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46.

PLDT VS TIAMZON, 474 SCRA 761


474 SCRA 761 – Political Law – Constitutional Law – Due Process; Private Entities –
Procedural Due Process
Labor Law – Labor Relations – Termination of Employment – Twin Notice Rule
Grounds for Termination – Substantial Evidence
Antonio Tiamson was a radio technician at PLDT (Philippine Long Distance Telephone Company,
Inc.). In 1994, PLDT discovered that there were some illegal long distance calls being made by
employees. Tiamson and his workmates were summoned. One employee named Vidal Busa
admitted to the wrongdoings but he implicated his other workmates including Tiamson. PLDT
then made the investigation formal and Busa was made to submit an affidavit containing his earlier
story; notices were sent to the employees to explain; an investigation was done; and later
termination notices were sent. Among those terminated was Tiamson.
Tiamson later sued PLDT for illegal dismissal as he claimed the twin notice rule was not fully
complied with.
ISSUE: Whether or not Tiamson was denied due process.
HELD: Yes. In termination cases, the burden of proof rests upon the employer to show that the
dismissal is for just and valid cause; failure to do so would necessarily mean that the dismissal was
illegal. The employer’s case succeeds or fails on the strength of its evidence and not on the
weakness of the employee’s defense. If doubt exists between the evidence presented by the
employer and the employee, the scales of justice must be tilted in favor of the latter. Moreover, the
quantum of proof required in determining the legality of an employee’s dismissal is only
substantial evidence. Substantial evidence is more than a mere scintilla of evidence or relevant
evidence as a reasonable mind might accept as adequate to support a conclusion, even if other
minds, equally reasonable, might conceivably opine otherwise.
In this case, it appears that although Tiamson was sent a first notice (asking him to explain his
side) and then a second notice (termination notice) and he was also invited in a confrontation with
the management, still, the win notice rule was not fully complied with. The records show that Busa
and his other workmates submitted affidavits that did not implicate Tiamson. However, Busa was
made to submit a second affidavit which now impliacted Tiamson – which is quite irregular and
inconsistent – this would already create doubt in a reasonable mind as to whether or not Tiamson
really committed the wrongdoing.
Records further show that PLDT based its termination of Tiamson’s services on the ground that
Busa witnessed Tiamson after the latter allegedly just finished making illegal long distance calls.
This allegation by Busa was never communicated to Tiamson (as shown by the records). Hence,
Tiamson was never notified of the charges against him – in short, the first notice sent to
Tiamson was incomplete as to the charges against him.
Procedural due process requires that an employee be apprised of the charge against him, given
reasonable time to answer the same, allowed ample opportunity to be heard and defend himself,
and assisted by a representative if the employee so desires.
Procedural due process requires that the employer serve the employees to be dismissed two (2)
written notices before the termination of their employment is effected: (a) the first, to apprise them
of the particular acts or omission for which their dismissal is sought; and (b) second, to inform
them of the decision of the employer that they are being dismissed. Again, in this case, the first
notice was not fully complied with hence, Tiamson was illegally dismissed by PLDT.

47. MGG MARINE SERVICES VS NLRC, 259 SCRA 664

48. PHILIPPINE SAVINGS BANK VS NLRC, 261 SCRA 409


FACTS:
Petitioner and CESI entered into a letter agreement wherein CESI will provide
“Temporary Services” to petitioner. Attached to the letter was a list of messengers, assigned to
work with the petitioner, including respondent Orpiada. Orpiada rendered services within the
premises of the bank. On October 1976, petitioner requested CESI to withdraw Orpiada’s
assignment because Orpiada’s services were no longer needed. Thus, Orpiada filed a complaint
against petitioner for illegal dismissal and failure top ay the 13th month pay.
ISSUE: W/N an ER-EE relationship existed between the bank and respondent

HELD: Yes.
In the case at bar, Orpiada is not previously selected by the bank but was assigned to
work by CESI. The selection of Orpiada by CESI, was however subject to the acceptance of the
bank.
With respect to the payment of Orpiada’s wages, the bank remitted to CESI the daily rate
or Orpiada and CESI pays the latter his wages. He was also listed in the payroll of CESI with
SSS deduction.
In respect of the power of dismissal, the bank requested CESI to withdraw Orpiada’s
assignment, which resulted to the latter’s termination.
With regards to power of control, Orpiada performed his functions within the bank’s
premises and not in CESA/
Payment of wages and power of dismissal exist between CESI and Orpiada. However,
selection and control exist between Orpiada and the bank. Thus, it is necessary to determine the
relationship between the bank and CESI, whether the latter is a job (independent) contactor or a
labor-only contracting.
In the present case, the undertaking of CESI in favor of the bank was not the performance
of a specific job, but to produce its client – the bank – with a certain number of persons to work
as messengers. Thus, Orpiada utilized the premises and office equipment of the bank and not of
CESI.
Orpiada worked in the bank for a period of 16 months. Under the Labor Code, any
employee who has rendered at least 1 year, whether continuous or not, shall be considered as a
regular employee.
Therefore, CESI was only engaged in a labor-only contracting with petitioner and
Orpiada. As a result, petitioner is liable to Opiada as if Opiada had been directly employer by the
bank.
Wherefore, petition of certiorari is denied.

49. RAYCOR AIR CONTROL VS NLRC, 261 SCRA 589

50. WALLEM MARITIME SERVICES VS. NLRC, 263 SCRA 174


FACTS: Private respondent Joselito V. Macatuno was hired by Wallem Shipmanagement
Limited thru its local manning agent, Wallem Maritime Services, Inc., as an able-bodied seaman
on board the M/T Fortuna, a vessel of Liberian registry. Pursuant to the contract of employment,
private respondent was employed for ten (10) months covering the period February 26, 1989
until December 26, 1989 with a monthly salary of two hundred seventy-six US dollars (US
$276); among others xxxx
On June 24, 1989, while the vessel was berthed at the port of Kawasaki, Japan, an altercation
took place between private respondent and fellow Filipino crew member, Julius E. Gurimbao, on
the one hand, and a cadet/apprentice officer of the same nationality as the captain of the vessel
on the other hand. The master entered the incident in the tanker’s logbook.
As a consequence, private respondent and Gurimbao were repatriated to the Philippines where
they lost no time in lodging separate complaints for illegal dismissal with the POEA. According
to the affidavit private respondent executed before a POEA administering officer, the following
facts led to the filing of the complaint.
At about 5:50 a.m. of June 24, 1989, private respondent was on duty along with Gurimbao,
checking the manifold of the vessel and looking for oil leakages, when a cadet/apprentice who
was of the same nationality as the vessel’s captain (Singh), approached them. He ordered
Gurimbao to use a shovel in draining the water which, mixed with oil and dirt, had accumulated
at the rear portion of the upper deck of the vessel.
Gurimbao explained to the cadet/apprentice that throwing dirty and oily water overboard was
prohibited by the laws of Japan; in fact, port authorities were roaming and checking the sanitary
conditions of the port. The cadet/apprentice got mad and, shouting, ordered Gurimbao to get a
hose and siphon off the water. To avoid trouble, Gurimbao used a shovel in throwing the dirty
water into the sea.
Having finished his job, Gurimbao complained to private respondent about the “improper and
unauthorized act” of the cadet/apprentice. The two then went to the cadet/apprentice who was
idly standing in a corner. They reminded him that as a mere apprentice and not an officer of the
vessel, he had no right whatsoever to order around any member of the crew. However, the
cadet/apprentice reacted violently — shouting invectives and gesturing “as if challenging” the
two to a fight. To prevent him from “intimidating” them, private respondent pushed twice the
cadet/apprentice’s chest while Gurimbao “mildly hit” his arm. Frantic and shouting, the
cadet/apprentice ran to the captain “who happened to witness the incident” from the cabin’s
window.
The captain summoned private respondent and Gurimbao. With their bosun (head of the deck
crew), they went to the captain’s cabin. The captain told them to pack up their things as their
services were being terminated. They would disembark at the next port, the Port of Ube, from
where they would be flown home to the Philippines, the repatriation expenses to be shouldered
by them. The two attempted to explain their side of the incident but the captain ignored them
and firmly told them to go home.

xxxxx
A few days after their arrival in Manila or on July 1, 1989, one James Nichols told private
respondent that they could not secure a reimbursement of their repatriation expenses nor could
they get their salaries for the month of June.
Petitioner’s Defense: [basta pasaway daw ung mga respondents] alleged that the incident was not
the first infraction committed by the two xxx
POEA held the dismissal to be illegal; NLRC affirmed; Hence, this instant petition.
ISSUE: Whether or not there was illegal dismissal.
HELD: YES.
An employer may dismiss or lay off an employee only for the just and authorized causes
enumerated in Articles 282 and 283 of the Labor Code. However, this basic and normal
prerogative of an employer is subject to regulation by the State in the exercise of its paramount
police power. One’ s employment, profession, trade or calling is a property right within the
protection of the constitutional guaranty of due process of law.
We agree with petitioners that the ship captain’s logbook is a vital evidence as Article 612 of the
Code of Commerce requires him to keep a record of the decisions he had adopted as the vessel’s
head. Thus, inHaverton Shipping Ltd. v. NLRC, 10 the Court held that a copy of an official entry
in the logbook is legally binding and serves as an exception to the hearsay rule.
However, the Haverton Shipping ruling does not find unqualified application in the case at bar.
In said case, an investigation of the incident which led to the seaman’s dismissal was conducted
before he was dismissed.11
Consequently, the facts appearing in the logbook were supported by the facts gathered at
the investigation. In this case, because no investigation was conducted by the ship captain
before repatriating private respondent, the contents of the logbook have to be duly identified
and authenticated lest an injustice result from a blind adoption of such contents which merely
serve as prima facie evidence of the incident in question.

Moreover, petitioners did not submit as evidence to the POEA the logbook itself, or even
authenticated copies of pertinent pages thereof, which could have been easily xeroxed or
photocopied considering the present technology on reproduction of documents. 13 What was
offered in evidence was merely a typewritten collation of excerpts from what couldbe the
logbook 14 because by their format, they could have been lifted from other records kept in the
vessel in accordance with Article 612 of the Code of Commerce.
Under the Table of Offenses and Corresponding Administrative Penalties appended to the
contract of employment entered into by petitioners and private respondent, the offense described
by the logbook entry may well fall under insubordination and may constitute assaulting
a superior officer “with the use of deadly weapon” punishable with dismissal if the victim is
indeed a “superior officer.” However, an “apprentice officer” cannot be considered a
“superior officer.”
The aforequoted entry in the logbook is so sketchy that, unsupported by other evidence, it leaves
so many questions unanswered.
Petitioners’ failure to substantiate the grounds for a valid dismissal was aggravated by the
manner by which the employment of private respondent was terminated. Thus, Batas Pambansa
Blg. 130, amending paragraph (b) of Article 278 of the Labor Code, imposed as a
condition sine qua non that any termination of employment under the grounds provided in
Article 283 must be done only after notice and formal investigation have been accorded the
supposed errant worker.
As regards the notice requirement, the Court has stated:
On the issue of due process . . . , the law requires the employer to furnish the worker whose
employment is sought to be terminated a written notice containing a statement of the cause or
causes for termination and shall afford him ample opportunity to be heard and to defend himself
with the assistance of a representative. Specifically, the employer must furnish the worker
with two (2) written notices before termination of employment can be legally effected: (a) notice
which apprises the employee of the particular acts or omissions for which his dismissal is sought;
and (b) the subsequent notice which informs the employee of the employer’s decision to dismiss
him. (Emphasis supplied.) 22
Neither is the ship captain’s having witnessed the altercation an excuse for dispensing with
the notice and hearing requirements. Serving notice to private respondent under the
circumstances cannot be regarded as an “absurdity and superfluity.”

Petition Denied.

51. SAMILLANO VS NLRC, 265 SCRA 788

52. STOLT-NIELSEN VS NLRC, 264 SCRA 307


FACTS: On 6 March 1995, Sulpecio Madequillo (respondent) filed a complaint before the
Adjudication Office of the Philippine Overseas Employment Administration (POEA) against the
petitioners for illegal dismissal under a first contract and for failure to deploy under a
second contract.
COMPLAINT AFFIDAVIT STATES: On 6 November 1991(First Contract), he was hired by
Stolt-Nielsen Marine Services, Inc on behalf of its principal Chung-Gai Ship Management of
Panama as Third Assistant Engineer on board the vessel “Stolt Aspiration” for a period of nine
(9) months; He would be paid with a monthly basic salary and a fixed OT pay, a total of
$1,212.00 per month during the employment period; for nearly three (3) months of rendering
service and while the vessel was at Batangas, he was ordered by the ship’s master to
disembark the vessel and repatriated back to Manila for no reason or explanation;
Upon his return to Manila, he immediately proceeded to the petitioner’s office where he was
transferred employment with another vessel (Second Contract) named MV “Stolt Pride” under
the same terms and conditions of the First Contract; Despite the commencement of the Second
Contract on 21 April 1992, petitioners failed to deploy him; He made a follow-up with the
petitioner but the same refused to comply with the Second Employment Contract.
Thereafter, he demanded for his passport, seaman’s book and other employment documents.
However, he was only allowed to claim the said documents in exchange of his signing a
document; He was constrained to sign the document involuntarily because without these
documents, he could not seek employment from other agencies.
The case was transferred to the Labor Arbiter of the DOLE upon the effectivity of the Migrant
Workers and Overseas Filipinos Act of 1995.
LABOR ARBITER’S DECISION: respondent was constructively dismissed by the petitioners;
first contract entered into by and between the complainant and the respondents to have been
novated by the execution of the second contract. In other words, respondents cannot be held
liable for the first contract but are clearly and definitely liable for the breach of the second
contract.8 However, he ruled that there was no substantial evidence to grant the prayer for moral
and exemplary damages.
NLRC affirmed with modification, deleting the award of OT pay. Partial MR denied.
ISSUES: (1) WON there was novation of the first contract by the second contract; (2) WON the
alleged illegal dismissal under the 1st contract is barred by prescription; (3) WON respondent
was constructively dismissed.

HELD:

1. YES
It is evident that novation took place in this particular case. The parties impliedly
extinguished the first contract by agreeing to enter into the second contract to placate
Medequillo, Jr. who was unexpectedly dismissed and repatriated to Manila. The second contract
would not have been necessary if the petitioners abided by the terms and conditions of
Madequillo, Jr.’s employment under the first contract. The records also reveal that the 2nd
contract extinguished the first contract by changing its object or principal. These contracts were
for overseas employment aboard different vessels.
Contrary to petitioners’ assertion, the first contract was a “previous valid contract” since it
had not yet been terminated at the time of Medequillo, Jr.’s repatriation to Manila. The
legality of his dismissal had not yet been resolved with finality. Undoubtedly, he was still
employed under the first contract when he negotiated with petitioners on the second
contract. As such, the NLRC correctly ruled that petitioners could only be held liable
under the second contract

1. YES
Accordingly, the prescriptive period of three (3) years within which Medequillo Jr. may
initiate money claims under the 1st contract commenced on the date of his repatriation. xxx
The start of the three (3) year prescriptive period must therefore be reckoned on February 1992,
which by Medequillo Jr.’s own admission was the date of his repatriation to Manila. It was at
this point in time that Medequillo Jr.’s cause of action already accrued under the first contract.
He had until February 1995 to pursue a case for illegal dismissal and damages arising from the
1st contract. With the filing of his Complaint-Affidavit on March 6, 1995, which was clearly
beyond the prescriptive period, the cause of action under the 1st contract was already time-
barred.
1. NO (only breach of contract)
Even without actual deployment, the perfected contract gives rise to obligations on the part of
petitioners.
Even if by the standard contract employment commences only “upon actual departure of the
seafarer”, this does not mean that the seafarer has no remedy in case of non-deployment without
any valid reason. Parenthetically, the contention of the petitioners of the alleged poor
performance of respondent while on board the first ship MV “Stolt Aspiration” cannot be
sustained to justify the non-deployment, for no evidence to prove the same was presented.
We rule that distinction must be made between the perfection of the employment contract
and the commencement of the employer-employee relationship.

The perfection of the contract, which in this case coincided with the date of execution thereof,
occurred when petitioner and respondent agreed on the object and the cause, as well as the rest of
the terms and conditions therein.
Commencement of the employer-employee relationship, as earlier discussed, would have taken
place had petitioner been actually deployed from the point of hire.
Thus, 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. Thus, if the reverse had
happened, that is the seafarer failed or refused to be deployed as agreed upon, he would be liable
for damages.
Further, we do not agree with the contention of the petitioners that the penalty is a mere
reprimand.
The breach of contract happened on February 1992 and the law applicable at that time was
the 1991 POEA Rules and Regulations Governing Overseas Employment. The penalty for
non-deployment as discussed is suspension or cancellation of license or fine.
Now, the question to be dealt with is how will the seafarer be compensated by reason of the
unreasonable non-deployment of the petitioners?
We thus decree the application of Section 10 of Republic Act No. 8042 (Migrant Workers
Act) which provides for money claims by reason of a contract involving Filipino workers
for overseas deployment. The law provides:
Sec. 10. Money Claims. – xxxx the 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. x x x (Underscoring supplied)
Applying the rules on actual damages, Article 2199 of the New Civil Codeprovides that one is
entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly
proved.
Appeal Denied, respondent is awarded a actual damages equivalent to his salary for nine (9)
months as provided by the Second Employment Contract.
____________
NOTES:

Novation is the extinguishment of an obligation by the substitution or change of the obligation


by a subsequent one which extinguishes or modifies the first, either by changing the object or
principal conditions, or, by substituting another in place of the debtor, or by subrogating a third
person in the rights of the creditor. In order for novation to take place, the concurrence of the
following requisites is indispensable:
1. There must be a previous valid obligation,
2. There must be an agreement of the parties concerned to a new contract,
3. There must be the extinguishment of the old contract, and
4. There must be the validity of the new contract.

53. GARCIA VS NLRC, 264 SCRA 261

54. LUMIQUED VS EXENEA, 282 SCRA 125


282 SCRA 125 (89 SCAD 151) – Political Law – Constitutional Law – Due Process;
Administrative Bodies – Assistance by Counsel
Law on Public Officers – Right to Due Process – Public Office is Not a Property
Arsenio Lumiqued was the Regional Director of DAR-CAR. He was charged by Jeannette
Zamudio, the Regional Cashier, for dishonesty due to questionable gas expenses under his office.
It was alleged that he was falsifying gas receipts for reimbursements and that he had an
unliquidated cash advance worth P116,000.00. Zamudio also complained that she was unjustly
removed by Lumiqued two weeks after she filed the two complaints. The issue was referred to the
DOJ. Committee hearings on the complaints were conducted on July 3 and 10, 1992, but Lumiqued
was not assisted by counsel. On the second hearing date, he moved for its resetting to July 17,
1992, to enable him to employ the services of counsel. The committee granted the motion, but
neither Lumiqued nor his counsel appeared on the date he himself had chosen, so the committee
deemed the case submitted for resolution. The Investigating Committee recommended the
dismissal of Lumiqued. DOJ Sec Drilon adopted the recommendation. Fidel Ramos issued AO 52
dismissing Lumiqued.
Lumiqued appealed averring that his right to due process was violated as well as his right to
security of tenure.
ISSUE: Does the due process clause encompass the right to be assisted by counsel during an
administrative inquiry?
HELD: No. The right to counsel, which cannot be waived unless the waiver is in writing and in
the presence of counsel, is a right afforded a suspect or an accused during custodial investigation.
It is not an absolute right and may, thus, be invoked or rejected in a criminal proceeding and, with
more reason, in an administrative inquiry. In the case at bar, Lumiqued invoked the right of an
accused in criminal proceedings to have competent and independent counsel of his own choice.
Lumiqued, however, was not accused of any crime. The investigation conducted by the committee
was for the purpose of determining if he could be held administratively liable under the law for
the complaints filed against him. The right to counsel is not indispensable to due process unless
required by the Constitution or the law.
“. . . There is nothing in the Constitution that says that a party in a non-criminal proceeding is
entitled to be represented by counsel and that, without such representation, he shall not be bound
by such proceedings. The assistance of lawyers, while desirable, is not indispensable. The legal
profession was not engrafted in the due process clause such that without the participation of its
members, the safeguard is deemed ignored or violated. The ordinary citizen is not that helpless
that he cannot validly act at all except only with a lawyer at his side.”
In administrative proceedings, the essence of due process is simply the opportunity to explain
one’s side. Whatever irregularity attended the proceedings conducted by the committee was cured
by Lumiqued’s appeal and his subsequent filing of motions for reconsideration.
The Supreme Court also emphasized that the constitutional provision on due process safeguards
life, liberty and property. Public office is a public trust. It is not a property guaranteed of due
process. But when the dispute concerns one’s constitutional right to security of tenure, however,
public office is deemed analogous to property in a limited sense; hence, the right to due process
could rightfully be invoked. Nonetheless, the right to security of tenure is not absolute especially
when it was proven, as in this case, that the public officer (Lumiqued) did not live up to the
Constitutional precept i.e., that all public officers and employees must serve with responsibility,
integrity, loyalty and efficiency.