LABOR LAW:

The 2018 Bar Examinations

That which can be accomplished with just one
need not be accomplished with many. Be
Brief, Clear and Coherent. For this is the
inconvenient truth: the Bar Examiner, who
ought to honestly read 84 booklets (2,500 pages
or 4 books) a day in just 4 months, will not be
excited to read long answers.

DECISIONS
penned by

JUSTICE MARIANO DEL CASTILLO

Chairman, 2018 Bar Examinations
(Synthesized to Avoid Information Overload)

Benedict Guirey Kato 1

_______

LABOR PRINCIPLES
1
American Power Conversion Corp. v. Jason Yu Lim
G.R. No. 214291, 11 Jan. 2018

Quasi-Contract Doctrine

When several corporations adopt a scheme to circumvent Philippine licensing and tax
laws, whereby the beneficiary foreign corporation hires a person who is subsequently placed
under the payroll of a local corporation which supervises him and said employee is required to
receive work instructions from a third corporation/s, none of the conspiring corporations can
exercise the right to dismiss – except the contractual employer (hiring corporation). However, all
corporations shall be liable to the abused and illegally dismissed employee under the Quasi-
Contract Doctrine which states: “Certain lawful, voluntary and unilateral acts give rise to the
juridical relation of quasi-contract to the end that no person shall be enriched or benefited at the
expense of another.” (Art. 2142, NCC). Comment: Selection (not control) is determinative of
employer-employee relationship in this case.

2
Orchard Golf & Country Club v. Francisco
G.R. No. 178125 , 18 March 2013

Principle of the Necessitous Person

Although there may be no complete severance of employer-employee relationship

(Complete Severance Test), a constructive dismissal will result from an abused employee’s
being placed in a situation that leaves him no option except to continue discharging the functions
of a lower position (demotion in rank) as a necessitous person, i.e., even if there be no
demotion in pay. Necessitous men are not free men. Comment: Based on this case, an
involuntary servitude is a form of constructive dismissal.

3
Valencia v. Classique Vinyl Products Corp.
G.R No. 206390, 30 Jan. 2017

Presumption of Labor-Only Contracting

The presumption is that a contractor is a labor-only contractor. To bar this presumption

from arising, it must prove with substantial evidence that it is substantially capitalized or it
possesses investment in the form of tools, equipment, machineries or work premises.

1 Labor Arbiter (NCR), Law Professor (UST), Bar Reviewer (ABRC, Magnificus Juris, UST, VLC), Online Bar
Review Lecturer (ChanRobles), Member: UP Law Center Panel of Experts in Labor Law, and Author of “Survival
Notes in Labor Law”.
4
Malabunga v. Cathay Pacific Steel Corp.
G.R. No. 198515, 15 June 2015

Liberal Interpretation Rule

Even doubts arising from evidence in labor proceedings are required by the Full
Protection Clause and Liberal Interpretation Rule to be resolved in favor of labor.

5
Dagasdas v. Grand Placement & General Services Corp.
G.R. No. 205727, 18 Jan. 2017

Lex Loci Contractus

Employment contracts perfected on Philippine soil are governed by Philippine laws.

Comment: Sec. 10, R.A. 8042 (now Sec. 7, R.A. 10022) has made Philippine Labor Relations Law
extra-territorial (Lim v. NLRC, 2007).

ILLEGAL RECRUITMENT

6
People v. Dulay
G.R. No. 158627, 5 March 2010

Act of Referring

Referring, being an act of recruitment, requires a recruitment license. Referring is the act
of passing along or forwarding of an applicant for employment after an initial interview of a
selected applicant to a selected employer, placement officer, or bureau (citing People v. Goce, 247
SCRA 780). Comment: The acts of recruitment are CUTE CPAs Have Cute Red (referring)
Pens (Art. 13,b, PD 442). Visa assistance is not (Darvin v. CA, 1998).

7
People v. Mateo and Lapiz
G.R. No. 198012, 22 April 2015

Whether for Profit or Not

Money is not material to a prosecution for illegal recruitment considering that the
definition of “illegal recruitment” includes the phrase “whether for profit or not.” Comment: For
the same reason, remittance of money collected by an unlicensed person to a licensed recruiter is
not a valid defense (Rodolfo v. People), just as failure of the prosecution to present the receipts
covering placement fees is not a valid defense (People v. Jamilosa).

8
Nahas v. Olarte
G.R. No. 169247, 2 June 2014

Solidary Liability

The liability of the foreign employer (principal) and the recruiter (agent) for any and all
OFW claims is joint and solidary. If the recruiter is a juridical being, the corporate officers,
directors or partners, as the case may be, shall themselves be jointly and severally liable with the
corporation or partnership for said claims and damages (Sec. 6, R.A. 8042 – now Sec. 6, R.A. 10022).
Comment: Sec. 31 of the Corporation Code is not applicable.

EMPLOYER-EMPLOYEE RELATIONSHIP

9
Valeroso, et al. v. Skycable Corp.
G.R. No. 202015, 13 July 2016

Art. 280, PD 442, is not an EER Test

Art. 280 (now Art. 294) is not an employer-employee relationship test. It merely
distinguishes regular from casual employees for purposes of determining right to tenure. While
EER is a question of law, the parties’ characterization of their juridical relationship cannot
simply be ignored. Thus, where their written contract states their intention to be bound by
 independent contractorship (Sales Agency Agreement), their stipulation must be considered –
especially if the complainant acknowledges in his Release and Quitclaim that he was performing
sales activities as a sales agent/independent contractor and not as an employee. Comment: Work
usually necessary and desirable in the usual trade of the engaging party can also be given to an
independent contractor (Atok Big Wedge v. Gison, 2011).

10
Royal Homes Marketing v. Alcantara
G.R. No. 195190, 28 July 2014

Labor Law Concept of Control

A person who performs work for another and is subjected to its rules, regulations and code
of ethics does not necessarily become an employee. As long as the level of control does not
interfere with his means and methods of accomplishing assigned tasks, the rules imposed by the
hiring party on the hired party do not amount to the labor law concept of control that is indicative of
employer-employee relationship. Comment: Other types of control include post production
control (Sonza v. ABS-CBN); editorial right (Orosco v. PDI); built-in control in insurance
(Tongko v. Manulife).

11
Vicmar Dev’t Corp. v. Elarcosa
G.R. No. 202215, 9 Dec. 2015

Regular Employment Test

The test to determine whether an employee is regular is the reasonable connection between
the activity he performs and the employer’s trade or business. If necessary and desirable, as
shown by his continuous re-engagement to perform the same kind of work, he is a regular
employee. Comment: Short-term employment contracts entirely prepared by the employer,
separated by brief intervals, and involving the same kind of work are contracts of adhesion
(Dumpit-Murillo).

12
Herma Shipyard, Inc. v. Oliveros, et al.
G.R. No. 208936, 17 April 2017

1-Year Rule

Length of service (thru re-hiring) is not the controlling determinant of the tenure of a
project-based employee but his engagement for a specific project or undertaking. If its scope or
nature was made known to him upon engagement , his employment is co-terminus with said
project; otherwise, he enjoys tenurial security. Comment: These are inconsistent defenses: X is
at the same time a project employee (hence, an employee) and an independent contractor (hence,
not an employee). Likewise, an employer cannot claim that his employee is a fixed-term employee
(hence, an employee) and at the same time an independent contractor (hence, not an employee).

JOB CONTRACTING

13
Petron Corp. v. Caberte
G.R. No. 182255, 15 June 2015

Substantial Capital or Investment

BIR Certificate of Registration, VAT Return, BIR Confirmation Receipt, TIN, Individual
Income Tax Return, Mayor’s Permit and DTI Certificate of Registration are not conclusive
evidence of financial capability. They only show that the contractor is engaged in business under
a government license. Neither is a performance bond evidence of substantial capital. To be
significant evidence, the bond must be shown to be sufficient to cover not only payrolls, rentals and
equipment but also possible damages to the equipment and to third parties and other contingent
liabilities.
14
Sy, et al. v. Fairland Knitcraft Co., Inc.
G.R. No. 182915/189658, 12 Dec. 2011

Manpower Recruiter Only

Labor-only contracting is shown by the following: (a) aside from sewing machines,
Fairland Lent Weesan fire extinguishers, office tables & chairs, and plastic chairs; (b) the supposed
service agreement between Fairland and Weesan was not submitted; (c) it was not proven that
Weesan had other principals despite allegation to that effect; and (d) it has not been proven that the
workers were ever assigned to other clients.

15
Alviado, et al. v. Proctor & Gamble Phils., Inc.
G.R. No. 160506, 9 March 2010

Sales Promotions Service Agreement/Merchandizing Agreement

Promm-Gem has substantial capital which relates to the work to be performed because it
has authorized capital stock of 1M and paid-in capital of P500,000.00. It also has long term assets
worth P432,895.28 and current assets of P719,042.32. It maintains its own warehouse and office space
and has other clients, supplies its workers with relevant material, such as markers, tapes, liners and
cutter, necessary to perform their work; it issues them uniforms and considered them as its regular
employees.

SAP, in contrast, has a paid-in capital of P31,250.00 only. There is no evidence that it has
investment.

EMPLOYMENT TERMINATION

16
Brown v. Marswin Marketing Inc.
G.R. No. 206891, 15 March 2017.

Abandonment

Intent not to return to work must be clear. The employer must show that efforts were
exerted to convince the employee to resume work. A notice to warn the employee that his failure to
report would be deemed as abandonment must be sent also.

17
Carigue v. Phil. Scout Veterans Security & Investigation Agency, Inc.
G.R. No. 197484, 16 Sept. 2015

Floating Status

Off-detail status is not an unusual occurrence for security guards given that their
assignments primarily depend on the contracts entered into by the agency with third parties.
Floating status for not more than 6 months is not illegal dismissal.

18
INC Shipmanagement, Inc., et al. v. Camporedondo
G.R. No. 199931, 07 Sept, 2015

Analogous Cause

The report of incompetent action/insubordination/ indiscipline against the employee

(cook) does not describe the specific acts showing his alleged poor performance, or his want of
slight care in the performance of his official tasks as chief cook for a certain period of time; hence,
even assuming that his performance was unsatisfactory, it has not been shown that his poor
performance amounted to gross and habitual neglect of duties.

19
Basay, et al. v. Hacienda Consolacion
G.R. No. 175532, 19 April 2010

Burden of Proof; Overt Act Test

Absent overt act of dismissal, there can be no illegal dismissal – especially when: (a) the
complainants were asked to return to work but they refused to upon advice of their lawyer: (b) even
 after 3 months following filing of the complaint for illegal dismissal, they were still on company
payroll as shown by the Master Voucher; (c) while a voucher does not necessarily prove payment,
it is an acceptable documentary record of a business transaction; hence, entries made therein enjoy
the presumption of regularity because they were entered in the ordinary or regular course of
business.

20
Exoches Int’l Construction Corp. v. Biscocho, et al.
G.R. No. 166109, 23 Feb 2011

To Each His Loss Rule;

Reinstatement to Project v.
Reinstatement to Work Pool.

When there is neither actual dismissal nor abandonment, the employees shall be admitted
back to work under the same terms and conditions. As to non-project employees (members of the
pool who are hired not in reference to any specific project), it cannot be argued that they cannot be
reinstated because the project in which they worked has already reached completion. They should
be reinstated to the work pool of regular employees.

21
Litex Glass and Aluminum Supply v. Sanchez
G.R. No. 198465, 22 April 2015

Reinstatement Bar: Atmosphere of Antipathy and Antagonism

An atmosphere of antipathy and antagonism, as shown by the strained relations caused by

the altercation between the employee and the employer, justifies the award of separation pay in lieu
of reinstatement, i.e., even if reinstatement is not prayed for.

22
Julies Bakeshop/Reyes v. Arnaiz, et al.
G.R. No, 173882, 15 Feb 2012

Transfer as Constructive Dismissal

The employer must demonstrate that the questioned transfer is not unreasonable,
prejudicial or inconvenient to the employee and that it does not involve demotion in rank or salary;
otherwise, it amounts to constructive dismissal. Transfer from the titular rank of chief bakers to
utility/security personnel is a drastic change involving transfer from a position of dignity to a
service or menial job.

23
Ang v. San Joaquin, Jr., et al.
G.R. No. 185549, 7 Aug. 2013

Overt Act of Dismissal

Destruction of time cards is constructive dismissal. A time card is an evidence of

employment (basis of payroll); hence, when destroyed by tearing, the employee is virtually
removed from the payroll as to erase all vestiges of his employment.

24
ICT Marketing Service, Inc. v. Sales
G.R. No. 202090, 9 Sept. 2015

Valid Lateral Transfer v. Punitive Transfer

Jurisprudential Guidelines:

(a) a transfer is a movement from one position to another of equivalent rank, level or salary
without break in the service (lateral transfer);

(b) the employer has the inherent right to transfer or reassign an employee for legitimate
business purposes;

(c) a transfer becomes unlawful where it is motivated by discrimination or bad faith, or is

effected as form of punishment or is a demotion without sufficient cause (punitive
transfer); and
 (d) the employer must show that the transfer is not unreasonable, prejudicial or inconvenient
to the employee (UPI).

25
Areno, Jr. v. Skycable PCC-Baguio
G.R. No. 180302, 5 Feb 2010

Suspension Order

A suspension order must be complied with; otherwise, the employee is dismissible on the
ground of wilful disobedience, i.e., even if the employee is questioning its basis.

26
Jerusalem v. Keppel Monte Bank, et al.
G.R. No. 169564, 6 April 2011

Clear and Convincing Evidence

Loss of trust and confidence requires 2 things: (a) the position is one of trust and
confidence (Asst. BP of Jewelry Dept); and (b) there must be factual basis (positive act). The basis
for the loss must be clearly and convincingly established but proof beyond reasonable doubt is not
required.

27
Lambort Pawnbrokers & Jewelry Corp. v. Binamura
G.R. No. 170464, 12 July 2010

Audited Financial Statements

The financial statement for 1997-1998 (dismissal by retrenchment was in 1998) was prepared
in 1999. It is highly improbable that the management already knew in 1998 that they would be
incurring substantial losses.

28
Shimizie Phils. Contractors, Inc. v. Callanta
G.R. No. 165923, 29 Sept 2010

Progressive Retrenchment

Progressive retrenchment, or manpower downsizing over a period of time, lends validity to

a retrenchment – especially where cost-cutting measures were adopted before implementing the
retrenchment program.

DUE PROCESS

29
LIBCAP Marketing Corp et al. v. Baquial
G.R. No. 192011, 30 June 2014

Prejudgment; Payroll Deduction

The employee was prejudged even before the investigation could start. The P1, 437.00 was
peremptorily deducted from his salary on a staggered basis, culminating on 30 June 2003, or nearly
1 month prior to the scheduled investigation on 28 July 2003. In doing so, she was considered
responsible for the embezzlement even before she could be tried, the payroll deductions being her
penalty and recompense.

30
JARL Construction, et al. v. Atencio
G.R. No. 175969, 1 Aug 2012

Termination of Service
Agreement v. Termination of
Employment

Notice of termination of the subcontracting agreement between the employer’s company

and the employee’s company is not the required notice of employee termination. Said notice does
not bear the charges levelled against the complainant before the Labor Arbiter; hence, he was not
accorded the opportunity to explain them prior to being dismissed. It was addressed solely to the
employee’s company; it also apprises the subcontractor that 15% of the contract price would be
 retained until the principal accepts the project. This is expected in a subcontracting arrangement
but not in an employment contact.
COMPLETE SEVERANCE TEST

31
Ca ñedo v. Kampilan Security and Detective Agency
G.R. No. 179326, 31 July 2013

Upon the employee’s request, the General Manager issued this certification (in connection
with the former’s retirement effective June 2003):

“This is to certify that Mr. Luciano Paragoso Ca ñedo was employed by

this agency from Nov. 20, 1996 up to May 7, 2003 as security guard assigned at NPC,
Sigpit Substation. He was terminated from his employment by this agency on May
7, 2003 as per client’s request.”

Aside from above certification, the guard presented no proof that he was dismissed and not
simply floated. The import of said certification is that he was assigned to NPC from Nov. 20, 1996 to
May 7, 2003 and that on May 7, 2003, the agency terminated his assignment to NPC upon the latter’s
request. Hence, he was not illegally dismissed.

FINDING OF ILLEGAL DISMISSAL: CONSEQUENCES

32
Inutan, et al. v. Napar Contracting & Allied Services, et al.
G.R. No. 195654, 25 Nov 2015

Reassessment Procedure;
Rescission of Compromise
Agreement.

Non-compliance with an approved compromise agreement justifies its rescission (Art.

2041, NCC). The employer’s insistence that the returning employees (reinstatement by compromise)
submit clearances and undergo trainings and assessment procedure (as a condition for assignment
to other clients to perform same tasks) violates the compromise agreement. As ordinary factory
workers, the complainants do not need special training or any skills assessment procedures for
proper placement.

33
Lu, et al. v. Capada, et al.
G.R. No. 168501, 31 Jan 2011

Two-Fold Test

Reinstatement wages are barred when: (a) there is actual delay in reinstating the
employees, or the reinstatement order is not executed; and (b) non-reinstatement is not due to the
employer’s fault (e.g. , due to corporate rehabilitation).

If non-reinstatement is due to the employer’s need to consult his lawyer first, there is
unjustifiable non-compliance with the reinstatement order; hence, he must pay reinstatement
wages.

34
Tangga-an v. Phil. Transmarine Carriers, et al.
G.R. No. 180636, 13 March 2013

Economic Components of
Salaries for Unexpired Portion
of Contract.

An illegally terminated seafarer is entitled to the restoration of the salaries and guaranteed
vacation leave benefit and tonnage bonus which he would have received had he not been illegally
dismissed. Said benefits are not contingent as shown by the fact that their amounts are contractually
fixed (USD 2,500 vacation leave pay and USD 700.00 tonnage bonus per month). Thus, the seafarer
is entitled to USD 5,000.00 salary + USD2,500.00 vacation leave pay + USD700.00 tonnage bonus
multiplied by the remaining portion of his 6-month contract (4 months).
35
Goodyear Phils., Inc. v. Angus
G.R. No. 185449, 12 Nov 2014

Retirement Pay and Separation Pay

Angus was retired early under the company’s retirement plan. She was paid her retirement
benefit in check. She received it under protest. At the same time, she demanded for separation pay
because her separation was by reason of redundancy. The company took back the check; hence, she
sued for illegal dismissal claiming that she was not paid separation pay as the retirement pay check
was different from separation pay. Absent prohibition in the Retirement Plan, she can collect both
retirement pay and separation pay.

COMPENSATION LAW

36
Picop Resources, Inc. v. Social Security Commission
G.R. No. 206936, 3 Aug 2016

Condonation

To avail of the benefits under R.A. 9903 or the Social Security Condonation Law, the
employer must pay “all contributions due and payable.” Hence, partial payment will not suffice.
The employer’s other option is to submit a proposal for payment. It was never the intention of the
law to give the employer the option of remitting and settling only some of its delinquencies, and not
all; of paying the lowest outstanding delinquencies and ignoring the most burdensome; of choosing
the course of action most beneficial to it, while leaving its employees and government to enjoy the
least desirable outcome. Condonation laws, being acts of benevolence on the part of the
Government , are strictly construed against applicants.

37
GSIS v. Calumpiano
G.R. No. 196102, 26 Nov. 2014

Hypertension and Glaucoma

Hypertension is a listed occupational disease. Since there appears to be a link between

blood pressure and the development of glaucoma, the disability caused by the glaucoma is
compensable. The rule is that essential hypertension is compensable only if it causes impairment of
function of body organs, like kidneys, heart, eyes and brain, resulting in permanent disability.

38
GSIS v. Besitan
G.R. No. 178901, 23 Nov 2011

Increased Risk Theory

Chronic Glumerolonephritis is an unlisted disease. Hence, to prove compensability, it

must be shown that the member’s risk of contracting it was increased by his working conditions.
As Bank Officer III of the BSP, Besitan could have been exposed to certain bacterial, viral and
parasitic infection which, in turn, could have caused his disease. Delaying his urination during his
long trips to the provinces could have also increased his risk of contracting it.

39
Villamor v. ECC
G.R. No. 204422, 21 Nov 2016

Cerebro-Vascular Disease;
Stroke; Hypertension

For illness or disease to be compensable, it must be an occupational disease listed in Annex

“A” of the AREC with the conditions set therein satisfied; otherwise, proof must be shown that the
risk of contracting the disease was increased by working conditions. Stroke and hypertension are
listed diseases under items 19 and 20, Annex “A” of the rules. As Sports Dispatcher and Union
President, the employee’s work caused him physical and mental strain.
 SEAFARERS

40
Heirs of Delfin dela cruz v. Phil. Transmarine Carriers, Inc.
G.R. No. 196357, 20 April 2015

Pre-Employment Medical Exam (PEME)

PEME is non-exploratory. It merely determines if one is “fit to work” at sea but does not
state the real state of health of an applicant. The “fit to work” certification is not a conclusive proof
that he was free from any ailment prior to his deployment.

41
DOHLE-PHILMAN Manning Agency, Inc. v. Gazzingan
G.R. No. 199568, 17 June 2015

Dissecting Aneurism; Theory of Aggravation

Even assuming that Gazzingan had a pre-existing condition, this does not negate the
possibility that his aortic dissection was aggravated by his working conditions. As a messman, his
work was not confined to serving food and beverages. He also assisted the cook and performed
most duties in the steward department. Therefore, he was bound to suffer chest and back pains
which could have caused or aggravated his illness. His employment has contributed to some
degree to the development of his illness.

42
New Filipino Maritime Agencies, Inc. v. Dalayan
G.R. No. 202859, 11 Nov 2015

Death Compensation: Requisites

There must be substantial evidence showing that: (a) the death is work-related; and (b) that
it transpired during the term of the seafarer’s employment. Suicide is not work-related.

43
Wallem Maritime Services, Inc. v. Quillao
G.R. No. 202885, 20 Jan 2006

Direct Attribution Rule: 240- Day

Rule

No compensation and benefits shall be payable in respect of any injury, incapacity,

disability or death of the seafarer resulting from his wilful or criminal act or intentional breach of
his duties; provided, however, that the employer can prove that such injury, disability or death is
directly attributable to the seafarer.

23 Nov 2009 – Disability complaint was filed while undergoing treatment.

12 March 2010 – Co-designated physician issued Grade 10 disability rating.

August 2011 – Physician of choice issued Grade 8 disability rating.

The complaint should be dismissed for lack of cause of action because, at the time of its
filing, the seafarer had no medical basis yet. In violation of duty, he abandoned his treatment before
the lapse of 240 days.

44
Saso v. 88 Aces Maritime Service, Inc.
G.R. No. 211638, 7 October 2015

3-Day Reporting Requirement

Sec 20 (B), POEA-SEC, requires the seafarer to report to his manning agency within 3 days
upon his return for post-employment medical examination – except when physically unable to, in
which case he must report in writing within the same period. Failure to comply results in forfeiture
of his right to claim benefits.
 Total and Permanent Disability

The instances when a seafarer may pursue a claim for total and permanent disability benefits
are as follows:

(a) When the company-designated physician fails to issue a declaration of fitness to

resume sea duty, or assign a disability grade within 120 days;

(b) When the company-designated physician fails to issue a declaration of fitness to

resume sea duty, or assign a disability grade within 240 days (in the event of a
justifiable extension);

(c) Within the 120/240-day period, the company-designated physician declares him fit
for sea duty but his physician of choice and third physician certify otherwise;

(d) the company-designated physician certifies his disability as partial and permanent,
but his physician of choice and third physician certify that it is actually total and
permanent;

(e) the company-designated physician acknowledges that he is totally and

permanently disabled but there is a dispute on the disability grading ;

(f) the company-designated physician certifies that his disability is not work-related
but the his own doctor and third doctor certify that he is unfit to work;

(g) the company-designated physician certifies that he is totally and permanently

disabled but his employer refuses to pay; and

(h) the company-designated physician declares that he is partially and permanently

disabled within the 120/240-day period but he remains incapacitated to resume his
customary sea duty after the lapse of either period.

The 120-Day Rule

Filing of disability complaint on the 105 th day of the 120 days makes the claim premature.
Comment: The Vergara Court ruled that the 120-day period can be extended by another 120 days (6
October 2008).

45
Phil Transmarine Carriers, Inc. v. Aligway
G.R. No. 201793, 16 September 2015

Gastric Cancer

Gastric cancer is not a listed disease; hence, the seafarer must establish the connection
between his stomach cancer and working conditions as a cook. He cannot just rely on his PEME.
Since he did not pursue a second medical opinion, the assessment of the company-designated
physician that his disability is not work-connected must stand.

46
Grace Marine Shipping Corp. v. Alarcon
G.R. No. 201536, 9 September 2015.

Psoriasis and Nummular Eczema

As messman, the seafarer maintained messroom sanitation and was exposed to chemicals.
His direct exposure to cleaning agents and other chemicals and the fumes thereof triggered his
nummular eczema. The disability assessment was issued by the company doctor after 240 days;
hence, it is not binding. Besides, despite his certification that the complainant’s skin problem had
been resolved, the company did not re-engage the complainant anymore.
47
Fil-Pride Shipping Co., Inc. v. Balasta
G.R. No, 193047, 3 March 2014

Definite, Categorical and

Final Assessment Rule

Failure to issue a definite assessment on the last day of the 240-day period renders the
disability total and permanent. In fact, such degree of disability can already be determined before
the lapse of 240 days considering that there can be no reasonable expectation that the seafarer would
recover from his coronary artery bypass graft surgery during the remainder of said period.
 Concededly, the period 18 September 2005 to 19 April 2006 is less than 240 days. Nonetheless, it is
impossible to expect that by 19 May 2006 (last day), he would be declared fit to work.

SELF-ORGANIZATION

48
AIM v. AIM Faculty Association (AIMFA)
G.R. No. 207971, 23 Jan. 2017

Union Composed of Managers

DOLE Case No. NCR-OD-M-0705-007

AIMFA filed a CE petition. AIM moved to dismiss on the ground that AIMFA consisted
of managers. The Med-Arbiter dismissed the CE petition. On appeal, the SOLE reversed the Med-
Arbiter and ordered the DOLE-NCR to conduct the election.

DOLE Case No, NCROD-0707-001-LRD

AIM filed a CR cancellation petition against AIMFA based on its membership which was
a violation of Art. 245, PD 442. The DOLE-NCR granted the petition and delisted AIMFA. On
appeal, the BLR reversed the DOLE-NCR and ordered AIMFA’S retention in the roster of LLOs.
AIM’s MR was denied by the BLR.

CA-G.R. SP No. 109487 & G.R. No. 197089

AIM filed a petition for certiorari to nullify the SOLE’s reversal of the Med-Arbiter’s
order dismissing the CE petition. AIMFA’S MR was denied; hence, it filed G.R. No. 207971. Said
case is pending.

CA-G.R. SP No. 114122 and G.R. No. 207971

AIM sought nullification of the resolution of BLR ordering retention of AIMFA in the
roster of LLOs. The CA affirmed the BLR and denied AIM’S MR. Hence, the instant Rule 45
petition docketed as G.R. No. 207971.

Issue: WON the CA seriously erred in affirming the BLR.

Held: Yes. In Holy Child Catholic School v. Hon. Sto. Tomas, the SC held that the proper
procedure for an employer where disqualified employees are included is to directly file a CR
cancellation petition due to misrepresentation, false statement or fraud under the circumstances
enumerated under Art.239, PD 442. Since the registration of AIMFA is a patent nullity, its CR can
be cancelled.

However, since G.R. No. 197089 is still pending with the SC. The issue therein is WON
the members of AIMFA are managers. Said issue cannot be resolved in G.R. No. 207972 (the
present case) out of judicial courtesy and to avoid conflicting rulings.

49
SMCC-SUPER v. Charter Chemical and Coating Corp.
G.R. No. 169717, 16 March 2011.

Commingling/ Mixed Union Membership

Mixed-union membership is no longer a ground for CR cancellation.

50
Legend Int’l Resorts Ltd v. KML – Independent
G.R. No. 169754, 23 Feb 2011

Presumption of LLO Status

Until its CR is cancelled, the petitioning union is presumed to possess the legal
personality to file a CE petition. Its LLO status cannot be attacked in a CE proceedings. Even
pending CR cancellation proceedings, its CE petition shall proceed.
51
Wesleyan University Philippines (WUP) v. WUP Faculty and Staff Association
G.R. No, 181806, 12 March 2014

Mandatory Force of Contracts

Unilateral change by employer of the “2 retirement plan” to “1 retirement plan”

constitutes unlawful diminution of benefits. This principle applies if the benefit is based on an
express policy a written contract, or has ripened into a practice. To be a practice, it must be
consistently and deliberately made by the employer over a period of time. The exception is when
the practice is due to an error in the construction or application of a doubt or difficult question of
law. However, the error must be immediately corrected after its discovery.

52
Mitsubishi Motors Phils. Salaried Employees Union v. Mitsubishi Motors Phils. Corp.
G.R. No. 175773, 17 June 2013

Double Recovery

Since the CBA provision is an “insurance contract” in that it guarantees indemnification of

the medical expenses of the covered workers’ dependents, the general principles on insurance shall
govern, e.g., rule against double indemnity/unjust enrichment. Since the separate health insurance
of the dependents covered their medical expenses already, the company cannot be required to make
indemnity covering the full medical expenses incurred. The CBA provision is really an insurance
contract as the covered members were paying insurance premiums thru monthly salary deductions.

LABOR PROCEDURE

53
AMECOS Innovations, Inc. et. al., v. Lopez
G.R. No. 178055, 2 July 2014

Sum of Money, Jurisdiction

A reimbursement claim pertaining to undeducted employee SSS contributions, which the

employer paid to the SSS, is under the jurisdiction of the Labor Arbiter (Art. 224, PD 442). Since the
contributions were already remitted, SSS should not be unnecessarily dragged into the picture.
While employed and her SSS contributions were withheld, the employee was never covered by the
System; hence, there is no sense in making her answerable for the required contributions during
the period of her employment.
54
Real v. Sangre Phils., Inc.
G.R. No, 168757, 19 Jan 2011

Intarcorporate Controversy

The two-tier test for determining intracorporate controversy consists of (a) the
Relationship Test; and (b) Nature of Controversy Test. The controversy must not only be rooted in
the existence of an intracorporate relationship, but must as well pertain to the enforcement of the
parties’ correlative rights and obligations under the Corporation Code.

55
U-BIX Corp v. Hollero
G.R. No. 199660, 13 July 2015

Appeal Bond; Security Deposit

Sec. 6, Rule VI of the NLRC Rules of Procedure (2005) requires that a surety bond should
be accompanied by proof of a security deposit or collateral. Hence, even if the bonding company
did not require said deposit or collateral, the appeal must be dismissed for non-perfection.

Computation of Backwages
 The computation of backwages depends on the final awards adjudged as a consequence of
illegal dismissal in that:

(a) When reinstatement is ordered, the computation is from time of dismissal to actual
reinstatement;
(b) When separation pay is ordered in lieu of reinstatement, from date of dismissal to
finality of judgment ordering separation pay;
(c) When separation pay is ordered after finality of judgement (e.g., due to a
supervening event), from date of dismissal to finality of decision ordering
separation pay.

56
University Plans, Inc. v. Solano. et al.
G.R. No. 170416, 22 June 2011

Motion to Reduce Appeal Bond

If the motion to reduce is by reason of alleged receivership, the NLRC should make a
preliminary determination of the truth of said allegation before resolving it. This is in keeping with
the rule that it must use reasonable means to ascertain the facts of each case speedily and
objectively, without regard to technicalities of law and procedure, all in the interest of due process.

57
Beduya, et. al., v. Ace Promotion and Marketing Corp., et al.
G.R. No. 195513, 22 June 2015

Meritorious Grounds & Reasonable Bond

The motion to reduce appeal bond from ₱6,269,856.89 to ₱ 437,201.00 is on meritorious

grounds. First, 8 complainants failed to verify the position paper meriting exclusion of their
monetary awards. Second, 9 complainants withdrew from the case warranting reduction of the
award. The contention of the workers that the accompanying bond should at least be 30% of the
judgment award is erroneous because the Mcburnie Ruling has set provisional bond at 10% only.

58
Tiger Constructions & Dev’t Corp. v. Abay, et al.
G.R. No, 164141, 26 Feb. 2010

Referral Order

Exercise of visitorial power is not subject to the 5k jurisdictional threshold. Hence, the RD
committed an error in referring the case to the NLRC. The employer cannot defeat the judgment
award, which has attained finality already, by belatedly assailing the RD’s jurisdiction based on
her referral order. After all, she was reversed by the SOLE. If the SOLE committed an error, the
employer should have challenged her order under Rule 65, Rules of Court.

59
Guagua National Colleges (GNC) v. GNC Faculty Labor Union, et al.
G.R No. 204693, 13 July 2016

Express Stipulation Rule

There is a need for an express stipulation in the CBA that ULP should be resolved in the
ultimate by the Voluntary Arbitrator since it is generally within the exclusive jurisdiction of the
Labor Arbiter by express provision of law. Absent such express stipulation, the phrase “all
disputes” should be construed as limited to the areas of conflict traditionally within the jurisdiction
of voluntary arbitrators.

60
Others

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