. Respondent argued that his
ailment is a ground for claiming disability benefits. He also seeks for payment of sickness
allowance and other monetary claims.

Petitioner denied any liability for disability benefits arguing that their company-designated
physician has already declared respondent fit to work following the normal results of his
laboratory tests. Petitioner also disagreed with respondents computation of his sickness
allowance at 120 days. Petitioners argued that the physician declared him fit to work on May 12,
2003, 92 days counting from February 10, 2003, the day he disembark from the vessel.

Issue:

W/N the respondent can claim total and permanent disability benefits?

Ruling:
The Supreme Court ruled that respondent is not entitled to total and permanent disability
benefits. The Labor Code provides that disability to be deemed total and permanent should last
continuously for more than 120 days. In this case, respondent was declared fit to work within
120 days period- 92 days after disembarking from the vessel. In the same manner, the
compensation and benefits for injury or illness when the seafarer suffers the same during the
term of his contract is entitled to 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. Thus, such benefits for injury or
illness shall only be computed for 92 days.

D.M. CONSUNJI CORPORATION v. ROGELIO P. BELLO


G.R. No. 159371, 28 July 2013, FIRST DIVISION, (Bersamin, J.)
The extension of the employment of a project employee long after the supposed project has
been completed removes the employee from the scope of a project employee and makes him a regular
employee.
Respondent Rogelio Bello brought a complaint for illegal dismissal and damages against the
petitioner, D.M. Consunji Corporation (DMCI). Bello alleges that he had been a very diligent and
devoted worker and never violated any company rules, after he had been diagnosed to be suffering
from pulmonary tuberculosis , thereby necessitating his leave of absence, upon his recovery and
reported back to work, DMCI had refused to accept him and had instead handed to him a termination
paper that he had been terminated due to "RSD" and that he did not know the meaning of such cause
of termination as well as not giving him prior notice of his termination. DMCI on the other hand,
alleges that Bello is only a project employee and that he had tendered his voluntary resignation for
health reasons that had rendered him incapable of performing his job. The Labor Arbiter rendered a
decision in favor of Bello, holding that he is considered as a regular employee and having been
illegally dismissed. On appeal to the NLRC, Labor Arbiters decision was reversed. On appeal to the
CA, the NLRCs decision was reversed and further holding that Bello has acquired the status of a
regular employee due to his repeated re-hiring.

ISSUE:
Did Rogelio Bello attaint the status of a regular employee due to his repeated re-hiring by
DMCI? And was he illegally dismissed by DMCI?

RULING:
The Supreme Court affirmed the CAs conclusion that Bello acquired in time the
status of a regular employee by virtue of his continuous work as a mason of DMCI. It is settled that
the extension of the employment of a project employee long after the supposed project has been
completed removes the employee from the scope of a project employee and makes him a regular
employee.

Article 280 of the Labor Code states that an employment shall be deemed to be regular
where the employee has been engaged to perform activities which are usually necessary and
desirable to the usual business or trade of the employer, except where the employment has been fixed
for a specific project or undertaking the completion or termination of which has been determined at
the time of the engagement of the employee or where the work or service to be performed is seasonal
in nature and the employment is for the duration of the season. A project employee is, therefore, one
who is hired for a specific project or undertaking, and the completion or termination of such project
or undertaking has been determined at the time of engagement of the employee. In the context of the
law, Bello was a project employee of DMCI at the beginning of their employer-employee
relationship, but due to the continuous re-hiring of Bello by DMCI, he had attained the status of a
regular employee.
As to the Issue on whether Bello was illegally dismissed by DMCI, the latter contends that
the former voluntarily resigned from work due to the handwritten resignation letter, but Bello denies
that he had resigned, and explained that he merely resigned because DMCI had made him believe
that the letter was for the purpose of extending his sick leave. The Supreme Court held that the fact
that Bellos claim that he had been led to believe that the letter would serve only as the means of
extending his sick leave from work should have alerted DMCI to the task of proving the
voluntariness of the resignation. The doubt would then be justifiably raised against the letter being at
all intended to end his employment. Under the circumstances, DMCI became burdened with the
obligation to prove the due execution and genuineness of the document as a letter of resignation.
Well settled is the rule in labor law that the employer who interposes the defense of voluntary
resignation of the employee in an illegal dismissal case must prove by clear, positive and convincing
evidence that the resignation was voluntary; and that the employer cannot rely on the weakness of the
defense of the employee.

UNILEVER PHILIPPINES, INC v. MARIA RUBY M. RIVERA


G.R. No. 201701, 3 June 2013, THIRD DIVISION (MENDOZA, J.)
Separation pay shall be allowed as a measure of social justice only in those instances where
the employee is validly dismissed for causes other than serious misconduct or those reflecting on his
moral character.
Petitioner, Unilever Philippines, employed the respondent Maria Ruby M. Rivera as its
managing the sales, distribution and promotional activities in her area and supervising a third party
service provider for the companys activation projects. Unilever enforces a strict policy that every
trade activity must be accompanied by a Trade Development Program and that the allocated budget
for a specific activity must be used for such activity only. When Unilevers internal auditor
conducted a random audit and found out that there were fictitious billings and fabricated receipts
supposedly from the third party service provider. Upon verification, the third party service provider
reported that the fund deviations were upon the instruction of Rivera. Unilever issued a show-cause
notice asking Rivera to explain the charges made against her. Rivera admitted the fund diversions but
justified her actions by claiming that it was for the companys promotional ventures in her area.
Unilever then found Rivera guilty of serious breach of the companys code which compelled it to
terminate Rivera, and denied her of her retirement benefits as its forfeiture was a legal consequence
of her dismissal from work. This prompted Rivera to file a complaint for Illegal Dismissal against
Unilever. The Labor Arbiter (LA) dismissed the complaint for lack of merit as well as her claim for
retirement benefits. On appeal to the NLRC, Riveras prayer was partially granted by granting her
retirement benefits. On appeal to the CA, the appellate court affirmed with modification the NLRCs
decision finding Rivera's dismissal from work to be valid as it was for a just cause and declaring that
she was not entitled to any retirement benefit but however, awarded separation pay in her favor as a
measure of social justice.

ISSUE:
Whether or not Rivera who was validly dismissed is entitled to an award of separation pay.

RULING:

The Supreme Court held that as a general rule, an employee who has been dismissed for any
of the just causes enumerated under Article 282 of the Labor Code is not entitled to a separation pay.
In exceptional cases, however, the Court has granted separation pay to a legally dismissed employee
as an act of "social justice" or on "equitable grounds." In both instances, it is required that the
dismissal (1) was not for serious misconduct; and (2) did not reflect on the moral character of the
employee.
Jurisprudence also holds that separation pay shall be allowed as a measure of social justice
only in those instances where the employee is validly dismissed for causes other than serious
misconduct or those reflecting on his moral character. Where the reason for the valid dismissal is, for
example, habitual intoxication or an offense involving moral turpitude, like theft or illicit sexual
relations with a fellow worker, the employer may not be required to give the dismissed employee
separation pay, or financial assistance, or whatever other name it is called, on the ground of social
justice.
The policy of social justice is not intended to countenance wrongdoing simply because it is
committed by the underprivileged. At best, it may mitigate the penalty but it certainly will not
condone the offense. Compassion for the poor is an imperative of every humane society but only
when the recipient is not a rascal claiming an undeserved privilege. Social justice cannot be
permitted to be refuge of scoundrels any more than can equity be an impediment to the punishment
of the guilty. Those who invoke social justice may do so only if their hands are clean and their
motives blameless and not simply because they happen to be poor. This great policy of our
Constitution is not meant for the protection of those who have proved they are not worthy of it, like
the workers who have tainted the cause of labor with the blemishes of their own character.
In the case at bar, Rivera was dismissed due to the fact that she intentionally circumvented a
strict company policy, manipulated another entity to carry out her instructions without the companys
knowledge and approval, and directed the diversion of funds. These transgressions were serious
offenses that warranted her dismissal from employment and proved that her termination from work
was for a just cause. Hence, she is not entitled to a separation pay.

ORIENTAL SHIPMANAGEMENT CO., INC., et. al. vs. RAINERIO N. NAZAL


G.R. No. 177103, June 3, 2013, SECOND DIVISION, (J. BRION)
Rainerio N. Nazal was employed as cook by Oriental Shipmanagement Co., Inc.
(Oriental), an agency, for its principal, Bennet Shipping SA Liberia (Bennet). After finishing his
contract, he was found to be suffering from high blood pressure and diabetes. He, then, asked for
compensation and medical assistance, but the agency denied his request and advised him not to
work again. Nazal demanded permanent total disability compensation from Oriental, contending
that his ailments developed during his employment with the company and while he was
performing his duties. As his demand went unheeded, he filed the present complaint. Oriental,
for itself and for its principal, argued that Nazals claim is barred by laches as it was filed at least
two years and ten (10) months late; even if it were otherwise, it still cannot prosper because of
Nazals failure to submit himself to a post-employment medical examination by a company
designated physician within three working days upon his disembarkation, as mandated by the
Philippine Overseas Employment Administration Standard Employment Contract (POEA-SEC).
This resulted, it added, in the forfeiture of his right to claim disability benefits.

ISSUES:
Whether or not the Oriental and Bennet are liable for the death of Nazal
RULING:
SC finds no substantial evidence supporting the ruling that the agency and its principal
are liable to Nazal by way of temporary or partial total disability benefits. The labor tribunal and
the appellate court grossly misappreciated the facts and even completely disregarded vital pieces
of evidence in resolving the case.
First, Nazal disembarked from the vessel M/V Rover for a "finished contract," not for
medical reasons. Except for his bare allegations, nothing on record supports Nazals claim that
he contracted his supposed ailments on board the vessel. The absence of a medical report or
certification of Nazals ailments and disability only signifies that his post-employment medical
examination did not take place as claimed. SC, thus, cannot accept the NLRC reasoning that the
absence of a medical report does not mean that Nazal was not examined by the companydesignated physician as the medical reports are normally in the custody of the manning agency
and not with the seaman. In UST Faculty Union v. University of Santo Tomas, the Court
declared: "a party alleging a critical fact must support his allegation with substantial evidence.
Any decision based on unsubstantiated allegation cannot stand as it will offend due process."
Second, Nazal inordinate delay in the institution of the complaint casts a grave suspicion
of his true intentions against the petitioners. It took him two years and 10 months to file the
complaint (on September 16, 2004) since he disembarked from the vessel M/V Rover on
November 24, 2001. Why it took him that long a time to file the complaint only Nazal can
answer, but one thing is clear: he obtained another employment as a seaman for three months
(from March 1, 2004 to June 11, 2004), long after his employment with the petitioners. He was
deployed by manning agent Crossocean Marine Services, Inc. (Crossocean) on board the vessel
Kizomba A FPSO, for the principal Eurest Shrm Far East Pte., Ltd. Nazal admitted as much
when he submitted in evidence before the LA photocopies of the visa section of his passport
showing a departure on March 1, 2004 and an arrival on June 11, 2004.
If Nazal was able to secure an employment as a seaman with another vessel after his
disembarkation in November 2001, how can there he a case against the petitioners, considering
especially the lapse of time when the case was instituted? How could Nazal be accepted for
another ocean-going job if he had not been in good health? How could he be engaged as a
seaman after his employment with the petitioners if he was then already disabled? Surely, before
he was deployed by Crossocean, he went through a pre-employment medical examination and
was found fit to work and healthy; otherwise, he would not have been hired. Under the
circumstances, his ailments resulting in his claimed disability could only have been contracted or
aggravated during his engagement by his last employer or, at the very least, during the period
after his contract of employment with the petitioners expired. For ignoring this glaring fact, the
NLRC committed a grave abuse of discretion; for upholding the NLRC, the CA committed the
same jurisdictional error.

CENTURY IRON WORKS, INC. and BENITO CHUA vs. ELETO B. BAAS
G.R. No. 184116, June 19, 2013, (J. BRION)
Eleto B. Baas worked at Century Iron as an inventory comptroller. Century Iron
received letters of complaint from its gas suppliers regarding alleged massive shortage of empty
gas cylinders; after investigation of Century Iron, it found that Baas failed to make a report of
the missing cylinders. Century terminated Baas services on grounds of loss of trust and
confidence, and habitual and gross neglect of duty making the latter file a case of illegal
dismissal. Baas alleged that he merely worked as an inventory clerk who is not responsible for
the lost cylinders and pointed out that his tasks were limited to conducting periodic and yearly
inventories, and submitting his findings to the personnel officer. He maintained that unlike a
supervisory employee, he was not required to post a bond and he did not have the authority to
receive and/or release cylinders in the way that a warehouseman does. Therefore, he cannot be
terminated on the ground of loss of confidence. Century countered that Baas was a supervisory
employee who was responsible for the lost cylinders. They maintained that Baas committed
numerous infractions during his tenure amounting to gross and habitual neglect of duty. They
reiterate that since Baas was a supervisory employee, he could be dismissed on the ground of
loss of confidence. Finally, the petitioners claim that Baas was grossly and habitually negligent
in his duty which further justified his termination.
ISSUES:
1) Whether or not loss of confidence is a ground for terminating a rank-and-file employee
who is not routinely charged with the care and custody of the employers money or
property
2) Whether or not Baas was grossly and habitually neglectful of his duties.
RULING:
Baas did not occupy a position of trust and confidence nor was he in charge of the care and
custody of Century Irons money or property
Baas did not occupy a position of trust and confidence nor was he routinely in charge
with the care and custody of Century Irons money or property, his termination on the ground of
loss of confidence was misplaced. The Supreme Court pointed out in this respect that loss of
confidence applies to: (1) employees occupying positions of trust and confidence, the managerial
employees; and (2) employees who are routinely charged with the care and custody of the
employers money or property which may include rank-and-file employees. Examples of rankand-file employees who may be dismissed for loss of confidence are cashiers, auditors, property
custodians, or those who, in the normal routine exercise of their functions, regularly handle
significant amounts of money or property. Thus, the phrasing of the petitioners second
assignment of error is inaccurate because a rank-and-file employee who is routinely charged with
the care and custody of the employers money or property may be dismissed on the ground of
loss of confidence.

Baas was grossly and habitually neglectful of his duties


The evidence on record shows that Baas committed numerous infractions in his one year
and eleven-month stay in Century Iron. On different instances, Century Iron gave Baas a
warning for failing to check the right quantity of materials subject of his inventory; he also went
undertime; and two instances of an absence without asking for prior leave. He was further
warned for failure to implement proper warehousing and housekeeping procedures; and, he
failed to ensure sufficient supplies of oxygen-acetylene gases during business hours. Century
Irons accounting department also found out that Baas made double and wrong entries in his
inventory.
Under Article 282 of the Labor Code provides that one of the just causes for terminating
an employment is the employees gross and habitual neglect of his duties. This cause includes
gross inefficiency, negligence and carelessness. "Gross negligence connotes want or absence of
or failure to exercise slight care or diligence, or the entire absence of care. It evinces a
thoughtless disregard of consequences without exerting any effort to avoid them. Fraud and
wilful neglect of duties imply bad faith of the employee in failing to perform his job, to the
detriment of the employer and the latters business. Habitual neglect, on the other hand, implies
repeated failure to perform one's duties for a period of time, depending upon the circumstances.
Such numerous infractions are sufficient to hold him grossly and habitually negligent. His
repeated negligence is not tolerable. The totality of infractions or the number of violations he
committed during his employment merits his dismissal. Moreover, gross and habitual negligence
includes unauthorized absences and tardiness, as well as gross inefficiency, negligence and
carelessness.
Besides, the determination of who to keep in employment and who to dismiss for cause is
one of Century Iron's prerogatives. Time and again, SC has recognized that the employer has the
right to regulate, according to its discretion and best judgment, all aspects of employment,
including work assignment, working methods, processes to be followed, working regulations,
transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and
recall of workers. It would be the height of injustice if we force an employer to retain the
services of an employee who does not value his work.

MAGSAYSAY MARITIME CORPORATION and/or WESTFAL-LARSEN AND CO.,


A/S, vs. NATIONAL LABOR RELATIONS COMMISSION, First Division, and WILSON
G. CAPOY
G.R. No. 19190, June 19, 2013, SECOND DIVISION, (J. BRION)
Magsaysay Maritime Corporation (MMC), on behalf of its foreign principal, co-petitioner
Westfal-Larsen and Co., A/S, hired respondent Wilson G. Capoy as Fitter on board the vessel
M/S Star Geiranger. While he was at work, Capoy allegedly fell down a ladder and claimed that
he immediately felt numbness in his fingertips that gradually extended to his hands and elbows.
Despite the incident, he continued performing his work. While climbing a flight of stairs, he
again fell and said that he could not tightly hold to the railings of the stairs due to the numbness
of his fingers and that he felt electricity-like sensation in his body, legs and hands. It was found
out that Capoy had an illness making him unfit to work and was advised not to return to work.
Capoy was medically repatriated; however, the cost of the surgery for his injury was shouldered
by MMC. Capoy, then, filed a complaint for disability benefits, maintenance allowance, damages
and attorneys fees against the petitioners. He argued that after the lapse of 120 days without
being declared fit to work, he was entitled to permanent total disability benefits in accordance
with the collective bargaining agreement (CBA) his union, the Associated Marine Officers and
Seamens Union of the Philippines (AMOSUP), had with his employer. The petitioners denied
its liability and argued that Capoy was not entitled to permanent disability benefits as his claim
was premature since no disability assessment has yet been made by the company-designated
physician. MMC further argued that the injury which caused Capoys disability was self-inflicted
due to his failure to follow the recommended medical treatment. Additionally, they disputed
Capoys claim, that he suffered a fall twice on board the vessel, pointing out that the vessels
logbook had no record of the incidents. They presented the affidavit of the vessel M/S Star
Geirangers Master, Tomas Littaua, on the absence of reports regarding the incidents.
ISSUE:
Whether or not Capoy is entitled to permanent total disability benefits
RULING:
Considering that Capoy was still under treatment by the company doctors even after the
lapse of 120 days but within the 240-day extended period allowed by the rules, he was under
temporary total disability and entitled to temporary total disability benefits under the same rules.
Moreover, with respect to Capoys failure to comply with the procedure under the POEASEC
vis-a-vis Dr. Sabados certification, we find the following Court pronouncement in C.F. Sharp
Crew Management, Inc. v. Taok most applicable, thus:
Indeed, a seafarer has the right to seek the opinion of other doctors under Section 20-B(3) of the
POEA-SEC but this is on the presumption that the company-designated physician had already
issued a certification as to his fitness or disability and he finds this disagreeable. Under the same
provision, it is the company-designated physician who is entrusted with the task of assessing a
seafarers disablity and there is a procedure to contest his findings. It is patent from the records
that Taok submitted these medical certificates during the pendency of his appeal before the
NLRC. More importantly, Taok prevented the company-designated physician from determining
his fitness or unfitness for sea duty when he did not return on October 18, 2006 for re-evaluation.

Thus, Taoks attempt to convince this Court to put weight on the findings of his doctors-of-choice
will not prosper given his failure to comply with the procedure prescribed by the POEA-SEC.

Very obviously, Capoys case suffers from the same infirmities committed by Taok in the
cited case, when he presented Dr. Sabados certification to the LA without going through the
procedure under the POEA-SEC. Capoy, needless to say, prevented Dr. Salvador from
determining his fitness or unfitness for sea duty when he did not return on April 6, 2006 for reevaluation.
For grossly misappreciating the facts, the clear import of the law and the rules, as well as
recent jurisprudence on maritime compensation claims, the NLRC gravely abused its discretion
in sustaining the award of permanent total disability benefits to Capoy. For upholding the NLRC
ruling, the CA itself committed a reversible error of judgment.
In light of these considerations, Capoys claim for permanent total disabilty benefits must
necessarily fail. However, since it is undisputed that Capoy still needed medical treatment
beyond the initial 120 days from his repatriation - it lasted for 197 days as found by the CA - he
is entitled, under the rules, to the income benefit for temporary total disability during the
extended period or for one hundred ninety-seven (197) days. This benefit must be paid to him.

UNIVAC DEVELOPMENT, INC., vs. WILLIAM M. SORIANO


G.R. No. 182072, June 19, 2013, THIRD DIVISION, (J. PERALTA)
William Soriano was hired by petitioner, UNIVAC Development, Inc. on probationary
basis as legal assistant of the company. Soriano claimed that eight (8) days prior to the
completion of his six months probationary period, he was informed that he was being terminated
from employment due to the companys cost-cutting measures. Univac, on the other hand, denied
the allegations of Soriano and claimed instead that prior to his employment, the latter was
informed of the standards required for regularization. Univac also supposedly informed him of
his duties and obligations. Univac recalled that a company meeting was held where respondent
allegedly expressed his intention to leave the company because he wanted to review for the bar
examinations. It was also in that meeting where he was informed of his unsatisfactory
performance in the company. Thus, when respondent did not report for work, Univac assumed
that he pushed through with his plan to leave the company, abandoning his job by his failure to
report for work.
Labor Arbiter (LA) rendered a decision dismissing Sorianos complaint for lack of merit
and held that respondent was informed of his unsatisfactory performance. On appeal, the NLRC
affirmed the LA decision in its entirety. Claiming that said decision never reached him because
his manifestation of change of address was belatedly integrated with the record of the case,
Soriano thus filed his motion for reconsideration but was likewise denied in a resolution which
became final and executory. Soriano elevated the matter to the CA via special civil action for
certiorari under Rule 65 of the Rules of Court and was able to obtain a favorable decision when
the CA granted his petition.
ISSUES:
1) Whether or not CA erred in granting the petition of Soriano when the resolution of the
NLRC is already final and executory
2) Whether or not Soriano was illegally dismissed by Univac
RULING:
Power of CA in reviewing NLRC Decisions
Under Article 223 of the Labor Code, the decision of the NLRC becomes final and
executory after the lapse of ten calendar days from receipt thereof by the parties. However, the
adverse party is not precluded from assailing the decision via petition for certiorari under Rule
65 of the Rules of Court before the CA and then to this Court via a petition for review under
Rule 45. Thus, contrary to the contention of petitioner, there is no violation of the doctrine of
immutability of judgment when respondent elevated the matter to the CA which the latter
consequently granted.
The power of the CA to review NLRC decisions has already been thoroughly explained
and clarified by the Court in several cases, to wit:
The power of the Court of Appeals to review NLRC decisions via Rule 65 or Petition for
Certiorari has been settled as early as in our decision in St. Martin Funeral Home v. National

Labor Relations Commission. This Court held that the proper vehicle for such review was a
Special Civil Action for Certiorari under Rule 65 of the Rules of Court, and that this action
should be filed in the Court of Appeals in strict observance of the doctrine of the hierarchy of
courts. Moreover, it is already settled that under Section 9 of Batas Pambansa Blg. 129, as
amended by Republic Act No. 7902[10] (An Act Expanding the Jurisdiction of the Court of
Appeals, amending for the purpose of Section Nine of Batas Pambansa Blg. 129 as amended,
known as the Judiciary Reorganization Act of 1980), the Court of Appeals pursuant to the
exercise of its original jurisdiction over Petitions for Certiorari is specifically given the power
to pass upon the evidence, if and when necessary, to resolve factual issues.

The CA can grant a petition when the factual findings complained of are not supported by
the evidence on record; when it is necessary to prevent a substantial wrong or to do substantial
justice; when the findings of the NLRC contradict those of the LA; and when necessary to arrive
at a just decision of the case. Thus, contrary to the contention of petitioner, the CA can review
the finding of facts of the NLRC and the evidence of the parties to determine whether the NLRC
gravely abused its discretion in finding that there was no illegal dismissal against respondent.
Soriano was illegally dismissed from employment by Univac
Univacs failure to specify the reasonable standards by which Sorianos alleged poor
performance was evaluated as well as to prove that such standards were made known to him at
the start of his employment, makes the latter a regular employee. In other words, because of this
omission on the part of Univac, Soriano is deemed to have been hired from day one as a regular
employee; and to justify the dismissal of an employee, the employer must, as a rule, prove that
the dismissal was for a just cause and that the employee was afforded due process prior to
dismissal. The SC finds no reason to depart from the CA conclusion that Sorianos termination
from employment is without just and valid ground. Neither was due process observed, making
his termination illegal. He is, therefore, entitled to the twin relief of reinstatement and backwages
granted under the Labor Code. However, as aptly held by the CA, considering the strained
relations between petitioner and respondent, separation pay should be awarded in lieu of
reinstatement. This Court has consistently ruled that if reinstatement is no longer feasible,
backwages shall be computed from the time of illegal dismissal until the date the decision
becomes final. Separation pay, on the other hand, is equivalent to at least one month pay, or one
month pay for every year of service, whichever is higher (with a fraction of at least six months
being considered as one whole year), computed from the time of employment or engagement up
to the finality of the decision.

ALFONSO L. FIANZA vs. NATIONAL LABOR RELATIONS COMMISSION (SECOND


DIVISION), BINGA YDROELECTRIC PLANT, INC., ANTHONY C. ESCOLAR,
ROLAND M. LAUTCHANG
G.R. No. 163061, June 26, 2013, FIRST DIVISION, (CJ SERENO)
Fianza was employed as Officer for Social Acceptance of Binga Hydroelectric Plant, Inc.
(BHPI). The details of his employment are embodied in a Memorandum issued by Mr. Catalino
Tan, the president and chairperson of the board at that time. After 2 years of employment, Fianza
did not receive his salary for the first 15 days of the month of February. He was advised not to
report for work until his status was officially clarified by the Manila office. Upon advise to
return to work, he was also told that the new management committee had to concur in his
reappointment before he could be reinstated in the payroll. It also wanted an opportunity to
determine whether his services would still be necessary to the company. As the management
committee did not act on his inquiries for several months, Fianza filed a Complaint for illegal
dismissal before the LA. Fianza argues that he was a supervisory employee, as shown by the
evidence he presented and the nature of his work. He further contends that he did not abandon
his work, because he always made sure he followed up the status of his employment, and he was
willing to go back to work once he was re-enrolled in the payroll. BHPI asserts in its
Memorandum that the former was a confidential consultant of its former president and
chairperson Catalino Tan. As such, petitioners tenure was therefore co-terminus with that of Mr.
Tan.
ISSUES:
1) Whether or not Fianza abandoned his work
2) Whether or not there exist an employer-employee relationship between BHPI and Fianza
RULING:
Fianza did not abandon his work
Abandonment as a fact and a defense can only be claimed as a ground for dismissal if the
employer follows the procedure set by law. In line with the burden of proof set by law, the
employer who alleges abandonment has the burden of proof to show a deliberate and unjustified
refusal of the employee to resume his employment without any intention of returning. As this
Court has stated in Agabon v. National Labor Relations Commission:
For a valid finding of abandonment, these two factors should be present: (1) the failure to report
for work or absence without valid or justifiable reason; and (2) a clear intention to sever
employer-employee relationship, with the second as the more determinative factor which is
manifested by overt acts from which it may be deduced that the employees has no more intention
to work. The intent to discontinue the employment must be shown by clear proof that it was
deliberate and unjustified.

From the foregoing, it is clear that BHPI failed to prove the necessary elements of
abandonment. Additionally, the NLRC and the CA failed to take into account the strict
requirements set by jurisprudence when they determined the existence of abandonment on the
basis of mere allegations that were contradicted by the evidence shown. The very act of filing the
Complaint for illegal dismissal should have negated any intention on petitioners part to sever his

employment. In fact, it should already have been sufficient evidence to declare that there was no
abandonment of work. Moreover, Fianza went back to the company several times to inquire
about the status of his employment. The fact that his inquiries were not answered does not
prejudice this position. Throughout the entire ordeal, Fianza was vigilant in protecting himself
from any claim that he had abandoned his work. The following circumstances evinced his intent
to return to work: (1) His continuous inquiry with respondent about the status of his work; (2)
His willingness to return to work at any time, subject to the approval of respondent, and his visits
to the plant to apply for work; and (3) His filing of an illegal dismissal case.
Fianza is a regular employee
BHPI claims that because Fianza was a confidential employee of its former president, his
tenure was co-terminus with that of his employer. BHPI, however, failed to realize however that
Mr. Tan, being its president, was clothed with authority to hire employees on its behalf. This was
precisely the import of Fianzas appointment papers, which even carried the letterhead of the
company. There is no indication from the facts that his employment was of a confidential nature.
Several things stand out in Fianzas appointment paper. First, its letterhead is that of
respondent company, indicating the official nature of the document. Second, there is no
indication that the employment is co-terminus with that of the appointing power, or that the
position was a confidential one. In fact, alongside the obligation of Fianza to report to Mr. Tan,
is that of reporting to those whom the latter had designated as well as to the management in case
the former had any suggestion. This description evinces a supervisory function, by which the
employee will carry out company policy, but can only give suggestions to management as to the
creation or implementation of a new policy. Finally, the appointment paper recognizes that the
petitioner would initially be on probation status for two months, at the end of which he would be
made a permanent employee should his services be found satisfactory by respondent. All these
circumstances are evident from the appointment paper itself, which belies the claim of BHPI that
it had no employer-employee relationship with Fianza.

INTER-ORIENT MARITIME, INCORPORATED and/or


TANKOIL CARRIERS, LIMITED vs. CRISTINA CANDAVA
G.R. No. 201251, June 26, 2013, SECOND DIVISION, (J. PERLAS-BERNABE)
Inter-Orient Maritime Incorporated (Inter-Orient) hired Joselito C. Candava (Joselito) as
an able-bodied seaman for its foreign principal, Tankoil Carriers Limited (Tankoil). Joselito was
then deployed to M/T Demetra and despite expiration of his contract period, Joselito continued
to work aboard the vessel due to the unavailability of a replacement. A month after return from
deployment, Joselito was found to have testicular tumor (cancer of the testes), abdominal germ
cell tumor, metastatic carcinoma to the lungs and pleural effusion. Joselito accompanied by
representatives from petitioner Inter-Orient, filed complaint for medical benefits. On the same
instance, Joselito sought for the dismissal of his complaint in consideration of a sum of money
and executed a Receipt and Release, releasing Tankoil and Inter-Orient from any claim arising
from his employment. Joselito, later on, passed away.
Respondent Cristina sent a letter to Inter-Orient, demanding payment of death benefits
but her pleas fell on deaf ears, prompting her to file a complaint for death and other monetary
benefits against Inter-Orient. In her complaint, respondent Cristina alleged that Joselito did not
receive any sickness benefit or medical assistance from petitioners other than those subject of the
release documents which were paid only after Joselito complied with the requirement of filing
his complaints. While admitting that Joselito was not coerced into signing the release documents,
Cristina averred that he was constrained by his physical and financial condition to accept the
measly amount offered by petitioners. Further, Cristina claimed that Joselitos death was due to
an illness contracted during the latters employment and thus, she is entitled to death
compensation, burial assistance, moral and exemplary damages, and attorneys fees. For their
part, Inter-Orient claimed that Cristinas complaint is barred by res judicata or the filing of the
previous complaints by Joselito, which were dismissed upon his motion, and the accompanying
release documents the latter executed.
ISSUE:
Whether or not Joselitos death is compensable as to entitle Cristina to claim death benefits.
RULING:
It bears stressing that the employment of seafarers, including claims for death benefits, is
governed by the contracts they sign at the time of their engagement. As long as the stipulations
therein are not contrary to law, morals, public order, or public policy, they have the force of law
between the parties. Nonetheless, while the seafarer and his employer are governed by their
mutual agreement, the POEA Rules and Regulations require that the POEA-SEC be integrated in
every seafarers contract.
The prevailing rule under the 1996 POEA-SEC was that the illness leading to the
eventual death of seafarer need not be shown to be work-related in order to be compensable, but
must be proven to have been contracted during the term of the contract. Neither is it required that
there be proof that the working conditions increased the risk of contracting the disease or illness.
An injury or accident is said to arise "in the course of employment" when it takes place within

the period of employment, at a place where the employee reasonably may be, and while he is
fulfilling his duties or is engaged in doing something incidental thereto. A meticulous perusal of
the records reveals that Joselito contracted his illness in the course of employment. It cannot also
be denied that the same was aggravated during the same period. Thus, there was a clear causal
connection between such illness and his eventual death, making his death compensable.
Verily, Joselito complained of significant pain in the abdominal region while aboard M/T
Demetra and during the extended period of his employment. Upon undergoing different medical
procedures, the doctors discovered that the tumor in Joselitos right inguinal canal "corresponded
to a tumor formation dependent on the right testicle." Despite the company designated
physicians declaration that Joselito was fit to work, his condition continued to deteriorate as
succeeding medical reports showed the presence of testicular as well as abdominal germ tumors.
His abdominal germ tumor, being in the midline portion of the body, the most common
metastasis (spread) will be in the lungs. This is supported by medical reports showing the
presence of multiple pulmonary nodules, as well as reactive mesothelial cells, which is consistent
with the presence of metastatic tumor. Thereafter, Joselito underwent thoracentesis which further
revealed malignant cells in his body.
Moreover, Joselitos Death Certificate stated respiratory failure as the immediate cause of
his death, with pulmonary metastasis as antecedent cause. The underlying cause for his death
was germ cell tumor which may be found, among others, in the testes and the center back wall of
the abdominal cavity. The World Health Organization defines an underlying cause as the disease
or injury that initiated the train of events leading directly to death, or circumstances of the
accident or violence that produced the fatal injury. Perforce, there existed a clear causal
connection between Joselitos illness which he contracted during employment and his eventual
death.

ROYAL PLANT WORKERS UNION vs.


COCA-COLA BOTTLERS PHILIPPINES, INC.-CEBU PLANT
G.R. No. 198783, April 15, 2013, THIRD DIVISION, (J. MENDOZA)

Coca-Cola Bottlers Philippines, Inc. (CCBPI) is a domestic corporation engaged in the


manufacture, sale and distribution of softdrink products. It has several bottling plants all over the
country employing bottling operators for each bottling plant. The bottling operators, who are all
members of Royal Plant Workers Union (ROPWU), were provided with chairs upon their
request; however, the chairs provided for the operators were removed pursuant to a national
directive of CCBPI in line with the "I Operate, I Maintain, I Clean" program for bottling
operators, wherein every bottling operator is given the responsibility to keep the machinery and
equipment assigned to him clean and safe. The bottling operators took issue with the removal of
the chairs. Through the representation of CCBPI, they initiated the grievance machinery of the
Collective Bargaining Agreement (CBA). Even after exhausting the remedies contained in the
grievance machinery, the parties submitted the same for mediation and, then, for arbitration.
Upon submission for arbitration, CCBPI argued that the removal of the chairs is valid as it is a
legitimate exercise of management prerogative, it does not violate the Labor Code and it does not
violate the CBA it contracted with respondent. On the other hand, respondent espoused the
contrary view. It contended that the bottling operators have been performing their assigned duties
satisfactorily with the presence of the chairs; the removal of the chairs constitutes a violation of
the Occupational Health and Safety Standards, the policy of the State to assure the right of
workers to just and humane conditions of work as stated in Article 3 of the Labor Code and the
Global Workplace Rights Policy.
ISSUE:
1) Whether or not CCBPI validly exercised its management prerogative in removing the
chairs previously granted
2) Whether or not there is a violation of Article 100 of the Labor Code, covering employees
benefits
RULING:
A Valid Exercise of Management Prerogative
The Court has held that management is free to regulate, according to its own discretion
and judgment, all aspects of employment, including hiring, work assignments, working methods,
time, place, and manner of work, processes to be followed, supervision of workers, working
regulations, transfer of employees, work supervision, lay-off of workers, and discipline,
dismissal and recall of workers. The exercise of management prerogative, however, is not
absolute as it must be exercised in good faith and with due regard to the rights of labor.
In the present controversy, it cannot be denied that CCBPI removed the operators chairs
pursuant to a national directive and in line with its "I Operate, I Maintain, I Clean" program,
launched to enable the Union to perform their duties and responsibilities more efficiently. The
chairs were not removed indiscriminately. They were carefully studied with due regard to the
welfare of the members of the Union. The removal of the chairs was compensated by: a) a
reduction of the operating hours of the bottling operators from a two-and-one-half (2 )-hour

rotation period to a one-and-a-half (1 ) hour rotation period; and b) an increase of the break
period from 15 to 30 minutes between rotations.
Apparently, the decision to remove the chairs was done with good intentions as CCBPI
wanted to avoid instances of operators sleeping on the job while in the performance of their
duties and responsibilities and because of the fact that the chairs were not necessary considering
that the operators constantly move about while working. In short, the removal of the chairs was
designed to increase work efficiency. Hence, CCBPIs exercise of its management prerogative
was made in good faith without doing any harm to the workers rights.
No Violation of Article 100 of the Labor Code
The operators chairs cannot be considered as one of the employee benefits covered in
Article 100 of the Labor Code. In the Courts view, the term "benefits" mentioned in the nondiminution rule refers to monetary benefits or privileges given to the employee with monetary
equivalents. Such benefits or privileges form part of the employees wage, salary or
compensation making them enforceable obligations.
Without a doubt, equating the provision of chairs to the bottling operators is something
within the ambit of "benefits'' in the context of Article 100 of the Labor Code is unduly
stretching the coverage of the law. The interpretations of Article 100 of the Labor Code do not
show even with the slightest hint that such provision of chairs for the bottling operators may be
sheltered under its mantle.

ZENAIDA D. MENDOZA, vs. HMS CREDIT CORPORATION and/or FELIPE R. DIEGO, et. al.
G.R. No. 187232, April 17, 2013, FIRST DIVISION, (CJ. SERENO)

Petitioner Zenaida D. Mendoza (Mendoza) was the Chief Accountant of respondent HMS
Credit Corporation (HMS Credit). During her employment, she simultaneously serviced three
other three companies, all part of the Honda Motor Sports Group (HMS Group), namely, Honda
Motor Sports Corporation (Honda Motors), Beta Motor Trading Incorporated (Beta Motor) and
Jianshe Cycle World (Jianshe). Mendoza avers that after she submitted to Luisa the audited
financial statements of Honda Motors, Beta Motor, and Jianshe, Felipe summoned Mendoza to
advise her of her termination from service. She claims that she was even told to leave the
premises without being given the opportunity to collect her personal belongings and was
prohibited from entering the premises of the office. On the other hand, respondents maintain that
Mendoza was hired on the basis of her qualification as a Certified Public Accountant
(CPA), which turned out to be a misrepresentation. They likewise contend that not only did she
fail to disclose knowledge of the resignations of two HMS Group officers, Art Labasan
(Labasan) and Jojit de la Cruz (de la Cruz), and their subsequent transfer to a competitor
company, but she also had a hand in pirating them. Thus, on 12 April 2002, they supposedly
confronted her about these matters. In turn, she allegedly told them that if they had lost their trust
in her, it would be best for them to part ways.
ISSUES:

1) Whether or not HMS Credit Corporation et.al. had timely filed their appeal with the
NLRC.
2) Whether or not Mendoza was illegally dismissed
RULING:
Timely filing of the appeal before the NLRC
The relevant portion of Article 223 of the Labor Code on appeals of decisions, awards or
orders of the Labor Arbiter as follows:
Art. 223. x x x In case of a judgment involving a monetary award, an appeal by the employer may
be perfected only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Commission in the amount equivalent to the monetary award in
the judgment appealed from.

In Pasig Cylinder v. Rollo, this Court explained that the required posting of a bond
equivalent to the monetary award in the appealed judgment may be liberally interpreted as
follows:
x x x. True, Article 223 of the Labor Code requires the filing of appeal bond "in the amount
equivalent to the monetary award in the judgment appealed from." However, both the Labor Code
and this Courts jurisprudence abhor rigid application of procedural rules at the expense of
delivering just settlement of labor cases. Petitioners reasons for their filing of the reduced appeal
bond the downscaling of their operations coupled with the amount of the monetary award
appealed are not unreasonable. Thus, the recourse petitioners adopted constitutes substantial
compliance with Article 223 consistent with our ruling in Rosewood Processing, Inc. v. NLRC,
where we allowed the appellant to file a reduced bond of P50,000 (accompanied by the

corresponding motion) in its appeal of an arbiters ruling in an illegal termination case


awarding P789,154.39 to the private respondents.

In the case at bar, HMS et. al. filed a Motion to Reduce Appeal Bond, tendering the sum
of P650,000 instead of the P1,025,081.82 award stated in the Decision of the Labor Arbiter
because it was allegedly what respondents could afford, given the business losses they had
suffered at that time. Upon the denial by the NLRC of this Motion, respondents promptly
complied with its directive to post the differential in the amount of P122, 801.66, which had been
computed without including the award of moral and exemplary damages and attorneys fees.
Following the pronouncement in Pasig Cylinder, the CA was correct in holding that the appeal
was timely filed on account of respondents substantial compliance with the requirement under
Article 223.
Illegal dismissal of Mendoza
HMS Credit were unable to discharge their burden to prove the contemporaneous
existence of an intention on the part of Mendoza to resign and an overt act of resignation. Aside
from their self-serving allegation that she had offered to resign after they had expressed their loss
of trust in her, there is nothing in the records to show that she voluntarily resigned from her
position in their company. In this regard, it is worthy to underscore the established rule that the
filing of a complaint for illegal dismissal is inconsistent with resignation or abandonment.
Moreover, the conclusion of the NLRC and the CA that Mendoza voluntarily resigned in
consideration of respondents supposed payment of a settlement is bereft of any basis. The lower
tribunals merely surmised that the parties forged a compromise agreement despite respondents
own admission that they never decided thereon. In fact, the records are clear that none of the
parties claimed the existence of any settlement in exchange for her resignation.
From the foregoing discussion, it is evident that although there was a just cause for
terminating the services of Mendoza, respondents were amiss in complying with the two-notice
requirement. Following the prevailing jurisprudence on the matter, if the dismissal is based on a
just cause, then the non-compliance with 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. Therefore, the dismissal of Mendoza should be
upheld, and respondents cannot be held liable for the payment of either backwages or separation
pay. Considering all the circumstances surrounding this case, this Courts finds the award of
nominal damages in the amount of P30,000 to be in order.

BANKARD, INC., vs. NATIONAL LABOR RELATIONS COMMISSION- FIRST


DIVISION, PAULO BUENCONSEJO,BANKARD EMPLOYEES UNION-AWATU
G.R. No. 171664, March 6, 2013, THIRD DIVISION, (J. MENDOZA)
Bankard Employees Union-AWATU (Union) filed before the National Conciliation and
Mediation Board (NCMB) its Notice of Strike (NOS), alleging commission of unfair labor
practices by petitioner Bankard, Inc. (Bankard) and alleging bargaining in bad faith on the part of
the latter. Bankard alleged that job contractualization or outsourcing or contracting-out of jobs
was a legitimate exercise of management prerogative and did not constitute unfair labor practice.
Furthermore, Bankard denied that there was bad faith on its part in bargaining with the Union. It
continued to negotiate in good faith until the Memorandum of Agreement (MOA) re-negotiating
the provisions of the 1997-2002, Collective Bargaining Agreement (CBA) was entered into
between Bankard and the Union. The CBA was overwhelmingly ratified by the Union members.
For said reason, Bankard contended that the issue of bad faith in bargaining had become moot
and academic. The Union, on the other hand, contended that the number of regular employees
had been reduced substantially through the management scheme of freeze-hiring policy on
positions vacated by regular employees on the basis of cost-cutting measures and the
introduction of a more drastic formula of streamlining its regular employees. Moreover, Union
averred that Bankards proposals were way below their demands, showing that the management
had no intention of reaching an agreement. It was a scheme calculated to force the Union to
declare a bargaining deadlock.
ISSUE:
Whether or not Bankard is guilty of unfair labor practice
RULING:
The Court has ruled that the prohibited acts considered as ULP relate to the workers
right to self-organization and to the observance of a CBA. It refers to "acts that violate the
workers right to organize." Without that element, the acts, even if unfair, are not ULP. Thus, an
employer may only be held liable for unfair labor practice if it can be shown that his acts affect
in whatever manner the right of his employees to self-organize.
Aside from the bare allegations of the Union, nothing in the records strongly proves that
Bankard intended its program, the MRP, as a tool to drastically and deliberately reduce union
membership. Contrary to the findings and conclusions of both the NLRC and the CA, there was
no proof that the program was meant to encourage the employees to disassociate themselves
from the Union or to restrain them from joining any union or organization. There was no
showing that it was intentionally implemented to stunt the growth of the Union or that Bankard
discriminated, or in any way singled out the union members who had availed of the retirement
package under the MRP. True, the program might have affected the number of union
membership because of the employees voluntary resignation and availment of the package, but
it does not necessarily follow that Bankard indeed purposely sought such result. It must be
recalled that the MRP was implemented as a valid cost-cutting measure, well within the ambit of
the so-called management prerogatives. Bankard contracted an independent agency to meet
business exigencies. In the absence of any showing that Bankard was motivated by ill will, bad

faith or malice, or that it was aimed at interfering with its employees right to self-organize, it
cannot be said to have committed an act of unfair labor practice.
"Substantial evidence is more than a mere scintilla of evidence. It means such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion, even if other
minds equally reasonable might conceivably opine otherwise." Unfortunately, the Union, which
had the burden of adducing substantial evidence to support its allegations of ULP, failed to
discharge such burden.
Contracting out of services is an exercise of business judgment or management
prerogative. Absent any proof that management acted in a malicious or arbitrary manner, SC will
not interfere with the exercise of judgment by an employer. Furthermore, bear in mind that ULP
is punishable with both civil and/or criminal sanctions. As such, the party so alleging must
necessarily prove it by substantial evidence. The Union, as earlier noted, failed to do this.
Bankard merely validly exercised its management prerogative. Not shown to have acted
maliciously or arbitrarily, no act of ULP can be imputed against it.

THE ORCHARD GOLF AND COUNTRY CLUB vs. AMELIA R. FRANCISCO


G.R. No. 178125, March 18, 2013, SECOND DIVISION, (J. DEL CASTILLO)
Amelia R. Francisco (Francisco) was employed as Club Accountant, to head the Clubs
General Accounting Division was charged of insubordination, when Francisco had failed to draft
a letter to SGV & Co., the Clubs external auditor. This resulted to his suspension without pay
for a period of 15 days. Francisco, then, filed a Complaint for illegal dismissal against the Club.
On another instance, Francisco was suspended for another 15 days because of her unauthorized
leave/absence. After serving her suspension, Francisco again was placed on forced leave with
pay for 30 days for the alleged reason that the case of betrayal of company trust filed against
her has strained her relationship with her superiors. After the expiration of her forced leave, she
has been permanently transferred, without diminution of benefits, to the Clubs Cost Accounting
Section. Francisco protested that her permanent transfer was made in bad faith; and in her prayer,
she sought to be reinstated to her former position as Club Accountant. The club contends that the
transfer was made in good faith and was made in proper exercise of management prerogative.
ISSUE:
Whether or not the transfer of Francisco can be considered as diminution amounting to
constructive dismissal
RULING:
There was constructive dismissal when Francisco was transferred to the Cost Accounting
Section.
SC shares the CAs observation that when Francisco was placed on forced leave and
transferred to the Cost Accounting Section, not once was Francisco given the opportunity to
contest these company actions taken against her. It has also not escaped our attention that just
when one penalty has been served by Francisco, another would instantaneously take its place.
And all these happened even while the supposed case against her, the alleged charge of "betrayal
of company trust", was still pending and remained unresolved. In fact, one of the memoranda
was served even at Franciscos residence.
Not even the claim that her relations with her superiors have been strained could justify
Franciscos transfer to Cost Accounting Section. Indeed, it appears that her charge was never
resolved. And if Famy, Nuevo and Clemente truly believed that their relations with Francisco
have been strained, then it puzzles the SC why, despite her transfer, she continues to remain
under Famys direct supervision.
The fact that Francisco continued to report for work does not necessarily suggest that
constructive dismissal has not occurred, nor does it operate as a waiver. Constructive dismissal
occurs not when the employee ceases to report for work, but when the unwarranted acts of the
employer are committed to the end that the employees continued employment shall become so
intolerable. In these difficult times, an employee may be left with no choice but to continue with
his employment despite abuses committed against him by the employer, and even during the
pendency of a labor dispute between them. This should not be taken against the employee.

Instead, we must share the burden of his plight, ever aware of the precept that necessitous men
are not free men.
"An employer is free to manage and regulate, according to his own discretion and
judgment, all phases of employment, which includes hiring, work assignments, working
methods, time, place and manner of work, supervision of workers, working regulations, transfer
of employees, lay-off of workers, and the discipline, dismissal and recall of work. While the law
recognizes and safeguards this right of an employer to exercise what are clearly management
prerogatives, such right should not be abused and used as a tool of oppression against labor. The
companys prerogatives must be exercised in good faith and with due regard to the rights of
labor. A priori, they are not absolute prerogatives but are subject to legal limits, collective
bargaining agreements and the general principles of fair play and justice. The power to dismiss
an employee is a recognized prerogative that is inherent in the employers right to freely manage
and regulate his business. x x x. Such right, however, is subject to regulation by the State,
basically in the exercise of its paramount police power. Thus, the dismissal of employees must
be made within the parameters of the law and pursuant to the basic tenets of equity, justice and
fair play. It must not be done arbitrarily and without just cause."

MAGSAYSAY MARITIME SERVICES and PRINCESS CRUISE LINES, LTD., vs.


EARLWIN MEINRAD ANTERO F. LAUREL
G.R. No. 195518, March 20, 2013, THIRD DIVISION, (J. MENDOZA)
Earlwin Meinrad Antero F. Laurel (Laurel) was employed by Princess Cruise Lines, Ltd.,
through its local manning agency, petitioner Magsaysay Maritime Corporation, as second
pastryman on board the "M/V Star Princess." In the course of the voyage, Laurel fell ill and was
later on repatriated for further evaluation. Seeking medical care upon return, he was diagnosed
with upper respiratory tract infection and hyperthyroidism. Laurel, then, filed a complaint against
the petitioners before the NLRC, claiming medical reimbursement, sickness allowance,
permanent disability benefits, damages, and attorneys fees.
MMS argued that Laurels illness was not work-related as convincingly proven through
the expert opinion of the company-designated physician. They aver that hyperthyroidism is not
among those listed in the POEA-SEC as an occupational disease, hence, not compensable. They
emphasize that Laurels illness was essentially genetic and was not caused by his employment.
Laurel counters that his illness is compensable because it was acquired during the effectivity of
his employment contract while performing his work aboard the petitioners vessel. The fact that
Graves Disease may be hereditary does not bar him from entitlement to disability benefits.
Compensability does not require that employment be the sole cause of the illness. It is enough
that there exists a reasonable work connection. The strenuous condition of his employment on
board the MV Star Princess triggered the development of his hyperthyroidism due to his
exposure to varying temperature and chemical irritants.
ISSUE:
Whether or not there is a reasonable connection between Laurels condition as pastryman and the
development of his hyperthyroidism.
RULING:
Although Graves Disease is attributed to genetic influence, SC finds a reasonable work
connection between Laurels condition at work as pastryman (cook) and the development of his
hyperthyroidism. His constant exposure to hazards such as chemicals and the varying
temperature, like the heat in the kitchen of the vessel and the coldness outside, coupled by
stressful tasks in his employment caused, or at least aggravated, his illness. It is already
recognized that any kind of work or labor produces stress and strain normally resulting in wear
and tear of the human body. Thus, the Court sustains the finding of the CA that:
Stressful conditions in the environment, in a word, can result in hyperthyroidism, and the
employment conditions of a seafarer on board an ocean-going vessel are likely stress factors in
the development of hyperthyroidism irrespective of its origin. As recounted by the respondent in
his position paper, the work on board the MV Star Princess was a strenuous one. It involved dayto-day activities that brought him under pressure and strain and exposed him to chemical and
other irritants, and his being away from home and family only aggravated these stresses.

Indeed, Laurel has shown a reasonable causation between his working condition and his
hyperthyroidism contracted during his employment warranting the recovery of compensation.

Settled is the rule that for illness to be compensable, it is not necessary that the nature of the
employment be the sole and only reason for the illness suffered by the seafarer. It is sufficient
that there is a reasonable linkage between the disease suffered by the employee and his work to
lead a rational mind to conclude that his work may have contributed to the establishment or, at
the very least, aggravation of any pre-existing condition he might have had.

CAVITE APPAREL, INCORPORATED and ADRIANO TIMOTEO


vs. MICHELLE MARQUEZ
G.R. No. 172044, February 06, 2013, SECOND DIVISION, (J. BRION)
Cavite Apparel is a domestic corporation engaged in the manufacture of garments for
export. It hired Michelle as a regular employee in its Finishing Department. Michelle enjoyed,
among other benefits, vacation and sick leaves of seven (7) days each per annum. Prior to her
dismissal, Michelle committed infractions: (1) Absence without leave (AWOL) on December 6,
1999 written warning; (2) AWOL on January 12, 2000 stern warning with three (3) days
suspension; (3) AWOL on April 27, 2000 suspension for six (6) days. On May 8, 2000,
Michelle got sick and did not report for work. When she returned, she submitted a medical
certificate. Cavite Apparel, however, denied receipt of the certificate. Michelle did not report for
work on May 15-27, 2000 due to illness. When she reported back to work, she submitted the
necessary medical certificates. Nonetheless, Cavite Apparel suspended Michelle for six (6) days
(June 1-7, 2000). When Michelle returned on June 8, 2000, Cavite Apparel terminated her
employment for habitual absenteeism. Michelle, then, filed a complaint for illegal dismissal with
prayer for reinstatement, backwages and attorneys fees with the NLRC. Cavite Apparel, now,
argues that it is its prerogative to discipline its employees.
ISSUE:
Whether or not Michelle was habitually negligent making Cavite Apparels dismissal valid
RULING:
Michelles four absences were not habitual; "totality of infractions" doctrine not applicable
Neglect of duty, to be a ground for dismissal under Article 282 of the Labor Code, must
be both gross and habitual. Gross negligence implies want of care in the performance of ones
duties. Habitual neglect imparts repeated failure to perform ones duties for a period of time,
depending on the circumstances. Under these standards and the circumstances obtaining in the
case, we agree with the CA that Michelle is not guilty of gross and habitual neglect of duties.
Cavite Apparel faults the CA for giving credit to Michelles argument that she submitted
a medical certificate to support her absence on May 8, 2000; there was in fact no such
submission, except for her bare allegations. It thus argues that the CA erred in holding that since
doubt exists between the evidence presented by the employee and that presented by the
employer, the doubt should be resolved in favor of the employee. The principle, it contends,
finds no application in this case as Michelle never presented a copy of the medical certificate. It
insists that there was no evidence on record supporting Michelles claim, thereby removing the
doubt on her being on absence without official leave for the fourth time, an infraction punishable
with dismissal under the company rules and regulations.
Cavite Apparels position fails to convince us. Based on what we see in the records, there
simply cannot be a case of gross and habitual neglect of duty against Michelle. Even assuming
that she failed to present a medical certificate for her sick leave on May 8, 2000, the records are
bereft of any indication that apart from the four occasions when she did not report for work,

Michelle had been cited for any infraction since she started her employment with the company in
1994. Four absences in her six years of service, to our mind, cannot be considered gross and
habitual neglect of duty, especially so since the absences were spread out over a six-month
period.
Michelles penalty of dismissal too harsh or not proportionate to the infractions she committed
Michelle might have been guilty of violating company rules on leaves of absence and
employee discipline, still we find the penalty of dismissal imposed on her unjustified under the
circumstances. As earlier mentioned, Michelle had been in Cavite Apparels employ for six
years, with no derogatory record other than the four absences without official leave in question,
not to mention that she had already been penalized for the first three absences, the most serious
penalty being a six-day suspension for her third absence on April 27, 2000.
While previous infractions may be used to support an employees dismissal from work in
connection with a subsequent similar offense, we cautioned employers in an earlier case that
although they enjoy a wide latitude of discretion in the formulation of work-related policies,
rules and regulations, their directives and the implementation of their policies must be fair and
reasonable; at the very least, penalties must be commensurate to the offense involved and to the
degree of the infraction.
SC finds no evidence supporting Cavite Apparels claim that Michelles absences
prejudiced its operations; there is no indication in the records of any damage it sustained because
of Michelles absences. Also, we are not convinced that allowing Michelle to remain in
employment even after her fourth absence or the imposition of a lighter penalty would result in a
breakdown of discipline in the employee ranks. What the company fails to grasp is that, given
the unreasonableness of Michelles dismissal i.e., one made after she had already been
penalized for her three previous absences, with the fourth absence imputed to illness
confirming the validity of her dismissal could possibly have the opposite effect. It could give rise
to belief that the company is heavy-handed and may only give rise to sentiments against it.

SUSANA R. SY vs. PHILIPPINE TRANSMARINE CARRIERS, INC.,


and/or SSC SHIP MANAGEMENT PTE., LTD.
G.R. No. 191740, February 11, 2013, THIRD DIVISION (J. PERALTA)
Alfonso N. Sy (Sy) was hired by Philippine Transmarine Carriers Incorporated (PTCI)
for and in behalf of its foreign principal, co-respondent SSC Ship Management Pte. Ltd. Sy was
then assigned to work on board the vessel M/V Chekiang. While the vessel was at the Port of
Jakarta, Indonesia, Sy went on shore leave and left the vessel. The vessel's agent from Jardine
received an advice from the local police that one of the vessel's crew members died ashore;
which was confirmed to be the cadaver to be that of Sy. Based on the initial investigation, Sy
was riding on a motorcycle when he stopped the driver to urinate at the riverside of the road.
Since Sy had not returned after a while, the motorcycle driver went to look for him at the
riverside, but the former was nowhere to be found. After a few hours, Sy's corpse was found. A
forensic pathologist certified that Sy's death was an accident due to drowning, and that there was
"alcohol 20mg%" in his urine. Sy's body was repatriated to the Philippines and the Medico-Legal
Officer of the National Bureau of Investigation (NBI) conducted a post-mortem examination on
AB Sy's body and certified that the cause of death was Asphyxia by drowning.
Petitioner Susana R. Sy, widow of Sy, demanded from respondents payment of her
husband's death benefits and compensation. Respondents denied such claim, since AB Sy's death
occurred while he was on a shore leave, hence, his death was not work-related and, therefore, not
compensable. As her repeated demands were denied, petitioner filed, on March 1, 2006, a
complaint against respondents for death benefits, burial assistance, moral and exemplary
damages, and attorney's fees.
ISSUE:
Whether or not Susana Sy is entitled to death compensation benefits from PTCI
RULING:
As a matter of general proposition, an injury or accident is said to arise "in the course of
employment" when it takes place within the period of the employment, at a place where the
employee reasonably may be, and while he is fulfilling his duties or is engaged in doing
something incidental thereto.
AB Sy was hired as a seaman on board M/V Chekiang on June 23, 2005 and was found
dead on October 1, 2005, with drowning as the cause of death. Notably, at the time of the
accident, AB Sy was on shore leave and there was no showing that he was doing an act in
relation to his duty as a seaman or engaged in the performance of any act incidental thereto. It
was not also established that, at the time of the accident, he was doing work which was ordered
by his superior ship officers to be done for the advancement of his employer's interest. On the
contrary, it was established that he was on shore leave when he drowned and because of the 20%
alcohol found in his urine upon autopsy of his body, it can be safely presumed that he just came
from a personal social function which was not related at all to his job as a seaman. Consequently,
his death could not be considered work-related to be compensable.

JONATHAN I. SANG-AN vs. EQUATOR KNIGHTS DETECTIVE


AND SECURITY AGENCY, INC.
G.R. No. 173189, February 13, 2013, SECOND DIVISION, (J. Brion)
Jonathan was the Assistant Operation Manager of respondent Equator Knights Detective
and Security Agency, Inc. (Equator). He was tasked, among others, with the duty of assisting in
the operations of the security services; he was also in charge of safekeeping Equators firearms.
Equator, then, discovered that two firearms were missing from its inventory. The investigation
revealed that it was Jonathan who might have been responsible for the loss, therefore,
temporarily suspending him from work pending further investigation. While Jonathan was under
suspension, a security guard from Equator was apprehended by policemen for violating the
Commission on Elections gun ban rule. The security guard stated in his affidavit that the
unlicensed firearm had been issued to him by Jonathan. Jonathan treated his case as one for
illegal dismissal and alleged that he had been denied due process when he was dismissed. He
filed with the NLRC a complaint for illegal suspension with prayer for reinstatement. Equator,
on the other hand, argued that Jonathans dismissal was not illegal but was instead for a just
cause under Article 282 of the Labor Code.
Jonathan contends that when Equator filed a petition for certiorari under Rule 65 of the
Rules of Court alleging grave abuse of discretion by the NLRC, it failed to post a cash or surety
bond as required by Article 223 of the Labor Code. Without complying with this condition, the
petition for certiorari should have been dismissed outright. Also, Jonathan contends that the
CAs findings of fact are contrary to the findings of fact by the NLRC. Since the findings of fact
of quasi-judicial agencies are accorded respect and finality, he argues that the NLRCs decision
must be sustained.
Equator, on the other hand, submits that the rule on posting of cash or surety bond as
required by Article 223 of the Labor Code is not applicable in a petition for certiorari under Rule
65 of the Rules of Court. It also submits that both the LA and the NLRC concur in finding just
cause for the dismissal of Jonathan; hence, Jonathans subsequent dismissal is valid.
ISSUE:
Whether Jonathan was validly dismissed.
RULING:
Jurisprudence has expounded on the guarantee of due process, requiring the employer to
furnish the employee with two 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. In considering whether the charge in the first notice is
sufficient to warrant dismissal under the second notice, the employer must afford the employee
ample opportunity to be heard.
A review of the records shows that Jonathan was not furnished with any written notice
that informed him of the acts he committed justifying his dismissal from employment. The notice

of suspension given to Jonathan only pertained to the first offense, i.e., the loss of Equators
firearms under Jonathans watch.1wphi1 With respect to his second offense (i.e., the issuance of
an unlicensed firearm to Equators security guard that became the basis for his dismissal),
Jonathan was never given any notice that allowed him to air his side and to avail of the
guaranteed opportunity to be heard. That Equator brought the second offense before the LA does
not serve as notice because by then, Jonathan had already been dismissed.
In order to validly dismiss an employee, the observance of both substantive and
procedural due process by the employer is a condition sine qua non. Procedural due process
requires that the employee be given a notice of the charge against him, an ample opportunity to
be heard, and a notice of termination.
Since Jonathan had been dismissed in violation of his right to procedural due process but
for a just cause, Equator should pay him nominal damages of P30,000.00, in accordance with
Agabon v. NLRC.

PS: I THINK THIS INVOLVES REMEDIAL ISSUE

Lepanto Consolidated Mining Company Vs. The Lepanto Capataz Union


Lepanto is a domestic corporation authorized to engage in large-scale mining and
operated several mining claims in Benguet. Lepanto Capataz Union (Union), a labor organization
duly registered with DOLE, filed a petition for consent election proposing to represent
139 capatazes of Lepanto. Lepanto opposed the petition, contending that the Union was in reality
seeking a certification election, not a consent election, and would be thereby competing with the
Lepanto Employees Union (LEU), the current collective bargaining agent. Lepanto pointed out
that the capatazes were already members of LEU, the exclusive representative of all rank-andfile employees of its Mine Division.
ISSUE:
Whether or not capatazes are rank-and-file employees, therefore, cannot be represented by
another bargaining agent.
RULING:
Capatazes are not rank-and-file employees; hence, they could form their own union
SC notes that Med-Arbiter Lontoc found in her Decision issued on May 2, 2000 that the
capatazes were performing functions totally different from those performed by the rank-and-file
employees, and that the capatazes were "supervising and instructing the miners, mackers and
other rank-and-file workers under them, assess[ing] and evaluat[ing] their performance, mak[ing]
regular reports and recommend[ing] new systems and procedure of work, as well as guidelines
for the discipline of employees." Hence, Med-Arbiter
Lontoc concluded,
the capatazes "differ[ed] from the rank-and-file and [could] by themselves constitute a separate
bargaining unit."
Agreeing with Med-Arbiter Lontocs findings, then DOLE Undersecretary Baldoz, acting
by authority of the DOLE Secretary, observed in the resolution dated July 12, 2000, thus:
The bargaining unit sought to be represented by the appellee are the capataz employees of
the appellant. There is no other labor organization of capatazes within the employer unit except
herein appellant. Thus, appellant is an unorganized establishment in so far as the bargaining unit
of capatazes is concerned. In accordance with the last paragraph of Section 11, Rule XI,
Department Order No. 9 which provides that "in a petition filed by a legitimate labor organization
involving an unorganized establishment, the Med-Arbiter shall, pursuant to Article 257 of the
Code, automatically order the conduct of certification election after determining that the petition
has complied with all requirements under Section 1, 2 and 4 of the same rules and that none of the
grounds for dismissal thereof exists", the order for the conduct of a certification election is
proper.

SC cannot undo the affirmance by the DOLE Secretary of the correct findings of her
subordinates in the DOLE, an office that was undeniably possessed of the requisite expertise on
the matter in issue. In dealing with the matter, her subordinates in the DOLE fairly and

objectively resolved whether the Union could lawfully seek to be the exclusive representative of
the bargaining unit of capatazes in the company. Their factual findings, being supported by
substantial evidence, are hereby accorded great respect and finality. Such findings cannot be
made the subject of our judicial review by petition under Rule 45 of the Rules of Court, because:
x x x [T]he office of a petition for review on certiorari under Rule 45 of the Rules of Court
requires that it shall raise only questions of law. The factual findings by quasi-judicial agencies,
such as the Department of Labor and Employment, when supported by substantial evidence, are
entitled to great respect in view of their expertise in their respective field. Judicial review of
labor cases does not go far as to evaluate the sufficiency of evidence on which the labor officials
findings rest. It is not our function to assess and evaluate all over again the evidence, testimonial
and documentary, adduced by the parties to an appeal, particularly where the findings of both the
trial court (here, the DOLE Secretary) and the appellate court on the matter coincide, as in this
case at bar. The Rule limits that function of the Court to review or revision of errors of law and
not to a second analysis of the evidence. Here, petitioners would have us re-calibrate all over
again the factual basis and the probative value of the pieces of evidence submitted by the
Company to the DOLE, contrary to the provisions of Rule 45. Thus, absent any showing of
whimsical or capricious exercise of judgment, and unless lack of any basis for the conclusions
made by the appellate court may be amply demonstrated, we may not disturb such factual
findings.
In any event, we affirm that capatazes or foremen are not rank-and-file employees
because they are an extension of the management, and as such they may influence the rank-andfile workers under them to engage in slowdowns or similar activities detrimental to the policies,
interests or business objectives of the employers.

Pepsi-Cola Products Philippines, Inc. vs. Anecito Molon, et al.


G.R. No. 175002, February 18, 2013, SECOND DIVISION, (J. PERLAS-BERNABE)
Petitioner Pepsi-Cola Products Philippines, Inc. (Pepsi) is a domestic corporation
engaged in the manufacturing, bottling and distribution of soft drink products. Pepsi adopted a
company-wide retrenchment program and sent a notice of retrenchment to the DOLE as well as
individual notices to the affected employees informing them of their termination from
work. Subsequently, Pepsi notified the DOLE of the initial batch of forty-seven (47) workers to
be retrenched. Among these employees were elected officers and active members of the Leyte
Pepsi-Cola Employees Union-Associated Labor Union (LEPCEU-ALU), including herein
respondents.
LEPCEU-ALU filed a Notice of Strike before the National Conciliation and Mediation
Board (NCMB) due to Pepsis alleged acts of union busting/ULP, and eventually, went on strike.
Pepsi filed before the NLRC a petition to declare the strike illegal with a prayer for the loss of
employment status of union leaders and some union members. DOLE Secretary Bienvenido A.
Laguesma certified the labor dispute to the NLRC for compulsory arbitration. A return-to-work
order was also issued. Eventually, Pepsi and LEPCEU-ALU agreed to settle their labor dispute
arising from the companys retrenchment program and thus, respondents signed individual
release and quitclaim forms in September 1999 (September 1999 quitclaims) stating that Pepsi
would be released and discharged from any action arising from their employment.
Notwithstanding the foregoing, respondents still filed separate complaints for illegal dismissal
with the NLRC.
ISSUE:
1. Whether or not Pepsis retrenchment was valid
2. Whether or not Pepsi committed ULP in the form of union busting;
3. Whether or not the execution of quitclaims amounted to a final settlement of the case
RULING:
Validity of Retrenchment
Pepsis Corporate Rightsizing Program was a company-wide program which had already been
implemented in its other plants in Bacolod, Iloilo, Davao, General Santos and
Zamboanga. Consequently, given the general applicability of its retrenchment program, Pepsi
could not have intended to decimate LEPCEUALUs membership, much less impinge upon its
right to self-organization, when it employed the same.
Moreover, it must be underscored that Pepsis management exerted conscious efforts to
incorporate employee participation during the implementation of its retrenchment program.
Records indicate that Pepsi had initiated sit-downs with its employees to review the criteria on
which the selection of who to be retrenched would be based. This is evidenced by the report of
NCMB Region VIII Director Juanito Geonzon which states that "[Pepsis] [m]anagement
conceded on the proposal to review the criteria and to sit down for more positive steps to resolve
the issue."

Union Busting and ULP


As explained in the case of Philcom Employees Union v. Philippine Global Communications:
Unfair labor practice refers to acts that violate the workers' right to organize. The prohibited
acts are related to the workers' right to selforganization and to the observance of a CBA. Without
that element, the acts, no matter how unfair, are not unfair labor practices. The only exception is
Article 248(f) [now Article 257(f)].

Mindful of their nature, SC finds it difficult to attribute any act of union busting or ULP
on the part of Pepsi considering that it retrenched its employees in good faith. As earlier
discussed, Pepsi tried to sit-down with its employees to arrive at mutually beneficial criteria
which would have been adopted for their intended retrenchment. In the same vein, Pepsis
cooperation during the NCMB-supervised conciliation conferences can also be gleaned from the
records. Furthermore, the fact that Pepsis rightsizing program was implemented on a companywide basis dilutes respondents claim that Pepsis retrenchment scheme was calculated to stymie
its union activities, much less diminish its constituency. Therefore, absent any perceived threat to
LEPCEU-ALUs existence or a violation of respondents right to self-organization as
demonstrated by the foregoing actuations Pepsi cannot be said to have committed union busting
or ULP in this case.
Execution of Quitclaims
A waiver or quitclaim is a valid and binding agreement between the parties, provided that it
constitutes a credible and reasonable settlement and the one accomplishing it has done so
voluntarily and with a full understanding of its import. In Olaybar v. National Labor Relations
Commission, the Court, recognizing the conclusiveness of compromise settlements as a means to
end labor disputes, held that Article 2037 of the Civil Code, which provides that "[a]
compromise has upon the parties the effect and authority of res judicata," applies suppletorily to
labor cases even if the compromise is not judicially approved.
As correctly observed by the CA, the September 1999 quitclaims must be read in conjunction
with the September 17, 1999 Agreement, to wit:
2. Both parties agree that the release of these benefits is without prejudice to the filing of the
case by the Union with the National Labor Relations Commission;
3. The Union undertakes to sign the Quitclaim but subject to the 2nd paragraph of this
Agreement. x x x

The language of the September 17, 1999 Agreement is straightforward. The use of the term
"subject" in the 3rd clause of the said agreement clearly means that the signing of the quitclaim
documents was without prejudice to the filing of a case with the NLRC. Hence, when
respondents signed the September 1999 quitclaims, they did so with the reasonable impression
that that they were not precluded from instituting a subsequent action with the NLRC.
Accordingly, it cannot be said that the signing of the September 1999 quitclaims was tantamount
to a full and final settlement between Pepsi and respondents.

LEOPARD SECURITY AND INVESTIGATION AGENCY vs.


TOMAS QUITOY, RAUL SABANG and DIEGO MORALES
G.R. No. 186344, February 20, 2013, SECOND DIVISION, (J. PEREZ)
Tomas Quitoy, Raul Sabang and Diego Morales were hired as security guards by
petitioner Leopard Security and Investigation Agency (LSIA) which maintained its office at
BCC House, 537 Shaw Boulevard, Mandaluyong City. All being residents of Cebu City,
respondents were assigned by LSIA to the different branches of its only client in said locality,
Union Bank of the Philippines (Union Bank). Union Bank served a notice to LSIA, terminating
the parties security service contract. Respondents and Ondong filed a complaint for illegal
dismissal, unpaid 13th month pay and service incentive leave pay (SILP), moral and exemplary
damages as well as attorneys fees against LSIA. In support of their complaint, respondents
averred that they were hired and assigned by LSIA to the different Cebu City branches of Union
Bank which directly paid their salaries and whose branch managers exercised direct control and
supervision over them. Required to work from 7:30 a.m. to 9:00 p.m. daily, respondents claimed
that they took orders and instructions from Union Banks branch managers since LSIA had no
administrative personnel in Cebu City. LSIA, on the other hand, asserted that upon being hired,
respondents opted for an assignment in Cebu City and were, accordingly, detailed at the different
branches of Union Bank in said locality. LSIA, later on, direct respondents to report for work at
its Mandaluyong City office. As respondents failed to do so, LSIA alleged that it issued show
cause letters, requiring the former to explain why they should not be administratively sanctioned
for their unexplained absences.
ISSUE:
1) Whether or not the respondents were illegally dismissed by LSIA
2) Whether or not CA was correct in awarding separation pays to the respondents
RULING:
No illegal dismissal: recognition of floating status
Applying Article 286 of the Labor Code of the Philippines by analogy, this Court has
repeatedly recognized that security guards may be temporarily sidelined by their security agency
as their assignments primarily depend on the contracts entered into by the latter with third
parties. Temporary "off-detail" or "floating status" is the period of time when security guards are
in between assignments or when they are made to wait after being relieved from a previous post
until they are transferred to a new one. It takes place when, as here, the security agencys clients
decide not to renew their contracts with the agency, resulting in a situation where the available
posts under its existing contracts are less than the number of guards in its roster. For as long as
such temporary inactivity does not continue for a period exceeding six months, it has been ruled
that placing an employee on temporary "off-detail" or "floating status" is not equivalent to
dismissal.
In the case at bench, respondents were informed on 29 April 2005 that they were going to
be relieved from duty as a consequence of the 30 April 2005 expiration of the security service
contract between Union Bank and LSIA. While respondents lost no time in immediately filing

their complaint on 3 May 2005, the record equally shows that they were directed by LSIA to
report for work at its Mandaluyong City office on 10 May 2005 or a mere ten days from the time
the former were effectively sidelined. Considering that a security guard is only considered
illegally dismissed from service when he is sidelined from duty for a period exceeding six
months, SC finds that the CA correctly upheld the NLRCs ruling that respondents were not
illegally dismissed by LSIA. Parenthetically, said ruling is binding on respondents who did not
appeal either the decision rendered by the NLRC or the CA in line with the entrenched
procedural rule in this jurisdiction that a party who did not appeal cannot assign such errors as
are designed to have the judgment modified.
No strain in parties relation: full backwages and reinstatement instead of separation pay
Having correctly ruled out illegal dismissal of respondents, the CA reversibly erred,
however, when it sustained the NLRCs award of separation pay on the ground that the parties
relationship had already been strained. For one, liability for the payment of separation pay is a
legal consequence of illegal dismissal where reinstatement is no longer viable or feasible. Under
Article 279 of the Labor Code, an illegally dismissed employee is entitled to the twin reliefs of
full backwages and reinstatement without loss of seniority rights. Aside from the instances
provided under Articles 283 and 284 of the Labor Code, separation pay is, however, granted
when reinstatement is no longer feasible because of strained relations between the employer and
the employee. In cases of illegal dismissal, the accepted doctrine is that separation pay is
available in lieu of reinstatement when the latter recourse is no longer practical or in the best
interest of the parties.
As a relief granted in lieu of reinstatement, however, it consequently goes without saying
that an award of separation pay is inconsistent with a finding that there was no illegal dismissal.
Standing alone, the doctrine of strained relations will not justify an award of separation pay, a
relief granted in instances where the common denominator is the fact that the employee was
dismissed by the employer. Even in cases of illegal dismissal, the doctrine of strained relations is
not applied indiscriminately as to bar reinstatement, especially 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 employers business. Although litigation may also
engender a certain degree of hostility, it has likewise been ruled that the understandable strain in
the parties relations would not necessarily rule out reinstatement which would, otherwise,
become the rule rather than the exception in illegal dismissal cases.

RAMON G. NAZARENO vs. MAERSK FILIPINAS CREWING INC.,


and ELITE SHIPPING A/S
G.R. No. 168703, February 26, 2013, EN BANC, (J. PERALTA)
Ramon G. Nazareno (Nazareno) was hired by Maersk Filipinas Crewing Inc. (MCI) as
Chief Officer for and in behalf of its foreign principal Elite Shipping A/S (Elite) on board its
vessel M/V Artkis Hope. The vessel was berthed at Port Belem, Brazil to load timber. While
petitioner was checking the last bundle of timber to be loaded, he suddenly lost his balance and
fell, landing on the timber and injured his right shoulder. Due to the pain he felt in his right
shoulder, he was later examined in USA and was considered not fit for work. It was
recommended that petitioner should be confined for thorough evaluation and further tests, and
see an Orthopedic Surgeon and/or a Neurologist. However, petitioner was not permitted to
disembark as there was no one available to replace him. Upon medication in South Korea, he
was also advised to undergo physical therapy. Consequently, petitioner was declared unfit to
work and was recommended to be signed off from duty. Petitioner was repatriated to Manila. He
then consulted a Neurologist and was told that petitioner will no longer be able to function as in
his previous disease-free state and that his condition would hamper him from operating as chief
officer of a ship. He was also, later on, diagnosed to be suffering from Parkinsons disease and a
frozen right shoulder (secondary) and was concluded unfit to work as a seafarer. Petitioner now
sought payment of his disability benefits and medical allowance from respondents, but was
refused.
ISSUE:
Whether or not Nazareno is entitled to disability benefits for the injury he obtained on-board the
vessel
RULING:
If serious doubt exists on the company-designated physician's declaration of the nature of
a seaman's injury and its corresponding impediment grade, resort to prognosis of other
competent medical professionals should be made. In doing so, a seaman should be given the
opportunity to assert his claim after proving the nature of his injury. These pieces of evidence
will in turn be used to determine the benefits rightfully accruing to him.
In any case, the bottomline is this: the certification of the company designated physician
would defeat petitioners claim while the opinion of the independent physicians would uphold
such claim. In such a situation, SC adopts the findings favorable to Nazareno. The law looks
tenderly on the laborer. Where the evidence may be reasonably interpreted in two divergent
ways, one prejudicial and the other favorable to him, the balance must be tilted in his favor
consistent with the principle of social justice.
Anent the question of whether or not petitioner is indeed entitled to disability benefits based on
the findings and conclusions, not only of his personal doctors, but also on the findings of the
doctors whom he consulted abroad, the Court rules in the affirmative.

From the documents presented by the parties, it is apparent that in a Message to Elite, it
was established that Nazareno was already declared "not fit for duty" and was advised to be
confined and undergo MRI treatment. Similarly, when petitioner was brought to the Ulsan
Hyundai Hospital, South Korea on August 8, 2001 for his frozen right shoulder, he was again
declared not fit for duty and was advised to be "signed off" for further physical therapy. Indeed,
petitioner was repatriated to Manila and underwent physical therapy session with Dr. Periquet.
However, still not feeling well, he underwent a series of treatment with Dr. Tan for his frozen
right shoulder until December 1, 2001. Petitioner then consulted Dr. Santiago for neurologic
evaluation on December 27, 2001. In Dr. Santiagos Neurologic Summary, it was indicated that
petitioner developed right shoulder pains nine months before and that despite repeated physical
therapy, it only provided petitioner temporary relief. Dr. Santiago was also of the impression that
petitioner was afflicted with Parkinsons disease and concluded that petitioner will no longer
function as in his previous disease free state.
From the findings and prognosis of the rest of petitioners doctors who attended and
treated him, petitioner already established that he is entitled to disability benefits. Indeed, the fact
remains that petitioner injured his right shoulder while on board the vessel of Elite; that he
received treatment and was repatriated due to the said injury; and was declared unfit for duty
several times by the doctors who attended and treated petitioner abroad and in Manila. Clearly,
the medical certificate issued by Dr. Campana cannot be given much weight and consideration
against the overwhelming findings and diagnoses of different doctors, here and abroad, that
petitioner was not fit for work and can no longer perform his duties as a seafarer.

TEGIMENTA CHEMICAL PHILS. and VIVIAN ROSE D. GARCIA


vs. MARY ANNE OCO
G.R. No. 175369, February 27, 2013, FIRST DIVISION, (CJ. Cereno)
Mary Anne Oco (Oco) worked as a clerk, and later on as a material controller, for
Tegimenta Chemical Philippines, Incorporated (Tegimenta), a company owned by Vivian Rose
D. Garcia (Garcia). By reason of her pregnancy, Oco incurred numerous instances of absence
and tardiness from March to April 2002. Garcia subsequently advised her to take a vacation,
which the latter did from 1 to 15 May 2002. On her return, Oco immediately worked for the next
four working days of May. However, on 21 May 2002, Garcia allegedly told her to no longer
report to the office effective that day. Hence, respondent no longer went to work. She
nevertheless called petitioner at the end of the month, but was informed that she had no more job
to do. Oco, then, filed a Complaint for illegal dismissal and prayed for reinstatement and back
wages before the LA. Later on, she amended her Complaint by asking for separation pay instead
of reinstatement. Oco maintained that petitioner verbally dismissed her without any valid cause
and without due process. To bolster her story, respondent adduced that Tegimenta hired new
employees to replace her. In their defense, petitioners countered that she had abandoned her job
by being continuously absent without official leave (AWOL). They further narrated that they
could not possibly terminate her services, because she still had to settle her accountabilities.
ISSUES:
Whether or not Oco had abandoned her work by being on AWOL
RULING:
For abandonment to exist, two factors must be present: (1) the failure to report for work
or absence without a valid or justifiable reason; and (2) a clear intention to sever the employeremployee relationship, with the second element as the more determinative factor being
manifested by some overt acts.
The mere absence of an employee is not sufficient to constitute abandonment. As an
employer, Tegimenta has the burden of proof to show the deliberate and unjustified refusal of the
employee to resume the latters employment without any intention of returning.
Here, Tegimenta failed to discharge its burden of proving that Oco desired to leave her
job. The courts a quo uniformly found that she had continuously reported for work right after her
vacation, and that her office attendance was simply cut off when she was categorically told not to
report anymore. These courts even noted that she had also called up the office to follow up her
status; and when informed of her definite termination, she lost no time in filing a case for illegal
dismissal. Evidently, her actions did not constitute abandonment and instead implied her
continued interest to stay employed.
Petitioners, further, posit that Ocos act of replacing the prayer for reinstatement with that
for separation pay implied that respondent abandoned her employment.
Abandonment is a matter of intention and cannot lightly be inferred or legally presumed
from certain equivocal acts. For abandonment to be appreciated, there must be a "clear, willful,

deliberate, and unjustified refusal of the employee to resume employment."31 Here, the mere fact
that Oco asked for separation pay, after she was told to no longer report for work, does not
reflect her intention to leave her job. She is merely exercising her option under Article 279 of the
Labor Code, which entitles her to either reinstatement and back wages or payment of separation
pay.

ROLANDO L. CERVANTES vs. PAL MARITIME CORPORATION and/or


WESTERN SHIPPING AGENCIES, PTE., LTD.
G.R. No. 175209, January 16, 2013, SECOND DIVISION, (J. PEREZ)
Petitioner Rolando Cervantes (Cervantes) was hired as Master on board the vessel M/V
Themistocles by respondent PAL Maritime Corporation, the manning agent of respondent
Western Shipping Agencies, PTE., LTD., (Western Shipping) for a 10-month period. In less than
a month on-board, a telex message was sent to Cervantes enumerating several complaints against
him received from Colonial Shipping, the owner of the vessel. On the following day, petitioner
sent a telex message and imputed ill-motive on the part of the foreign inspectors who were
making false accusations against Filipino crew members. In the same message, petitioner
addressed all the complaints raised against him.
Cervantes sent another telex message informing Western Shipping of the unbearable
situation on board. In response to said message, Western Shipping sent a letter informing the
former that the owners have decided to relieve him upon passing Panama Canal or next
convenient port and that the pre-mature ending of contract is mutually agreed and for the benefits
of the parties. Cervantes replied that he had no choice but to accept the decision and thanked
them for relieving him. Petitioner was, then, repatriated to Manila. Petitioner filed a Complaint
for illegal dismissal. He prayed for actual, moral and exemplary damages plus attorneys fees. In
their Answer, respondents alleged that petitioner voluntarily and freely pre-terminated his own
contract.
ISSUE:
Whether or not Cervantes resigned from his employment
RULING:
Resignation is the voluntary act of an employee who finds himself in a situation where he
believes that personal reasons cannot be sacrificed in favor of the exigency of the service, such
that he has no other choice but to disassociate himself from his employment. This is precisely
what obtained in this case.
The statements of petitioner were simple and straightforward. There is no merit to his
claim that he was forced to resign due to extreme pressure. Only two (2) days had elapsed from
the time petitioner received a copy of the complaint from the owners of the vessel until his letter
demanding his relief. The telex message outlining numerous complaints against petitioner
probably bruised his ego, causing petitioner to react impulsively by resigning.
Petitioner failed to substantiate his claim that he and the Filipino crew members were
being subjected to racial discrimination on board. Petitioner presented a letter-petition against a
Greek technician who allegedly maltreated Filipino crew members. However, there was no
showing that the Greek technician spearheaded nor had any participation in the complaint of
Colonial Shipping against petitioner.

Nelson B. Gan Vs. Galderma Philippines, Inc. and Rosendo C. Veneracion


G.R. No. 177167. January 17, 2013, THIRD DIVISION, (J. Peralta)
Galderma Philippines, Inc. (Galderma), a wholly-owned subsidiary of Galderma Pharma
S.A., is engaged in the business of selling, marketing, and distribution of Cetaphil Brand Product
Lines (CBPL). Nelson B. Gan (Gan) was hired by Galderma as Product Manager for its
Consumer Products Division to handle the marketing of CBPL. With his satisfactory
performance during the first year, Gan was acknowledged and rewarded by Galderma through
positive performance appraisal, salary and benefits increases, and informal notations on his
marketing reports. However, after several years of employment, Gan had several
misunderstanding with the company and he alleged that there was diminution of his benefits and
he was forced to resign. He, however, continued to do occasional field work for Galderma and
submitted the required periodic field reports on a twice a month basis. Galderama, on the other
hand, avers that it was Gan, himself, that informed Veneracion of his desire to leave the
company and requested that his resignation be made to take effect after 60 days and that the
same was voluntary on the part of Gan.
ISSUE:
Whether or not Gan was constructively dismissed by Galderama
RULING:
To begin with, constructive dismissal is defined as quitting or cessation of work because
continued employment is rendered impossible, unreasonable or unlikely; when there is a
demotion in rank or a diminution of pay and other benefits. It exists if an act of clear
discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the
employee that it could foreclose any choice by him except to forego his continued
employment. There is involuntary resignation due to the harsh, hostile, and unfavorable
conditions set by the employer. The test of constructive dismissal is whether a reasonable person
in the employee's position would have felt compelled to give up his employment/position under
the circumstances.
On the other hand, "resignation is the voluntary act of an employee who is in a situation
where one believes that personal reasons cannot be sacrificed in favor of the exigency of the
service, and one has no other choice but to dissociate oneself from employment. It is a formal
pronouncement or relinquishment of an office, with the intention of relinquishing the office
accompanied by the act of relinquishment. As the intent to relinquish must concur with the overt
act of relinquishment, the acts of the employee before and after the alleged resignation must be
considered in determining whether he or she, in fact, intended to sever his or her employment."
Since Gan submitted a resignation letter, it is incumbent upon him to prove with clear, positive,
and convincing evidence that his resignation was not voluntary but was actually a case of
constructive dismissal; that it is a product of coercion or intimidation. He has to prove his
allegations with particularity.
Gan could not have been coerced. Coercion exists when there is a reasonable or wellgrounded fear of an imminent evil upon a person or his property or upon the person or property

of his spouse, descendants or ascendants. Neither do the facts of this case disclose that Gan was
intimidated.
What is evident, therefore, is that Gan's resignation is NOT "a case of adherence, not of
choice," but was a product of a mutually beneficial arrangement. We agree with respondents that
the result of the negotiation leading to Gan's resignation is a "win-win" solution for both parties.
On one hand, Gan was able to obtain a favorable severance pay while getting flexible working
hours to implement his post-resignation career options. On the other hand, Galderma was able to
cut its relation with an employee perceived to be unwilling to perform additional product
responsibilities while being given ample time to look for an alternative to hire and train. Indeed,
Gan voluntarily resigned from Galderma for a valuable consideration. He negotiated for an
improvement of the resignation package offered and he managed to obtain an acceptable one. As
opposed to the case of San Miguel Corporation v. NLRC, Gan was not tricked or was "morally
and psychologically hoodwinked" to draft, sign, and tender his resignation letter. It was not made
without proper discernment and time to reflect; nor was it a knee-jerk reaction that left him with
no alternative but to accede.

Kestrel Shipping Co., Inc./Capt. Amador P. Servillon


and Atlantic Manning Ltd. vs. Francisco D. Munar
G.R. No. 198501, January 30, 2013, FIRST DIVISION, (J. Reyes)
Kestrel Shipping, Inc. (Kestrel), on behalf of its principal, Atlantic Manning, Ltd., and
respondent Francisco Munar (Munar) forged an employment contract designating Munar as
pump man for M/V Southern Unity. On board, after Munar assisted in manually lifting the ships
anchor windlass motor that weighs about 350 kilograms, he started to limp and experience severe
pain in his lumbar region (lower spine). He was admitted at a hospital in South Africa and was
evaluated that his lumbar spine showed degenerative changes, which required him to take pain
medication, use pelvic traction, and undergo physiotherapy. It was further evaluated that he
should undergo further treatment and management in a spine rehabilitation facility but if he
would not register a positive response thereto, he must undergo surgery. Munar was declared
unfit to perform his usual sea duties and was repatriated. Upon return to the Philippines, Munar
seek for medication and was recommended to undergo surgery and therapy. Despite the said
procedures, Munar was evaluated that he will take a long time to fully recovered. Therefore, he
may be given disability. Munar filed a complaint for total and permanent disability benefits.
During the mandatory mediation and conciliation conferences, Kestrel invoked Dr. Chuas
assessment per his medical report dated May 3, 2007 and offered to pay Munar the benefit
corresponding to Grade 8 disabilities or $16,795.00. Munar rejected Kestrels offer and
maintained that his disability should be rated as Grade 1. Munar relied on the following
assessment made by Dr. Edward L. Chiu (Dr. Chiu), an orthopedic surgeon at Lorma Medical
Center, in a medical certificate.
ISSUE:
Whether or not Munar can claim total and permanent disability
RULING:
In this case, the following are undisputed: (a) when Munar filed a complaint for total and
permanent disability benefits on April 17, 2007, 181 days had lapsed from the time he signed-off
from M/V Southern Unity on October 18, 2006; (b) Dr. Chua issued a disability grading on May
3, 2007 or after the lapse of 197 days; and (c) Munar secured the opinion of Dr. Chiu on May 21,
2007; (d) no third doctor was consulted by the parties; and (e) Munar did not question the
competence and skill of the company-designated physicians and their familiarity with his
medical condition.
It must be noted that when Munar filed his complaint, Dr. Chua had not yet determined
the nature and extent of Munars disability. Also, Munar was still undergoing physical therapy
and his spine injury had yet been fully addressed. Furthermore, when Munar filed a claim for
total and permanent disability benefits, more than 120 days had gone by and the prevailing rule
then was that enunciated by this Court in Crystal Shipping, Inc. v. Natividad that total and
permanent disability refers to the seafarers incapacity to perform his customary sea duties for
more than 120 days. Particularly:
Permanent disability is the inability of a worker to perform his job for more than 120 days,
regardless of whether or not he loses the use of any part of his body. As gleaned from the records,

respondent was unable to work from August 18, 1998 to February 22, 1999, at the least, or more
than 120 days, due to his medical treatment. This clearly shows that his disability was permanent.
Total disability, on the other hand, means the disablement of an employee to earn wages in the
same kind of work of similar nature that he was trained for, or accustomed to perform, or any
kind of work which a person of his mentality and attainments could do. It does not mean absolute
helplessness. In disability compensation, it is not the injury which is compensated, but rather it is
the incapacity to work resulting in the impairment of ones earning capacity.
xxxx

Consequently, that after the expiration of the 120-day period, Dr. Chua had not yet made
any declaration as to Munars fitness to work and Munar had not yet fully recovered and was still
incapacitated to work sufficed to entitle the latter to total and permanent disability benefits.
In addition, that it was by operation of law that brought forth the conclusive presumption
that Munar is totally and permanently disabled, there is no legal compulsion for him to observe
the procedure prescribed under Section 20-B(3) of the POEA-SEC. A seafarers compliance with
such procedure presupposes that the company-designated physician came up with an assessment
as to his fitness or unfitness to work before the expiration of the 120-day or 240-day periods.
Alternatively put, absent a certification from the company-designated physician, the seafarer had
nothing to contest and the law steps in to conclusively characterize his disability as total and
permanent.
This Courts pronouncements in Vergara presented a restraint against the indiscriminate
reliance on Crystal Shipping such that a seafarer is immediately catapulted into filing a
complaint for total and permanent disability benefits after the expiration of 120 days from the
time he signed-off from the vessel to which he was assigned. Particularly, a seafarers inability to
work and the failure of the company-designated physician to determine fitness or unfitness to
work despite the lapse of 120 days will not automatically bring about a shift in the seafarers
state from total and temporary to total and permanent, considering that the condition of total and
temporary disability may be extended up to a maximum of 240 days.
Nonetheless, Vergara was promulgated on October 6, 2008, or more than two (2) years from the
time Munar filed his complaint and observance of the principle of prospectivity dictates that
Vergara should not operate to strip Munar of his cause of action for total and permanent
disability that had already accrued as a result of his continued inability to perform his customary
work and the failure of the company-designated physician to issue a final assessment.

GENERAL MILLING CORPORATION vs. VIOLETA L. VIAJAR


G.R. No. 181738, January 30, 2013, FIRST DIVISION, (J. Reyes)
GMC is a domestic corporation with principal office in Makati City and a manufacturing
plant in Lapu-Lapu City. GMC terminated the services of thirteen (13) employees for
redundancy, including herein respondent, Violeta Viajar (Viajar). GMC alleged that it has been
gradually downsizing its Vismin (Visayas-Mindanao) Operations in Cebu where a sizeable
number of positions became redundant over a period of time. When Viajar reported for, a month
before the effectivity of her severance from the company, the guard on duty barred her from
entering GMCs premises. She was also denied access to her office computer and was restricted
from punching her daily time record in the bundy clock. Viajar was then invited to the HRD
Cebu Office where she was asked to sign certain documents, which turned out to be an
"Application for Retirement and Benefits." The respondent refused to sign and sought
clarification because she did not apply for retirement and instead asserted that her services were
terminated for alleged redundancy. Viajar also claimed that between the period of July 4, 2003
and October 13, 2003, GMC hired fifteen (15) new employees which aroused her suspicion that
her dismissal was not necessary. For its part, GMC insisted that Viajars dismissal was due to the
redundancy of her position. GMC reasoned out that it was forced to terminate the services of the
respondent because of the economic setbacks the company was suffering which affected the
companys profitability, and the continuing rise of its operating and interest expenditures.
Redundancy was part of the petitioners concrete and actual cost reduction measures. GMC also
presented the required "Establishment Termination Report" which it filed before the Department
of Labor and Employment (DOLE) on October 28, 2003, involving thirteen (13) of its
employees, including Viajar.
ISSUE:
Whether or not Viajar was validly dismissed on the ground of redundancy
RULING:
Article 283 of the Labor Code provides that redundancy is one of the authorized causes
for dismissal. It reads:
Article 283. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installment of labor-saving devices,
redundancy, retrenchment to prevent losses or the closing or cessation of operation of the
establishment or undertaking unless the closing is for the purpose of circumventing the provisions
of this Title, by serving a written notice on the worker and the Ministry of Labor and
Employment at least one (1) month before the intended date thereof. In case of termination due to
the installation of labor-saving devices or redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his one (1) month pay or to at least one (1)
month pay for every year of service, whichever is higher. In case of retrenchment to prevent
losses and in cases of closures or cessation of operations of establishment or undertaking not due
to serious business losses or reverses, the separation pay shall be equivalent to one (1) month pay
or at least one-half (1/2) month pay for every year of service, whichever is higher. A fraction of at
least six (6) months shall be considered one (1) whole year.

From the above provision, it is imperative that the employer must comply with the
requirements for a valid implementation of the companys redundancy program, to wit: (a) the

employer must serve a written notice to the affected employees and the DOLE at least one (1)
month before the intended date of retrenchment; (b) the employer must pay the employees a
separation pay equivalent to at least one month pay or at least one month pay for every year of
service, whichever is higher; (c) the employer must abolish the redundant positions in good faith;
and (d) the employer must set fair and reasonable criteria in ascertaining which positions are
redundant and may be abolished.
Furthermore, the Court cannot overlook the fact that Viajar was prohibited from entering
the company premises even before the effectivity date of termination; and was compelled to sign
an "Application for Retirement and Benefits." These acts exhibit the petitioners bad faith since it
cannot be denied that the respondent was still entitled to report for work until November 30,
2003. The demand for her to sign the "Application for Retirement and Benefits" also contravenes
the fact that she was terminated due to redundancy. Indeed, there is a difference between
voluntary retirement of an employee and forced termination due to authorized causes.

SAMPAGUITA AUTO TRANSPORT CORPORATION vs. NATIONAL LABOR


RELATIONS COMMMISSION and EFREN I. SAGAD
G.R. No. 197384, January 30, 2013, SECOND DIVISION, (J. Brion)
Efren I. Sagad charged the Sampaguita Auto Transport Corporation (company); Andy
Adagio, President and General Manager; Monina Ariola Adagio, Vice-President and Finance
Manager; Virgilio Olunan (referred to as Olonan by Sagad), Operations Manager; and Gerry
Dimate, HRO Officer, with illegal dismissal and damages plus attorney's fees. Sagad alleged that
the company hired him as a regular bus driver, not as a probationary employee as the company
claimed. He disowned his purported signature on the contract of probationary
employment submitted in evidence by the company and maintained that his signature was
forged. He further alleged that he was dismissed by the company for allegedly conniving with
conductor Vitola in issuing tickets outside their assigned route. The company countered that it
employed Sagad as a probationary bus driver; he was duly informed of his corresponding duties
and responsibilities. He was further informed that during the probationary period, his attendance,
performance and work attitude shall be evaluated to determine whether he would qualify for
regular employment. The company alleged that an evaluator boarded Sagads bus and described
Sagads manner of driving as reckless driver, nakikipaggitgitan, nakikipaghabulan, nagsasakay
sa gitna ng kalsada, sumusubsob ang pasahero. The company further requested conductors who
had worked with Sagad to comment on his work. Conductors A. Hemoroz and Israel Lucero
revealed that Sagad proposed that they cheat on the company by way of an unreported early bus
trip. The company also cited Sagads involvement in a hit-and-run accident while on a
trip. Allegedly, Sagad did not report the accident to the company. Upon conclusion of the
evaluation, the company terminated Sagads employment for his failure to qualify as a regular
employee.
ISSUE:
1) Whether or not Sagad is a regular employee
2) Whether or not Sagad was dismissed illegally;
3) Whether Sagad is entitled to backwages and separation pay after working with the
company for barely five months.
RULING:
Sagad was already a regular employee upon dismissal
After a review of the records, we are convinced that Sagad was dismissed, not as a
probationary employee, but as one who had attained regular status. The companys evidence on
Sagads purported hiring as a probationary employee is inconclusive. To start with, Sagad denied
that he entered into a probationary employment contract with the company, arguing that the
signature on the supposed contract was not his. He also denied receiving the alleged notice
terminating his probationary employment. The same thing is true with his purported letter asking
that he be given another chance to work for the company. He asserts that not only is the letter not
in his handwriting, the signature on the letter was also not his.

Even if we were to consider that Sagad went through a probationary period, the records
indicate that he was retained even beyond the expiration of his supposed probationary
employment on October 14, 2006. As the NLRC noted, Sagad claimed that he was dismissed by
the company on November 5, 2006, after he was accused of conniving with conductor Vitola in
issuing tickets outside their assigned route. The company never refuted this particular assertion
of Sagad and its silence can only mean that Sagad remained in employment until November 4,
2006, thereby attaining regular status as of that date. Under the law, "an employee who is
allowed to work after a probationary period shall be considered a regular employee."
Further, when the company questioned the payslips submitted by Sagad to substantiate
his claim that he earned on the average a daily commission of P1,000.00, it pointed out that
Sagad presented only one (1) payslip for the whole month of November 2006, five (5) payslips
for the month of October 2006, and one (1) payslip each for the months of July, August and
September 2006. This seemingly harmless allegation is significant in that it revealed that Sagad
continued working until the first week of November 2006 and was paid his salary for at least one
payroll period. Sagad, therefore, had become a regular employee when he was dismissed on
November 5, 2006.
Dismissal was valid
SC finds substantial evidence supporting Sagads removal as a bus driver. Through his reckless
driving and his schemes to defraud the company, Sagad committed serious misconduct and
breach of the trust and confidence of his employer, which, without doubt, are just causes for his
separation from the service. It is well to stress, at this point, an earlier pronouncement of the
Court "that justice is in every case for the deserving, to be dispensed in the light of the
established facts and applicable law and doctrine."
The twin-notice requirement
Even as we find a just cause for Sagads dismissal, we agree with the CA that the company failed
to comply with the two-notice rule. It failed to serve notice of: (1) the particular acts for which
Sagad was being dismissed on November 5, 2006 and (2) his actual dismissal. Consistent with
our ruling in Agabon v. NLRC, we hold that the violation of Sagad's right to procedural due
process entitles him to an indemnity in the form of nominal damages. Considering the
circumstances in the present case, we deem it appropriate to award Sagad P30,000.00.

ELPIDIO CALIPAY v. NATIONAL LABOR RELATIONS COMMISSION,


G.R. No. 166411, 3 AUGUST 2010, SECOND DIVISION, (J. PERALTA)
FACTS:
Petitioner Elpidio Calipay together with two other persons filed a complaint for illegal
dismissal, unfair labor practice, underpayment of wages and 13th month pay, non-payment of
service incentive leave pay, overtime pay, premium pay for holiday, rest day, night shift

allowances and separation pay against herein private respondents Triangle Ace Corporation and
Jose Lee alleging that in the course of their employment, they were not given any specific work
assignment and that they performed various kinds of work imposed upon them by Lee; that they
were required by Lee to work for nine (9) hours a day, beginning from 7:00 a.m. and ending at
6:00 p.m. with a break of one hour at 12:00 noon from Monday to Sunday and that they were
paid a uniform daily wage of P140.00 for work rendered beyond the normal eight (8) working
hours from Monday to Saturday and none for work performed on a Sunday due to the policy of
Lee that his workers must provide work without pay at least one day in a week under his socalled "bayanihan system"; that in receiving their wages, they were not given any duly
accomplished payslips; instead, they were forced to sign a blank form of their daily time records
and salary vouchers.
Respondents Triangle Ace countered that the termination of the complainants was for valid or
just cause and that due process was observed. They claimed that petitioner was on absence
without leave (AWOL) status and that petitioner refused to explain the cause of said absence
which constituted abandonment of work and is therefore a valid cause for dismissal.
The Labor Arbiter dismissed the Complaint for lack of merit. On appeal, the NLRC rendered
judgment ordering respondents to reinstate the dismissed employees in addition to the dismissal
of the complaint. On Motion for Reconsideration, the NLRC granted the motion resulting to the
NLRC decision being set aside and the Labor Arbiter decision reinstated.
Petitioner then filed a special civil action for certiorari with the Court of Appeals which
dismissed the petition.
ISSUE: Whether or not acts of petitioner Calipay constitutes abandonment YES
HELD:
The Supreme Court agrees with the Labor Arbiters finding that petitioner Calipay had
abandoned his work for failing to report for work for unknown reasons; his continued absences
without the private respondents approval constituted gross and habitual neglect which is a just
cause for termination under Article 282 of the Labor Code of the Philippines. Complainants
claimed that they did not abandon their work but that they were dismissed illegally but records
show that complainants actually reported for work and were paid wages by the respondent
company even after their alleged termination as evidenced by their Daily Time Records and
Salary Vouchers submitted by respondents.
Jurisprudence has held time and again that abandonment is totally inconsistent with the
immediate filing of a complaint for illegal dismissal, more so if the same is accompanied by a
prayer for reinstatement.

In the present case, petitioner Calipay filed his complaint more than one year after his
alleged termination from employment. Moreover, an inconsistency in their stand is shown by
the fact that in the complaint form, which they personally filled up and filed with the NLRC,
they only asked for payment of separation pay and other monetary claims. They did not ask for
reinstatement. It is only in their Position Paper later prepared by their counsel that they asked for
reinstatement. This is an indication that petitioner and the other complainants never had the
intention or desire to return to their jobs. In fact, there is no evidence to prove that petitioner and
his former co-employees ever attempted to return to work after they were dismissed from
employment.

FILEMON VERZANO, JR. v. FRANCIS VICTOR PARO, et. al.,


G.R. No. 171643, 8 AUGUST 2010, SECOND DIVISION, (J. PERALTA)
FACTS:
Petitioner Filemon Verzano was a former District Manager of Wyeth Philippines, Inc. who was
dismissed from service upon an administrative complaint filed against him by respondents Paro
and Florencio who were territory managers under the supervision of petitioner Verzano. The
complaint was founded on petitioners alleged violation of company policy on prohibited sale of
drug samples given for free to doctors and for the unauthorized act of "channeling," or the
transfer of stocks within the same area falsely creating an impression that there was a sale. After
conducting its own investigation and giving petitioner Verzano an opportunity to explain his
side, Wyeth resolved to dismiss him after tendering him a Notice of Termination.
Aggrieved by his termination, petitioner Verzano filed a Complaint for illegal dismissal with the
Regional Labor Arbitration Board, NLRC against Wyeth as well as a criminal complaint against
respondents Paro and Florencio for perjury, false testimony and incriminatory machination
arguing that the affidavits of respondents contained falsehoods against him, particularly on the
material date of the alleged sale and the fact that he sold products which are to be given free to
doctors. The complaint was dismissed by the City Prosecutor and subsequently reversed on
appeal to the Office of Regional State Prosecutor.
Two Informations for perjury were filed in the Municipal Trial Court in Cities (MTCC), Bacolod
City. On the same day, respondents Paro and Florencio filed a petition for certiorari before the
Court of Appeals assailing the Resolutions of the Regional State Prosecutor which reversed the
earlier Resolution of the City Prosecutor and for the granting of a TRO against the Regional
State Prosecutor.
The CA granted the TRO prayed for and the proceedings with the MTCC were suspended.
Subsequently, the CA rendered a Decision in favor of respondents. The CA ruled that the

Regional State Prosecutor committed grave abuse of discretion when he directed the filing of the
Informations for perjury on the simple reason that no counter-affidavits were submitted by
respondents.
ISSUE:
I. Whether or not the CA jurisdiction had been rendered moot and academic by the filing of
the cases in the MTCC NO
II. Whether or not the Regional State Prosecutor commited grave abuse of discretion in
reversing the resolution of the City Prosecutor NO
HELD:
The petition has no merit.
I.
The doctrine laid down in Crespo v. Mogul: the rule in this jurisdiction is that once a
complaint or information is filed in Court any disposition of the case as its dismissal or the
conviction or acquittal of the accused rests in the sound discretion of the Court. Although the
fiscal retains the direction and control of the prosecution of criminal cases even while the case is
already in Court he cannot impose his opinion on the trial court. The Court is the best and sole
judge on what to do with the case before it. The determination of the case is within its exclusive
jurisdiction and competence.
In Marcelo vs. Court of Appeals, the SC clarified that Crespo did not foreclose the power or
authority of the secretary of justice to review resolutions of his subordinates in criminal cases.
In the case at bar, while it is generally the Secretary of Justice who has the authority to review
the decisions of the prosecutors, the Supreme Court agrees with the Court of Appeals that the
same precedential principles apply in full force and effect to the authority of the CA to correct
the acts tainted with grave abuse of discretion by the prosecutorial officers notwithstanding the
filing of the information before the MTCC. The authority of the CA is bolstered by the fact that
the petition filed before it was one under Rule 65, therefore it has the jurisdiction to determine
whether or not the Regional State Prosecutor acted with grave abuse of discretion amounting to
lack or excess of jurisdiction.
II.
In finding grave abuse of discretion, the CA opined that the Regional State Prosecutor
reversed the finding of the City Prosecutor on the simple reason that respondents failed to submit
counter-affidavits. The CA ruled that it would have been different had the Regional State
Prosecutor reversed the resolutions of his subordinate upon a positive finding of probable cause.
If the respondent cannot be subpoenaed, or if subpoenaed, does not submit counter-affidavits
within the ten (10)-day period, the investigating officer shall resolve the complaint based on the
evidence presented by the complainant. Only a counter-affidavit subscribed and sworn to by the
respondent before the Public Prosecutor can dispute or put at issue the allegations in the

complaint thus, a respondent who fails to submit his counter-affidavit within the required period
is deemed not to have controverted the complainants evidence.
To follow the public respondent Regional State Prosecutors skewed premise that only counteraffidavits can dispute or controvert allegations in the Complaint, would be to perpetuate an
absurdity wherein a criminal complaint should automatically be resolved in favor of the
complainant in the absence of counter-affidavits.
PHARMACIA and UPJOHN, INC., et. al. v. RICARDO ALBAYDA, JR.,
G.R. No. 172724, 23 AUGUST 2010, SECOND DIVISION, (J. PERALTA)
FACTS:
Respondent Ricardo Albayda was an employee of Upjohn before the merger between Pharmacia
and Upjohn occured. After the merger, respondent Albayda was designated by petitioner
Pharmacia and Upjohn as District Sales Manager. Subsequently, a district meeting was held
regarding the district territorial configuration wherein respondent was reassigned as District
Sales Manager to another territorial district. Respondent Albayda wrote a letter to Pharmacias
Vice-President for Sales and Marketing questioning his transfer and requesting that he not be
reassigned. Respondent felt that he could not improve the sales of products if he was assigned to
an unfamiliar territory and that his transfer might be a way for his managers to dismiss him from
employment. Said request was denied.
Subsequently, Pharmacia made a letter expressing disappointment on the way respondent viewed
their reason for moving his place of assignment. That respondent would have been given
additional remuneration in his reassignment; something which was never done in the past and is
never the practice in the industry in the Philippines. The letter concluded that respondent would
not accept any reason for the movement and that nothing is acceptable to him except a Western
Visayas assignment. The company gave respondent time to weigh the pros and cons of his
decision on whether to accept a reassingment.
Respondent Albayda was sent a memorandum notifying him of the termination of his services
after he repeatedly refused to report for work despite due notice, on the basis of absence without
official leave (AWOL) and insubordination pursuant to Article 282 of the Labor Code of the
Philippines.
Albayda filed a Complaint with the Labor Arbiter for constructive dismissal. The complaint was
dismissed. The dismissal was affirmed by the NLRC on appeal so a Petition for Certiorari was
filed before the Court of Appeals who ruled in favor of the Albayda.
ISSUE:
I.

Whether or not the respondent was constructively dismissed. NO

II.

Whether or not the respondent was afforded due process. YES

HELD:
The petition is meritorious.
I.
Jurisprudence recognizes the exercise of management prerogative to transfer or assign
employees from one office or area of operation to another, provided there is no demotion in rank
or diminution of salary, benefits, and other privileges, and the action is not motivated by
discrimination, made in bad faith, or effected as a form of punishment or demotion without
sufficient cause. The employer must show that the transfer is not unreasonable, inconvenient, or
prejudicial to the employee; nor does it involve a demotion in rank or a diminution of his
salaries, privileges and other benefits. Should the employer fail to overcome this burden of proof,
the employee's transfer shall be tantamount to constructive dismissal.
The reassignment of respondent Albayda was a valid exercise of petitioners management
prerogative. The transfer was a valid exercise of a legitimate management prerogative to
maximize business opportunities, growth and development of personnel and that his expertise
was needed to do so. Also, the reassignment was not a demotion. It will be the same position he
is currently occupying and his emoluments will not be reduced but instead, increased due to
being entitled to Relocation Benefits and Allowance in accordance with petitioners Benefits
Manual. Also, it is indicated in the contract of employment that Albayda agreed to be assigned to
any work or workplace as may be determined by the company whenever the operations require
such assignment.
Based on the foregoing, the CA had overstepped its legal mandate by reversing the findings of
fact of the LA and the NLRC as it appears that both decisions were based on substantial
evidence. There is no proof of arbitrariness or abuse of discretion in the process by which each
body arrived at its own conclusions. Thus, the CA should have deferred to such specialized
agencies which are considered experts in matters within their jurisdictions instead of imposing
on petitioner Pharmacia its own opinion or judgment on what should have been a purely business
decision.
II.
An employee must be given notice and an ample opportunity, prior to dismissal to
adequately prepare for his defense. This is an elementary rule in labor law that due process in
dismissal cases contemplates the twin requisites of notice and hearing. These procedural
requirements have been mandatorily imposed to the employer to accord its employees the right
to be heard. Failure of the employer to comply with such requirements renders its judgment of
dismissal void and inexistent. A written notice from the employer containing the causes for the
dismissal must be given. The employee is then given ample opportunity to be heard and to
defend himself, appraising him of his right to counsel if he desires. Lastly, a written notice
informing the employee of the decision of the employer, citing there reasons therefore, is given.

The above procedure was not followed in the instant case and the series of communications and
meetings cannot and is not sufficient to take the place of notice and hearing.
While no actual hearing was conducted before petitioners dismissed respondent, the same is not
fatal as only an "ample opportunity to be heard" is what is required in order to satisfy the
requirements of due process.
It is a cardinal rule in our jurisdiction that the employer must furnish the employee with two
written notices before the termination of employment can be effected: (1) the first apprises the
employee of the particular acts or omissions for which his dismissal is sought; and (2) the second
informs the employee of the employers decision to dismiss him. The requirement of a hearing,
on the other hand, is complied with as long as there was an opportunity to be heard, and not
necessarily that an actual hearing was conducted.
In the case at bar, the Supreme Court finds that petitioner Pharmacia had complied with the
requirements of law in effecting the dismissal of respondent Albayda.

PICOP RESOURCES, INCORPORATED (PRI) v. ANACLETO TANECA et. al.,


G.R. No. 160828, 9 AUGUST 2010, SECOND DIVISION, (J. PERALTA)
FACTS:
Respondents Taneca and fourteen (14) others filed a Complaint for unfair labor practice, illegal
dismissal and money claims against petitioner PICOP Resources, Inc. (PRI). Respondents were
regular rank-and-file employees of PRI and bona fide members of Nagkahiusang Mamumuo sa
PRI Southern Philippines Federation of Labor (NAMAPRI-SPFL), which is the collective
bargaining agent for the rank-and-file employees of petitioner PRI. PRI has a collective
bargaining agreement (CBA) with NAMAPRI-SPFL for a period of five (5) years from May 22,
1995 2000.
A letter was sent to the management of PRI demanding the termination of employees who
allegedly campaigned for, supported and signed the Petition for Certification Election of the
Federation of Free Workers Union (FFW) during the effectivity of the CBA. NAMAPRI-SPFL
considered said act of campaigning for and signing the petition for certification election of FFW
as an act of disloyalty and a valid basis for termination for a cause in accordance with its
Constitution and By-Laws, and the terms and conditions of the CBA, specifically Article II,
Sections 6.1 and 6.2 on Union Security Clause.
Acting on the letters of the NAMAPRI-SPFL, a memorandum was issued addressed to the
concerned employees to explain in writing why their employment should not be terminated due
to acts of disloyalty as alleged by their Union. After evaluation, it was found that the member's

explanations were unsatisfactory. PRI served notices of termination for causes to the 31 out of
the 46 employees whom NAMAPRIL-SPFL sought to be terminated on the ground of "acts of
disloyalty" committed against it. A Notice was also served on the DOLE.
Respondents then accused PRI of Unfair Labor Practice punishable under Article 248 of the
Labor Code. Respondents maintained that their acts of signing the authorization signifying
support to the filing of a Petition for Certification Election of FFW was merely prompted by their
desire to have a certification election among the rank-and-file employees of PRI with hopes of a
CBA negotiation in due time and not to cause the downfall of NAMAPRI-SPFL. Furthermore,
respondents contended that there was lack of procedural due process and that at the time
NAMAPRI-SPFL demanded their termination, it was no longer the bargaining representative of
the rank-and-file workers of PRI, because the CBA had already expired. Hence, there could be
no justification in PRIs act of dismissing respondents due to disloyalty.
The Labor Arbiter declared the respondents dismissal to be illegal and ordered PRI to reinstate
respondents to their former or equivalent positions without loss of seniority rights and to jointly
and solidarily pay their backwages. On appeal to the NLRC, the commission reversed the
decision of the Labor Arbiter; thus, declaring the dismissal of respondents from employment as
legal.
On petition for certiorari under Rule 65 before the Court of Appeals, the CA reversed and set
aside the NLRC resolution and reinstated the Decision of the Labor Arbiter.
ISSUE: Whether or not the respondents were validly dismissed by PRI NO
HELD:
Petition DENIED.
In terminating the employment of an employee by enforcing the union security clause, the
employer needs to determine and prove that: (1) the union security clause is applicable; (2) the
union is requesting for the enforcement of the union security provision in the CBA; and (3) there
is sufficient evidence to support the decision of the union to expel the employee from the union.
These requisites constitute just cause for terminating an employee based on the union security
provision of the CBA.
As to the first requisite, there is no question that the CBA between PRI and respondents included
a union security clause, specifically, a maintenance of membership as stipulated in Sections 6 of
Article II, Union Security and Check-Off. Following the same provision, PRI, upon written
request from the Union, can indeed terminate the employment of the employee who failed to
maintain its good standing as a union member.

As to the second requisite, it is undisputed that NAMAPRI-SPFL, in two (2) occasions


demanded from PRI to terminate the employment of respondents due to their acts of disloyalty to
the Union.
As to the third requisite, however, the Supreme Court finds no sufficient evidence to support the
decision of PRI to terminate the employment of the respondents. The SC disagrees with PRIs
allegation that respondents were terminated from employment based on acts of disloyalty they
committed when they signed an authorization for the Federation of Free Workers (FFW) to file a
Petition for Certification Election among all rank-and-file employees of PRI; that said acts of
respondents violate the Union Security Clause provided for in the CBA. The mere signing of the
authorization in support of the Petition for Certification Election of FFW is not sufficient ground
to terminate the employment of respondents inasmuch as the petition itself was actually filed
during the freedom period. Nothing in the records would show that respondents failed to
maintain their membership in good standing in the Union. Respondents did not resign or
withdraw their membership from the Union to which they belong. Respondents continued to pay
their union dues and never joined the FFW.
Significantly, the SC is constrained to believe that an "authorization letter to file a petition for
certification election" is different from an actual "Petition for Certification Election." Strictly
speaking, what is prohibited is the filing of a petition for certification election outside the 60-day
freedom period. This is not the situation in this case. If at all, the signing of the authorization to
file a certification election was merely preparatory to the filing of the petition for certification
election, or an exercise of respondents right to self-organization.
Time and again, the SC have adhered to the policy of enhancing the welfare of the workers.
Their freedom to choose who should be their bargaining representative is of paramount
importance. The fact that there already exists a bargaining representative in the unit concerned is
of no moment as long as the petition for certification election was filed within the freedom
period. What is imperative is that by such a petition for certification election the employees are
given the opportunity to make known of who shall have the right to represent them thereafter.
Not only some, but all of them should have the right to do so. What is equally important is that
everyone be given a democratic space in the bargaining unit concerned.
INSULAR HOTEL EMPLOYEES UNION NFL v. WATERFRONT INSULAR HOTEL
DAVAO,
G.R. No. 174040-41, 22 SEPTEMBER 2010, SECOND DIVISION, (J. PERALTA)
FACTS:
Respondent Hotel sent the DOLE, Davao City a Notice of Suspension of Operations notifying
the same that it will suspend its operations for a period of six months due to severe and serious
business losses. In said notice, respondent assured the DOLE that if the company could not

resume its operations within the six-month period, the company would pay the affected
employees all the benefits legally due to them.
During the period of the suspension, the President of Davao Insular Hotel Free Employees
Union, the recognized labor organization in Waterfront Davao, sent respondent Hotel a number
of letters asking management to reconsider its decision. Said letters intimated that the members
of the Union were determined to keep their jobs and that they believed they too had to help and
enable the company to save substantial amounts and greatly reduce payroll costs without
affecting the finances of the families of the employees because they will still have a job from
where they could get their income. Also, the union was open to possible reductions of some
economic benefits as its gesture of sincere desire to help as well as to suspend their CBA
renegotiations with the understanding that while suspended, the same existing CBA shall be
adopted and that all provisions therein shall remain enforced. After series of negotiations,
respondent and DIHFEU-NFL signed a Memorandum of Agreement wherein respondent agreed
to re-open the hotel subject to certain concessions offered by DIHFEU-NFL in its letter.
Two local officers of the National Federation of Labor (NFL) filed a Notice of Mediation before
the National Conciliation and Mediation Board (NCMB) against the respondent Hotel. In said
Notice, it was stated that the Union involved was "DARIUS JOVES/DEBBIE PLANAS ET. AL,
National Federation of Labor." The issue raised in said Notice was the "Diminution of wages and
other benefits through unlawful Memorandum of Agreement." The NCMB called for a
conference to explore the possibility of settling the conflict. In the said conference, the parties
signed a Submission Agreement wherein they chose a voluntary arbitrator to determine whether
or not there was a diminution of wages and other benefits through an unlawful MOA.
The voluntary arbitrator ruled that the MOA in question as invalid as it is contrary to law and
public policy and that there is diminution of wages and other benefits of Union members and
officers under said invalid MOA. The voluntary arbitrator also ordered the immediate
reinstatement of the workers wage rates and other benefits that they were receiving and enjoying
before the signing of the invalid MOA.
On appeal, the Court of Appeals rendered a decision in favor of respondent hotel.
ISSUE:
I.
Whether or not the Memorandum of Agreement (MOA) entered into by the Union and
the respondent Hotel had the effect of allowing diminution of the benefits enjoyed by the
employees. YES
II.

Whether or not the NFL is the proper party to file the complaint NO

HELD:
The petition is not meritorious.

I.
The argument that Article 100 of the Labor Code applies only to benefits already enjoyed
at the time of the promulgation of the Labor Code is without merit.
Article 100. PROHIBITION AGAINST ELIMINATION OR DIMINUTION OF
BENEFITS - Nothing in this Book shall be construed to eliminate or in any way diminish
supplements, or other employee benefits being enjoyed at the time of the promulgation of this
Code.
Clearly, the prohibition against elimination or diminution of benefits set out in Article 100 of the
Labor Code is specifically concerned with benefits already enjoyed at the time of the
promulgation of the Labor Code. Article 100 does not apply to situations arising AFTER
the promulgation date of the Labor Code.
Even assuming arguendo that Article 100 applies to the case at bar, the same does not prohibit a
union from offering and agreeing to reduce wages and benefits of the employees. The right to
free collective bargaining, after all, includes the right to suspend it.
A CBA is "a contract executed upon request of either the employer or the exclusive bargaining
representative incorporating the agreement reached after negotiations with respect to wages,
hours of work and all other terms and conditions of employment, including proposals for
adjusting any grievances or questions arising under such agreement." The primary purpose of a
CBA is the stabilization of labor-management relations in order to create a climate of a sound
and stable industrial peace. In construing a CBA, the courts must be practical and realistic and
give due consideration to the context in which it is negotiated and the purpose which it is
intended to serve.
Lastly, the Supreme Court is not unmindful of the fact that DIHFEU-NFL's Constitution and ByLaws specifically provides that "the results of the collective bargaining negotiations shall be
subject to ratification and approval by majority vote of the Union members at a meeting
convened, or by plebiscite held for such special purpose." Accordingly, it is undisputed that the
MOA was not subject to ratification by the general membership of the Union. It must be
remembered that after the MOA was signed, the members of the Union individually signed
contracts denominated as "Reconfirmation of Employment." Thus, the individual members of the
union cannot feign knowledge of the execution of the MOA. Each contract was freely entered
into and there is no indication that the same was attended by fraud, misrepresentation or duress.
The signing of the individual "Reconfirmation of Employment" should, therefore, be deemed an
implied ratification by the Union members of the MOA.
Under Article 231 of the Labor Code and Sec. 1, Rule IX, Book V of the Implementing Rules,
the parties to a collective bargaining agreement are required to furnish copies of the appropriate
Regional Office with accompanying proof of ratification by the majority of all the workers in a
bargaining unit. This was not done in the case at bar. But the CBA cannot be said as invalid or
void considering that the employees have enjoyed benefits from it. They cannot receive benefits

under provisions favorable to them and later insist that the CBA is void simply because other
provisions turn out not to the liking of certain employees. Moreover, the two CBAs prior to the
current CBA were not also formally ratified, yet the employees are basing their present claims on
these CBAs. It is iniquitous to receive benefits from a CBA and later on disclaim its validity.
II.
The respondent hotel in questioning the propriety of the complaint and the jurisdiction of
the NCMB when said complaint was filed by local officers of the NFL which were not
personalities in the case submitted for voluntary arbitration or with the Submission Agreement /
Memorandum of Agreement is with merit considering the proper party to file the case should
have been DIHFEU-NFL.
Section 3, Rule IV of the NCMB Manual of Procedure provides who may file a notice of
preventive mediation, to wit:
Any certified or duly recognized bargaining representative may file a notice or declare a
strike or request for preventive mediation in cases of bargaining deadlocks and unfair
labor practices. x x x
Pursuant to Article 260 of the Labor Code, the parties to a CBA shall name or designate their
respective representatives to the grievance machinery and if the grievance is unsettled in that
level, it shall automatically be referred to the voluntary arbitrators designated in advance by
parties to a CBA. Consequently, only disputes involving the union and the company shall be
referred to the grievance machinery or voluntary arbitrators.
If the individual members of the Union have no authority to file the case, the federation to which
the local union is affiliated have no standing to file in behalf of the local union. A local union
does not owe its existence to the federation with which it is affiliated. It is a separate and distinct
voluntary association owing its creation to the will of its members. Mere affiliation does not
divest the local union of its own personality, neither does it give the mother federation the
license to act independently of the local union. It only gives rise to a contract of agency, where
the former acts in representation of the latter. Hence, local unions are considered principals while
the federation is deemed to be merely their agent. Being merely an agent of the local union, NFL
should have presented its authority to file the Notice of Mediation.
The NFL had no authority to file the complaint in behalf of the individual employees and it
should have been the recognized union, the DIHFEU-NFL, which should have filed the case.

COLLEGE OF THE IMMACULATE CONCEPTION v. NATIONAL LABOR RELATIONS


COMMISSION and ATTY. MARIUS F. CARLOS, PH.D.
(G.R. No. 167563, 22 March 2010, J. Peralta)
FACTS:

College of the Immaculate Conception (CIC) appointed Atty. Marius F. Carlos (Atty. Carlos) as Dean of
the Department of Business Administration and Accountancy. CIC reminded Atty. Carlos that upon the
expiration of his term as Dean, he will be appointed as full-time professor of Law and Accounting without
diminution of his teaching salary as Dean. After his term, Atty. Carlos was given eight (8) teaching loads
as full-time professor, but he requested for the payment of overload pay. He argued that the regular full
time load of a faculty member is only six. CIC denied Atty. Carlos claim, stating that a full time faculty
member is one who teaches at least eight (8) loads per semester. Further, CIC directed Atty. Carlos to
explain why no disciplinary action should be taken against him for engaging in the practice of law and
teaching law in another law school without prior permission from CIC. Exchanges of letters between the
parties were made arguing their respective claims. Their contradicting claims resulted to Atty. Carlos not
being assigned any teaching load for the succeeding semester. Thus, Atty. Carlos filed a complaint against
CIC for unfair labor practice and illegal dismissal.
The Labor Arbiter (LA) ruled that Atty. Carlos was illegally dismissed. CIC then appealed to the National
Labor Relations Commission (NLRC). The NLRC reversed the LAs decision. Further, it deleted the
award of moral damages and exemplary damages for lack of factual and legal basis.
CIC, then, filed a motion for Clarification and/or Partial Reconsideration praying that since Atty. Carlos
was not illegally dismissed, he should be directed to refund the petitioner all the amounts he received by
way of payroll reinstatement. The NLRC denied said motion. Thus, CIC filed a petition for certiorari with
the Court of Appeals (CA). The CA dismissed the petition and sustained the NLRC ruling. Hence, this
petition.
ISSUE:
Whether Atty. Carlos should reimburse petitioner all the salaries and benefits he received pursuant to the
immediate execution of the LAs erroneous decision ordering his reinstatement as Department Dean
RULING:
It is not disputed at this point that the LA erred in ordering Atty. Carlos reinstatement as Dean. The
NLRC ruled that Atty. Carlos should have been merely reinstated as a full-time law professor, because the
term of his appointment as Dean had long expired. However, such mistake on the part of the LA cannot,
in any way, alter the fact that during the pendency of the appeal of his decision, his order for Atty. Carlos
reinstatement as Dean was immediately executory. Article 223 of the Labor Code explicitly provides that:
Art. 223. - Appeal. x x x
xxxx
In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as
the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The
employee shall either be admitted back to work under the same terms and conditions prevailing prior to
his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting
of a bond by the employer shall not stay the execution for reinstatement provided therein.

Therefore, CIC could not validly insist that it is entitled to reimbursement for the payment of the salaries
of Atty. Carlos pursuant to the execution of the LA's decision by simply arguing that the LA's order for
reinstatement is incorrect. The pertinent law on the matter is not concerned with the wisdom or propriety
of the LA's order of reinstatement, for if it was, then it should have provided that the pendency of an
appeal should stay its execution. After all, a decision cannot be deemed irrefragable unless it attains
finality.
An employee cannot be compelled to reimburse the salaries and wages he received during the pendency
of his appeal, notwithstanding the reversal by the NLRC of the LA's order of reinstatement. In this case,
there is even more reason to hold the employee entitled to the salaries he received pending appeal,
because the NLRC did not reverse the LA's order of reinstatement, but merely declared the correct
position to which respondent is to be reinstated, i.e., that of full-time professor, and not as Dean.
NFD INTERNATIONAL MANNING AGENTS, INC./BARBER SHIP MANAGEMENT LTD.
v. ESMERALDO C. ILLESCAS
(G.R. No. 183054, 29 September 2010, J. Peralta)
FACTS:
Esmeraldo C. Illescas (Illescas) entered into a Contract of Employment with NFD International Manning
Agents, Inc.,(NFD) acting for and in behalf of its foreign principal, co-NFD Barber Ship Management,
Ltd. when Illescas had been on board the vessel for seven months, Captain Jaspal Singh and Chief Officer
Maydeo Rajev ordered Illescas to carry 25 fire hydrant caps from the deck to the engine workshop, then
back to the deck to refit the caps. The next day, while carrying a heavy basketful of fire hydrant caps,
Illescas felt a sudden snap on his back, with pain that radiated down to the left side of his hips. He
immediately informed the ship captain about his condition, and he was advised to take pain relievers. As
the pain was initially tolerable, he continued with his work. After a few days, the pain became severe, and
Illescas had difficulty walking. When the vessel was in Japan, Illescas was brought to the
Higashiogishima Clinic. Illescas was diagnosed to be suffering from lumbago and sprain. The doctor gave
Illescas medication and advised him to wear a corset, avoid lifting heavy objects and get further
examination and treatment if the symptoms persisted.
Despite the lighter work assigned to Illescas, he continued to experience excruciating pain. On June 13,
2003, NFD was referred to a doctor upon arrival of M/V Shinrei at the port of Hay Point, Australia. The
doctor declared that Illescas was unfit to work, and recommended that Illescas return home for further
management.
Illescas wrote NFD demanding the payment of disability benefit. The claim was referred to Pandiman
Philippines, Inc., the local corIllescas of the P&I Club with which NFD Barber Ship Management Ltd.
was affiliated. In the meantime, Illescas filed a Complaint with the Arbitration Branch of the NLRC.
The parties failed to arrive at an agreement so the NLRC directed them to file their Position Papers. The
Labor Arbiter rendered a Decision finding Illescas entitled to disability benefit under the CBA. NLRC
affirmed but modified the decision of the Labor Arbiter.
Illescas filed a special civil action for certiorari with the Court of Appeals (CA). The CA ruled in favor of
Illescas. Hence, the petition.

ISSUES:
Whether the disability is compensable under the CBA
RULING:
The Court notes that the CBA states that the degree of disability, which the company is liable to pay, shall
be determined by a doctor appointed by the company. In this case, the POEA schedule is the basis of the
assessment whether a seafarers permanent disability is 50 percent or more, or less than 50 percent. The
Alegre Medical Clinic, NFDs accredited clinic, found that Illescas had a Grade 8 disability (33.59%),
described as "moderate rigidity or two-thirds (2/3) loss of motion or lifting power of the trunk." Dr.
Almeda, Illescass independent doctor, on the other hand, found Illescas to be suffering from Grade 11
disability (14.93%), described as "slight rigidity or one-third (1/3) loss of motion or lifting power of the
trunk."
In HFS Philippines, Inc. v. Pilar, the Court held that a claimant may dispute the company-designated
physicians report by seasonably consulting another doctor. In such a case, the medical report issued by
the latter shall be evaluated by the labor tribunal and the court based on its inherent merit. In this case,
NFD never questioned the weight given by the Labor Arbiter and the Court of Appeals to the findings of
Illescas independent doctor in regard to the disability of Illescas.
This case involves the propriety of the award of disability compensation under the CBA to Illescas, who
worked as a seaman in the foreign vessel of NFD Barber Ship Management Ltd. The award of attorneys
fees is justified under Article 2208 (2) of the Civil Code. Even if NFDs did not withhold payment of a
smaller disability benefit, Illescas was compelled to litigate to be entitled to a higher disability benefit.
Moreover, in HFS Philippines, Inc. v. Pilar and Iloreta v. Philippine Transmarine Carriers, Inc., the Court
sustained the NLRCs award of attorneys fees, in addition to disability benefits to which the concerned
seamen-claimants were entitled. It is no different in this case wherein Illescas has been awarded disability
benefit and attorneys fees by the Labor Arbiter and the Court of Appeals. It is only just that Illescas be
also entitled to the award of attorneys fees.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. JOEY B. TEVES
(G.R. No. 143511, 15 November 2010, J. Peralta)
FACTS:
Joey Teves (Teves) was employed by petitioner Philippine Long Distance Telephone Company (PLDT)
in 1981 as Clerk II until his termination from service on June 1, 1992. PLDT terminated Teves through an
Inter-Office Memorandum dated May 29, 1992 on account of his three (3) unauthorized leaves of absence
committed within three (3) years in violation of petitioners rules and regulations.
Teves first absent was from August 23 to September 3, 1990 as his wife gave birth on August 25 but was
only discharged from the hospital on September 2 due to complications. Teves called through a third
party to inform PLDT that he will go on an extended leave. His second absent was from May 39 to June
12, 1991. Teves, upon reporting back to work, explained that his absences were due to the fact that his
eldest and youngest daughters were sick and had to be confined. The third absence occurred after eight

months when Teves availed of a seven-day leave of absence and extended such leave to complete his
annual vacation leave, which was on February 11, 1992. However, Teves failed to report for work from
February 11 to 19, 1992. In an Inter-Office Memorandum, Teves was terminated from service.
Teves filed a complaint for, among others, illegal dismissal. The Labor Arbiter (LA) ruled that the
dismissal is lega. Teves appealed to the NLRC and the NLRC reversed the LAs ruling. PLDT filed a
petition for Certiorari. The Court of Appeals (CA) affirmed the illegality of Teves dismissal. Hence, this
petition.
ISSUE:
Whether sufficient grounds exists for Teves dismissal from service
RULING:
The petition is partly granted.
Notably, the alleged two prior incidents of Teves unauthorized absences were due to a family emergency
or sickness. Teves explanations should have been given a kind consideration by PLDT. An employee
cannot anticipate when sickness or emergencies in the family may happen, thus, he may not be able to
give prior notice or seek prior approval of his absence, but could only do so after the occurrence of the
incident.
However, Teves had shown that he had given petitioner prior notice of his absences from August 23 to
September 3, 1990. As the NLRC found, petitioner admitted that "on August 23, 1990, Teves called up
through a third party to inform PLDT that he would go on an extended leave." Such admission was even
reiterated in PLDTs petition for certiorari filed with the Supreme Court. Notably, when Teves returned
for work on September 4, 1990, he immediately submitted a letter to petitioner explaining his absence and
attaching a medical certificate thereto to attest to the reason of his absence. Thus, the suspension imposed
on him was not proper.
As to Teves second unauthorized absence, while he had relayed his inability to report for work on May
29, 1991 to a co-employee, who unfortunately did not also report for work, he was negligent in not
verifying whether his notice of absence had reached petitioner, and the duration of his absence. While
respondent offered a justifiable reason for his absences from May 29 to June 12, 1990, i.e., his two
daughters were sick and confined at a nearby clinic, however, the court finds that he failed to give PLDT
prior notice of his absence, thus, such absence was properly considered as unauthorized.
Thus, Teves absence from February 11 to 19, 1991 which was made to prolong payment of his
demandable financial obligations in the office, and which absence was found by both the NLRC and the
CA to be unjustified, was Teves second unauthorized absence. The court finds that Teves termination
for committing three unauthorized absences within a three-year period had no basis; thus, there was no
valid cause for respondent's dismissal.
Even assuming that Teves absenteeism constitutes willful disobedience, such offense does not warrant
respondent's dismissal. Not every case of insubordination or willful disobedience by an employee

reasonably deserves the penalty of dismissal. There must be a reasonable proportionality between the
offense and the penalty.
PLDT's claim that the alleged previous infractions may be used as supporting justification to a subsequent
similar offense, which would merit dismissal, finds no application in this case. Teves absence from
August 23 to September 3, 1990 was justified and not unauthorized as there was prior notice. His absence
from May 29 to June 12, 1991, although found to be unauthorized, was not at all unjustified. Thus, his
absence during the period from February 11 to 19, 1991, being the only unauthorized and unjustified
absence and his second unauthorized absence, should not merit the penalty of dismissal.
While management has the prerogative to discipline its employees and to impose appropriate penalties on
erring workers, pursuant to company rules and regulations, however, such management prerogatives must
be exercised in good faith for the advancement of the employers interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws and valid agreements. The
Court is wont to reiterate that while an employer has its own interest to protect, and pursuant thereto, it
may terminate an employee for a just cause, such prerogative to dismiss or lay off an employee must be
exercised without abuse of discretion. Its implementation should be tempered with compassion and
understanding. The employer should bear in mind that, in the execution of said prerogative, what is at
stake is not only the employees position, but his very livelihood, his very breadbasket.
Dismissal is the ultimate penalty that can be meted to an employee. Even where a worker has committed
an infraction, a penalty less punitive may suffice, whatever missteps maybe committed by labor ought not
to be visited with a consequence so severe. This is not only the laws concern for the workingman. There
is, in addition, his or her family to consider. Unemployment brings untold hardships and sorrows upon
those dependent on the wage-earner.
ST. LUKE'S MEDICAL CENTER, INC. and ROBERT KUAN, Chairman v. ESTRELITO
NOTARIO
(G.R. No. 152166, 20 October 2010, J. Peralta)

FACTS:
St. Lukes Medical Center, Inc. (St. Lukes) employed Estrelito Notario (Notario) as In-House Security
Guard. Nimaya Electro Corporation installed a closed-circuit television (CCTV) system in the premises of
petitioner hospital to enhance its security measures and conducted an orientation seminar for the in-house
security personnel on the proper way of monitoring video cameras, subject to certain guidelines.
On December 30, 1996, Notario was on duty from 6:00 p.m. to 6:00 a.m. of the following day. In the
evening of the same day, Justin Tibon, a foreigner from Majuro, Marshall Island, then attending to his 3year-old daughter, Andanie De Brum at Room 257, reported to the management of petitioner hospital
about the loss of his mint green traveling bag, which was placed inside the cabinet. Acting on the
complaint of Tibon, the Security Department of petitioner hospital conducted an investigation. When the
tapes of video camera recorder (VCR) no. 3 covering the subject period were reviewed, it was shown that
the cameras failed to record any incident of theft at room 257.

St. Lukes issued a Memorandum to Notario, the CCTV monitoring staff on duty, directing him to explain
in writing, within 24 hours upon receipt thereof, why no disciplinary action should be taken against him
for violating the normal rotation/sequencing process of the VCR and, consequently, failed to capture the
theft of Tibon's traveling bag at room 257. Notario explained that on the subject dates, he was the only
personnel on duty as nobody wanted to assist him. Because of this, he decided to focus the cameras on the
Old and New Maternity Units, as these two units have high incidence of crime.
Finding the explanation unreasonable, St. Lukes served on Notario a copy of the Notice of Termination
dismissing him on the ground of gross negligence/inefficiency.
Notario filed a complaint for illegal dismissal against St. Lukes and its Chairman Robert Kuan (Kuan).
The Labor Arbiter dismissed Notarios complaint for illegal dismissal against St. Lukes and Kuan. On
appeal, the NLRC reversed the said ruling. St. Lukes and Kuan filed a petition for Certiorari with the
Court of Appeals, but the same was denied. Hence, this petition.
ISSUE:
Whether the dismissal of Notario is valid
RULING:
To effectuate a valid dismissal from employment by the employer, the Labor Code has set twin
requirements, namely: (1) the dismissal must be for any of the causes provided in Article 282 of the Labor
Code; and (2) the employee must be given an opportunity to be heard and defend himself. This first
requisite is referred to as the substantive aspect, while the second is deemed as the procedural aspect.
An employer can terminate the services of an employee only for valid and just causes, which must be
supported by clear and convincing evidence. The employer has the burden of proving that the dismissal
was indeed for a valid and just cause.
A perusal of St. Lukes CCTV Monitoring Guidelines, disseminated to all in-house security personnel,
reveals that that there is no categorical provision requiring an in-house security personnel to observe a
rotation sequence procedure in focusing the cameras so that the security monitoring would cover as many
areas as possible.
Under Article 282 (b) of the Labor Code, an employer may terminate an employee for gross and habitual
neglect of duties. Neglect of duty, to be a ground for dismissal, must be both gross and habitual. Gross
negligence connotes want of care in the performance of ones duties. Habitual neglect implies repeated
failure to perform ones duties for a period of time, depending upon the circumstances. A single or
isolated act of negligence does not constitute a just cause for the dismissal of the employee. Under the
prevailing circumstances, respondent exercised his best judgment in monitoring the CCTV cameras so as
to ensure the security within the hospital premises. Verily, assuming arguendo that Notario was negligent,
although this Court finds otherwise, the lapse or inaction could only be regarded as a single or isolated act
of negligence that cannot be categorized as habitual and, hence, not a just cause for his dismissal.
St. Lukes anchor on the postulate that even a single or isolated act of negligence by respondent

constitutes a just cause for his dismissal as it engendered the possibility of a legal action that may be
taken against them by the owner of the lost items. This is purely speculative. The Certification, dated July
8, 1999, issued by Renato Politud Valebia, Police Superintendent, Station Commander of Galas Police
Station (Station II), stated that no incident of theft was reported by the management of petitioner hospital
or any of its authorized representatives involving the loss of the plane tickets and other personal
belongings of Justin Tibon and Andanie De Brum. Even the supposed complainant, Tibon, did not
institute any complaint against St. Lukes. Therefore, it cannot be said that St. Lukes and Kuan incurred
actual loss or pecuniary damage.
St. Lukes and Kuan question the findings of the CA that there was no compliance with the twin-notice
rule and hearing, while Notario maintains that they violated his right to due process.1avvphi1
The employee must be furnished two written notices: the first notice apprises the employee of the
particular acts or omissions for which his dismissal is sought, and the second is a subsequent notice,
which informs the employee of the employer's decision to dismiss him.
The CA found that St. Lukes failed to comply with the rule on twin notice and hearing as it merely
required respondent to give his written explanation within 24 hours and, thereafter, ordered his dismissal.
VARORIENT SHIPPING CO., INC., and ARIA MARITIME CO., LTD., v. GIL A. FLORES
(G.R. No. 161934, 06 October 2010, J. Peralta)
FACTS:
Varorient Shipping Co., Inc., employed Flores, in behalf of its foreign principal, Aria Maritime Co., Ltd.
of Piraeus, Greece, for the position of Chief Officer on board M/V Aria. During his employment, the
master of the vessel sent Flores to the Centre Medical de Ngodi at Doula, Cameroon, where he was
treated for three days due to the shooting pain in the lower extremities, particularly on his right foot.
Flores was declared not fit to work. The doctor recommended Floress repatriation to the Philippines for
continuing treatment.
When he reported back to work, he was referred to the company physician, Dr. John H.E. Cusi who, in
turn, referred him to Dr. Irene B. Roman-Igual, a neurologist at Makati Medical Center. On June 30,
1997, Flores was subjected to the Computed Tomography Scan (CT Scan). Dr. Igual recommended
Flores confinement for at least two weeks for P.T. [physical therapy] and medications; if not resolved,
may need surgical decompression.
In a letter to Varorient, Flores, through his counsel, stated that due to the gross and evident bad faith of
Varorient Shipping Co. Inc. and Aria Maritime Co., Ltd. in refusing to grant him continued medical
assistance until he becomes fit to work, as recommended by their company doctors, he was forced to seek
medical treatment at his own expense. Flores demanded that Varorient Shipping Co. Inc. and Aria
Maritime Co., Ltd. should provide him medical treatment and pay him sickness wages and disability
compensation, within five (5) days from receipt of the letter; otherwise, he would be constrained to
institute appropriate legal action against them.
His letter being left unheeded, Flores filed a Complaint against Varorient Shipping Co. Inc. and Aria
Maritime Co., Ltd.s. Acting Executive Labor Arbiter Pedro C. Ramos dismissed Flores's complaint for

permanent and total disability benefits, sickness wages and all other claims and, likewise, Varorient
Shipping Co. Inc. and Aria Maritime Co., Ltd.'s counterclaim for damages, for lack of merit.
The NLRC reversed said decision. The Court of Appeals affirmed the NLRC decision with modification,
stating that Varorient Shipping Co., Inc. and Aria Maritime Co., Ltd., are, jointly and severally, ordered to
pay private Flores Gil A. Flores the balance of sickness wages and the reimbursement of medical and
surgical expenses. Hence, the instant petition.
ISSUE:
Whether Flores is entitled to the balance of his sickness wages and the reimbursement of medical and
surgical expenses
RULING:
Contrary to Varorient Shipping Co. Inc. and Aria Maritime Co., Ltd.'s contention, Flores is entitled to
sickness wages. The shooting pain on his right foot is an injury which he suffered during the course of his
employment and, therefore, obligates Varorient Shipping Co. Inc. and Aria Maritime Co., Ltd. to
compensate him and provide him the appropriate medical treatment.
This is in consonance with the mandated provisions under Section 20 B (1), (2), (3), (4), and (5) of the
Standard Terms and Conditions Governing the Employment of Filipino Seafarers On Board Ocean-Going
Vessels, pursuant to Department Order No. 4, series of 2000, of the Department of Labor and
Employment (by then Secretary Bienvenido E. Laguesma), adopted on May 31, 2000.
On June 21, 1997, Flores was repatriated to the Philippines and declared fit to work on November 7,
1997, or a total period of 141 days. Applying the said provisions of the Standard Contract, Flores is
entitled to receive sickness wages, covering the maximum period of 120 days, or the amount of
US$4,800.00. The NLRC, as affirmed by the CA, found that Varorient Shipping Co. Inc. and Aria
Maritime Co., Ltd. are liable to pay Flores the total amount of US$3,790.00 (US$4,800.00 less the
amount of US$1,010.00 which he already received by virtue of the Receipt and Quitclaim dated June 25,
1997).
As pointed out by the CA, Varorient Shipping Co. Inc. and Aria Maritime Co., Ltd., in their motion for
reconsideration of the NLRC Decision, raised for the first time that they had given an amount to Flores
and belatedly submitted two (2) cash vouchers. The CA observed that the said cash vouchers do not bear
the name and logo of Varorient Shipping Co. Inc. and Aria Maritime Co., Ltd.s, unlike the check voucher
they issued for the reimbursement of the medical expenses of Flores amounting to P4,896.50, and that
these vouchers were supposedly already in existence or in the possession of the Varorient Shipping Co.
Inc. and Aria Maritime Co., Ltd. since April 1997, but they never interposed such fact in their pleadings,
e.g., Position Paper, Supplement to Flores's Position Paper, or Opposition to Complainant's Appeal. The
Court sees no reason to disturb this factual finding.
Moreover, Varorient Shipping Co. Inc. and Aria Maritime Co., Ltd. were remiss in providing continuous
treatment for Flores in accordance with the recommendation of their company physician that Flores

should undergo a two-week confinement and physical therapy and, if his condition does not improve, then
he would have to be subjected to surgical decompression to alleviate the pain on his right foot. Flores's
ailment required urgent medical response, thereby necessitating him to seek immediate medical attention,
even at his own expense. The CA enumerated the medical expenses of Flores for which Varorient
Shipping Co. Inc. and Aria Maritime Co., Ltd. would be liable.
The Receipt and Quitclaim executed by Flores lacks the elements of voluntariness and free will and,
therefore, does not absolve Varorient Shipping Co. Inc. and Aria Maritime Co., Ltd. from liability in
paying him the sickness wages and other monetary claims.
Although Flores avers that his signature on the said quitclaim was a forgery, the CA relied on the factual
findings of the labor arbiter and the NLRC that gave credence to it. Thus, the matter to be resolved would
be whether the Receipt and Quitclaim can be considered substantial compliance to the contractual
obligation by Varorient Shipping Co. Inc. and Aria Maritime Co., Ltd.s under the standard employment
contract.
In More Maritime Agencies, Inc. v. NLRC, the Court ruled that the law does not consider as valid any
agreement to receive less compensation than what a worker is entitled to recover nor prevent him from
demanding benefits to which he is entitled. Quitclaims executed by the employees are thus commonly
frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the
workers legal rights, considering the economic disadvantage of the employee and the inevitable pressure
upon him by financial necessity. Thus, it is never enough to assert that the parties have voluntarily entered
into such a quitclaim. There are other requisites, to wit: (a) that there was no fraud or deceit on the part of
any of the parties; (b) that the consideration of the quitclaim is credible and reasonable; and (c) that the
contract is not contrary to law, public order, public policy, morals or good customs, or prejudicial to a
third person with a right recognized by law.
A perusal of the provisions of the Receipt and Quitclaim shows that Flores would be releasing and
discharging Varorient Shipping Co. Inc. and Aria Maritime Co., Ltd. from all claims, demands, causes of
action, and the like in an all-encompassing manner, including the fact that he had not contracted or
suffered any illness or injury in the course of his employment and that he was discharged in good and
perfect health. These stipulations clearly placed Flores in a disadvantageous position vis--vis the
Varorient Shipping Co. Inc. and Aria Maritime Co., Ltd.s.

SAN MIGUEL PROPERTIES PHILIPPINES, INC.,


vs. GWENDELLYN ROSE S. GUCABAN
G.R. No. 153982, July 18, 2011, THIRD DIVISION, (J. PERALTA)
Gwendellyn Rose Gucaban (Gucaban) was well into the tenth year of her career as a
licensed civil engineer when she joined the workforce of petitioner San Miguel Properties
Philippines, Inc. (SMPI). She had been in continuous service in the latter capacity until her
severance from the company. Gucaban then filed for a complaint of illegal dismissal alleging
that her separation from service was practically forced upon her by management. She claimed
that she was informed that the company was planning to reorganize its manpower in order to cut
on costs, and that she must file for resignation or otherwise face termination; and that SMPI

furnished her a blank resignation form which she refused to sign. SMPI argued that it truly
encountered a steep market decline in 1997 that necessitated cost-cutting measures and
streamlining of its employee structure which, in turn, would require the abolition of certain job
positions; Gucabans post as project development manager was one of such positions; and that
on her resignation, she signed a document denominated as Receipt and Release whereby she
acknowledged receipt of cash representing her monetary benefits and waived her right to demand
satisfaction of any employment-related claims which she might have against management. SMPI
admitted having made several other appointments in June 1998, but the same, however, were
supposedly part of the full implementation of its reorganization scheme.
ISSUE:
Whether or not Gucaban voluntarily resigned from his office in SMPI
RULING:
Resignation the formal pronouncement or relinquishment of a position or office is the
voluntary act of an employee who is in a situation where he believes that personal reasons cannot
be sacrificed in favor of the exigency of the service, and he has then no other choice but to
disassociate himself from employment. The intent to relinquish must concur with the overt act of
relinquishment; hence, the acts of the employee before and after the alleged resignation must be
considered in determining whether he in fact intended to terminate his employment. In illegal
dismissal cases, fundamental is the rule that when an employer interposes the defense of
resignation, on him necessarily rests the burden to prove that the employee indeed voluntarily
resigned. Guided by these principles, we agree with the Court of Appeals that with the availing
evidence, SMPI was unable to discharge this burden.
While indeed the abolition of Gucabans position as a consequence of petitioners
supposed reorganization plan is not the ground invoked in this case of termination, still, the
question of whether or not there was such reorganization plan in place at the time of Gucabans
separation from the company, is material to the determination of whether her resignation was of
her own volition as claimed by SMPI, inasmuch as the facts of this case tell that Gucaban could
not have filed for resignation had Gonzalez not communicated to her the alleged reorganization
plan for the company.
It is not difficult to see that, shortly prior to and at the time of Gucabans alleged
resignation, there was actually no genuine corporate restructuring plan in place as yet. In other
words, although the company might have been suffering from losses due to market decline as
alleged, there was still no concrete plan for a corporate reorganization at the time Gonzalez
presented to Gucaban the seemingly last available alternative options of voluntary resignation
and termination by abolition of her office. Certainly, inasmuch as the necessity of corporate
reorganization generally lies within the exclusive prerogative of management, Gucaban at that
point had no facility to ascertain the truth behind it, and neither was she in a position to question
it right then and there. Indeed, she could not have chosen to file for resignation had SMPI not
broached to her the possibility of her being terminated from service on account of the supposed
reorganization.

Lastly, reinstatement and payment of backwages, as the normal consequences of illegal


dismissal, presuppose that the previous position from which the employee has been removed is
still in existence or there is an unfilled position of a nature, more or less, similar to the one
previously occupied by said employee. Yet, it has been more than a decade since the incident
which led to Gucabans involuntary resignation took place and, hence, with the changes in
SMPIs corporate structure through the years, the former position occupied by Gucaban, or an
equivalent thereof, may no longer be existing or is currently occupied. Furthermore, there is the
possibility that Gucabans rejoining SMPIs workforce would only exacerbate the tension and
strained relations which in the first place had given rise to this incident. This, considering that as
project development manager she was holding a key position in the company founded on trust
and confidence and, hence, there is also the possibility of compromising her efficiency and
productivity on the job. For these two reasons, the ruling of the Court of Appeals is modified in
this respect. In lieu of reinstatement, an award of separation pay is in order, equivalent to one (1)
month salary for every year of service.

SAN MIGUEL FOODS, INCORPORATED vs.


SAN MIGUEL CORPORATION SUPERVISORS and EXEMPT UNION
G.R. No. 146206, August 1, 2011, THIRD DIVISION, (J. Peralta)
In G.R. No. 110399, previously decided by the SC held that even if they handle
confidential data regarding technical and internal business operations, supervisory employees 3
and 4 and the exempt employees of San Miguel Foods, Inc. (SMFI) are not to be considered
confidential employees, because the same do not pertain to labor relations, particularly,
negotiation and settlement of grievances. Pursuant to the said decision, Department of Labor and
Employment National Capital Region (DOLE-NCR) conducted pre-election conferences.
However, there was a discrepancy in the list of eligible voters, i.e., SMFI submitted a list of 23
employees for the San Fernando plant and 33 for the Cabuyao plant, while Union listed 60 and
82, respectively. On the date of said election, SMFI filed the Omnibus Objections and Challenge
to Voters, questioning the eligibility to vote by some of its employees on the grounds that some
employees do not belong to the bargaining unit which respondent seeks to represent or that there
is no existence of employer-employee relationship with SMFI and that some are confidential
employees, employees not covered by the bargaining unit, or employees who are members of
other unions. Union averred that (1) the bargaining unit contemplated in the original petition is
the Poultry Division of San Miguel Corporation, now known as San Miguel Foods, Inc.; (2) it
covered the operations in Calamba, Laguna, Cavite, and Batangas and its home base is either in
Cabuyao, Laguna or San Fernando, Pampanga; and (3) it submitted individual and separate
declarations of the employees whose votes were challenged in the election.
Based on the results on the final results of election, the Med-Arbiter issued the Order
stating that since the "Yes" vote received 97% of the valid votes cast, SMCSEU is certified to be
the exclusive bargaining agent of the supervisors and exempt employees of petitioner's Magnolia
Poultry Products Plants in Cabuyao, San Fernando, and Otis.
ISSUES:
1) Whether or not employees assigned to the live chicken are covered by the bargaining unit
2) Whether CA erred in not excluding the positions of Human Resource Assistant and
Personnel Assistant in the definition of a confidential employee
RULING:
Employees assigned to the live chicken are covered by the bargaining unit
In National Association of Free Trade Unions v. Mainit Lumber Development Company
Workers Union United Lumber and General Workers of the Phils, the Court, taking into
account the "community or mutuality of interests" test, ordered the formation of a single
bargaining unit consisting of the Sawmill Division in Butuan City and the Logging Division in
Zapanta Valley, Kitcharao, Agusan [Del] Norte of the Mainit Lumber Development Company. It
held that while the existence of a bargaining history is a factor that may be reckoned with in
determining the appropriate bargaining unit, the same is not decisive or conclusive. Other factors
must be considered. The test of grouping is community or mutuality of interest. This is so
because the basic test of an asserted bargaining units acceptability is whether or not it is

fundamentally the combination which will best assure to all employees the exercise of their
collective bargaining rights. Certainly, there is a mutuality of interest among the employees of
the Sawmill Division and the Logging Division. Their functions mesh with one another. One
group needs the other in the same way that the company needs them both. There may be
differences as to the nature of their individual assignments, but the distinctions are not enough to
warrant the formation of a separate bargaining unit.
Thus, applying the ruling to the present case, the Court affirms the finding of the CA that
there should be only one bargaining unit for the employees in Cabuyao, San Fernando, and
Otis of Magnolia Poultry Products Plant involved in "dressed" chicken processing and Magnolia
Poultry Farms engaged in "live" chicken operations. Certain factors, such as specific line of
work, working conditions, location of work, mode of compensation, and other relevant
conditions do not affect or impede their commonality of interest. Although they seem separate
and distinct from each other, the specific tasks of each division are actually interrelated and there
exists mutuality of interests which warrants the formation of a single bargaining unit.
CA is correct in ruling the positions of Human Resource Assistant and Personnel Assistant
are confidential employees
A confidential employee is one entrusted with confidence on delicate, or with the
custody, handling or care and protection of the employers property. Confidential employees,
such as accounting personnel, should be excluded from the bargaining unit, as their access to
confidential information may become the source of undue advantage. However, such fact does
not apply to the position of Payroll Master and the whole gamut of employees who, as perceived
by petitioner, has access to salary and compensation data. The CA correctly held that the position
of Payroll Master does not involve dealing with confidential labor relations information in the
course of the performance of his functions. Since the nature of his work does not pertain to
company rules and regulations and confidential labor relations, it follows that he cannot be
excluded from the subject bargaining unit.

ATOK BIG WEDGE COMPANY, INC. vs. JESUS P. GISON


G.R. No. 169510, August 8, 2011, THIRD DIVISION, (J. Peralta)
Jesus P. Gison (Gison) was engaged as part-time consultant on retainer basis by Atok Big
Wedge Company (Atok), Inc. through its then Asst. Vice-President and Acting Resident
Manager, Rutillo A. Torres. As a consultant on retainer basis, Gison assisted Atok's retained
legal counsel with matters pertaining to the prosecution of cases against illegal surface occupants
within the area covered by the company's mineral claims. Gison was likewise tasked to perform
liaison work with several government agencies, which he said was his expertise. Atok did not
require the former to report to its office on a regular basis, except when occasionally requested
by the management to discuss matters needing his expertise as a consultant. As payment for his
services, respondent received a retainer fee of P3,000.00 a month, which was delivered to him
either at his residence or in a local restaurant. The parties executed a retainer agreement, but such
agreement was misplaced and can no longer be found; and the said arrangement continued for
the next eleven years. Sometime thereafter, since Gison was getting old, he requested that
petitioner cause his registration with the Social Security System (SSS), but Atok did not accede
to his request. He later reiterated his request but it was ignored by respondent considering that he
was only a retainer/consultant. The resident manager of Atok, then, issued a Memorandum
advising Gison that within 30 days from receipt thereof, Atok is terminating his retainer contract
with the company since his services are no longer necessary. Gison filed a Complaint for illegal
dismissal, unfair labor practice, underpayment of wages, non-payment of 13th month pay,
vacation pay, and sick leave pay with the National Labor Relations Commission (NLRC).
ISSUE:
Whether or not there exist an employer-employee relationship between Gison and Atok
RULING:
Well-entrenched is the doctrine that the existence of an employer-employee relationship
is ultimately a question of fact and that the findings thereon by the Labor Arbiter and the NLRC
shall be accorded not only respect but even finality when supported by substantial
evidence. Being a question of fact, the determination whether such a relationship exists between
petitioner and respondent was well within the province of the Labor Arbiter and the NLRC.
Being supported by substantial evidence, such determination should have been accorded great
weight by the CA in resolving the issue.
To ascertain the existence of an employer-employee relationship jurisprudence has
invariably adhered to the four-fold test, to wit: (1) the selection and engagement of the employee;
(2) the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee's conduct, or the so-called "control test." Of these four, the last one is the most
important. The so-called "control test" is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employer-employee relationship. Under
the control test, an employer-employee relationship exists where the person for whom the
services are performed reserves the right to control not only the end achieved, but also the
manner and means to be used in reaching that end.

Applying the aforementioned test, an employer-employee relationship is apparently


absent in the case at bar. Among other things, respondent was not required to report everyday
during regular office hours of petitioner. Respondent's monthly retainer fees were paid to him
either at his residence or a local restaurant. More importantly, petitioner did not prescribe the
manner in which respondent would accomplish any of the tasks in which his expertise as a
liaison officer was needed; respondent was left alone and given the freedom to accomplish the
tasks using his own means and method. Respondent was assigned tasks to perform, but petitioner
did not control the manner and methods by which respondent performed these tasks. Verily, the
absence of the element of control on the part of the petitioner engenders a conclusion that he is
not an employee of the petitioner.
Moreover, the absence of the parties' retainership agreement notwithstanding, respondent
clearly admitted that petitioner hired him in a limited capacity only and that there will be no
employer-employee relationship between them.

St. PAUL COLLEGE QUEZON CITY, SR. LILIA THERESE TOLENTINO, SPC, SR.
BERNADETTE RACADIO, SPC, AND SR. SARAH MANAPOL vs. REMIGIO
MICHAEL A. ANCHETA II AND CYNTHIA A. ANCHETA
G.R. No. 169905, September 7, 2011, THIRD DIVISION, (J. Peralta)
Remigio Michael was hired by the St. Paul College, Quezon City (SPCQC) as a teacher
in the General Education Department with a probationary rank in the School Year (SY) 19961997 which was renewed in the following SY. His wife, respondent Cynthia was hired by the
same school as a part time teacher of the Mass Communication Department in the second
semester of same SY and her appointment was renewed for SY 1997-1998. Remigio Michael
and Cynthia wrote a letter, signifying their intentions to renew their contract with SPCQC for SY
1998-1999. They, later on received two letters with the same contents informing them that upon
the recommendation of the College Council, the school is extending to them new contracts for
SY 1998-1999.
A letter was sent to petitioner Sr. Bernadette containing the teachers' sentiments
regarding two school policies, namely: first, the policy of penalizing the delay in encoding final
grades and, second, the policy of withholding salaries of the teachers. Remigio Michael then
received a letter that enumerated the departmental and instructional policies that respondent
Remigio Michael failed to comply with. Thereafter, petitioner Sr. Bernadette wrote a letter to
petitioner Sr. Lilia, endorsing the immediate termination of the teaching services of the
respondent spouses based on several grounds. The spouses had refused and continue to refuse to
evaluate the students' performance on the bases of an established grading system to ensure just
and fair appraisal (violating par. 1.4, p. 40 of our Faculty Manual). Respondent spouses were
given an opportunity to comment on the above letter-recommendation of petitioner Sr.
Bernadette. Spouses then received their letters of termination prompting them to file a complaint
of illegal dismissal against SPCQC.
ISSUE:
Whether or not SPCQC can validly terminate the employment status of Spouses Ancheta
RULING:
The plain admissions of the charges against them were the considerations taken into
account by the petitioner school in their decision not to renew the respondent spouses'
employment contracts. This is a right of the school that is mandated by law and jurisprudence. It
is the prerogative of the school to set high standards of efficiency for its teachers since quality
education is a mandate of the Constitution. As long as the standards fixed are reasonable and not
arbitrary, courts are not at liberty to set them aside. Schools cannot be required to adopt
standards which barely satisfy criteria set for government recognition. The same academic
freedom grants the school the autonomy to decide for itself the terms and conditions for hiring its
teacher, subject of course to the overarching limitations under the Labor Code. The authority to
hire is likewise covered and protected by its management prerogative the right of an employer
to regulate all aspects of employment, such as hiring, the freedom to prescribe work assignments,
working methods, process to be followed, regulation regarding transfer of employees,
supervision of their work, lay-off and discipline, and dismissal and recall of workers.

MARITIME FACTORS INC. vs. BIENVENIDO R. HINDANG


G.R. No. 151993, October 19, 2011, THIRD DIVISION (J. Peralta)
Petitioner Maritime Factors Inc. (MFI), a domestic manning agency, for and in behalf of
its foreign principal Bahrain Marine Contracting/Panama, engaged the services of Danilo R.
Hindang (Danilo) to work as GP/Deckhand on board the M/T "Reya," a Panamanian-registered
ocean-going vessel, for a period of 12 months. While within the territorial jurisdiction of the
Kingdom of Saudi Arabia and on board the vessel, vessel employees found Danilo's body inside
the locker (wardrobe) of his cabin. Danilo was found hanging by a strap on his neck in a kneeling
position. They turned over Danilo's body to the Saudi police authorities, who then brought the
body to a Medical Examiner, Dr. Hameed, for an autopsy on Danilo's remains and concluded
that Danilo committed suicide by hanging himself. However, on the autopsy conducted by a
Medico-Legal Officer of the National Bureau of Investigation (NBI), it was concluded that the
cause of Danilo's death was Asphyxia by Strangulation, Ligature. Subsequently, certification was
issued clarifying that Danilo died of Asphyxia by strangulation which meant that somebody
caused his death based on his autopsy findings.
Respondent Bienvenido R. Hindang, brother of the deceased seaman Danilo, filed for
death compensation benefits pursuant to the POEA Standard Employment Contract Governing
the Employment of All Filipino Seamen on Board Ocean-Going Vessels. MFI filed its Position
Paper claiming that based on Dr. Hameed's medical jurisprudence report, Danilo committed
suicide by hanging himself; thus, his death is not compensable. Respondent contended that the
NBI autopsy report categorically declared that the cause of Danilo's death was Asphyxia by
strangulation, ligature; that the alleged Dr. Hameed's medical report cannot be given legal effect,
since the report was a mere photocopy of a fax transmission from petitioner's foreign principal,
hence, the document was unreliable as to its due execution and genuineness.
ISSUE:
Whether or not Danilo committed suicide during the term of his employment contract which
would exempt petitioner from paying Danilo's death compensation benefits to his beneficiaries
RULING:
In order to avail of death benefits, the death of the employee should occur during the
effectivity of the employment contract. The death of a seaman during the term of employment
makes the employer liable to his heirs for death compensation benefits. Once it is established that
the seaman died during the effectivity of his employment contract, the employer is liable. This
rule, however, is not absolute. The employer may be exempt from liability if he can successfully
prove that the seaman's death was caused by an injury directly attributable to his deliberate or
willful act. Clearly, respondent's entitlement to any death benefit depends on whether petitioner's
evidence suffices to prove that Danilo committed suicide, and the burden of proof rests on
petitioner.
SC agrees with the finding of the LA, the NLRC and the CA that Danilo died of
Asphyxia by strangulation as proved by the NBI post-mortem findings and certification issued
by the medico-legal officer. These three tribunals did not consider the photocopy of the fax
transmission of the purported English translation of Dr. Hameed's medical report to prove that

Danilo committed suicide, since the medical report's genuineness and due execution were
unverifiable.
Moreover, the identity of the person who made the translation and whether the translator
has the recognized competence in both English and the language the medical report was
originally written are not established. Thus, there is no clear assurance that the translated words
are the accurate translation of the original medical report of Dr. Hameed.
More importantly, the alleged translated medical report was not even signed by Dr.
Hameed which creates doubt as to its authenticity. The unsigned translated medical report is
nothing but a self-serving document which ought to be treated as a mere scrap of paper devoid of
any evidentiary value even in administrative proceedings.
Thus, based on the foregoing, the photocopy of the fax transmission of an alleged
translated medical report was correctly denied consideration, since it is required that there be
some proof of authenticity or reliability as condition for the admission of documents.

DUP SOUND PHILS. and/or MANUEL TAN


vs. COURT OF APPEALS and CIRILO A. PIAL
G.R. No. 168317, November 21, 2011, THIRD DIVISION, (J. Peralta)
Cirilo A. Pial (Pial) was an employee of herein petitioner DUP Sound Phils. (DUP),
which is an entity engaged in the business of recording cassette tapes for various recording
companies; petitioner Manuel Tan (Tan) is the owner and manager of DUP; Pial was first
employed in May 1988 until December 1988; and was, later on, re-employed by DUP and was
given the job of "mastering tape". In one instance, Pial got absent from work because he got sick;
when he got well the following day and was ready for work, he called up their office in
accordance with his employer's policy; to his surprise, he was informed by the office secretary
that the latter was instructed by Tan to tell him not to report for work until such time that they
will advise him to do so; after three weeks, without receiving any notice, Pial again called up
their office; this time the office secretary advised him to look for another job because, per
instruction of Tan, he is no longer allowed to work at DUP. Pial then filed a complaint for illegal
dismissal and prayed for the payment of his unpaid service incentive leave pay, full backwages,
separation pay, moral and exemplary damages as well as attorney's fees.
DUP and Tan denied the material allegations of Pial contending that the latter failed to
report for work following an altercation with his supervisor the previous day; when Pial called
up their office and informed the office secretary that he will be going back to work on he,
however, failed to report for work on the said date; DUP were subsequently surprised when they
learned that Pial filed a complaint for illegal dismissal against them; Pial was never dismissed,
instead, it was his unilateral decision not to work at DUP anymore; Tan even offered him his old
post during one of the hearings before the NLRC hearing officer, but Pial refused such offer or
any other offer of amicable settlement.
ISSUE:
Whether or not Pial was illegally dismissed by DUP
RULING:
The settled rule in labor cases is that the employer has the burden of proving that the
employee was not dismissed, or, if dismissed, that the dismissal was not illegal, and failure to
discharge the same would mean that the dismissal is not justified and, therefore, illegal. In the
instant case, what betrays DUP's claim that Pial was not dismissed from his employment but
instead abandoned his job is their failure to prove that the latter indeed stopped reporting for
work without any justifiable cause or a valid leave of absence. Petitioners merely presented the
affidavits of their office secretary which narrated their version of the facts. These affidavits,
however, are not only insufficient to prove their defense but also undeserving of credence
because they are self-serving.
Moreover, considering the hard times in which we are in, it is incongruous for private
respondent to simply give up his work without any apparent reason at all. No employee would
recklessly abandon his job knowing fully well the acute unemployment problem and the

difficulty of looking for a means of livelihood nowadays. Certainly, no man in his right mind
would do such thing.
Furthermore, the consistent rule is that the employer must affirmatively show rationally
adequate evidence that the dismissal was for a justifiable cause. The employer must also observe
the requirements of procedural due process. In the present case, petitioners failed to submit
sufficient evidence to show that private respondent's dismissal was for a justifiable cause and in
accordance with due process.
The Court also agrees with Pial that DUP's earnestness in offering re-employment to the
former is suspect. It was only after two months following the filing of the complaint for illegal
dismissal that it occurred to petitioners, in a belated gesture of goodwill during one of the
hearings conducted before the NLRC, to invite private respondent back to work. If petitioners
were indeed sincere, they should have made their offer much sooner. Under circumstances
established in the instant case, the Court doubts that petitioners' offer would have been made if
private respondent had not filed a complaint against them.

CESAR C. LIRIO, doing business under the name and style of


CELKOR AD SONICMIX, vs.WILMER D. GENOVIA
G.R. No. 169757, November 23, 2011, THIRD DIVISION, (J. Peralta)
Genovia alleged, among others, that he was hired as studio manager by petitioner Lirio,
owner of Celkor Ad Sonicmix Recording Studio (Celkor). He was employed to manage and
operate Celkor and to promote and sell the recording studio's services to music enthusiasts and
other prospective clients. He was made to report for work from Monday to Friday from 9:00 a.m.
to 6 p.m. On Saturdays, he was required to work half-day only, but most of the time, he still
rendered eight hours of work or more. Genovia stated that a few days after he started working as
a studio manager, Lirio approached him and told him about his project to produce an album for
his daughter. Lirio asked respondent to compose and arrange songs for his daughter and
promised that he would draft a contract to assure Genovia of his compensation for such services.
However, upon finishing the works for the said album, Genovia did not receive proper
compensation; and later on, Lirio, verbally terminated respondents services, and he was
instructed not to report for work. Genovia asserts that he was illegally dismissed as he was
terminated without any valid grounds, and no hearing was conducted before he was terminated,
in violation of his constitutional right to due process. Having worked for more than six months,
he was already a regular employee. Lirio, on the other hand, asserted that his relationship with
respondent is one of an informal partnership under Article 1767 of the New Civil Code, since
they agreed to contribute money, property or industry to a common fund with the intention of
dividing the profits among themselves. Lirio had no control over the time and manner by which
respondent composed or arranged the songs, except on the result thereof. Hence, Lirio contended
that no employer-employee relationship existed between him and Genovia, and there was no
illegal dismissal to speak of.
ISSUE:
Whether or not there exist an employer-employee relationship between Lirio and Genovia
RULING:
The elements to determine the existence of an employment relationship are: (a) the
selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal;
and (d) the employers power to control the employees conduct. The most important element is
the employers control of the employees conduct, not only as to the result of the work to be
done, but also as to the means and methods to accomplish it.
It is settled that no particular form of evidence is required to prove the existence of an
employer-employee relationship. Any competent and relevant evidence to prove the relationship
may be admitted.
In this case, the documentary evidence presented by Genovia to prove that he was an
employee of petitioner are as follows: (a) a document denominated as "payroll" (dated July 31,
2001 to March 15, 2002) certified correct by petitioner, which showed that respondent received a
monthly salary of P7,000.00 (P3,500.00 every 15th of the month and another P3,500.00 every
30th of the month) with the corresponding deductions due to absences incurred by respondent;

and (2) copies of petty cash vouchers, showing the amounts he received and signed for in the
payrolls.
The said documents showed that Lirio hired Genovia as an employee and he was paid
monthly wages ofP7,000.00. The former wielded the power to dismiss as the latter stated that he
was verbally dismissed by Lirio, and Genovia, thereafter, filed an action for illegal dismissal
against Lirio. The power of control refers merely to the existence of the power. It is not essential
for the employer to actually supervise the performance of duties of the employee, as it is
sufficient that the former has a right to wield the power. Nevertheless, Lirio stated in his
Position Paper that it was agreed that he would help and teach Genovia how to use the studio
equipment. In such case, Lirio certainly had the power to check on the progress and work of
respondent.
On the other hand, Lirio failed to prove that his relationship with Genovia was one of
partnership. Such claim was not supported by any written agreement. The Court notes that in the
payroll dated July 31, 2001 to March 15, 2002, there were deductions from the wages of
respondent for his absence from work, which negates petitioners claim that the wages paid were
advances for respondents work in the partnership. In Nicario v. National Labor Relations
Commission, the Court held:
It is a well-settled doctrine, that if doubts exist between the evidence presented by the employer
and the employee, the scales of justice must be tilted in favor of the latter. It is a time-honored
rule that in controversies between a laborer and his master, doubts reasonably arising from the
evidence, or in the interpretation of agreements and writing should be resolved in the formers
favor. The policy is to extend the doctrine to a greater number of employees who can avail of the
benefits under the law, which is in consonance with the avowed policy of the State to give
maximum aid and protection of labor. This rule should be applied in the case at bar, especially
since the evidence presented by the private respondent company is not convincing. x x x

Building Care Corporation/Leopard Security & Investigation Agency and/or Ruperto Protacio vs. Myrna
Macaraeg. G.R. 198357, 10 December 2012
Facts:
The respondent, was an employee of the petitioner. She was relieved of her previous post and was reassigned to
another and finally, was not given any assignment thereafter. She then filed a complaint against the petitioners for
illegal dismissal, underpayment of salaries, non-payment of separation pay and refund of cash bond. The labor
arbiter rendered a judgment of dismissal of the case but ordering the petitioners to pay the respondent for
financial assistance. The respondent then filed a Notice of Appeal with the National Labor Relations Commissions
but the said commission dismissed the appeal for having filed out of time thereby declaring the decision of the
Labor Arbiter as final and executory. She then elevated her case to the Court of Appeals which granted her petition
for certiorari and reversed the decision of the NLRC.
Issue:
Whether the Court of Appeals erred in liberally applying the rules of procedure and ruling that respondent's appeal
should be allowed and resolved on the merits despite having been filed out of time
Ruling:

Yes, the Court of Appeals has erred in liberally applying the rules of procedure. It should be emphasized that the
resort to a liberal application, or suspension of the application of procedural rules, must remain as exception to the
well-settled principle that rules must be complied with for the orderly administration of justice.
While procedural rules may be relaxed in the interest of justice, it is well-settled that these are tools designed to
facilitate the adjudication of cases. The relaxation of procedural rules in the interest if justice was never intended
to be a license for erring litigants to violate the rules with impunity. Liberality in the interpretation and application
of the rules can be invoked only in proper cases and under justifiable causes and circumstances.
To merit liberality, petitioner must show reasonable cause justifying its non-compliance with the rules and must
convince the Court that the outright dismissal of the petition would defeat the administration of substantial
justice.
In this case, the justifications given by the Court of Appeals for its liberality by choosing to overlook the belated
filing of the appeal are the, importance of the issue raised and the belief that respondent should be afforded the
amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities,
considering that the belated filing of respondent's appeal before the NLRC was the fault of respondent's former
counsel. Note, however, that neither respondent nor her former counsel gave any explanation or reason citing
extraordinary circumstances for her lawyer's failure to abide by the rules for filing an appeal. Respondent merely
insisted that she had not been remiss in following up her case with said lawyer.
Clearly, allowing an appeal, even if belatedly filed, should never be taken lightly. The judgement attains finality by
the lapse of the period for taking an appeal without such appeal or motion for reconsideration being filed.

Cecilia T. Manese, Julietes E. Cruz and Eufemio Peano II vs. Jollibee Foods Corporation, Tony Tan Caktiong,
Elizabeth Dela Cruz, Divina Evangelista, and Sylvia Mariano. G.R. 170454, 11 October 2012
Facts:

Petitioners were employees of the respondent. At the time of their termination, the petitioners were all occupying
managerial positions. Prior to their termination, the respondent has conducted a corporate audit and found out
that a lot of the respondent's product, under the care of the petitioners, were declared as wastage which
prompted an investigation by the respondents and eventually lead to their dismissal due to loss of trust and
confidence. The petitioners then filed a complaint against the respondents for illegal dismissal. The Labor Arbiter
dismissed their case for want of merit. The petitioners then appealed the decision of the Labor Arbiter to the NLRC
which prompted the respondents to file their Opposition to Appeal of the petitioners. The NLRC in its resolution
dismissed the respondent's appeal. Furthermore, the NLRC also said that since the respondent's appeal was filed
out of time, the said commission was constrained to affirm the findings and the award of the Labor Arbiter. The
petitioners elevated the resolution of the NLRC to the Court of Appeals. The Court of Appeals found that
petitioners were terminated based on the result of the clarificatory hearing and administrative findings of
respondent company. It held that since the petitioners were managerial employees, the mere existence of a basis
for believing that they have breached the trust of their employer would suffice for their dismissal. It also held that
it cannot fault the respondent corporation for terminating petitioners, considering their acts and omissions,
enumerated in their respective notices of termination, constituting the breach. Hence, the Court of Appeals held
that the NLRC did not commit grave abuse of discretion in issuing the assailed resolutions.
Issues:

1. Whether the Court of Appeals acted with grave abuse of discretion in passing upon the legality of the dismissal
in passing upon the legality of the dismissal of the petitioners and considering that the resolution of the
Honorable Labor Arbiter a quo had become final and executory when no timely appeal was filed by the private
respondent as far as the legality of her dismissal is concerned.
2. Whether the Court of Appeals gravely erred in patently deviating in the appreciation of facts and issues
anchoring the dismissal of the petitioners based on loss of trust and confidence being managerial employees
Ruling
1.

The contention is meritorius. It is well-settled procedural rule in this jurisdiction, and wee see no reason why
it should not apply in this case, that an appellee who has not himself appealed cannot obtain from the
appellate court any affirmative relief other than those granted in the decision of the court below. The appellee
can only advance any argument that he may deem necessary to defeat the appellant's claim or to uphold the
decision that he is being disputed. He can assign errors on appeal if such is required to strengthen the views
expressed by the court a quo. Such assigned errors, in turn, may be considered by the appellate court solely to
maintain the appealed decision on other grounds, nut not for the purpose of modifying the judgment in the
appellee's favor and giving him other affirmative reliefs.
In this case, respondents did not appeal from the decision of the Labor Arbiter who ruled that the dismissal of
petitioner was illegal. Respondents only filed an Opposition to Appeal, which prayed for the reversal of the
Labor Arbiter's orders declaring as illegal the dismissal of the petitioners and payment of the separation pay of
the petitioners. The NLRC stated that the registry return receipt showed that respondent's counsel received a
copy of the Labor Arbiter's decision on August 28, 2003, and had ten days or up to September 8, 2003 within
which to file an appeal. However, instead of filing an appeal, respondent filed an Opposition to petitioner's
appeal. The NLRC stated that respondent's opposition could have been treated as an appeal, but its was filed
only in October, way beyond the ten-day reglementary period within which an appeal may be filed.

2.

The contention is unmeritorious. The mere existence of a basis for loss of trust and confidence justifies the
dismissal of the managerial employee because when an employee accepts a promotion to a managerial
position or to an office requiring full trust and confidence, such employee gives up some of the rigid
guaranties available to ordinary workers. Infractions, which if committed by others would be overlooked or
condoned or penalties mitigated, may be visited with more severe disciplinary action. Proof beyond
reasonable doubt is not required provided there is a valid reason for the loss of trust and confidence, such as
when the employer has a reasonable ground to believe that the managerial employee concerned is
responsible for the purported misconduct and the nature if his participation renders him unworthy of the trust
and confidence demanded by the position. D
However, the right of the management to dismiss must be balanced against managerial employee's right to
security of tenure which is not one of the guaranties he gives up. We had consistently ruled that managerial
employees enjoy security of tenure and, although the standards for their dismissal are less stringent, the loss of
trust and confidence must be substantial and founded on clearly established facts sufficient ti warrant the
managerial employee's separation from the company. Substantial evidence is of critical importance and the
burden rests on the employer to prove it.
In this case, the acts and omissions enumerated in the respective memorandum with notice of termination of
the petitioners were valid bases for their termination, which was grounded on gross negligence and/or loss of
trust and confidence.

Crewlink, Inc. and/or Gulf Marine Services vs. Editha Teringtering, for her behalf and in behalf of minor
Eimareach Rose de Garcia Teringtering. G.R. 166803, 11 October 2012
Facts:
The husband of the respondent entered into an overseas employment contract with the petitioners. During the
effectivity of the employment contract with the petitioners, the husband died due to drowning. After which, the
respondent claimed from the petitioners the payment of death compensation, burial expenses and additional
death compensation for the minor respondents but was refused without valid cause.
Respondent claimed that the death of her husband is compensable because he died during the term of his contract
with the petitioners. They asserted that even though the husband was suffering from a Mood Disorder Bipolar
Type, which resulted to his jumping into the sea and his eventual death. They further asserted that the husband's
death was not deliberate and not of his own will, but was a result of a mental disorder, thus compensable.
The petitioner asserted that the respondent is not entitled to benefits being claimed because the husband has
committed suicide. They also alleged that the husband of the respondent jumped into the sea twice. And after all
efforts to prevent him from jumping to the sea for the second time, he was able to do it again. Finally, when the
husband was recovered despite all the efforts to revive him, he was already dead from drowning.
Issue:
Whether the death of seafarer in this case was a result of a deliberate/willful act on his own life, an act directly
attributable to the deceased, and no other, as found and so ruled by the Labor Arbiter and NLRC, as to render his
death not compensable.
Ruling:
The death of the seafarer in this case was deliberate; thus, rendering his death not compensable.
Indeed, in order to avail of death benefits, the death of the employee should occur during the effectivity of the
employment contract. The death of a seaman during the term if employment makes the employer liable to his
heirs for death compensation benefits. This rule, however, is not absolute. The employer may be exempt from
liability if it can successfully prove that the seaman's death was caused by an injury directly attributable to his
deliberate or willful act.
In the instant case, petitioner was able to substantially prove that the husband's death was attributable to his
deliberate act of killing himself by jumping into the sea. Meanwhile, respondent, other than her bare allegation
that her husband was suffering from a mental disorder, no evidence, witness. Or any medical report was given to
support her claim of the husband's insanity. The record does not even show when the alleged insanity if the
husband did start. Homesickness and/or family problems may result to depression, but the same does not
necessarily equate to mental disorder. The issue of insanity is a question of fact; for insanity is a condition of the
mind not susceptible of the usual means of proof. As no man would know what goes on in the mind of another, the
state or condition of a person's mind can only be measured and judged by his behavior. Establishing the insanity of
an accused requires opinion testimony which may be given by a witness who is intimately acquainted with the
person claimed to be insane, or who has rational basis to conclude that a person was insane based on the witness's
own perception of the person, or who is qualified as an expert, such as a psychiatrist. No such evidence, was
presented to support the respondent's claim.
We commiserates with the respondents, but absent substantial evidence from which reasonable basis for the
grant of benefits prayed for can be drawn, we are left with no choice but to deny her petition, lest an injustice be
caused to the employer. Otherwise stated, while it is true that labor contracts are impressed with public interest
and the provisions of the POEA-SEC must be construed logically and liberally in favor of Filipino seamen in the

pursuit if their employment on board ocean-going vessels still the rule is that justice is in every case for the
deserving, to be dispensed with in the light of established facts, the applicable law, and existing jurisprudence.

Park Hotel, J's Playhouse Burgos Corp. Inc., and/or Gregg Harbutt, General Manager, Atty. Roberto Enriquez,
President, and Bill Percy vs. Manolo Soriano, Lester Gonzales and Yolanda Badilla. G.R. 171118. 10 September
2012
Facts:
The respondents are terminated employees of the petitioners. They were terminated for alleged stealing company
properties. Thus, prompting the respondents in filing a complaint for illegal dismissal, unfair labor practice, and
payment of moral and exemplary damages and attorney's fees. The petitioners allege that aside from the charge of
theft, the respondents had violated various company rules and regulations contained in several memoranda issued
to them. The respondents on the other hand, allege that the real reason for their dismissal was that they were
organizing a union for the company's employees. They also allege that they never received the memoranda
containing their alleged violation of company rules and they argued that those memoranda were fabricated to give
a semblance of a cause to their termination.
Issue:
Whether the respondents were validly dismissed
Ruling:
The respondents were not validly dismissed.
The requisites for a valid dismissal are: (a) the employee must be afforded due process and (b) the dismissal must
be for a valid cause as provided in Article 282 of the Labor Code, or for any authorized causes under Articles 283
and 284 of the same Code. In the case before us, both elements are completely lacking. Respondents were
dismissed without any just or authorized cause and without being given the opportunity to be heard and defend
themselves. The law mandates that the burden of proving the validity of the termination of employment rests with
the employer. Failure to discharge this evidentiary burden would necessarily mean that the dismissal was not
justified and, therefore, illegal. Unsubstantiated suspicions, accusation, and conclusions of employers do not
provide for legal justification for dismissing employees. In case of doubt, such cases should be resolved in favor of
labor, pursuant to the social justice policy of labor laws and the Constitution.
Anent the unfair labor practice, Article 248(a) of the Labor Code considers it an unfair labor practice when an
employer interferes, restrains or coerces employees in the exercise of their right to self-organization or the right ti
form an association. In order to show that the employer committed unfair labor practice under the Labor Code,
substantial evidence is required to support the claim. In the case at bar, respondents were indeed
unceremoniously dismissed from work by reason of their intent to form and organize a union.

Duty Free Philippines Services, Inc. vs. Manolito Q. Tria. G.R. 174809. 27 June 2012
Facts:
The respondent herein is employed as a warehouse supervisor of the petitioner's principal, Duty Free
Philippines(DFP). In an audit report conducted by the DFP, it was found out that there some goods that was
illegally brought out of the warehouse and made it appear that such goods were legally condemned. Consequently,
the respondent was asked to submit a written explanation regarding the findings in the Audit Report and the
allegations of his co-workers which he denied his participation to the illegal transaction. The petitioner then
terminated the respondent's employment on the basis of the finding of his guilt for dishonesty and subsequently
file a complaint against the petitioner. The Labor Arbiter and the NLRC rendered a decision finding the respondent
to have been illegally dismissed from employment. When the case was elevated to the Court of Appeals, the Court
of Appeals denied for the first time the existence of employer-employee relationship and pointed to DFP as
respondent's real employer but he still concurred with the findings of the LA and NLRC.
Issues:
Whether the petitioner is the employer of the respondent and whether he was illegally dismissed
Ruling:
Yes, the petitioner is the employer of the respondent and he was illegally dismissed.
With aforesaid pleadings submitted by the petitioner, together with the corresponding pleadings filed by the
respondent, the LA and the NLRC declared the dismissal of the respondent illegal. These decisions were premised
on the finding that there was an employer-employee relationship. Nowhere in said pleadings did petitioner deny
the existence of said relationship. Rather, the line of its defense impliedly admitted said relationship. The issue of
illegal dismissal would have been irrelevant had there been no employer-employee relationship in the first place.
It was only in petitioner's Petition for Certiorari before the Court of Appeals did it impute liability on DFP as
respondent's direct employer and as the entity who conducted the investigation and initiated respondent's
termination proceedings. Obviously, petitioner changed its theory when it elevated the NLRC decision to the Court
of Appeals. The appellate court, therefore, aptly refused to consider the new theory offered by petitioner in its
petition.
In this case, petitioner insisted that respondent was dismissed from employment for cause and after the
observance of the proper procedure for termination. Consequently, petitioner cannot now deny that respondent is
its employee. While indeed, jurisdiction cannot be conferred by acts or omission of the parties, petitioner's belated
denial that it is the employer of respondent is obviously an afterthought, a devise to defeat the law and evade its
obligations.
Petitioner dismissed respondent from employment based on the recommendation of the DFPDC holding
respondent guilty of dishonesty for his direct participation in the "fake condemnation" and "pilferage" of the
missing goods. Respondent was implicated in the anomalous transaction by his co-employees who pointed to the
former as the one who ordered the other suspects to look for a vehicle that would be used to transport the goods.
This, according to the DFPDC, was odd and strange. With this act alone and by reason of his position, the DFPDC
concluded, and affirmed by petitioner, that respondent definitely had knowledge of the "fake condemnation".
From these circumstances, petitioner sustained the findings of dishonesty and dismissed respondent from
employment.
We agree with the appellate court that DFPDC's conclusions are not supposed by clear and convincing evidence to
warrant the dismissal of respondent. In illegal dismissal cases, the employer is burdened to prove just cause for
terminating the employment if its employee with clear and convincing evidence. This principle is designed ti give

flesh and blood to the guaranty if security of tenure granted by the Constitution to employees under the Labor
Code. In this case, petitioner failed to submit clear and convincing evidence of respondent's direct participation in
the alleged fake condemnation proceedings. To be sure, unsubstantiated suspicions, accusations, and conclusions
of employers do not provide for legal justification for dismissing employees. In case of doubt, such cases should be
resolved in favor of labor, pursuant to the social justice policy of labor laws and the Constitution.

Polyfoam-RGC International Corporation and Precilla A. Gramaje vs. Eduardo Concepcion. G.R. 172349. 13 June
2012
Facts:
The respondent is employed by Polyfoam-RGC International Corporation(PolyFoam) as an all-around factory
worker. When he is about to report for work, he suddenly discovered that his time card was not in the rack and
was later informed by the security guard that he could no longer punch his time card. He immediately protested to
his supervisor but the latter allegedly told him that the management decided to dismiss him due to an infraction of
company rule. He even wrote a letter through his counsel requesting that he be re-admitted to work, but the
request remained unheeded prompting the latter to file the complaint for illegal dismissal. On the course of
proceedings with the Labor Arbiter, Precilla A. Gramaje(Gramaje) that she be allowed to intervene in the case. She
then argues that she was the real employer of the respondent. Polyfoam then moved to dismiss the case since it
was Gramaje who is the real employer of the respondent. The Labor Arbiter found that Polyfoam and Gramaje are
both liable to the respondent. However, the NLRC exonerated Polyfoam and rendered Gramaje to be an
independent contractor. The Court of Appeals then reinstated the decision of the Labor Arbiter.
Issues:

1. Whether or not Gramaje is an independent job contractor


2. Whether or not an employer-employee relationship exists between Polyfoam and the respondent
3. Whether or nit was illegally dismissed from employment.
Ruling:
1.

Gramaje is a Labor-Only Contractor. The test of independent contractorship is whether one claiming to be an
independent contractor has contracted to do the work according to his won methods and without being
subject to the control of the employer, except only as to the results of the work.
Gramaje has no substantial capital or investment. The presumption is that a contractor is a labor-only
contractor unless he overcomes the burden of proving that it has substantial capital, investment, tools, and the
like. The employee should not be expected to prove the negative fact that the contractor does not have
substantial capital, investment and tools to engage in job-contracting.

2.

An employer-employee relationship exists between respondent and polyfoam. A finding that a contractor is
a "labor-only" contractor as opposed to permissible job contracting is equivalent to declaring that there is an
employer-employeerelationship between the principal and the employees of the supposed contractor, and
the "labor-only" contractor is considered as a mere agent of the principal, the real employer. In this case,
Polyfoam is the principal employer and Gramaje is the labor-only contractor. Polyfoam and Gramaje are,
therefore, solidarily liable for the rightful claims of respondent.

3.

Respondent was illegaly dismissed from employment. Respondent stated that his time card was suddenly
taken off the rack. His supervisor later informed him that Polyfoam's management decided to dismiss him due
ti infraction if company rule. In short, respondent insisted that he was dismissed from employment without
just or lawful cause and without due process. Polyfoam did not offer any explanation if such dismissal. It,
instead, explained that respondent's real employer is Gramaje. Gramaje, on the other hand, denied the claim
of illegal dismissal. She shifted the blame on respondent claiming that the latter in fact abandoned his work.
Abandonment cannot be inferred from the actuations of respondent. When he discovered that his time card
was off the rack, he immediately inquired from his supervisor. He later sought the assistance of his counsel,
who wrote a letter addressed to Polyfoam requesting that he be re-admitted to work. When said request was

not acted upon, he filed the instant illegal dismissal case. These circumstances clearly negate the intention to
abandon his work.
Petitioners failed to show any valid or authorized cause under the Labor Code which allowed it to terminate the
services of respondent. Neither was it shown that respondent was given ample opportunity to contest the
legality if his dismissal. No notice of termination as given to him. Clearly, the respondent was not afforded due
process. Having failed to establish compliance with the requirements of termination of employment under the
Labor Code, the dismissal of respondent was tainted with illegality.

ESTATE OF NELSON R. DULAY, represented by his


ABOITIZ JEBSEN MARITIME, INC. and GENERAL CHARTERERS, INC.

wife

MERRIDY

JANE

P.

DULAY, v.

FACTS
Nelson R. Dulay (Nelson) was employed by respondent General Charterers Inc. (GCI)as an ordinary
seaman and later as bosun on a contractual basis. After the completion of his employment contract, Nelson died
due to acute renal failure secondary to septicemia. Having been a member of the Associated Marine Officers and
Seamans Union of the Philippines (AMOSUP), GCIs collective bargaining agent, Nelsons widow, Merridy Jane,
filed a complaint with the NLRC against GCI for death and medical benefits, after the grievance procedure with GCI
was declared deadlocked. GCI asserted that the NLRC had no jurisdiction over the action on account of the
absence of employer-employee relationship between GCI and Nelson at the time of the latters death and that the
cause of death was not work-related.
The Labor Arbiter (LA) assumed jurisdiction over the case and ruled in favor of Merridy Jane. The National
Labor Relations Commission (NLRC) affirmed the LAs decision. On appeal to the Court of Appeals (CA), the CA
ruled that while the suit filed by Merridy Jane is a money claim, the same basically involves the interpretation and
application of the provisions in the subject CBA. As such, jurisdiction belongs to the voluntary arbitrator and not
the labor arbiter.Hence, this petition.
RULING
It is true that R.A. 8042 (Migrant Workers and Overseas Filipinos Act of 1995) is a special law governing
overseas Filipino workers. However, a careful reading of this special law would readily show that there is no
specific provision thereunder which provides for jurisdiction over disputes or unresolved grievances regarding the
interpretation or implementation of a CBA. Section 10 of R.A. 8042 simply speaks, in general, of "claims arising out
of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages." On the other hand,
Articles 217(c) and 261 of the Labor Code are very specific in stating that voluntary arbitrators have jurisdiction
over cases arising from the interpretation or implementation of collective bargaining agreements. Stated
differently, the instant case involves a situation where the special statute (R.A. 8042) refers to a subject in general,
which the general statute (Labor Code) treats in particular. In the present case, the basic issue raised by Merridy
Jane in her complaint filed with the NLRC is: which provision of the subject CBA applies insofar as death benefits
due to the heirs of Nelson are concerned. The Supreme Court (SC) agreed with the CA that this issue clearly
involves the interpretation or implementation of the said CBA. Thus, the specific or special provisions of the Labor
Code govern.
The SC agreed with Merridy Janes contention that the CBA is the law or contract between the parties.
Article 13.1 of the CBA provides as follows:
The Company and the Union agree that in case of dispute or conflict in the
interpretation or application of any of the provisions of this Agreement, or enforcement of
Company policies, the same shall be settled through negotiation, conciliation or voluntary
arbitration.
From the foregoing, it is clear that the parties, in the first place, really intended to bring to conciliation or
voluntary arbitration any dispute or conflict in the interpretation or application of the provisions of their CBA. It is

settled that when the parties have validly agreed on a procedure for resolving grievances and to submit a dispute
to voluntary arbitration then that procedure should be strictly observed.
Further, pursuant to the present Omnibus Rules and Regulations Implementing the Migrant Workers and
Overseas Filipinos Act of 1995, it is only in the absence of a collective bargaining agreement that parties may opt to
submit the dispute to either the NLRC or to voluntary arbitration. It is elementary that rules and regulations issued
by administrative bodies to interpret the law which they are entrusted to enforce, have the force of law, and are
entitled to great respect. Such rules and regulations partake of the nature of a statute and are just as binding as if
they have been written in the statute itself.
Consistent with this constitutional provision, Article 211 of the Labor Code provides the declared policy of
the State "[t]o promote and emphasize the primacy of free collective bargaining and negotiations, including
voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes."On the basis of
the foregoing, the SC found no error in the ruling of the CA that the voluntary arbitrator has jurisdiction over the
instant case.
ALCANTARA & SONS, INC.v. COURT OF APPEALS, ET AL.
G.R. Nos. 155109, 155135, 179220, 29 September 2010

FACTS

NagkahiusangMamumuosaAlsons-SPFL (the Union) is the exclusive bargaining agent of the C. Alcantara&


Sons, Inc.s (the Company) rank and file employees. The Company and the Union entered into a Collective
Bargaining Agreement (CBA) that bound them to hold no strike and no lockout in the course of its life. At some
point the parties began negotiating the economic provisions of their CBA but this ended in a deadlock, prompting
the Union to file a notice of strike. They went on strike.

The Company, on the other hand, filed a petition to declare the Unions strike illegal, citing its violation of
the no strike, no lockout, provision of their CBA. Subsequently, the Company amended its petition to implead the
named Union members who allegedly committed prohibited acts during the strike. For their part, the Union, its
officers, and its affected members filed against the Company a counterclaim for unfair labor practices, illegal
dismissal, and damages.

RULING

A strike may be regarded as invalid although the labor union has complied with the strict requirements for
staging one as provided in Article 263 of the Labor Code when the same is held contrary to an existing agreement,
such as a no strike clause or conclusive arbitration clause. Here, the CBA between the parties contained a no

strike, no lockout provision that enjoined both the Union and the Company from resorting to the use of economic
weapons available to them under the law and to instead take recourse to voluntary arbitration in settling their
disputes.

No law or public policy prohibits the Union and the Company from mutually waiving the strike and
lockout maces available to them to give way to voluntary arbitration. Indeed, no less than the 1987 Constitution
recognizes in Section 3, Article XIII, preferential use of voluntary means to settle disputes. Thus

The State shall promote the principle of shared responsibility between workers and
employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.

Since the Unions strike has been declared illegal, the Union officers can, in accordance with law be
terminated from employment for their actions. This includes the shop stewards. They cannot be shielded from the
coverage of Article 264 of the Labor Code since the Union appointed them as such and placed them in positions of
leadership and power over the men in their respective work units.

As regards the rank and file Union members, Article 264 of the Labor Code provides that termination from
employment is not warranted by the mere fact that a union member has taken part in an illegal strike. It must be
shown that such a union member, clearly identified, performed an illegal act or acts during the strike.

The grounds for termination under Article 264 are based on prohibited acts that employees could commit
during a strike. On the other hand, the grounds for termination under Articles 282 to 284 are based on the
employees conduct in connection with his assigned work. Still, Article 217, which defines the powers of Labor
Arbiters, vests in the latter jurisdiction over all termination cases, whatever be the grounds given for the
termination of employment. Consequently, Article 223, which provides that the decision of the Labor Arbiter
reinstating a dismissed employee shall immediately be executory pending appeal, cannot but apply to all
terminations irrespective of the grounds on which they are based.

Here, although the Labor Arbiter failed to act on the terminated Union members motion for
reinstatement pending appeal, the Company had the duty under Article 223 to immediately reinstate the
affected employees even if it intended to appeal from the decision ordaining such reinstatement. The
Companys failure to do so makes it liable for accrued backwages until the eventual reversal of the order of
reinstatement by the NLRC on November 8, 1999, a period of four months and nine days.

While it is true that generally the grant of separation pay is not available to employees who are validly
dismissed, there are, in furtherance of the laws policy of compassionate justice, certain circumstances that
warrant the grant of some relief in favor of the terminated Union members based on equity.

Bitter labor disputes, especially strikes, always generate a throng of odium and abhorrence that
sometimes result in unpleasant, although unwanted, consequences. Considering this, the striking employees
breach of certain restrictions imposed on their concerted actions at their employers doorsteps cannot be
regarded as so inherently wicked that the employer can totally disregard their long years of service prior to such
breach. The records also fail to disclose any past infractions committed by the dismissed Union members. Taking
these circumstances in consideration, the Court regards the award of financial assistance to these Union members
in the form of one-half month salary for every year of service to the company up to the date of their termination as
equitable and reasonable.

WILFREDO ARO, ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.


G.R. No. 174792, 7 March 2012
FACTS
Petitioners Wilfredo Aro, et al. (Aro, et al) were hired by private respondent Benthel Development
Corporation (BENTHEL) as employees for the construction of a resort. Upon their dismissal, Aro, et al. filed a
complaint for illegal dismissal before the Labor Arbiter (LA). The LA ruled that Aro, et al were illegally dismissed
project employees of BENTHEL. The LA ordered BENTHEL to pay various amounts of separation pay to Aro, et al to
be computed until the finality of the said decision. Eventually, the said case reached the Supreme Court (SC)where
the SC denied BENTHELs petition for technicality reasons.
Aro, et al moved for the execution of the earlier LA ruling which the LA granted. BENTHEL, appealed to the
National Labor Relations Commission (NLRC) contending that the computation for backwages must be only until
the completion of the project of Aro, et al and not until the finality of the decision. The NLRC affirmed the LAs
ruling. On appeal to the Court of Appeals (CA) BENTHELs petition was granted. Hence, this petition.

RULING
It is not disputed that Aro, et al. were hired for the construction of the Cordova Reef Village Resort in
Cordova, Cebu. By the nature of the contract alone, it is clear that Aro, et al's employment was to carry out a
specific project. Hence, the CA did not commit grave abuse of discretion when it affirmed the findings of the LA.
Therefore, being project employees, Aro, et al are only entitled to full backwages, computed from the
date of the termination of their employment until the actual completion of the work. Illegally dismissed workers
are entitled to the payment of their salaries corresponding to the unexpired portion of their employment where
the employment is for a definite period. In this case, as found by the CA, the Cordova Reef Village Resort project
had been completed in October 1996 and BENTHEL had signified its willingness, by way of concession to Aro, et al
to set the date of completion of the project as March 18, 1997; hence, the latter date should be considered as the
date of completion of the project for purposes of computing the full backwages of Aro, et al.
Being project employees, Aro, et al are only entitled to full backwages, computed from the date of the termination
of their employment until the actual completion of the work. Illegally dismissed workers are entitled to the payment
of their salaries corresponding to the unexpired portion of their employment where the employment is for a definite
period.

WUERTH PHILIPPINES, INC., v. RODANTE YNSON


G.R. No. 175932, February 15, 2012
FACTS
Petitioner Wuerth Philippines, Inc. (WPI), a subsidiary of Wuerth Germany, hired respondent Rodante
Ynson (Ynson), as its National Sales Manager (NSM) for Automotive. Ynson furnished WPI the former with a copy
of his sales targets for the year 2003 and coverage plan for the month of January 2003. However, respondent was
not able to follow the said coverage plan starting, as he failed to report to work since then. It turned out that
Ynson has been confined in Davao City because of a stroke. He immediately informed WPI about his ailment.
During his confinement, Ynsons physician certified that respondent may return to work, but advised him to
continue with his rehabilitation regimen for another month and a half. Later on, WPI sent a letter to Ynson,
directing him to appear before the formers office in Manila for an investigation, relative to the following
violations: (1) absences without leave, and (2) abandonment of work. Ynson explained the reasons for his inability
to attend the investigation proceedings in Manila and, instead, suggested that WPI, thru its Chief Executive Office,
to come to Davao and conduct the investigation there.
Thereafter, WPI informed Ynson of his termination on the ground of continued absences without filing a
leave of absence. Consequently, Ynson filed a complaint before the Labor Arbiter (LA) against WPI, for illegal
dismissal and non-payment of allowances. The LA ruled in favor of Ynson. The National Labor Relations
Commission (NLRC), on appeal, affirmed the LAs ruling. Upon recourse the the Court of Appeals (CA), the CA
reversed the NLRCs ruling but nonetheless ordered WPI to pay Ynson the following amounts: P1,225,000.00
(representing his salary from he was released from the hospital until his termination), and 13th month pay
of P175,000.00. Hence, this petition.
RULING
Beginning June 5, 2003 (day after Ynsons physician issued the medical certificate stating that he may
return to work), Ynson should have reported back to work, but he failed to do so. Consequently, he can only be
entitled to compensation for the actual number of work days. It would be unfair to allow Ynson to recover
something he has not earned and count not have earned, since he could not discharge his work as NSM. WPI
should be exempted from the burden of paying backwages. The age-old rule governing the relation between labor
and capital, or management and employee, of "a fair day's wage for a fair day's labor" remains as the basic factor
in determining employee's wages. If there is no work performed by the employee, there can be no wage or pay
unless, of course, the laborer was able, willing and ready to work but was illegally locked out, suspended or
dismissed, or otherwise illegally prevented from working, a situation which is not prevailing in the present case.
Anent the CA's ruling that Ynson should be entitled to 13th month pay, the Court clarified that the 13th
Month Pay Law, which provides the rules on the entitlement and computation of the 13th month pay, cannot be
applied to him because he is a managerial employee, and the law applies only to rank- and-file employees. Be that
as it may, although he is not covered by the said law, records showed that he is entitled to this benefit. However,
the Court cannot make a proper determination as to the exact amount either full or pro-rated amount of the
13th month pay, if any, that he would be entitled to. Thus, reference should be made in consonance with the
existing company policy on the payment of the 13th month pay vis--vis the number of days that he actually
worked.

It would be unfair to allow Ynson to recover something he has not earned and count not have earned, since he
could not discharge his work as NSM. WPI should be exempted from the burden of paying backwages. The age-old
rule governing the relation between labor and capital, or management and employee, of "a fair day's wage for a
fair day's labor" remains as the basic factor in determining employee's wages. If there is no work performed by the
employee, there can be no wage or pay unless, of course, the laborer was able, willing and ready to work but was
illegally locked out, suspended or dismissed, or otherwise illegally prevented from working, a situation which is not
prevailing in the present case.

BRIGHT MARITIME CORPORATION (BMC)/DESIREE P. TENORIO v. RICARDO B. FANTONIAL


G.R. No. 165935, February 8, 2012
FACTS
Respondent Ricardo B. Fantional (Fantional) executed an employment contract with petitioner Bright
Maritime Corporation (BMC), as approved by the Philippine Overseas Employment Administration (POEA). The said
contract provided that Fantional shall be employed as boatswain of its foreign vessel. He underwent a medical
examination with BMCs accredited medical clinic for which he was issued a certificate that he was fit to work. The
medical certificate was issued on the day of Fantionals supposed departure for Germany. At the time of his
supposed departure, BMCs liaison officer told Fantional that he could not leave on that day due to some defects in
his medical certificate. He went back to the clinic where his physician stated that there was nothing wrong or
irregular with his medical certificate. Consequently, Fantional filed a complaint before the Labor Arbiter (LA)
against BMC for illegal dismissal and payment of salaries for the unexpired portion of the employment contract.
BMC asserted that since Fantional was not yet declared fit to work on the day of his supposed depature,
he was not able to leave on the scheduled date of his flight to Germany to join the vessel. With his non-departure,
the employment contract was not commenced; hence, there is no illegal dismissal to speak of. The LA ruled in
favor of Fantional. The LA ratiocinated that unilateral revocation of the employment contract by BMC amounted to
pre-termination of the said contract without just or authorized cause. On appeal, the National Labor Relations
Commission (NLRC) reversed the LAs ruling, and held that Fantionals failure to depart in order to join the vessel
M/V AUK in Germany was due to the latters health. The Court of Appeals (CA) reinstated the LAs ruling. Hence,
this petition.
RULING
An employment contract, like any other contract, is perfected at the moment (1) the parties come to
agree upon its terms; and (2) concur in the essential elements thereof: (a) consent of the contracting parties, (b)
object certain which is the subject matter of the contract, and (c) cause of the obligation. The object of the
contract was the rendition of service by respondent on board the vessel for which service he would be paid the
salary agreed upon.
In Santiago v. CF Sharp Crew Management, Inc., the Court held that the employment contract did not
commence when the petitioner therein, a hired seaman, was not able to depart from the airport or seaport in the
point of hire; thus, no employer-employee relationship was created between the parties.
Nevertheless, even before the start of any employer-employee relationship, contemporaneous with the
perfection of the employment contract was the birth of certain rights and obligations, the breach of which may
give rise to a cause of action against the erring party. If the reverse happened, that is, the seafarer failed or refused
to be deployed as agreed upon, he would be liable for damages.
The Court agrees with the NLRC that a recruitment agency, like BMC, must ensure that an applicant for
employment abroad is technically equipped and physically fit because a labor contract affects public interest.
Nevertheless, in this case, BMC failed to prove with substantial evidence that they had a valid ground to prevent

Fantional from leaving on the scheduled date of his deployment. While the POEA Standard Contract must be
recognized and respected, neither the manning agent nor the employer can simply prevent a seafarer from being
deployed without a valid reason.
BMCs act of preventing Fantional from leaving and complying with his contract of employment
constitutes breach of contract for which BMC is liable for actual damages to Fantional for the loss of one-year
salary as provided in the contract.

SUSANA R. SY v. PHILIPPINE TRANSMARINE CARRIERS, INC., AND/OR SSC SHIP MANAGEMENT PTE., LTD.
G.R. No. 191740, 15 February 2013
FACTS
Alfonso N. Sy (Sy) was hired as Able Seaman (AB) by Philippine Transmarine Carriers Incorporated for and
in behalf of its foreign principal, SSC Ship Management Pte. Ltd. While their vessel was at the Port of Jakarta,
Indonesia, AB Sy went on shore leave and left the vessel. Hours later, he was found dead. The cause of death was
Asphyxia by drowning.
AB Sy's body was repatriated to the Philippines. Susana R. Sy, widow of AB Sy, demanded from the
respondents payment of her husband's death benefits and compensation. As her repeated demands were denied,
Sy filed a complaint against respondents for death benefits, burial assistance, moral and exemplary damages, and
attorney's fees.
The Labor Arbiter (LA) ruled in favor of Sy. The National Labor Relations Commission (NLRC) dismissed the
appeal for lack of merit. The CA rendered its assailed Decision reversing the ruling of the NLRC.
RULING
Clearly, to be entitled for death compensation benefits from the employer, the death of the seafarer (1)
must be work-related; and (2) must happen during the term of the employment contract. Under the Amended
POEA Contract, work-relatedness is now an important requirement. The qualification that death must be workrelated has made it necessary to show a causal connection between a seafarers work and his death to be
compensable.
Under the 2000 POEA Amended Employment Contract, work-related injury is defined as an injury(ies)
resulting in disability or death arising out of and in the course of employment. Thus, there is a need to show that
the injury resulting to disability or death must arise (1) out of employment, and (2) in the course of employment.
As a matter of general proposition, an injury or accident is said to arise "in the course of employment"
when it takes place within the period of the employment, at a place where the employee reasonably may be, and
while he is fulfilling his duties or is engaged in doing something incidental thereto.
While AB Sy's employment relationship with respondents did not stop but continues to be in force even
when he was on shore leave, their contract clearly provides that it is not enough that death occurred during the
term of the employment contract, but must be work-related to be compensable. There is a need to show the
connection of AB Sy's death with the performance of his duty as a seaman. As we found, AB Sy was not in the
performance of his duty as a seaman, but was doing an act for his own personal benefit at the time of the
accident. The cause of AB Sy's death at the time he was en shore leave, which was drowning, was not brought
about by a risk which was only peculiar to his employment as a seaman. In fact, he was in no different
circumstance with other people walking along the riverside who might also drown if no due care to one's safety is
exercised. Sy failed to establish by substantial evidence her right to the entitlement of the benefits provided by
law.

ROWENA DE LEON CRUZ v. BANK OF THE PHILIPPINE ISLADS


G.R. No. 173357, 13 February 13, 2013

Dismissal from Employment; Valid Ground: Loss of Trust and Confidence: The basic premise for dismissal on the
ground of loss of confidence is that the employees concerned hold 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.
Managerial Employee: The test of supervisory or managerial status depends on whether a person possesses
authority to act in the interest of his employer and whether such authority is not merely routinary or clerical in
nature, but requires the use of independent judgment.

FACTS
Petitioner Rowena Cruz (Cruz) was hired by Far East Bank and Trust Company (FEBTC) in 1989. Upon the
merger of FEBTC with respondent Bank of the Philippine Islands (BPI) in April 2000, Cruz automatically became an
employee of BPI. Cruz held the position of Assistant Branch Manager of the BPI Ayala Avenue Branch in Makati
City, and she was in charge of the Trading Section.
After 13 years of continuous service, BPI terminated Cruz on grounds of gross negligence and breach of
trust. Cruz's dismissal was brought about by the fraud perpetrated against three depositors in BPI's Ayala Avenue
Branch.
An administrative hearing was held to give Cruz an opportunity to explain her side of the controversy.
However, a notice of termination was issued informing Cruz of her dismissal on grounds of gross negligence and
breach of trust. Thereafter, Cruz filed a Complaint for illegal dismissal against BPI and its officers with the Arbitral
Office of the NLRC.
RULING
Gross negligence connotes want or absence of or failure to exercise slight care or diligence, or the entire
absence of care. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. On
the other hand, the basic premise for dismissal on the ground of loss of confidence is that the employees
concerned hold 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.
In this case, BPI avers that Cruz held the position of Assistant Manager in its Ayala Avenue Branch.
However, Cruz contends that her position was only Cash II Officer. The test of supervisory or managerial status
depends on whether a person possesses authority to act in the interest of his employer and whether such
authority is not merely routinary or clerical in nature, but requires the use of independent judgment.
Cruz holds a managerial status since she is tasked to act in the interest of her employer as she exercises
independent judgment when she approves pre-termination of USD CDs or the withdrawal of deposits. In fact, Cruz
admitted the exercise of independent judgment when she explained that as regards the pre-termination of the

USD CDs of Uymatiao and Caluag, the transactions were approved on the basis of her independent judgment that
the signatures in all the documents presented to her by the traders matched, as shown in her reply.
Cruz was remiss in the performance of her duty to approve the pre-termination of certificates of deposits
by legitimate depositors or their duly-authorized representatives, resulting in prejudice to the bank, which
reimbursed the monetary loss suffered by the affected clients. Hence, BPI was justified in dismissing Cruz on the
ground of breach of trust.

ALILEM CREDIT COOPERATIVE, INC., NOW KNOWN AS ALILEM MULTIPURPOSE COOPERATIVE, INC. v. SALVADOR
M. BANDIOLA, JR.
G.R. No. 173489, 25 February 2013

FACTS

Salvador M. Bandiola (Bandiola) was employed by Alilem Multipurpose Cooperative (AMPC) as its
bookkeeper. AMPC, thru its Board of Directors, after complying with due process, terminated the services of
Bandiola when it was informed that the latter engaged in extra-marital affairs with one Thelma G. Palma (Palma).
The termination letter informed Bandiola of the existence of a prima facie case against him for illicit marital affair,
an act that brings discredit to the cooperative and a cause for termination pero AMPC Personnel Policy. AMPCs
evidence consisted of sworn statements of the relatives and friends of Palma and Bandiola.

Insisting that the ground for his termination was not among the just causes enumerated under the Labor
Code, Bandiola filed a Complaint for Illegal Dismissal before the Labor Arbiter (LA). The LA dismissed the Complaint
for lack of merit. The National Labor Relations Commission (NLRC) set aside the LAs Decision. The Court of Appeals
(CA) reinstated the earlier Decision of the LA.

RULING

An employer is free to regulate all aspects of employment. It may make reasonable rules and regulations
for the government of its employees which become part of the contract of employment provided they are made
known to the employee. In the event of a violation, an employee may be validly terminated from employment on
the ground that an employer cannot rationally be expected to retain the employment of a person whose lack of
morals, respect and loyalty to his employer, regard for his employers rules and application of the dignity and
responsibility, has so plainly and completely been barred.

The employers evidence consists of sworn statements of either relatives or friends of Palma and
Bandiola. They either had direct personal knowledge of the illicit relationship or revealed circumstances indicating
the existence of such relationship.

While Bandiolas act of engaging in extra-marital affairs may be considered personal to him and does not
directly affect the performance of his assigned task as bookkeeper, aside from the fact that the act was specifically

provided for by AMPCs Personnel Policy as one of the grounds for termination of employment, said act raised
concerns to AMPC as the Board received numerous complaints and petitions from the cooperative members
themselves asking for the removal of Bandiola because of his immoral conduct.

RAMON G. NAZARENO v. MAERSK FILIPINAS CREWING INC., AND ELITE SHIPPING A/S
G.R. No. 168703, 26 February 2013
FACTS
Ramon G. Nazareno (Nazareno) was hired by Maersk Filipinas Crewing Inc. (MCI) as Chief Officer for and
in behalf of its foreign principal Elite Shipping A/S (Elite). While Nazareno was on board, he met an accident where
he fell at a height of two (2) meters which injured his right shoulder. After examination in Philadelphia, he was
considered not fit for work.
Nazareno was repatriated to Manila. He then underwent a physical therapy. Thereafter, the company
designated physician declared that Nazareno was fit for work. However, after almost two (2) months of therapy,
Nazareno did not notice any improvement. Two private doctors examined Nazareno and both concluded that
Nazareno is unfit to work as a seafarer.
On the basis of the findings of his doctors, Nazareno sought payment of his disability benefits and medical
.
allowance from respondents, but was refused. Nazareno therefore instituted a Complaint. The Labor Arbiter (LA)
rendered a Decision in favor of Nazareno. Aggrieved, respondents appealed to the National Labor Relations
Commission (NLRC). The NLRC rendered a Decision affirming with modification the decision of the LA. The Court
of Appeals (CA) rendered a Decision granting the petition. The CA set aside the decision and resolution of the
NLRC and dismissed Nazarenos complaint
RULING
Verily, in the case of Seagull Maritime Corporation v. Dee, this Court held that nowhere in the case of
German Marine Agencies, Inc. v NLRC was it held that the company-designated physicians assessment of the
nature and extent of a seaman's disability is final and conclusive on the employer company and the seafarerclaimant. While it is the company-designated physician who must declare that the seaman suffered a permanent
disability during employment, it does not deprive the seafarer of his right to seek a second opinion. Consequently,
the findings of Nazarenos own physician can be the basis in determining whether he is entitled to his disability
claims.
Accordingly, if serious doubt exists on the company-designated physician's declaration of the nature of a
seaman's injury and its corresponding impediment grade, resort to prognosis of other competent medical
professionals should be made. In doing so, a seaman should be given the opportunity to assert his claim after
proving the nature of his injury. These pieces of evidence will in turn be used to determine the benefits rightfully
accruing to him.
In any case, the bottomline is this: the certification of the company-designated physician would defeat
Nazarenos claim while the opinion of the independent physicians would uphold such claim. In such a situation, the
Court adopts the findings favorable to Nazareno. The law looks tenderly on the laborer. Where the evidence may
be reasonably interpreted in two divergent ways, one prejudicial and the other favorable to him, the balance must
be tilted in his favor consistent with the principle of social justice.

RICARDO E. VERGARA, JR., vs. COCA-COLA BOTTLERS PHILIPPINES, INC.,


G.R. No. 176985

April 1, 2013

FACTS
Petitioner Ricardo E. Vergara, Jr. was an employee of respondent Coca-Cola Bottlers Philippines, Inc. from May
1968 until he retired on January 31, 2002 as a District Sales Supervisor.
Claiming his entitlement to an additional PhP474,600.00 as Sales Management Incentives.

ISSUE To be resolved is the singular issue of whether the Sales Management Incentives (SMI) should be included in
the computation of petitioners retirement benefits on the ground of consistent company practice.

RULING
Generally, employees have a vested right over existing benefits voluntarily granted to them by their employer.
Thus, any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued
15
or eliminated by the employer. The principle of non-diminution of benefits is actually founded on the
Constitutional mandate to protect the rights of workers, to promote their welfare, and to afford them full
16
protection. In turn, said mandate is the basis of Article 4 of the Labor Code which states that "all doubts in the
implementation and interpretation of this Code, including its implementing rules and regulations, shall be
17
rendered in favor of labor."
There is diminution of benefits when the following requisites 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 in the construction or application of a doubtful or difficult question of law; and (4) the
diminution or discontinuance is done unilaterally by the employer.
To be considered as a regular company practice, the employee must prove by substantial evidence that the giving
of the benefit is done over a long period of time, and that it has been made consistently and
19
deliberately. Jurisprudence has not laid down any hard-and-fast rule as to the length of time that company
20
practice should have been exercised in order to constitute voluntary employer practice. The common
denominator in previously decided cases appears to be the regularity and deliberateness of the grant of benefits
21
over a significant period of time. It requires an indubitable showing that the employer agreed to continue giving
the benefit knowing fully well that the employees are not covered by any provision of the law or agreement
22
requiring payment thereof. In sum, the benefit must be characterized by regularity, voluntary and deliberate
23
intent of the employer to grant the benefit over a considerable period of time.
Upon review of the entire case records, We find no substantial evidence to prove that the grant of SMI to all
retired DSSs regardless of whether or not they qualify to the same had ripened into company practice. Despite
more than sufficient opportunity given him while his case was pending before the NLRC, the CA, and even to this
Court, petitioner utterly failed to adduce proof to establish his allegation that SMI has been consistently,
deliberately and voluntarily granted to all retired DSSs without any qualification or conditions whatsoever.

UNIVAC DEVELOPMENT, INC., vs. WILLIAM M. SORIANO


G.R. No. 182072

June 19, 2013

FACTS

Respondent Soriano was hired by petitioner UNIVAC on a probationary basis as legal assistant. Respondent
claimed that on February 15, 2005, or eight (8) days prior to the completion of his six months probationary period,
Castro allegedly informed him that he was being terminated from employment due to the companys cost-cutting
measures. He allegedly asked for a thirty-day notice but his termination was ordered to be effective immediately.
Thus, he was left with no choice but to leave the company.
Petitioner, on the other hand, denied the allegations of respondent and claimed instead that prior to his
employment, respondent was informed of the standards required for regularization. Petitioner also supposedly
informed him of his duties and obligations. Petitioner recalled that on January 5, 2005, a company meeting was
held where respondent allegedly expressed his intention to leave the company because he wanted to review for
the bar examinations. It was also in that meeting where he was informed of his unsatisfactory performance in the
company. Thus, when respondent did not report for work on February 16, 2005, petitioner assumed that he
pushed through with his plan to leave the company. In other words, petitioner claimed that respondent was not
illegally dismissed from employment, rather, he in fact abandoned his job by his failure to report for work.
ISSUE Whether there petitioner failed to inform respondent of the standards required for regularization, making
him a regular employee.

RULING
In this case, as held by the CA, petitioner failed to present adequate evidence to substantiate its claim that
respondent was apprised of said standards. It is evident from the LA and NLRC decisions that they merely relied on
surmises and presumptions in concluding that respondent should have known the standards considering his
educational background as a law graduate. Equally important is the requirement that in order to invoke "failure to
meet the probationary standards" as a justification for dismissal, the employer must show how these standards
have been applied to the subject employee. In this case, aside from its bare allegation, it was not shown that a
performance evaluation was conducted to prove that his performance was indeed unsatisfactory.
Indeed, the power of the employer to terminate a probationary employee is subject to three limitations, namely:
(1) it must be exercised in accordance with the specific requirements of the contract; (2) the dissatisfaction on the
part of the employer must be real and in good faith, not feigned so as to circumvent the contract or the law; and
(3) there must be no unlawful discrimination in the dismissal. In this case, not only did petitioner fail to show that
respondent was apprised of the standards for regularization but it was likewise not shown how these standards
had been applied in his case.
Pursuant to well-settled doctrine, petitioners failure to specify the reasonable standards by which respondents
alleged poor performance was evaluated as well as to prove that such standards were made known to him at the
start of his employment, makes respondent a regular employee. In other words, because of this omission on the
33
part of petitioner, respondent is deemed to have been hired from day one as a regular employee.

MANILA
POLO
MANILA POLO CLUB, INC.,
G.R. No. 172846

CLUB

EMPLOYEES'

UNION

(MPCEU)

FUR-TUCP, vs.

July 24, 2013

FACTS
The Board of Directors of respondent unanimously resolved to completely terminate the entire operations of its
Food and Beverage (F & B) outlets due to business losses sustained in the past years.
Respondents Board approved the implementation of the retrenchment program of employees who are directly
and indirectly involved with the operations of the F & B outlets and authorized then General Manager Philippe D.
Bartholomi to pay the employees separation pay.
On even date, respondent sent notices to the petitioner and the affected employees (via registered mail) as well as
9
submitted an Establishment Termination Report to the DOLE. Respondent informed, among others, of the
10
retrenchment of 123 employees in the F & B Division and those whose functions are related to its operations; the
discontinuance of the F & B operations effective March 25, 2002; the termination of the employment relationship
on April 30, 2002; and, the continued payment of the employees salaries despite the directive not to report to
work effective immediately.
Unaware yet of the termination notice sent to them by respondent, the affected employees of petitioner were
surprised when they were prevented from entering the Club premises as they reported for work on March 25,
2002. Treating the incident as respondents way of terminating union members under the pretense of
retrenchment to prevent losses, petitioner filed a Step II grievance.
ISSUE: Whether the dismissal was under the pretense of retrenchment.
RULING
Unlike retrenchment, closure or cessation of business, as an authorized cause of termination of employment, need
not depend for validity on evidence of actual or imminent reversal of the employer's fortune. Article 283
authorizes termination of employment due to business closure, regardless of the underlying reasons and
25
motivations therefor, be it financial losses or not.
To be precise, closure or cessation of an employers business operations, whether in whole or in part, is governed
by Article 283 of the Labor Code, as amended.
In sum, under Article 283 of the Labor Code, three requirements are necessary for a valid cessation of business
operations: (a) service of a written notice to the employees and to the DOLE at least one month before the
intended date thereof; (b) the cessation of business must be bona fide in character; and (c) payment to the
employees of termination pay amounting to one month pay or at least one-half month pay for every year of
28
service, whichever is higher.
We summarize:
1. Closure or cessation of operations of establishment or undertaking may either be partial or total.

2. Closure or cessation of operations of establishment or undertaking may or may not be due to serious
business losses or financial reverses. However, in both instances, proof must be shown that: (1) it was
done in good faith to advance the employer's interest and not for the purpose of defeating or
circumventing the rights of employees under the law or a valid agreement; and (2) a written notice on the
affected employees and the DOLE is served at least one month before the intended date of termination of
employment.
3. The employer can lawfully close shop even if not due to serious business losses or financial reverses but
separation pay, which is equivalent to at least one month pay as provided for by Article 283 of the Labor
Code, as amended, must be given to all the affected employees.
4. If the closure or cessation of operations of establishment or undertaking is due to serious business
losses or financial reverses, the employer must prove such allegation in order to avoid the payment of
separation pay. Otherwise, the affected employees are entitled to separation pay.
5. The burden of proving compliance with all the above-stated falls upon the employer.
Guided by the foregoing, the Court shall refuse to dwell on the issue of whether respondent was in sound financial
condition when it resolved to stop the operations of its F & B Department. As stated, an employer can lawfully
close shop anytime even if not due to serious business losses or financial reverses. Furthermore, the issue would
entail an inquiry into the factual veracity of the evidence presented by the parties, the determination of which is
not Our statutory function. Indeed, petitioner is asking Us to sift through the evidence on record and pass upon
whether respondent had, in truth and in fact, suffered from serious business losses or financial reverses.

MZR INDUSTRIES, MARILOU R. QUIROZ AND LEA TIMBAL vs. MAJEN COLAMBOT
G.R. No. 179001

August 28, 2013

Respondent was hired by petioner Marilou Quiroz, owner and VP for finance of MZR Industries as messenger on
February 8, 2000.
Beginning 2002, Colambots work performance started to deteriorate. Petitioners issued several memoranda to
Colambot for habitual tardiness, negligence, and violations of office policies. He was also given warnings for
negligence due to careless handling of documents and insubordination for leaving his post without turnover.
Petitioners claimed that despite written warnings for repeated tardiness and insubordination, Colambot failed to
mend his ways
Hence, in a Memorandum dated October 25, 2004 issued by petitioner Lea Timbal (Timbal), MZR's Administrative
Manager, Colambot was given a notice of suspension for insubordination and negligence.
Petitioners claimed they waited for Colambot to report back for work on December 7, 2004, but they never heard
from him anymore. Later, petitioners were surprised to find out that Colambot had filed a complaint for illegal
dismissal, illegal suspension, underpayment of salaries, holiday pay, service incentive pay, 13th month pay and
separation pay.
Colambot claimed that he was made to choose between resigning from the company or the company will be the
one to terminate his services. He said he refused to resign. Colambot alleged that Quiroz made him sign a
memorandum for his suspension, from November 26 to December 6, 2004. After affixing his signature, Quiroz told
him that effective December 7, 2004, he is already deemed terminated.
Petitioners, however, insisted that while Colambot was suspended due to insubordination and negligence, they
maintained that they never terminated Colambot's employment. They added that Colambot's failure to report for
work since December 7, 2004 without any approved vacation or sick leave constituted abandonment of his work,
but they never terminated his employment.
LA rendered a decision in favor of Colambot and that there was an illegal dismissal. Such decision was reversed
and set aside by the NLRC. CA on its part, reversed and set aside the decision of the NLRC and posited that there
was an illegal dismissal.

ISSUE: Whether there was an illegal dismissal.

RULING

Petition granted. There was no illegal dismissal in the present case.


While we recognize the rule that in illegal dismissal cases, the employer bears the burden of proving that the
termination was for a valid or authorized cause, in the present case, however, the facts and the evidence do not

establish a prima facie case that the employee was dismissed from employment. Before the employer must bear
the burden of proving that the dismissal was legal, the employee must first establish by substantial evidence the
fact of his dismissal from service. If there is no dismissal, then there can be no question as to the legality or
illegality thereof.
In the present case, other than Colambot's unsubstantiated allegation of having been verbally terminated from his
work, there was no evidence presented to show that he was indeed dismissed from work or was prevented from
returning to his work.
However, while the Court concurs with the conclusion of the NLRC that there was no illegal dismissal, no dismissal
having actually taken place, the Court does not agree with its findings that Colambot committed abandonment of
work.
In a number of cases, this Court consistently held that to constitute abandonment of work, two elements must be
present: first, the employee must have failed to report for work or must have been absent without valid or
justifiable reason; and second, there must have been a clear intention on the part of the employee to sever the
employer-employee relationship manifested by some overt act.
These circumstances, taken together, the lack of evidence of dismissal and the lack of intent on the part of the
respondent to abandon his work, the remedy is reinstatement but without backwages. However, considering that
reinstatement is no longer applicable due to the strained relationship between the parties and that Colambot
already found another employment, each party must bear his or her own loss, thus, placing them on equal footing.

HERNANDO BORRA, et al., v. COURT OF APPEALS SECOND AND NINETEENTH DIVISIONS and HAWAIIAN
PHILIPPINE COMPANY,
G.R. No. 167484

September 9, 2013

Herein petitioners filed with the NLRC two separate complaints, RAB Case No.06-09-10698-97 was filed against
herein private respondent alone, while RAB Case No. 06-09-10699-97 impleaded herein private respondent and a
certain Fela Contractor as respondents. In RAB Case No. 06-09-10698-97,herein petitioners asked that they be
recognized and confirmed as regular employees of herein private respondent and further prayed that they be
awarded various benefits received by regular employees for three (3) years prior to the filing of the complaint,
while in RAB Case No. 06-09-10699-97,herein petitioners sought for payment of unpaid wages, holiday pay,
allowances, 13th month pay, service incentive leave pay, moral and exemplary damages also during the three (3)
years preceding the filing of the complaint.
LA ruled that in RAB Case No. 06-09-10699-97 that there was no employer-employee relationship. We, thus
resolveto dismiss the complaint against respondent Hawaiian, who as we have found in an earlier pronouncement
has no employer-employee relations with the complainant, let alone, any privity of relationship, except for the fact
that it is the depository of sugar where the sugar of the planters and traders are hauled by the workers of the
contractor, like respondent herein Fela Contractor/Jardinico.
No appeal was taken from the above quoted Decision. Thus, the same became final and executory.
As a consequence of the finality of the Decision in RAB Case No. 06-09-10699-97, herein private respondent again
filed a Motion to Dismiss RAB Case No. 06-09-10698-97 on the ground, among others, of res judicata.
The Labor Arbiter handling RAB Case No. 06-09-10698-97 issued an Order denying private respondent's Motion to
Dismiss.
Upon appeal, CA granted the petition and RAB Case No. 09-10698-97 was ordered DISMISSED.
ISSUE: Whether CA has jurisdiction over the decision of the LA on the motion to dismiss.
RULING Petition denied.
In this regard, it should be reiterated that what has been filed by private respondent with the CA is a special civil
action for certiorari assailing the Labor Arbiter's Order which denied its motion to dismiss.
The NLRC rule proscribing appeal from a denial of a motion to dismiss is similar to the general rule observed in civil
procedure that an order denying a motion to dismiss is interlocutory and, hence, not appealable until final
judgment or order is rendered. The remedy of the aggrieved party in case of denial of the motion to dismiss is to
file an answer and interpose, as a defense or defenses, the ground or grounds relied upon in the motion to dismiss,
proceed to trial and, in case of adverse judgment, to elevate the entire case by appeal in due course. In order to
avail of the extraordinary writ of certiorari, it is incumbent upon petitioner to establish that the denial of the
motion to dismiss was tainted with grave abuse of discretion.

ANTONIO E. UNICA vs. ANSCOR SWIRE SHIP MANAGEMENT CORPORATION,


G.R. No. 184318

February 12, 2014

Respondent Anscor Swire Ship Management Corporation is a manning agency. Since the late 1980s, petitioner was
employed by respondent under various contracts. In his last contract, petitioner was deployed for a period of nine
(9) months from January 29, 2000 to October 25, 2000. However, since the vessel was still at sea, petitioner was
only repatriated on November 14, 2000, or twenty (20) days after the expiration of his contract of employment.
Petitioner averred that since he was allowed to stay in the vessel for another twenty (20) days, there was an
implied renewal of his contract of employment. Hence, when he was repatriated on November 14, 2000 without a
valid cause, he was illegally dismissed.
The LA decided in favor of petitioner, Antonio Unica, and held that there was an implied renewal of contract due to
the fact that petitioner was not repatriated on the date of the expiration of the contract. Such decision was
upheld by the NLRC.
The decision of the NLRC was annulled and set aside by the CA. The CA ruled that there was no implied renewal of
contract and the 20 days extension was due to the fact that the ship was still at sea. Hence, the present petition.
ISSUE: Whether there was an implied renewal of contract due to the fact that petitioner was repatriated only 20
days after the expiration of the contract.
RULING
The petition is not meritorious.
Petitioner's stay in the vessel for another 20 days should not be interpreted as an implied extension of his contract.
A seaman need not physically disembark from a vessel at the expiration of his employment contract to have such
contract considered terminated.
It is a settled rule that seafarers are considered contractual employees.1wphi1 Their employment is governed by
the contracts they sign everytime they are rehired and their employment is terminated when the contract expires.
8
Their employment is contractually fixed for a certain period of time. Thus, when petitioner's contract ended on
October 25, 2000, his employment is deemed automatically terminated, there being no mutually-agreed renewal
or extension of the expired contract.