January 2014 Philippine Supreme

Court Decisions on Labor Law

Posted on February
Cases, Philippines - Law

21,

2014 by Leslie

C.

Dy

Posted

in Labor

Law, Philippines

Here are select January 2014 rulings of the Supreme Court of the Philippines on
labor law:
Backwages; when awarded. As a general rule, backwages are granted to
indemnify a dismissed employee for his loss of earnings during the whole period that he
is out of his job. Considering that an illegally dismissed employee is not deemed to have
left his employment, he is entitled to all the rights and privileges that accrue to him
from the employment. The grant of backwages to him is in furtherance and effectuation
of the public objectives of the Labor Code, and is in the nature of a command to the
employer to make a public reparation for dismissing the employee in violation of the
Labor Code.
The Court held that the respondents are not entitled to the payment of
backwages. The Court, citing G&S Transport Corporation v. Infante (G. R. No. 160303,
September 13, 2007) stated that the principle of a fair days wage for a fair days
labor remains as the basic factor in determining the award thereof. An exception to
the rule would be if the laborer was able, willing and ready to work but was illegally
locked out, suspended or dismissed or otherwise illegally prevented from working. It is,
however, required, for this exception to apply, that the strike be legal, a situation which
does not obtain in the case at bar. Visayas Community Medical Center (VCMC) formerly
known as Metro Cebu Community Hospital (MCCH) v. Erma Yballe, et al.,G.R. No.
196156, January 15, 2014
Dismissal; burden of proof on employer. The burden is on the employer to prove
that the termination was for valid cause. Unsubstantiated accusations or baseless
conclusions of the employer are insufficient legal justifications to dismiss an employee.
The unflinching rule in illegal dismissal cases is that the employer bears the burden of
proof.
One of CCBPIs policies requires that, on a daily basis, CCBPI Salesmen/Account
Specialists must account for their sales/collections and obtain clearance from the
company Cashier before they are allowed to leave company premises at the end of their
shift and report for work the next day. If there is a shortage/failure to account, the
concerned Salesmen/Account Specialist is not allowed to leave the company premises
until he settles the same. In addition, shortages are deducted from the employees
salaries. If CCBPI expects to proceed with its case against petitioner, it should have
negated this policy, for its existence and application are inextricably tied to CCBPIs
accusations against petitioner. In the first place, as petitioners employer, upon it lay the
burden of proving by convincing evidence that he was dismissed for cause. If petitioner
continued to work until June 2004, this meant that he committed no infraction, going by
this company policy; it could also mean that any infraction or shortage/non-remittance
incurred by petitioner has been duly settled. Respondents decision to ignore this issue
generates the belief that petitioner is telling the truth, and that the alleged infractions
are fabricated, or have been forgiven. Coupled with Macatangays statement which
remains equally unrefuted that the charges against petitioner are a scheme by local
CCBPI management to cover up problems in the Naga City Plant, the conclusion is
indeed telling that petitioner is being wrongfully made to account.Jonas Michael R.
Garza v. Coca-Cola Bottlers Phils., Inc., et al.,G.R. No. 180972. January 20, 2014.

Embezzlement; failure to remit collections. The irregularity attributed to

petitioner with regard to the Asanza account should fail as well. To be sure, Asanza
herself confirmed that she did not make any payment in cash or check of P8,160.00
covering the October 15, 2003 delivery for which petitioner is being held to account.
This being the case, petitioner could not be charged with embezzlement for failure to
remit funds which he has not collected. There was nothing to embezzle or remit because
the customer made no payment yet. It may appear from Official Receipt No. 303203
issued to Asanza that the October 15 delivery of products to her has been paid; but as
admitted by her, she has not paid for the said delivered products. The reason for
petitioners issuance of said official receipt to Asanza is the latters concurrent promise
that she would immediately issue the check covering the said amount, which she failed
to do. Jonas Michael R. Garza v. Coca-Cola Bottlers Phils., Inc., et al.,G.R. No. 180972.
January 20, 2014
Grave abuse of discretion; concept of. Having established through substantial
evidence that respondents injury was self-inflicted and, hence, not compensable
pursuant to Section 20 (D) of the 1996 POEA-SEC, no grave abuse of discretion can be
imputed against the NLRC in upholding LAs decision to dismiss respondents complaint
for disability benefits. It is well-settled that an act of a court or tribunal can only be
considered to be tainted with grave abuse of discretion when such act is done in a
capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction. INC
Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation
Limited v. Alexander L. Moradas,G.R. No., January 15, 2014
Illegal strike and illegal acts during the strike; distinction between union
members and union officers in determining when they lose their employment status.
The Supreme Court stressed that the law makes a distinction between union members
and union officers. A union member who merely participates in an illegal strike may not
be terminated from employment. It is only when he commits illegal acts during a strike
that he may be declared to have lost employment status. In contrast, a union officer
may be terminated from employment for knowingly participating in an illegal strike or
participates in the commission of illegal acts during a strike. The law grants the
employer the option of declaring a union officer who participated in an illegal strike as
having lost his employment. It possesses the right and prerogative to terminate the
union officers from service.
NAMA-MCCH-NFL is not a legitimate labor organization, thus, the strike staged by
its leaders and members was declared illegal. The union leaders who conducted the
illegal strike despite knowledge that NAMA-MCCH-NFL is not a duly registered labor
union were declared to have been validly terminated by petitioner. However, as to the
respondents who were mere union members, it was not shown that they committed any
illegal act during the strike. The Labor Arbiter and the NLRC were one in finding that
respondents actively supported the concerted protest activities, signed the collective
reply of union members manifesting that they launched the mass actions to protest
managements refusal to negotiate a new CBA, refused to appear in the investigations
scheduled by petitioner because it was the unions stand that they would only attend
these investigations as a group, and failed to heed petitioners final directive for them to
desist from further taking part in the illegal strike. The CA, on the other hand, found that
respondents participation in the strike was limited to the wearing of armbands. Since
an ordinary striking worker cannot be dismissed for such mere participation in the illegal
strike, the CA correctly ruled that respondents were illegally dismissed. However, the CA
erred in awarding respondents full back wages and ordering their reinstatement despite
the prevailing circumstances. Visayas Community Medical Center (VCMC) formerly
known as Metro Cebu Commnunity Hospital (MCCH) v. Erma Yballe, et al.,G.R. No.
196156, January 15, 2014

Labor law; kinds of employment; casual employment; requisites. Casual

employment, the third kind of employment arrangement, refers to any other
employment arrangement that does not fall under any of the first two categories, i.e.,
regular or project/seasonal. Universal Robina Sugar Milling Corporation and Rene
Cabati, G.R. No. 186439. January 15, 2014.
Labor law; kinds of employment; fixed term employment; requisites. The Labor
Code does not mention another employment arrangement contractual or fixed term
employment (or employment for a term) which, if not for the fixed term, should fall
under the category of regular employment in view of the nature of the employees
engagement, which is to perform an activity usually necessary or desirable in the
employers business.
In Brent School, Inc. v. Zamora (G.R. No. L-48494, February 5, 1990), the Court,
for the first time, recognized and resolved the anomaly created by a narrow and
literal interpretation of Article 280 of the Labor Code that appears to restrict the
employees right to freely stipulate with his employer on the duration of his
engagement. In this case, the Court upheld the validity of the fixed-term employment
agreed upon by the employer, Brent School, Inc., and the employee, Dorotio Alegre,
declaring that the restrictive clause in Article 280 should be construed to refer to
the substantive evil that the Code itself x x x singled out: agreements entered into
precisely to circumvent security of tenure. It should have no application to instances
where [the] fixed period of employment was agreed upon knowingly and voluntarily by
the parties x x x absent any x x x circumstances vitiating [the employees] consent, or
where [the facts satisfactorily show] that the employer and [the] employee dealt with
each other on more or less equal terms[.] The indispensability or desirability of the
activity performed by the employee will not preclude the parties from entering into an
otherwise valid fixed term employment agreement; a definite period of employment
does not essentially contradict the nature of the employees duties as necessary and
desirable to the usual business or trade of the employer.
Nevertheless, where the circumstances evidently show that the employer
imposed the period precisely to preclude the employee from acquiring tenurial
security, the law and this Court will not hesitate to strike down or disregard the period
as contrary to public policy, morals, etc. In such a case, the general restrictive rule
under Article 280 of the Labor Code will apply and the employee shall be deemed
regular. Universal Robina Sugar Milling Corporation and Rene Cabati, G.R. No. 186439.
January 15, 2014.
Labor law; kinds of employment; nature of the employment depends on the
nature of the activities to be performed by the employee. 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,
taking into account the nature of the employers business, the duration and scope of
work to be done, and, in some cases, even the length of time of the performance and its
continued existence. Universal Robina Sugar Milling Corporation and Rene Cabati, G.R.
No. 186439. January 15, 2014.
Labor law; kinds of employment; project employment; requisites; length of time
not controlling. A project employment, on the other hand, contemplates on
arrangement whereby the employment has been fixed for a specific project or
undertaking whose completion or termination has been determined at the time of the
engagement of the employee[.] Two requirements, therefore, clearly need to be
satisfied to remove the engagement from the presumption of regularity of employment,
namely: (1) designation of a specific project or undertaking for which the employee is

hired; and (2) clear determination of the completion or termination of the project at the
time of the employees engagement. The services of the project employees are legally
and automatically terminated upon the end or completion of the project as the
employees services are coterminous with the project. Unlike in a regular employment
under Article 280 of the Labor Code, however, the length of time of the asserted
project employees engagement is not controlling as the employment may, in fact,
last for more than a year, depending on the needs or circumstances of the project.
Nevertheless, this length of time (or the continuous rehiring of the employee even after
the cessation of the project) may serve as a badge of regular employment when the
activities performed by the purported project employee are necessary and
indispensable to the usual business or trade of the employer. In this latter case, the law
will regard the arrangement as regular employment. Universal Robina Sugar Milling
Corporation and Rene Cabati, G.R. No. 186439. January 15, 2014.
Labor law; kinds of employment; regular employment; requisites. Article 280 of
the Labor Code provides for three kinds of employment arrangements, namely: regular,
project/seasonal and casual. Regular employment refers to that arrangement whereby
the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer[.] Under this definition, the
primary standard that determines regular employment is the reasonable connection
between the particular activity performed by the employee and the usual business or
trade of the employer; the emphasis is on the necessity or desirability of the
employees activity. Thus, when the employee performs activities considered necessary
and desirable to the overall business scheme of the employer, the law regards the
employee as regular.
By way of an exception, paragraph 2, Article 280 of the Labor Code also
considers as regular, a casual employment arrangement when the casual employees
engagement is made to last for at least one year, whether the service is continuous or
broken. The controlling test in this arrangement is the length of time during which the
employee is engaged. Universal Robina Sugar Milling Corporation and Rene Cabati, G.R.
No. 186439. January 15, 2014.
Labor law; kinds of employment; seasonal employment; requisites. Seasonal
employment operates much in the same way as project employment, albeit it
involves work or service that is seasonal in nature or lasting for the duration of the
season. As with project employment, although the seasonal employment
arrangement involves work that is seasonal or periodic in nature, the employment
itself is not automatically considered seasonal so as to prevent the employee from
attaining regular status. To exclude the asserted seasonal employee from those
classified as regular employees, the employer must show that: (1) the employee must
be performing work or services that are seasonal in nature; and (2) he had been
employed for the duration of the season. Hence, when the seasonal workers are
continuously and repeatedly hired to perform the same tasks or activities for several
seasons or even after the cessation of the season, this length of time may likewise
serve as badge of regular employment. In fact, even though denominated as seasonal
workers, if these workers are called to work from time to time and are only temporarily
laid off during the off-season, the law does not consider them separated from the
service during the off-season period. The law simply considers these seasonal workers
on leave until re-employed. Universal Robina Sugar Milling Corporation and Rene
Cabati, G.R. No. 186439. January 15, 2014.
Overseas employment; that the entitlement of seamen on overseas work to
disability benefits is a matter governed, not only by medical findings, but by law and by
contract. With respect to the applicable rules, it is doctrinal that the entitlement of
seamen on overseas work to disability benefits is a matter governed, not only by

medical findings, but by law and by contract. The material statutory provisions are
Articles 191 to 193 under Chapter VI (Disability Benefits) of the Labor Code, in relation
[to] Rule X of the Rules and Regulations Implementing Book IV of the Labor Code. By
contract, the POEA-SEC, as provided under Department Order No. 4, series of 2000 of
the Department of Labor and Employment, and the parties Collective Bargaining
Agreement bind the seaman and his employer to each other.
In the foregoing light, the Court observes that respondent executed his contract
of employment on July 17, 2000, incorporating therein the terms and conditions of the
2000 POEA-SEC which took effect on June 25, 2000. However, since the implementation
of the provisions of the foregoing 2000 POEA-SEC was temporarily suspended by the
Court on September 11, 2000, particularly Section 20, paragraphs (A), (B), and (D)
thereof, and was lifted only on June 5, 2002, through POEA Memorandum Circular No. 2,
series of 2002, the determination of respondents entitlement to the disability benefits
should be resolved under the provisions of the 1996 POEA-SEC as it was, effectively, the
governing circular at the time respondents employment contract was executed. INC
Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or Interorient Navigation
Limited v. Alexander L. Moradas,G.R. No., January 15, 2014
Payment of separation pay as alternative relief for union members who were
dismissed for having participated in an illegal strike is in lieu of reinstatement;
circumstances when applicable. The alternative relief for union members who were
dismissed for having participated in an illegal strike is the payment of separation pay in
lieu of reinstatement under the following circumstances: (a) when reinstatement can no
longer be effected in view of the passage of a long period of time or because of the
realities of the situation; (b) reinstatement is inimical to the employers interest; (c)
reinstatement is no longer feasible; (d) reinstatement does not serve the best interests
of the parties involved; (e) the employer is prejudiced by the workers continued
employment; (f) facts that make execution unjust or inequitable have supervened; or (g)
strained relations between the employer and employee.
The Court ruled that the grant of separation pay to respondents is the
appropriate relief under the circumstances considering that 15 years had lapsed from
the onset of this labor dispute, and in view of strained relations that ensued, in addition
to the reality of replacements already hired by the hospital which had apparently
recovered from its huge losses, and with many of the petitioners either employed
elsewhere, already old and sickly, or otherwise incapacitated. Visayas Community
Medical Center (VCMC) formerly known as Metro Cebu Commnunity Hospital (MCCH) v.
Erma Yballe, et al.,G.R. No. 196156, January 15, 2014
Rule 45; only questions of law are allowed in a petition for review on certiorari. It
is a settled rule in this jurisdiction that only questions of law are allowed in a petition for
review on certiorari. The Courts power of review in a Rule 45 petition is limited to
resolving matters pertaining to any perceived legal errors, which the CA may have
committed in issuing the assailed decision. In reviewing the legal correctness of the
CAs Rule 65 decision in a labor case, the Court examines the CA decision in the context
that it determined whether or not there is grave abuse of discretion in the NLRC decision
subject of its review and not on the basis of whether the NLRC decision on the merits of
the case was correct. Universal Robina Sugar Milling Corporation and Rene Cabati, G.R.
No. 186439. January 15, 2014.
Rule 45; the Courts jurisdiction in a Rule 45 petition is limited to the review of
pure questions of law; exceptions. The Courts jurisdiction in cases brought before it
from the CA via Rule 45 of the Rules of Court is generally limited to reviewing errors of
law. The Court is not the proper venue to consider a factual issue as it is not a trier of
facts. This rule, however, is not ironclad and a departure therefrom may be warranted
where the findings of fact of the CA are contrary to the findings and conclusions of the

NLRC and LA, as in this case. In this regard, there is therefore a need to review the
records to determine which of them should be preferred as more conformable to
evidentiary facts. INC Shipmanagement, Inc. Captain Sigfredo E. Monterroyo and/or
Interorient Navigation Limited v. Alexander L. Moradas,G.R. No., January 15, 2014.
Section 20 (B) of the 1996 POEA-SEC; an employer shall be liable for the injury or
illness suffered by a seafarer during the term of his contract; exception. 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. To be compensable, the injury or illness must
be proven to have been contracted during the term of the contract. However, 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. INC Shipmanagement, Inc. Captain Sigfredo E.
Monterroyo and/or Interorient Navigation Limited v. Alexander L. Moradas,G.R. No.,
January 15, 2014
Substantial evidence; concept of. 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. To note, considering that
substantial evidence is an evidentiary threshold, the Court, on exceptional cases, may
assess the factual determinations made by the NLRC in a particular case.
The Court ruled that NLRC had cogent legal bases to conclude that petitioners
have successfully discharged the burden of proving by substantial evidence that
respondents injury was directly attributable to himself. Records bear out circumstances
which all lead to the reasonable conclusion that respondent was responsible for the
flooding and burning incidents. While respondent contended that the affidavits and
statements of the vessels officers and his fellow crew members should not be given
probative value as they were biased, self-serving, and mere hearsay, he
nonetheless failed to present any evidence to substantiate his own theory. Besides,
as correctly pointed out by the NLRC, the corroborating affidavits and
statements of the vessels officers and crew members must be taken as a whole
and cannot just be perfunctorily dismissed as self-serving absent any showing that they
were lying when they made the statements therein. INC Shipmanagement, Inc. Captain
Sigfredo E. Monterroyo and/or Interorient Navigation Limited v. Alexander L.
Moradas,G.R. No., January 15, 2014