SALVADOR, Karmela Kate B.

(2B)

GRACE CHRISTIAN HIGH SCHOOL V. FILIPINAS LAVANDERA

G.R. NO. 177845
AUGUST 20, 2014

Topic: Retirement Pay Differentials

Doctrine: "an employees retirement benefits under any collective
bargaining [agreement (CBA)] and other agreements shall not be less than
those provided" under the same that is, at least one-half (1/2) month
salary for every year of service, a fraction of at least six (6) months being
considered as one whole year and that "[u]nless the parties provide for
broader inclusions, the term one-half (1/2) month salary shall mean fifteen
(15) days plus one-twelfth (1/12) of the 13th month pay and the cash
equivalent of not more than five (5) days of service incentive leaves."

FACTS:
Filipinas was employed by petitioner Grace Christian High School (GCHS) as
high school teacher since June1977, with a monthly salary of 18,662.00 as
of May 31, 2001.
On August 30, 2001, Filipinas filed a complaint for illegal (constructive)
dismissal, non-payment of service incentive leave (SIL) pay, separation pay,
service allowance, damages, and attorneys fees against GCHS and/or its
principal, Dr. James Tan. She alleged that on May 11, 2001, she was
informed that her services were to be terminated effective May 31, 2001,
pursuant to GCHS retirement plan which gives the school the option to
retire a teacher who has rendered at least 20 years of service, regardless of
age, with a retirement pay of one-half () month for every year of service.
At that time, Filipinas was only 58 years old and still physically fit to work.
She pleaded with GCHS to allow her to continue teaching but her services
were terminated, contrary to the provisions of Republic Act No. (RA)
7641, otherwise known as the "Retirement Pay Law."
For their part, GCHS denied that they illegally dismissed Filipinas. They
asserted that the latter was considered retired on May 31, 1997 after having
rendered 20 years of service pursuant to GCHS retirement plan and that she

was duly advised that her retirement benefits in the amount of 136,210.00
based on her salary at the time of retirement, i.e., 13,621.00, had been
deposited to the trustee-bank in her name. Nonetheless, her services were
retained on a yearly basis until May 11, 2001 when she was informed that
her year-to-year contract would no longer be renewed.
The LA Ruling
The Labor Arbiter dismissed the complaint but found that the retirement
benefits payable under GCHS retirement plan is deficient vis--vis those
provided under RA 7641
Dissatisfied, GCHS filed an appeal before the NLRC.
The NLRC Ruling
The NLRC set aside the LAs award, and ruled that Filipinas retirement pay
should be computed based on her monthly salary at the time of her
retirement on May 31, 1997.
Aggrieved, Filipinas filed a petition for certiorari before the CA.
The CA Ruling
The CA affirmed with modification the NLRCs Decision. It held that the Court
has simplified the computation of "one-half month salary" by equating it
to"22.5 days" which is "arrived at after adding 15 days plus 2.5 days
representing one-twelfth of the 13th month pay, plus 5 days of [SIL]."
Unperturbed, GCHS filed the instant petition.
ISSUE:
Whether or not the multiplier 22.5 days is to be used in computing
the retirement pay differentials of Filipinas.
RULING: NO.
RA 7641, which was enacted on December 9, 1992, amended Article 287 of
the Labor Code, providing for the rules on retirement pay to qualified private
sector employees in the absence of any retirement plan in the
establishment. The said law states that "an employees retirement benefits
under any collective bargaining [agreement (CBA)] and other agreements
shall not be less than those provided" under the same that is, at least one-

half (1/2) month salary for every year of service, a fraction of at least six (6)
months being considered as one whole year and that "[u]nless the parties
provide for broader inclusions, the term one-half (1/2) month salary shall
mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and
the cash equivalent of not more than five (5) days of service incentive
leaves."
The foregoing provision is applicable where (a) there is no CBA or other
applicable agreement providing for retirement benefits to employees, or (b)
there is a CBA or other applicable agreement providing for retirement
benefits but it is below the requirement set by law. 33 Verily, the determining
factor in choosing which retirement scheme to apply is still superiority in
terms of benefits provided.
In the present case, GCHS has a retirement plan for its faculty and nonfaculty members, which gives it the option to retire a teacher who has
rendered at least 20 years of service, regardless of age, with a retirement
pay of one-half (1/2) month for every year of service. Considering, however,
that GCHS computed Filipinas retirement pay without including one-twelfth
(1/12) of her 13th month pay and the cash equivalent of her five (5) days
SIL, both the NLRC and the CA correctly ruled that Filipinas retirement
benefits should be computed in accordance with Article 287 of the Labor
Code, as amended by RA 7641, being the more beneficent retirement
scheme. They differ, however, in the resulting benefit differentials due to
divergent interpretations of the term "one-half (1/2) month salary" as used
under the law.
The Court, in the case of Elegir v. Philippine Airlines, Inc., has recently
affirmed that "one-half (1/2) month salary means 22.5 days: 15 days plus
2.5 days representing one-twelfth (1/12) of the 13th month pay and the
remaining 5 days for [SIL]." The Court sees no reason to depart from this
interpretation. GCHS argument therefore that the 5 days SIL should be
likewise pro-rated to their 1/12 equivalent must fail.
NORIEL R. MONTIERRO V. RICKMERS MARINE AGENCY PHILS., INC.,
G.R. NO. 210634
JANUARY 14, 2015

Topic: Permanent or total disability

Doctrine: if the maritime compensation complaint was filed prior to 6

October 2008, the promulgation of Vergara, the 120-day rule applies; if, on
the other hand, the complaint was filed from 6 October 2008 onwards, the
240-day rule applies.
FACTS:
Respondent Rickmers Marine Agency Phils., Inc. (Rickmers) hired petitioner
Noriel Montierro as Ordinary Seaman with a basic monthly salary of USD420.
He was assigned to work on board the vessel M/V CSAV Maresias. Sometime
in May 2010, while on board the vessel and going down from a crane ladder,
Montierro lost his balance and twisted his legs, thus injuring his right
knee. Upon medical examination, the doctor found him unfit for duty. Thus
he was repatriated to the Philippines for further medical treatment.
On the 91st day of Montierros treatment, the company physician (Dr.
Alegre) issued an interim disability grade of 10 for stretching leg of
ligaments of a knee resulting in instability of the joint. He advised Montierro
to continue with the latters physical therapy and oral medications. Montierro
further underwent sessions of treatment and evaluation between 17
September
2010
and
28
December
2010.
On the 213th day of Montierros treatment, Dr. Alegre issued his final
assessment.
One month before Dr. Alegres issuance of the final disability grading,
Montierro filed with the labor arbiter a complaint for recovery of permanent
disability compensation. To support his claim he relied on a Medical
Certificate issued by his physician of choice recommending total permanent
disability grading.
LA and NLRC Rulings
The LA held that Montierro was entitled to permanent total disability
benefits under the Philippine Overseas Employment Agency Standard
Employment Contract (POEA-SEC), relying on the rule that the inability of
the seafarer to perform work for more than 120 days equate to permanent
total disability, which entitles a seafarer to full disability benefits. The
National Labor Relations Commission (NLRC) affirmed the decision of LA.
CA Ruling
The

CA

held

that

he

was

entitled

merely

to

Grade

10

permanent partial disability benefits. It ruled that his disability could not be
deemed total and permanent under the 240-day rule established by the
2008 case of Vergara v. Hammonia Maritime Services, Inc. which extends
the period to 240 days when, within the first 120-day period (reckoned from
the first day of treatment), a final assessment cannot be made because the
seafarer requires further medical attention, provided a declaration has been
made
to
this
effect.
The CA pointed out that only 215 days had lapsed from the time of
Montierros medical repatriation when Dr. Alegre issued a Grade 10 final
disability assessment. It justified the extension of the period to 240 days on
the ground that Dr. Alegre issued an interim disability grade of 10 on the
91st day of Montierros treatment, which was within the initial 120-day
period.
Further, the CA upheld the jurisprudential rule that, in case of conflict, it is
the recommendation issued by the company-designated physician that
prevails over the recommendation of the claimants physician of choice.
ISSUES:
I.

Whether it is the 120-day rule or the 240-day rule that should apply
to this case.

II.

Whether it is the opinion of the company doctor or of the personal

doctor of the seafarer that should prevail.

RULING:
I.

240-DAY RULE SHOULD APPLY

Based on Kestrel Shipping Co. Inc. v. Munar, if the maritime
compensation complaint was filed prior to 6 October 2008, the
promulgation of Vergara, the 120-day rule applies; if, on the other
hand, the complaint was filed from 6 October 2008 onwards, the
240-day
rule
applies.
In this case, Montierro filed his Complaint on 3 December 2010, which was
after the promulgation of Vergara on 6 October 2008. Hence, it is the 240day rule that applies to this case, and not the 120-day rule.
Applying the 240-day rule to this case, we arrive at the same conclusion
reached by the CA. Counting the days from 4 June 2010 to 3 January 2011,
the assessment by the company doctor was made on the 213 th day, well

within the 240-day period. The extension of the period to 240 days is
justified by the fact that Dr. Alegre issued an interim disability grade of 10
on 3 September 2010, the 91st day of Montierros treatment, which was
within
the
120-day
period.
Thus, the CA correctly ruled that Montierros condition cannot be deemed a
permanent total disability.
II.

OPINION OF THE COMPANY DOCTOR SHOULD PREVAIL

Procedure to be followed regarding the determination of liability for workrelated death, illness or injury in the case of overseas Filipino seafarers:
when a seafarer sustains a work-related illness or injury while on board the
vessel, his fitness for work shall be determined by the company-designated
physician. The physician has 120 days, or 240 days, if validly extended, to
make the assessment. If the physician appointed by the seafarer disagrees
with the assessment of the company-designated physician, the opinion of a
third doctor may be agreed jointly between the employer and the seafarer,
whose decision shall be final and binding on them (2000 POEA-SEC).
In this case, the parties are bound by the 2000 POEA-SEC. Montierro,
however, preempted the procedure when he filed on 3 December 2010 a
Complaint for permanent disability benefits based on his chosen physicians
assessment, which was made one month before the company-designated
doctor issued the final disability grading on 3 January 2011, the 213th day
of
Montierros
treatment.
Hence, for failure of Montierro to observe the procedure provided by the
POEA-SEC, the assessment of the company doctor should prevail.
To contest the company-designated physician's disability assessment of
Grade 10, Montierro relied on the total permanent disability assessment of
his physician of choice. In contrast to his physician's assessment embodied
in a one-page medical certificate dated December 3, 2010 which did
not even indicate any test or procedure that may have been
performed or conducted when he examined and determined
Montierro's disability, however, the company-designated physician's
finding is entitled to greater weight and respect because it was arrived at
after Montierro was regularly examined in coordination with other doctors,
prescribed with medications, and given physical therapy and rehabilitation
sessions.
Having extensive personal knowledge of the seafarer's actual medical
condition, and having closely, meticulously and regularly monitored and

treated his injury for an extended period, the company-designated physician

is certainly in a better position to give a more accurate evaluation of
Montierro's health condition. The disability grading given by him should
therefore be given more weight than the assessment of Montierro's physician
of choice.
BAR EXAM QUESTION:
Because of continuing financial constraints, XYZ Inc. gave its
employees the option to voluntarily resign from the company. A was one of
those who availed of the option. On October 5, 2007, he was paid separation
benefits equivalent to seven (7) months pay for his six (6) years and seven
(7) months of service with the company and he executed a waiver and
quitclaim. A week later, A filed against XYZ, Inc. a complaint for illegal
dismissal. While he admitted that he was not forged to sign the quitclaim, he
contended that he agreed to tender his voluntary resignation on the belief
that XYZ, Inc. was closing down its business. XYZ, Inc., however, continued
its business under a different company name, he claimed.
Rule on whether the quitclaim executed by A is valid or not. Explain.

ANSWER:
"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, they must locate their case within any of three narrow
grounds: (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 (Philippine Carpet Manufacturing Corporation vs. Ignacio
B. Tagyamon et. al., G.R. No. 191475, December 11, 2013).
In this case, the signing of the quitclaim was based on a wrong
premise, and the employer was deceitful by not divulging full information.
The subsequent re-opening of the business under another name is an
indication of bad faith and fraud. Therefore, the quitclaim is invalid.