Republic of the Philippines Supreme Court Manila THIRD DIVISION POLYFOAM-RGC INTERNATIONAL, and PRECILLA A.

GRAMAJE, Petitioners, CORPORATION G.R. No. 172349 Present:

could no longer punch his time card.[6] When he protested to his supervisor, the latter allegedly told him that the management decided to dismiss him due to an infraction of a company rule. Cheng, the companys manager, also refused to face him. Respondents counsel later wrote a letter[7] to Polyfoams manager requesting that respondent be re-admitted to work, but the request remained unheeded prompting the latter to file the complaint for illegal dismissal. [8]

On April 28, 2000, Gramaje filed a Motion for Intervention[9] claiming to be the real employer of respondent. On the other hand, Polyfoam and Cheng filed a Motion to Dismiss[10] on the grounds that the NLRC has no jurisdiction over the PERALTA, J., Acting Chairperson case, ,*because of the absence of employer-employee relationship between ABAD, Polyfoam and respondent and that the money claims had already - versus VILLARAMA, JR.,** prescribed.[11] MENDOZA, and PERLAS-BERNABE, JJ. On May 24, 2000, Labor Arbiter Adolfo Babiano issued an Order[12] granting Gramajes motion for intervention, it appearing that she is an EDGARDO CONCEPCION, Promulgated: indispensable party and denying Polyfoam and Chengs motion to dis miss as the Respondent. lack of employer-employee relationship is only a matter of defense. June 13, 2012 x-----------------------------------------------------------------------------------------x In their Position Paper,[13] Polyfoam and Cheng insisted that the NLRC has no jurisdiction over the case, because respondent was not their employee. They likewise contended that respondents money claims had already DECISION prescribed. Finally, they fault respondent for including Cheng as a partydefendant, considering that she is not even a director of the company.[14] PERALTA, J.: This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioners Polyfoam-RGC International Corporation (Polyfoam) and Precilla A. Gramaje (Gramaje) against respondent Edgardo Concepcion assailing the Court of Appeals (CA) Decision[1] dated December 19, 2005 and Resolution[2] dated April 25, 2006 in CA-G.R. SP No. 83696. The assailed decision reversed the National Labor Relations Commissions (NLRCs) Decision[3] dated May 7, 2003 in NLRC NCR CA No. 030622-02, while the assailed resolution denied petitioners and respondents motions for reconsideration. The factual and procedural antecedents follow: On February 8, 2000, respondent filed a Complaint [4] for illegal dismissal, non-payment of wages, premium pay for rest day, separation pay, service incentive leave pay, 13th month pay, damages, and attorneys fees against Polyfoam and Ms. Natividad Cheng (Cheng). Respondent alleged that he was hired by Polyfoam as an all-around factory worker and served as such for almost six years.[5] On January 14, 2000, he allegedly discovered that his time card was not in the rack and was later informed by the security guard that he In her Position Paper,[15] Gramaje claimed that P.A. Gramaje Employment Services (PAGES) is a legitimate job contractor who provided some manpower needs of Polyfoam. It was alleged that respondent was hired as packer and assigned to Polyfoam, charged with packing the latters finished foam products. She argued, however, that respondent was not dismissed from employment, rather, he simply stopped reporting for work.[16] On December 14, 2001, Labor Arbiter (LA) Marita V. Padolina rendered a Decision finding respondent to have been illegally dismissed from employment and holding Polyfoam and Gramaje/PAGES solidarily liable for respondents money claims. The dispositive portion of the Decision is quoted below for easy reference: WHEREFORE, premises considered, judgment is hereby rendered finding complainant to have been illegally dismissed and respondents Polyfoam-RGC International Corporation, P.A. Gramaje Employment Services/Precilla A. Gramaje are ordered to pay complainant jointly and severally the following: 1). Separation Pay P 52,000.00

2). Backwages 3). 13th Month Pay 4). Moral Damages 5). Exemplary Damages 6). Attorneys fees

157,041.38 17,407.00 5,000.00 5,000.00 ___ 23,644.83 P 260,093.21

All other claims are denied for lack of factual basis. SO ORDERED.[17] The Labor Arbiter found respondent to have been illegally dismissed from employment and thus is entitled to full backwages inclusive of allowances. In lieu of reinstatement, the LA awarded respondent separation pay of one month salary for every year of service from April 21, 1994 until promulgation of the decision.[18] The LA further held that petitioners are solidarily liable to respondent for the latters money claims, considering that Gramaje (the contractor) was not enrolled as private employment agency in the registry of the Regional Office of the Department of Labor and Employment (DOLE) and considering further that respondent performed a job directly related to the main business of Polyfoam.[19] On appeal by petitioners, the NLRC modified the LA decision by exonerating Polyfoam from liability for respondents claim for separation pay and deleting the awards of backwages, 13th month pay, damages, and attorneys fees. The dispositive portion of the decision reads: WHEREFORE, the appealed decision is modified in that the complaint against respondent-appellant Polyfoam-RGC International Corp. is dismissed. However, respondentintervenor-appellant P.A. Gramaje Employment Services is hereby ordered to pay complainant separation pay of one (1) month salary for every year of service reckoned from April 21, 1996 up to the rendition of this decision, or the sum of P58,5000 (sic). The awards of backwages, 13th month pay, damages, and attorneys fees are set aside. SO ORDERED.[20] The NLRC found Gramaje to be an independent contractor who contracted the packaging aspect of the finished foam products of Polyfoam. Pursuant to said contract, Gramajes employees, including respondent, were

assigned to Polyfoam but remained under the control and supervision of Gramaje. It likewise concluded that Gramaje had its own office equipment, tools, and substantial capital and, in fact, supplied the plastic containers and carton boxes used by her employees in performing their duties. [21] The Commission also found sufficient evidence to prove that Gramaje paid respondents wages and benefits and reported the latter to the Social Security System (SSS) as a covered employee.[22] As to whether there was illegal dismissal, the NLRC answered in the negative, since respondent was not notified that he had been dismissed nor was he prevented from returning to his work. The NLRC found Gramaje liable for claiming that respondent abandoned his job. Reinstatement, however, could not be decreed because of the strained relations between the parties; hence, the award of separation pay. But the NLRC refused to award backwages.[23] The award of moral and exemplary damages was likewise deleted for lack of evidence.[24] Aggrieved, respondent elevated the case to the CA in a special civil action for certiorari under Rule 65 of the Rules of Court. On December 19, 2005, the appellate court rendered the assailed decision,[25] the dispositive portion of which reads: WHEREFORE, IN VIEW OF THE FOREGOING, the petition is GRANTED. The assailed Decision of the National Labor Relations Commission, First Division dated May 7, 2003 isREVERSED and the decision of Labor Arbiter Marita Padolina, dated December 14, 2001, is hereby REINSTATED. SO ORDERED.[26] The CA agreed with the LAs conclusion that Gramaje is not a legitimate job contractor but only a labor-only contractor because of the following: (1) Gramaje failed to present its Audited Financial Statement that would have shown its financial standing and ownership of equipment, machineries, and tools necessary to run her own business;[27] (2) Gramaje failed to present a single copy of the purported contract with Polyfoam as to the packaging aspect of the latters business;[28] (3) Gramajes licenses supposedly issued by the DOLE appeared to be spurious.[29] (4) Gramaje was not registered with DOLE as a private recruitment agency;[30] and (5) Gramaje presented only one (1) SSS Quarterly Collection List whose authenticity is doubtful.[31] The CA noted that petitioners are represented by only one law firm though they made it appear that they were represented by different lawyers.[32] These circumstances, says the CA, give rise to the suspicion that the creation or establishment of Gramaje was just a scheme designed to evade the obligation inherent in an employeremployee relationship.[33] Thus, respondent was indeed Polyfoams employee. This relationship was specifically shown by Polyfoams exercise of supervision over the work of respondent;[34] the furnishing of a copy of

Polyfoams Mga Alituntunin at Karampatang Parusa to serve as respondents guide in the performance of his duty;[35] the length of time that respondent had performed activities necessary for Polyfoams business; [36] and Polyfoams act of directly firing respondent.[37] Finally, the appellate court affirmed the LAs findings of illegal dismissal as respondent was dismissed from the service without cause and due process.[38] Consequently, separation pay in lieu of reinstatement was awarded. The CA quoted with approval the LA conclusions on the award of respondents other money claims.[39] Petitioners now come before the Court in this petition for review on certiorari based on the following assigned errors: I. THE COURT OF APPEALS ERRED IN NOT DISMISSING THE PETITION FOR CERTIORARI FILED BY HEREIN RESPONDENT CONSIDERING THE FACT THAT IT WAS CLEARLY FILED OUT OF TIME, HAVING BEEN FILED ON THE 77 TH DAY FROM RECEIPT BY HEREIN RESPONDENT OF THE RESOLUTION OF THE NLRC DENYING HIS MOTION FOR RECONSIDERATION. II. THE COURT OF APPEALS ERRED IN NOT UPHOLDING THE DECISION OF THE NLRC AND ITS FINDINGS THAT A) RESPONDENT CONCEPCION IS AN EMPLOYEE OF P.A. GRAMAJE EMPLOYMENT SERVICES; B) P.A. GRAMAJE IS A LEGITIMATE JOB CONTRACTOR; C) RESPONDENT CONCEPCION WAS NOT DISMISSED FROM HIS JOB, CONSIDERING THAT THESE FINDINGS ARE FULLY SUPPORTED BY EVIDENCE. III. THE COURT OF APPEALS ERRED IN REINSTATING THE DECISION OF THE LABOR ARBITER MARITA PADOLINA AWARDING RESPONDENT CONCEPCION BACKWAGES, MORAL AND EXEMPLARY DAMAGES AND ATTORNEYS FEES.[40] There are three issues for resolution, to wit: (1) whether or not Gramaje is an independent job contractor; (2) whether or not an employer-employee relationship exists between Polyfoam and respondent; and (3) whether or not respondent was illegally dismissed from employment. Gramaje is a Labor-Only Contractor

Article 106 of the Labor Code explains the relations which may arise between an employer, a contractor, and the contractors employees, thus: ART. 106. Contractor or subcontracting. Whenever an employer enters into a contract with another person for the performance of the formers work, the employees of the contractor and of the latters subcontractor, if any, shall be paid in accordance with the provisions of this Code. In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. The Secretary of Labor and Employment may, by appropriate regulations, restrict or prohibit the contracting out of labor to protect the rights of workers established under the Code. In so prohibiting or restricting, he may make appropriate distinctions between labor-only contracting and job contracting as well as differentiations within these types of contracting and determine who among the parties involved shall be considered the employer for purposes of this Code, to prevent any violation or circumvention of any provision of this Code. 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 business of 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. In Sasan, Sr. v. National Labor Relations Commission 4th Division,[41] the Court distinguished permissible job contracting or subcontracting from labor only contracting, to wit: Permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put out or farm

out to a contractor or subcontractor the performance or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job, work or service is to be performed or completed within or outside the premises of the principal. A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur: (a) The contractor or subcontractor carries on a distinct and independent business and undertakes to perform the job, work or service on its own account and under its own responsibility according to its own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof; (b) The contractor substantial capital or or subcontractor investment; has and

methods and without being subject to the control of the employer, except only as to the results of the work.[43] In San Miguel Corporation v. Semillano,[44] the Court laid down the criteria in determining the existence of an independent and permissible contractor relationship, to wit: x x x [W]hether or not the contractor is carrying on an independent business; the nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign the performance of a specified piece of work; the control and supervision of the work to another; the employers power with respect to the hiring, firing and payment of the contractors workers; the control of the premises; the duty to supply the premises, tools, appliances, materials, and labor; and the mode, manner and terms of payment.[45] Simply put, the totality of the facts and the surrounding circumstances of the case are to be considered. Each case must be determined by its own facts and all the features of the relationship are to be considered.[46] Applying the foregoing tests, we agree with the CAs conclusion that Gramaje is not an independent job contractor, but a labor-only contractor. First, 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.[47] Gramaje claimed that it has substantial capital of its own as well as investment in its office, equipment and tools. She pointed out that she furnished the plastic containers and carton boxes used in carrying out the function of packing the mattresses of Polyfoam. She added that she had placed in Polyfoams workplace ten (10) sealing machines, twenty (20) hand trucks, and two (2) forklifts to enable respondent and the other employees of Gramaje assigned at Polyfoam to perform their job. Finally, she explained that she had her own office with her own staff.[48] However, aside from her own bare statement, neither Gramaje nor Polyfoam presented evidence showing Gramajes ownership of the equipment and machineries used in the performance of the alleged contracted job. Considering that these machineries are found in Polyfoams premises, there can be no other logical conclusion but that the tools and equipment utilized by Gramaje and her employees are owned by Polyfoam. Neither did Polyfoam nor Gramaje show that the latter had clients other than the former. Since petitioners failed to adduce evidence that

(c) The agreement between the principal and contractor or subcontractor assures the contractual employees entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security of tenure, and social and welfare benefits. In contrast, labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job, work or service for a principal. In labor-only contracting, the following elements are present: (a) The contractor or subcontractor does not have substantial capital or investment to actually perform the job, work or service under its own account and responsibility; and (b) The employees recruited, supplied or placed by such contractor or subcontractor are performing activities which are directly related to the main business of the principal.[42] The test of independent contractorship is whether one claiming to be an independent contractor has contracted to do the work according to his own

Gramaje had any substantial capital, investment or assets to perform the work contracted for, the presumption that Gramaje is a labor-only contractor stands.[49] Second, Gramaje did not carry on an independent business or undertake the performance of its service contract according to its own manner and method, free from the control and supervision of its principal, Polyfoam, its apparent role having been merely to recruit persons to work for Polyfoam. [50] It is undisputed that respondent had performed his task of packing Polyfoams foam products in Polyfoams premises. As to the recruitment of respondent, petitioners were able to establish only that respondents application was referred to Gramaje, but that is all. Prior to his termination, respondent had been performing the same job in Polyfoams business for almost six (6) years. He was even furnished a copy of Polyfoams Mga Alituntunin at Karampatang Parusa,[51] which embodied Polyfoams rules on attendance, the manner of performing the employees duties, ethical standards, cleanliness, health, safety, peace and order. These rules carried with them the corresponding penalties in case of violation. While it is true that petitioners submitted the Affidavit of Polyfoams supervisor Victor Abadia, claiming that the latter did not exercise supervision over respondent because the latter was not Polyfoams but Gramajes employee, said Affidavit is insufficient to prove such claim. Petitioners should have presented the person who they claim to have exercised supervision over respondent and their alleged other employees assigned to Polyfoam. It was never established that Gramaje took entire charge, control and supervision of the work and service agreed upon. And as aptly observed by the CA, it is likewise highly unusual and suspect as to the absence of a written contract specifying the performance of a specified service, the nature and extent of the service or work to be done and the term a nd duration of the relationship.[52] 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 employeremployee relationship 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.[53] 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. [54] Respondent was Illegally Dismissed From Employment

Respondent stated that on January 14, 2000, his time card was suddenly taken off the rack. His supervisor later informed him that Polyfoams management decided to dismiss him due to infraction of 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 of such dismissal. It, instead, explained that respondents 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. The LA gave credence to respondents narration of the circumstances of the case. Said conclusion was affirmed by the CA. We find no reason to depart from such findings. 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 of his dismissal. No notice of termination was given to him. Clearly, 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.[55] Consequently,respondent is 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 up to the time of his actual reinstatement. However, if reinstatement is no longer feasible as in this case, separation pay equivalent to one month salary for every year of service shall be awarded as an alternative. [56] Thus, the CA is correct in affirming the LAs award of separation pay with full backwag es and other monetary benefits. WHEREFORE, premises considered, the petition is hereby DENIED. The Court of Appeals Decision dated December 19, 2005 and Resolution dated April 25, 2006, in CA-G.R. SP No. 83696, are AFFIRMED. SO ORDERED.

SECOND DIVISION COASTAL SAFEWAY MARINE SERVICES INC., Petitioner, G.R. No. 185352

Currency equivalent to the exchange rate prevailing during the time of payment. SO ORDERED.[2] The Facts Present: A seafarer since 1991, respondent Elmer T. Esguerra (Esguerra) applied for placement with petitioner Coastal Safeway Marine Services, Inc. (CSMSI) sometime in 2003. Found fit for work during the pre-employment medical examination conducted by the company-designated physician,[3] Esguerra was hired by the CSMSI as Third Mate for the M/V Mr. Nelson, an ocean-going vessel under the flag of the United Arab Emirates (UAE) owned by its foreign principal, Canada & Middle East General Trading (CMEGT). Subject to the provisions of the POEA-SEC, the contract of employment executed by the parties on 9 May 2003 provided a term of one (1) year and a basic monthly salary of US$800.00 for a 48-hour work-week, with provisions for overtime pay and vacation leave with pay.[4] Rather than the aforesaid vessel, however, it appears that, on 13 May 2003, Esguerra, as Second Officer, eventually boarded the vessel M/V Gondwana which was likewise manned by CSMSI on behalf of Nabeel Shipmanagement Ltd. Fze. (NSLF).[5] On 28 June 2003 or after forty six (46) days of shipboard employment, Esguerra requested medical attention for back and chest pains while M/V Gondwana was docked at Port Jebel Ali, UAE. Examined on 5 July 2003 at the Jebel Ali Medical Centre, Esguerra was declared not fit for work until complete cardiac evaluation is done and advised to rest until then by Dr. Zarga S. Tulmar.[6] Despite the normal results of the serology, hematology, biochemistry and x-ray tests administered upon him,[7] however, Esguerra insisted on going home on the ground that he had been rendered unfit for work. Alleging that he had yet to receive his salary for June 2003 and that his employer was making him shoulder his repatriation expenses as a consequence of his failure to finish his contract, Esguerra also sought assistance from the Jebel Ali police/coastguard regarding his predicament.[8] Subsequent to his arrival in the Philippines on 7 July 2003, Esguerra went to the Philippine Heart Center (PHC), the Philippine Orthopedic Hospital (POH) and the Philippine General Hospital (PGH) for medical evaluation and treatment. Having consulted with Dr. Efren R. Vicaldo, a Doctor of Internal Medicine and Cardiology at the PHC as well as Dr. Rimando C. Saguin, an Orthopedic Surgeon at the POH, Esguerra further underwent diagnostic tests and was prescribed various medications at the PGH for chronic stable angina.[9] On 16 July 2003, Esguerra filed against CSMSI, its president, Benedicto C. Morcilla (Morcilla), and CMEGT, the complaint for medical reimbursement, sickness allowance, permanent disability benefits, damages and attorneys fees which

- versus -

CARPIO, J., Chairperson, BRION, BERSAMIN,* PEREZ, and SERENO, JJ.

ELMER T. ESGUERRA, Respondent.

Promulgated: August 10, 2011

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION PEREZ, J.: Compliance with the mandatory reporting requirements for the claim of disability benefits and sickness allowance under the Philippine Overseas Employment Administration Standard Employment Contract Governing the Employment of Filipino Seafarers On-Board Ocean-Going Vessels (POEA-SEC) is central to this Rule 45 petition for review on certiorari, primarily assailing the 29 August 2008 Decision rendered by the then Seventh Division of the Court of Appeals (CA) in CA-G.R. SP No. 90298,[1] the dispositive portion of which states: WHEREFORE, the petition is granted. The Resolutions dated June 30, 2004 and September 30, 2004 of public respondent NLRC are set aside. Accordingly, private respondents [Coastal Safeway Marine Services, Inc., Benedicto C. Morcilla and Canada and Middle East General Trading] are ordered to pay petitioner [Elmer T. Esguerra], jointly and solidarily, his sickness allowance of US$3,200.00 and disability benefits of US$20,900.00 which may be paid in Philippine

was docketed as NLRC-OFW Case No. (M) 03-07-1784-00 before the arbitral level of the National Labor Relations Commission (NLRC). [10] Subsequent to the filing of said complaint, Dr. Vicaldo issued a medical certificate dated 18 July 2003, diagnosing Esguerra to be afflicted with Coronary Art ery Disease, Stable angina pectoris and declaring him unfit for work, with an Impediment Grade VII (41.8%).[11] On 29 July 2003, Dr. Saguin also issued a medical certification stating that, as a consequence of his moderate rigidity with 2/3 loss of motion and loss of lifting power of the trunk, Esguerra was then unfit to work with an Impediment Grade VIII.[12] In support of his complaint, Esguerra alleged, among other, matters, that he was repatriated for medical reasons on account of his workrelated/aggravated ailment; that despite being apprised of his intention to submit himself for medical examination, CSMSI failed to refer him to a company-designated physician, and insisted that he was fit for work; and, that left with no choice but to seek medical attention on his own at the PGH, PHC and POH, he was constrained to file his complaint for disability benefits, sickness allowance, damages and attorneys fees.[13] In refutation, CSMSI, Morcilla and CMEGT averred that the tests administered on Esguerra at the Jebel Ali Medical Centre revealed that he was in good health; and, that disregarding the finding that he continued to be fit for work, Esguerra insisted on his repatriation and filed his complaint without submitting himself to a post-employment medical examination within three (3) working days upon his return.[14] Finding in favor CSMSI, Morcilla and CMEGT, Labor Arbiter Florentino R. Darlucio went on to render the 29 January 2004 Decision, dismissing the complaint on the ground that Esguerra failed to prove his disability and to submit himself to a postemployment medical examination by a company-designated physician, pursuant to Section 20-B of the POEA SEC.[15] With the affirmance of the Labor Arbiters decision in the 30 June 2003 Resolution issued by the NLRCs First Division in NLRC NCR CA No. 039292 04,[16] Esguerra filed the petition for certiorari docketed before the CA as CAG.R. SP No. 90298. On 29 August 2008, the CAs Seventh Division rendered the herein assailed decision reversing the NLRCs 30 June 2003 resolution, upon the following findings and conclusions, viz.: (a) the medical certifications issued by Drs. Vicaldo and Saguin indicate that respondent is entitled to temporary disability benefits corresponding to Impediment Grade VII (41.8%) which was assessed as a consequence of the illness he suffered during the period of his employment; (b) the post-employment medical examination by a companydesignated physician under POEA Memorandum Circular No. 055-96 (Revised Standard Employment Terms and Conditions Governing the Employment of Filipino Seafarers on Board Ocean-Going Vessels) is not absolute and admits of exceptions; (c) petitioners failure to refer him to a company-designated physician justified respondents resort to the physicians who declared him unfit for work and assessed his Impediment Grade as aforesaid; and, (d)

respondent is entitled to a sickness allowance equivalent to four months salary.[17] CSMSIs motion for reconsideration of the foregoing decision was denied for lack of merit in the CAs second assailed Resolution dated 11 November 2008,[18] hence, this petition. The Issues CSMSI seeks the reversal of the CAs assailed resolutions on the following grounds, to wit: 1. The ruling of the Court of the Court of Appeals reversing and setting aside the findings of fact and conclusions of law of Labor Arbiter Florentino R. Darlucio, which was affirmed in toto by the National Labor Relations Commission (NLRC), First Division, is contrary to the evidence on record and runs afoul with prevailing jurisprudence. The Court of Appeals misappreciated the evidence and applied the POEA Standard Employment Contract of 1996 instead of the Revised Terms and Conditions for Seafarers on Board Ocean-Going vessels, which is part and parcel of the Contract of Employment entered into between Esguerra and the petitioner on May 9, 2003.[19] The Courts Ruling We find the petition impressed with merit. Viewed in light of the fact that Esguerras contract of employment was executed on 9 May 2003, CSMSI correctly faults the CA for applying POEA Memorandum Circular No. 055-96 instead of the 2000 POEA-SEC which took effect on 25 June 2000. Deemed written in the seafarer's contract of employment,[20] the 2000 POEA-SEC like its predecessor was designed primarily for the protection and benefit of Filipino seamen in the pursuit of their employment on board ocean-going vessels.[21] Anent a seafarers entitlement to compensation and benefits for injury and illness, Section 20-B (3) thereof provides as follows: Section 20-B.Compensation and Benefits for Injury and Illness.

2.

xxxx 3. Upon sign-off from the vessel for medical treatment, the seafarer is entitled to sickness allowance equivalent to his basic wage until he is declared fit to work or the degree of permanent disability has been assessed by the companydesignated physician, but in no case shall this period exceed one hundred twenty (120) days.E For this purpose, the seafarer shall submit himself to a postemployment medical examination by a company-designated physician within three working days upon his return except when he is physically incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as compliance. Failure of the seafarer to comply with the mandatory reporting requirement shall result in his forfeiture of the right to claim the above benefits. If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly between the employer and the seafarer. The third doctor's decision shall be final and binding on both parties. (Emphasis added.)

justification for his inability to submit himself to a post-employment medical examination by a company-designated physician. If a written notice is required of a seafarer who is physically incapacitated for purposes of compliance with said requirement, we fail to see why a more tangible proof should not likewise be expected of Esguerra who, after his arrival on 7 July 2003, appears to have been well enough to consult with Dr. Vicaldo and Dr. Saguin on 9 July 2003.[29] Indeed, self-serving and unsubstantiated declarations are insufficient to establish a case before quasi-judicial bodies where the quantum of evidence required to establish a fact is substantial evidence.[30] Often described as more than a mere scintilla,[31] substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion, even if other equally reasonable minds might conceivably opine otherwise.[32] To our mind, Esguerras compliance with the mandatory reporting requirement under the POEA-SEC was made even more imperative by the fact that his repatriation for medical reasons was categorically disputed by CSMSI. Consistent with the 5 July 2003 diagnosis made by Dr. Tulmar at the Jebel Ali Medical Centre declaring him not fit for work until complete cardiac evaluation is done and advising him to rest until then,[33] it appears that Esguerra underwent serology, hematology, biochemistry and x-ray diagnostic tests which yielded no significant findings relative to the back and chest pains he claims to have suffered.[34] Although the 5 July 2003 notation made on the M/V Gondwana Chief Officers Logbook states that he was advised to be repatriated on the same day and to continue his medication in the Philippines, no less than Esguerra himself confirmed in his 6 July 2003 letter to the Jebel Ali police/coastguard that he had yet to undergo a compete cardiac evaluation and that CSMSIs foreign principal, NSLF, had refused to shoulder his repatriation expenses on the ground that he was unable to finish his contract.[35] Quite significantly, Esguerra also filed his complaint on 16 July 2003[36] or even before his impediment rating was definitively assessed by either Dr. Vicaldo or Dr. Saguin. Our perusal of the record further shows that, by and of themselves, the medical certifications upon which Esguerra anchored his claims for disability benefits and sickness allowance were not supported by such diagnostic tests and/or procedures as would adequately refute the normal results of those administered to him at the Jebel Ali Medical Centre. Working on a vague diagnosis of lower back problem, Dr. Saguin appears to have caused Esguerra to undergo physical therapy and prescribed him pain medications[37] similar to those he was already given abroad.[38] While Dr. Vicaldo also issued the 18 July 2003 medical certification, diagnosing Esguerra to be suffering from Coronary Artery Disease, Stable Angina Pectoris,[39] his justification for the assessment of an Impediment Grade VII (41.8%) was merely anchored on the following general impressions, to wit:

The foregoing provision has been interpreted to mean that it is the company-designated physician who is entrusted with the task of assessing the seaman's disability,[22] whether total or partial, due to either injury or illness, during the term of the latter's employment.[23] Concededly, this does not mean that the assessment of said physician is final, binding or conclusive on the claimant, the labor tribunal or the courts.[24] Should he be so minded, the seafarer has the prerogative to request a second opinion and to consult a physician of his choice[25] regarding his ailment or injury, in which case the medical report issued by the latter shall be evaluated by the labor tribunal and the court, based on its inherent merit.[26] For the seamans claim to prosper, however, it is mandatory that he should be examined by a company-designated physician within three days from his repatriation.[27] Failure to comply with this mandatory reporting requirement without justifiable cause shall result in forfeiture of the right to claim the compensation and disability benefits provided under the POEA-SEC.[28] There is no dispute regarding the fact that Esguerra had altogether failed to comply with the above-discussed mandatory reporting requirement. Beyond his bare assertion, however, that CSMSI never gave him referrals to continue his medications as recommended by the foreign doctor despite his call on 8 July 2003 to inform them that he will report the next day in order to submit his medical evaluation abroad, Esguerra did not present any evidence to prove

This patient/seaman presented with a history of shortness of breath, easy fatigue and chest pain [i]n June, 2003; He was seen in Dubai UAE where his ECG showed right bundle branch block. He was also seen at the PGH where he was treated [for] chronic stable angina. At present, he still complains of easy fatigue and chest pain. He is now unfit to resume work as seaman in any capacity. His illness is considered work aggravated. He would require antianginal medic[ine] to relieve his recurrent chest pain. He is at risk for developing full blown coronary artery disease in the future which may present as acute myocardial infarction. Having recurrent chest pain obviously impairs his quality of life. He needs lifestyle [modification] to improve his prognosis. This includes nicotine abstinence, dietary adjustments and physical exercise.[40]

unjustified non-compliance with the mandatory reporting requirement under the POEA-SEC. When the language of the contract is explicit and leaves no doubt as to the intention of its drafters, the rule is settled that courts may not read into it any other intention that would contradict its plain import. [47] While we sympathize with Esguerras plight, we are, therefore, constrained to deny his claims for disability benefits and sickness allowance absent proof of compliance with the requirements set forth in Section 20 (B), paragraph (3) of the POEASEC. WHEREFORE, premises considered, the petition is GRANTED and the assailed Decision dated 29 August 2008 is, accordingly, REVERSED and SET ASIDE. In lieu thereof, another is entered REINSTATING the 30 June 2004 Resolution issued by the NLRC and 29 January 2004 Decision rendered by Labor Arbiter Florentino R. Darlucio.

SO ORDERED.

Granted that strict rules of evidence are not applicable in claims for compensation,[41] and mere probability and not the ultimate degree of certainty is regarded as the touchstone or test of proof in compensation proceedings,[42] it cannot be gainsaid that awards of compensation cannot rest in speculations or presumptions.[43] In the absence of showing of adequate tests and reasonable findings to support the same, the divergent Impediment Grades assessed by Dr. Vicaldo and Dr. Saguin cannot be expediently taken at face value. In Magsaysay Maritime Corporation vs. Velasquez,[44] this Court significantly brushed aside the evidentiary value of a recommendation made by Dr. Vicaldowhich was likewise "based on a single medical report which outlined the alleged findings and medical history" of the claimant-seafarer. In Montoya vs. Transmed Manila Corporation,[45] a similar fate was dealt the same doctor's plain statement of the supposed work-relation/work-aggravation of a seafarer's ailment which was "not supported by any reason or proof submitted together with the assessment or in the course of the arbitration." We are well aware of the principle that, consistent with the purposes underlying the formulation of the POEA-SEC, its provisions must be applied fairly, reasonably and liberally in favor of the seafarers, for it is only then that its beneficent provisions can be fully carried into effect.[46] This exhortation cannot, however, be taken to sanction the award of disability benefits and sickness allowance based on flimsy evidence and/or even in the face of an

Republic of the Philippines Supreme Court Manila SECOND DIVISION 3RD ALERT SECURITY AND DETECTIVE SERVICES, INC., Petitioner, Present: G.R. No. 200653

On November 30, 2005, the labor arbiter issued a decision that Navias dismissal was illegal. 3rd Alert appealed to the National Labor Relations Commission (NLRC) which affirmed the ruling of the labor arbiter. 3rd Alerts motion for reconsideration of the NLRC decision was denied in a resolution dated October 19, 2008. From this ruling, 3rd Alert filed an appeal with the CA (docketed as CA-G.R. SP No. 106963) with a prayer for the issuance of a temporary restraining order. The CA denied the appeal; 3rd Alert moved for a motion for reconsideration but the motion was also denied. The writ of execution (CA-G.R. SP No. 117361) In the meantime, on January 29, 2009, the NLRC issued an Entry of Judgment certifying that the NLRC resolution dated October 19, 2008 has become final and executory. Thus, Navia filed with the labor arbiter an exparte motion for recomputation of back wages and an ex-parte motion for execution based on the recomputed back wages. On November 10, 2009, the labor arbiter issued a writ of execution to enforce the recomputed monetary awards. 3rd Alert appealed the recomputed amount stated in the writ of execution to the NLRC. 3rd Alert also alleged that the writ was issued with grave abuse of discretion since there was already a notice of reinstatement sent to Navia. The NLRC dismissed the appeal, ruling that 3rd Alert is guilty of bad faith since there was no earnest effort to reinstate Navia. The NLRC also ruled that there was no notice or reinstatement sent to Navias counsel. A motion for reconsideration was filed, but it was likewise denied. 3rd Alert filed a petition for certiorari with the CA which found the petition without merit because Navia had not been reinstated either physically or in the payroll. The CA also denied the motion for reconsideration filed by 3rd Alert; hence, this petition. The Issue In this petition, we resolve the issue of whether the CA erred in ruling that the NLRC did not commit any grave abuse of discretion. The Ruling

CARPIO, J., Chairperson, BRION, PEREZ, - versus SERENO, and REYES, JJ. Promulgated: ROMUALDO NAVIA, Respondent. x------------------------------------------------------------------------------------x RESOLUTION BRION, J.: This is a petition for review on certiorari[1] under Rule 45 of the Rules of Court, assailing the decision[2] dated September 30, 2011 and the resolution[3] dated February 15, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 117361, which dismissed the petition filed by 3rd Alert Security and Detective Services, Inc. (3rd Alert). The Antecedent Facts This case started from an illegal dismissal complaint filed by Romualdo Navia against 3rd Alert. June 13, 2012

We do not see any grave abuse of discretion after a close examination of the petition and the attached records where 3rd Alert insists that a copy of the manifestation on reinstatement had been sent to Navias counsel and was received by a certain Biznar. Time and again, we have held that this Court is not a trier of facts. [4] In the absence of any attendant grave abuse of discretion, these findings are entitled not only to respect, but to our final recognition in this appellate review. Since it was ruled that there had been no notice of reinstatement sent to Navia or his counsel, as also affirmed by the CA, we cannot rule otherwise in the absence of any compelling evidence. Article 223 of the Labor Code provides that in case there is an order of reinstatement, the employer must admit the dismissed employee under the same terms and conditions, or merely reinstate the employee in the payroll. The order shall be immediately executory. Thus, 3rd Alert cannot escape liability by simply invoking that Navia did not report for work. The law states that the employer must still reinstate the employee in the payroll. Where reinstatement is no longer viable as an option, separation pay equivalent to one (1) month salary for every year of service could be awarded as an alternative. [5] Since the proceedings below indicate that 3 rd Alert failed to adduce additional evidence to show that it tried to reinstate Navia, either physically or in the payroll, we adopt as correct the finding that there was no earnest effort to reinstate Navia. The CA was correct in affirming the judgment of the NLRC in this regard. We also take note that 3rd Alert resorted to legal tactics to frustrate the execution of the labor arbiters order; for about four (4) years, it e vaded the obligation to reinstate Navia. By so doing, 3rd Alert has made a mockery of justice. We thus find it proper, under the circumstances, to impose treble costs against 3rd Alert for its utter disregard to comply with the writ of execution. To reiterate, no indication exists showing that 3 rd Alert exerted any efforts to reinstate Navia; worse, 3rd Alerts lame excuse of having sent a notice of reinstatement to a certain Biznar only compounded the intent to mislead the courts. Also, the main issue of this case, finding Navia to have been illegally dismissed, has already attained finality. Litigation must end and terminate sometime and somewhere, and it is essential for an effective and efficient administration of justice that, once a judgment has become final, the winning party be not deprived of the fruits of the verdict.[6] The order is to reinstate Navia; sadly, the mere execution of this judgment has to even reach the highest court of the land, thereby frustrating the entire judicial process. This justifies thetreble costs we now impose against 3rd Alert.[7]

It is settled that in actions for recovery of wages or where an employee was forced to litigate and incur expenses to protect his right and interest, he is entitled to an award of attorney's fees.[8] Navia, having been compelled to litigate due to 3rd Alerts failure to satisfy his valid claim, is also entitled to attorney's fees of ten percent (10%) of the total award at the time of actual payment, following prevailing jurisprudence.[9] While we agree that lawyers owe their entire devotion to the interest of their clients, they should not forget that they are also officers of the court, bound to exert every effort to assist in the speedy and efficient administration of justice. They should not, therefore, misuse the rules of procedure to defeat the ends of justice or unduly delay a case, impede the execution of a judgment or misuse court processes.[10] WHEREFORE, premises considered, we hereby DENY the petition outright and AFFIRM the decision dated September 30, 2011 and the resolution dated February 15, 2012 of the Court of Appeals in CA-G.R. SP No. 117361. Treble costs and attorney's fees of ten percent (10%) of the total monetary award at the time of actual payment against 3rd Alert are hereby also awarded to Romualdo Navia. SO ORDERED.