G.R. No.

224026, February 03, 2020

DELIA B. BORRETA AS WIDOW OF DECEASED MANUEL A. BORRETA, JR., , v. EVIC

HUMAN RESOURCE MANAGEMENT, INC., ATHENIAN SHIP MANAGEMENT INC., ,
AND/OR MA. VICTORIA C. NICOLAS

J. REYES, JR., J:

Manuel was employed by respondent Evic Human Resource Management, Inc. (Evic),
for and in behalf of its foreign principal, respondent Athenian Ship Management, Inc.
(Athenian), as cook on board M/V Sea Lord. Respondent Ma. Victoria C. Nicolas is the
president of EVIC.

While M/V Sea Lord was cruising along the waters of Brazil towards Dammam, Kingdom
of Saudi Arabia, Manuel was found lifeless inside the toilet of the vessel's hospital cabin.
Because of this tragic incident, the vessel changed course and set sail to Galle, Sri Lanka
instead, where Manuel's remains were unloaded.

Senior Counsel Maharoof and Junior Counsel Zavahir conducted an investigation

on the death of Manuel. In the Investigation Report on the Death of Manuel that
they prepared, the investigators stated that the statements of the master, chief
officer, crew members, logged in the vessel log book as well as the details on the
medical assistance record showed that Manuel had not been acting like his usual
self. He failed to report for work and locked himself in the vessel's gymnasium and
then later shut himself inside the hospital. When they tried to communicate with
him, Manuel sounded distraught, talked non-sense and fearful that someone was
going to kill him. They could only talk to him through the ship's phone. Manuel was
offered food the following day but he refused to partake of the same. When Manuel
stopped communicating with them, the crew decided to force open the door to the
hospital room but found it unlocked and empty. The crew eventually found Manuel
inside the vessel's hospital lavatory, with a nylon cord tied around his neck and
hanging on a hook, dead. These facts notwithstanding, the investigators failed to
identify the cause of Manuel's death. As such, the Death Certificate that was issued
indicated the cause of death as "Under investigations."

The remains of Manuel was repatriated to the Philippines.Upon the request of the sister
of the deceased, Dr. San Diego, M.D., Medico-Legal Officer of the National Bureau of
Investigation (NBI), autopsied the remains of Manuel. In the Autopsy Report that was
subsequently issued, the NBI stated that the cause of death was "CONSISTENT WITH
ASPHYXIA BY LIGATURE."

Consultant Judicial Medical Officer at Galle, Sri Lanka issued a post-mortem report on
the post-mortem examination he conducted on Manuel. Dr. Ruwanpura remarked that "the
circumstantial data and [his] autopsy findings are in keeping with self suspension." Thus,
pronounced the cause of death to be asphyxia due to hanging.

Subsequently, petitioner filed her claim for benefits arising from the death of Manuel, but
the respondents refused to grant her any. Respondents averred that Manuel's death was not
compensable because he took his own life.This prompted petitioner to file a Notice to
Arbitrate before the NCMB of the Department of Labor and Employment (DOLE) demanding
for payment of compensation for loss of life, death benefit, mandatory insurance benefit,
moral damages, exemplary damages and attorney’s fees.

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 Petitioner averred that under Article 25 of the Collective Bargaining Agreement (CBA)
which covers Manuel's employment contract, respondents unconditionally bound themselves
to pay the same in the event of death of a seafarer through any cause while employed by
them. The Philippine Overseas Employment Administration's (POEA's) Standard Terms and
Conditions Governing the Employment of Filipino Seafarers On-Board Ocean-Going
Vessels, furthermore entitled her to death and burial benefits.

Respondents, for their part, insisted that they were not liable to pay compensation with
respect to the death of Manuel since the POEA's Standard Employment Contract (POEA-
SEC), as well as the CBA specifically exclude from the payment of benefits for death that are
directly attributable to the seafarer.

Respondents posited that the petitioner cannot claim insurance benefits under R.A. No.
10022 because only death through natural and accidental causes are covered by the said
law. Since suicide is neither natural nor accidental, the same is not compensable under R.A.
No. 10022. Since respondents are justified in denying petitioner's claims, there is also no
cogent reason to award moral damages, exemplary damages and attorney's fees in her
favor.

The Panel rendered a Decision in favor of the petitioner.

Respondents moved for reconsideration but the Panel denied it. Thereafter, Petitioner
moved for the resolution of her motion for execution of the Decision of the Panel.

Respondents filed a Manifestation with Opposition to Complainant's Motion for

Execution (Manifestation with Opposition).Records disclosed that the Panel had not acted on
the same.

CA found that respondents have successfully proved by substantial evidence that

Manuel killed himself. Such notwithstanding, respondents remain liable under the parties'
CBA tor death benefits, particularly Section 25.1 thereof. Since the same provision provides
that the employer will shoulder the costs for the transportation and burial of Manuel's body in
the Philippines, the CA ordered the respondents to, reimburse petitioner the transportation
and burial expenses she incurred. In addition, it held that life insurance may only be awarded
in case of accidental death. Since death by suicide cannot in any way be ruled as accidental,
petitioner was not entitled to claim the life insurance benefit under R.A. No. 10022.

The Supreme Court affirmed the decision of the CA with modification.

§ Death Benefits

Q: Are you entitled to death benefits in case of suicide?

Crucial to the determination of petitioner's entitlement to death benefits as well as her right
to get reimbursement for transportation and burial expenses she incurred are Sections 18.1 b,
21, 22, and 25 of the CBA. However, as observed by the CA, the copy of the CBA attached to
the petition filed before it did not completely cite Section 21, while Section 25 was missing. As
such, the CA adopted the parties' citation of Section 25 and lifted from the copy of the CBA
submitted to it the available portions of Section 21.107Viz.:

[SEC. 25.1] - If a seafarer dies through any cause whilst in the employment of the Company
including death from natural causes and death occurring whilst traveling to and from the vessel,
or as a result of marine or other similar peril, the Company shall pay the sums specified in the

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attached Annex 4 (four) to a nominated beneficiary and to each dependent child up to a
maximum of 4 (four) under the age of 18. The Company should also transport at its own
expense the body to Seafarer's home where practical and at the families' request and pay the
cost of burial expenses. If the seafarer shall leave no nominated beneficiary, the aforementioned
sum shall be paid to the person empowered by law or otherwise to administer the estate of the
Seafarer. For the purpose of this clause, a seafarer shall be regarded as "in employment of the
company" for as long as the provision[s] of Article[s] 21 and 22 apply and provided the death is
directly attributable to sickness or injury that caused the seafarer's employment to be terminated
in accordance with Article 18.1b

The cause of death of the seafarer is immaterial to the determination of petitioner's

entitlement to the said benefits. It is clear from the express provision of Section 25.1 of the CBA
that respondents hold themselves liable for death benefits for the death of the seafarer under
their employ for any cause.

G.R. No. 247409. February 3, 2020

Lemoncito Vs. BSM Crew Service Centre Philippines, Inc./Bernard Schulte
Shipmanagement
Lazaro-Javier, J:

Respondent BSM Crew Service Centre Philippines, Inc. (BSM), on behalf of its principal
respondent Bernard Schulte Shipmanagement (BSS), hired petitioner Michael Angelo
Lemoncito as a motor man for a duration of nine (9) months. Petitioner was covered by the
collective bargaining agreement (CBA) between International Maritime Employees' Council
and Associated Marine Officers' and Seamen's Union of the Philippines. After being declared
fit to work, petitioner boarded MV British Ruby.

While on board, petitioner complained of fever and cough productive of whitish phlegm
and throat discomfort. His blood pressure reached 173/111, for which he was given
medication. He was then medically repatriated. He was referred to the Marine Medical
Services under the care of company-designated doctors Pangilinan and Sulit. After a series
of tests, he was diagnosed with lower respiratory tract infection and hypertension.In their
final report, they noted that petitioner had been previously cleared of his lower respiratory
tract infection and that his hypertension was responding to medication.

Disagreeing with conclusions of the company-designated doctors, petitioner consulted

Dr. Pascual, who issued a Medical Report.He declared petitioner "unfit to work as a seaman"
as a result of existing medical conditions.

Petitioner invoked the grievance procedure embodied in the CBA and lodged a
complaint for total permanent disability benefits, sickness allowance, damages and
attorney's fees before the Panel of Voluntary Arbitrators. Despite the treatment given him by
the company-designated doctors, he never recovered from his debilitating illness. His
condition was work-related, thus, compensable.

Respondents countered saying that petitioner did not adduce substantial evidence to
prove that the nature of his work contributed to his hypertension. It is only compensable
when it is uncontrolled with end organ damage to the kidneys, brain, heart or eyes. Besides,
petitioner failed to observe the third-doctor-referral rule under the POEA-SEC when he
independently consulted his physician, Dr. Pascual.

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 The Panel of Voluntary Arbitrators found petitioner to be totally and permanently
disabled. Petitioner's non-compliance with the third-doctor-referral rule should not be taken
against him because the company designated doctors failed to make a fitness assessment
within the required 120-day period.

On appeal, the Court annulled and set aside the decision of the Panel of Voluntary
Arbitrators.

The Supreme Court ruled in the reinstatement of the decision of the Panel of Voluntary
Arbitrators. Without a valid final and definitive assessment from the company-designated
doctors within the 120/240-day period, as in this case, the law already steps in to consider a
seafarer's disability as total and permanent. By operation of law, therefore, petitioner is
already totally and permanently disabled. Besides, jurisprudence grants permanent total
disability compensation to seafarers, who suffered from either cardiovascular diseases or
hypertension, and were under the treatment of or even issued fitto-work certifications by
company-designated doctors beyond 120 or 240 days from their repatriation.

§ Disability Benefits

Q: How is disability determined?

The responsibility of the company-designated physician to arrive at a definite assessment

within the prescribed periods necessitates that the perceived disability rating has been properly
established and inscribed in a valid and timely medical report. To be conclusive and to give
proper disability benefits to the seafarer, this assessment must be complete and definite;
otherwise, the medical report shall be set aside and the disability grading contained therein shall
be ignored. As case law holds, a final and definite disability assessment is necessary in order to
truly reflect the true extent of the sickness or injuries of the seafarer and his or her capacity to
resume work as such.

Failure the company-designated physician to arrive at a definite assessment of the

seafarer's fitness to work or permanent disability within the prescribed periods and if the
seafarer's medical condition remains unresolved, the law steps in to consider the latter's
disability as total and permanent.

G.R. No. 245258, February 05, 2020

METRO PSYCHIATRY, INC. v. BERNIE J. LLORENTE

Reyes, A., J.:

The respondent, Bernie Llorente (Llorente), was hired as a nursing attendant at MPI, a
domestic corporation engaged in full service psychiatric care and rehabilitation services of its
patients.

Llorente was served with a Memorandum by MPI requiring him to explain why no
disciplinary action should be taken against him for continuously refusing to perform certain
tasks assigned to him by his immediate supervisor. In his Explanation Letter, , Llorente
bewailed how he was being treated by MPI.

NIPI served Llorente with another Memorandum, this time, for:

1. for falsely reporting to the parents of one patient that the latter was
being maltreated in the hospital; and

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 2. for failing to comply with the assistant nursing attendant head's
instruction to clean the facility and to attend endorsement meetings.

Per the Memorandum, the mother of a patient named Tan appeared at MPI's facility,
demanding to see her son. She received a text message from someone who claimed to be a
former staff of MPI, stating that Tan was being subjected to physical assault by the members
of the clinic staff. However, upon checking Tan, no sign of physical injury was found on him.
Consequently, Tan's mother called the informant via speaker phone, and as she did, Nurse
Dumalanta and Nurse Manawat recognized Llorente's voice on the other end. When the
management reviewed the CCTV footage on the said date, Llorente was seen flipping
through patients' charts and copying information, which he placed inside his pocket. NIPI
then issued the Memorandum requiring Llorente to explain his side. He was also placed on
preventive suspension.

Through an Explanation Letter, Llorente denied all allegations.

Llorente received a Notice of Termination informing him of his dismissal from

employment for loss of trust and confidence and willful disobedience. This prompted
Llorente to file a complaint for constructive dismissal against MPI. He posited that because
of a previous labor case, MPI subjected him to harassment and discriminatory acts.

MPI counteracted that Llorente raised immaterial matters in an attempt to absolve

himself from his misdeeds.

The Labor Arbiter dismissed the complaint filed by Llorente. It also clarified that
Llorente did not resign but was actually terminated from employment. Hence, his dismissal
was not constructive.

The NLRC affirmed the ruling of Labor Arbiter with modification.  NLRC agreed with
the LA as regards the validity of Llorente's dismissal. However, the NLRC awarded salary
differential, service incentive leave, holiday pay, and pay for additional work days rendered
by Llorente based on the evidence that the parties submitted.

The Court of Appeals overturned the ruling of the NLRC and the LA, holding that the
evidence presented by MPI against Llorente were inadequate to cause his termination from
employment. According to the CA, MPI failed to substantiate their claim that it was Llorente
who falsely alerted Tan's family about his alleged physical abuse because it relied entirely
on the handwritten statements of witnesses, Nurses Dumalanta and Manawat. While the CA
found Llorente's actions in the CCTV footage suspicious, the CA concluded that the same
was not completely untoward since he is a nursing attendant.

The Supreme Court reinstated the decision of the NLRC. It cannot be said that
the penalty of dismissal is commensurate to Llorente's act of disobedience. However,
viewed with the charge of serious misconduct, termination is justified under the
circumstances.

§ Willful Disobedience or insubordination as a valid ground for dismissal

§ Misconduct as a valid ground for dismissal

Q: When is willful disobedience or insubordination to be a valid ground for dismissal?

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 Concerning the charge of willful disobedience or insubordination, Llorente's refusal to heed
the directives of the nursing attendant head, by itself, is insufficient to warrant his termination
from employment. For dismissal to be valid under this ground, the following must be present: (a)
there must be disobedience or insubordination; (b) the disobedience or insubordination must be
willful or intentional characterized by a wrongful or perverse attitude; (c) the order violated must
be reasonable, lawful, and made known to the employee; and (d) the order must pertain to the
duties which he has been engaged to discharge.

Q: What is misconduct?

Misconduct is defined as the 'transgression of some established and definite rule

of action, a forbidden act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error in judgment." For misconduct to be a just cause
for dismissal, the following requisites must concur: "(a) the misconduct must be
serious; (b) it must relate to the performance of the employee's duties showing that
the employee has become unfit to continue working for the employer; and (c) it
must have been performed with wrongful intent."

G. R. No. 244721, February 05, 2020

Teodoro v TEEKAY SHIPPING PHILIPPINES, INC.
Perlas-Bernabe, J:

Petitioner was hired as Chief Cook by respondent Teekay Shipping Philippines, Inc.
(TSPI), for its principal, Teekay Shipping Limited (TSL), on board the vessel M.T. Al
Marrouna for a period of eight (8) months, with such being covered by a Contract of
Employment and a Collective Bargaining Agreement (CBA) between TSPI, on behalf of TSL,
and the Philippine Seafarers' Union (PSU) - ALU TUCP. After undergoing the required pre-
employment medical examination, petitioner was declared fit for duty by the company-
designated physician notwithstanding the former's declaration of Dyslipidemia and diabetes
mellitus. For this reason, petitioner was made to sign an Affidavit of Undertaking relative to
his health condition before boarding the vessel.

The ship arrived at the port of Fujairah, United Arab Emirates, to get its food supplies.
Petitioner claimed that aside from preparing meals for the officers and crew, he also assisted
in hauling the food provisions from the upper deck of the ship to its reefer where the food
items were frozen and stored at the meat and fish rooms. Because of the sudden extreme
changes in temperature from the upper deck to the freezer during the hauling and storage
process, petitioner experienced a fever-like symptom with body pain and blindness in his left
eye the following day.He was brought to a hospital in India where he was diagnosed with
"Left Eye Endophthalmitis with Orbital Cellulitis;" subsequently, he was repatriated for further
medical treatment.

Upon arrival in Manila, petitioner was referred to a company-designated physician at the

Ship to Shore Medical Assist and his condition was confirmed. The company designated
physician explicated that petitioner's eye condition may have been triggered by his diabetes
mellitus which, in addition to lack of sleep or inadequate rest, impaired his immune system,
thus, making his body susceptible to infections. Hence, it was not work-related.Moreover,
petitioner's visual prognosis and recovery were found to be poor due to the permanent loss
of vision in one eye despite medications, and as such, he was declared to be unfit for further
sea duties.

Considering that there was permanent loss of vision in his left eye resulting in his
unfitness to work as declared by his attending specialist, and since he was no longer

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advised by TSPI to return for further consultations in view of the company's alleged policy on
a 130-day limit liability only, petitioner demanded from TSPI the payment of disability
benefits pursuant to the CBA, which the latter refused. This prompted petitioner to raise his
grievance before the Philippine Seafarers' Union, which likewise resulted in a
deadlock.Consequently, petitioner filed a complaint for disability benefits against TSPI, its
President Verchez , and its foreign principal, TSL, with the NCMB, DOLE.

In its defense, TSPI asserted that petitioner did not suffer from a work-related illness,
claiming that his eye condition was highly attributed to his pre-existing diabetes mellitus and
that it was also aggravated by his own failure to take his prescribed medications.

The PYA ruled in favor of petitioner, ordering the payment of total and
permanent disability benefits.

The CA partly granted TSPI's petition declaring petitioner entitled to partial and
permanent disability benefits only, or Grade 7 disability as assessed by the company-
designated physician, and deleted the award of attorney's fees. The CA also found no basis
in awarding petitioner attorney's fees, holding that there was no bad faith or malice on the
part of TSPI.

The Supreme Court affirmed the desision of the CA with modification. It granted
petitioner full disability benefits, as well as attorney’s fees.

§ Disability Benefits

Q: How is disability determined?

From the foregoing, since petitioner was declared by no less than his attending specialist to
be unfit for further sea service due to permanent loss of vision in his left eye, the Court finds his
resulting disability to be not only partial and permanent as ruled by the CA, but rather total and
permanent as correctly found by the PVA. It is well to point out that in disability compensation, it
is not the injury which is compensated, but rather it is the incapacity to work resulting in the
impairment of one's earning capacity. Total disability refers to an employee's inability to perform
his or her usual work. It does not require total paralysis or complete helplessness. Permanent
disability, on the other hand, is a worker's inability to perform his job for more than 120 days or
240 days, if the seafarer required further medical attention justifying the extension of the
temporary total disability period, regardless of whether or not he loses the use of any part of his
body.

G. R.No. 219059, February 12, 2020

GAUDIOSO ISO, JR. AND JOEL TOLENTINO v. SALCON POWER CORPORATION

Inting, J.

Brief facts of two consolidated cases:

Gaudioso Iso, Jr., together with his fellow petitioners, challenge the Decision of the
National Labor Relations Commission (NLRC), Cebu City, in denying their Motion for
Reconsideration. However, some of his co-petitioners entered into a Compromise
Agreement with respondent. Thereafter, the rest of the petitioners also executed a
Compromise Agreement with respondent. Thus, the Court rendered a Decision approving
said Compromise Agreements and dismissing the instant Petition. Petitioner Iso filed his

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Motion for Reconsideration arguing that the dismissal of the case should not affect him as he
was not a signatory to any of the Compromise Agreements. In response, the respondent
stressed, in its Comment that the Compromise Agreements do not concern the validly
dismissed petitioner as his monetary claims are directly connected or intertwined with his
continued employment with the company. Thereafter, petitioner Iso filed his Reply asserting
that since his case for illegal dismissal is still pending with the Court, it is premature to
render his claims moot as there is a possibility that his dismissal would be declared illegal,
thus entitling him to the benefits he claims.

Petitioner Gaudioso Iso, Jr. and Joel Tolentino allege that they are the union
officers of Salcon Power Independent Union (SPIU). They assert that since
respondent refused to recognize their union, they filed a petition for certification
election. A certification election was conducted wherein SPIU won as the employees'
collective bargaining agent. Thereafter, the SPIU submitted a Collective Bargaining
Agreement (CBA) proposal to [respondent]. However, [respondent] refused to
submit a counterproposal. It also refused to bargain with SPIU pending its appeal
with the Bureau of Labor Relations (BLR) concerning the cancellation of SPIU's union
registration. The BLR dismissed [respondent's] appeal. Thereafter, SPIU filed a
notice of strike on the ground of [respondent's] refusal to bargain. Afterwards,
respondent gave in and agreed to bargain collectively with SPIU.

Petitioners aver that [respondent's] petition for cancellation of SPIU's union registration
was a plot to remove them from the union. Likewise, petitioners assert that [respondent's]
petition to purge and automatically remove supervisory employees from SPIU was filed for
the same sinister purpose. Hence, SPIU decided to call a press conference. [Respondent]
alleges that during the press conference, petitioners and Dr. Tapang uttered false and
malicious accusations against it. Their statements were published in a newspaper of general
circulation in the Visayas. Consequently, [respondent] filed a criminal complaint for libel
against petitioners and Dr. Tapang. Moreover, [respondent] filed a civil case for damages
against them. Respondent issued show-cause notices to the petitioners, informing them that
they are charged with serious misconduct, dishonesty, breach of trust and serious
disobedience. Thereafter, hearings were conducted. The petitioners were found guilty of the
charges against them, which then prompted their dismissal from service. Aggrieved, the
petitioners filed a complaint for illegal dismissal.

The LA rendered a Decision that petitioners were not illegally dismissed and that there
was substantial evidence to support their dismissal.The LA found that petitioners committed
serious misconduct when they made malicious imputations against respondent, which are
totally unrelated to their collective bargaining negotiation efforts.

The CA found that the findings of fact of the LA and the NLRC, with respect to the
dismissal of petitioners for just causes, are fully supported by the evidence on record.

The Supreme court affirmed the decision of the CA. The Court notes the fact that
respondent SPC was shown to have afforded petitioners their right to due process. In
termination proceedings or employees, procedural due process consists of the twin
requirements of notice and hearing.The employer is required to furnish the employees with
two written notices before the termination of employment can be effected: (1) the first
apprises the employees of the particular acts or omissions for which their dismissal is
sought; and (2) the second informs the employees of the employer's decision to dismiss
them. There is compliance with the requirement of a hearing as long as there was an
opportunity to be heard, and not necessarily that an actual hearing was conducted. In this
case, petitioners were issued show cause notices and were made to explain. They were
then subjected to investigation wherein they were given the opportunity to defend

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themselves. Thereafter, respondent SPC found them guilty of the charges and issued
notices of dismissal .Accordingly, considering respondent SPC's compliance with procedural
due process, there is no other logical conclusion than that petitioners' dismissal was valid.

§ Twin Requirements of Notice and Hearing

§ Serious misconduct as a ground for dismissal

Q: How does Notice and Hearing operate as a right to due process?

The fact that respondent SPC was shown to have afforded petitioners their right to due
process. In termination proceedings or employees, procedural due process consists of the
twin requirements of notice and hearing.The employer is required to furnish the
employees with two written notices before the termination of employment can be effected:
(1) the first apprises the employees of the particular acts or omissions for which their
dismissal is sought; and (2) the second informs the employees of the employer's decision to
dismiss them. There is compliance with the requirement of a hearing as long as there was
an opportunity to be heard, and not necessarily that an actual hearing was conducted. In this
case, petitioners were issued show cause notices and were made to explain. They were
then subjected to investigation wherein they were given the opportunity to defend
themselves. Thereafter, respondent SPC found them guilty of the charges and issued
notices of dismissal .Accordingly, considering respondent SPC's compliance with procedural
due process, there is no other logical conclusion than that petitioners' dismissal was valid.

Q: How can serious misconduct be a ground for valid dismissal?

Article 282 of the Labor Code provides that serious misconduct is a valid cause for the
employer to terminate an employee.

Misconduct has been defined as an improper or wrong conduct. "It is a transgression of

some established and definite rule of action, a forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere error in judgment."For misconduct or
improper behavior to be a just cause for dismissal, there must be a concurrence of the
following elements: (a) the misconduct must be serious; (b) it must relate to the performance
of the employee's duties showing that the employee has become unfit to continue working
for the employer; and (c) it must have been performed with wrongful intent.

G.R. No. 184452, February 12, 2020

LUFTHANSA TECHNIK PHILIPPINES, INC., ANTONIO LOQUELLANO AND ARTURO

BERNAL v. ROBERTO CUIZON

Hernando, J:

Petitioner Lufthansa Technik Philippines, Inc. (LTP) is a corporation duly organized

under Philippine law, and is engaged in the business of aircraft maintenance, repair and
overhaul (MRO). It provides technical support and MRO services for the entire fleet of
Philippine Airlines (PAL).Petitioner Ziga is impleaded in his capacity as officer of LTP, while
petitioner Loquellano is impleaded in his capacity as an MA2 Division Manager of LTP, and
who is the immediate supervisor of herein respondent Cuizon. On the other hand, petitioner
Bernal is impleaded in his capacity as the Duty Manager of the Maintenance Control Center
of LTP, and is also the Chairman of the Employee Council of LTP (collectively, petitioners).

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 Petitioners claim that they validly terminated Cuizon's employment for loss of trust and
confidence in his ability to perform his duties as MA2 Duty Manager. They point out that
such loss of trust and confidence resulted from Cuizon's numerous violations and blatant
disregard of the LTP Standards in the Workplace, which violations were committed in the
course of two separate incidents, specifically:

1. [Cuizon's] willful concealment of the accidental light-up of PAL Aircraft EI-BZE

[accidental light-up incident] and
2. [Cuizon's] failure to observe the safety guidelines and precautions of petitioner LTP with
respect to aircraft towing, which caused damage to PAL Aircraft RP-C4008 [towing incident].

The Labor Arbiter rendered a Decision dismissing Cuizon's complaint for illegal

dismissal.

Aggrieved, Cuizon appealed to the National Labor Relations Commission (NLRC). The
NLRC likewise held that there was no illegal dismissal in respect to Cuizon.

Cuizon thereafter filed a Petition for Certiorari under Rule 65 of the Rules of Court with
the CA, claiming that the NLRC's Decision and Resolution should be annulled and set aside
for having been rendered with grave abuse of discretion amounting to lack or excess of
jurisdiction.

In its Decision, the CA found the petition meritorious. Thus, the CA reversed the findings
of the Labor Arbiter and the NLRC and held that Cuizon was indeed illegally dismissed.

The Supreme Court affirmed the ruling of the CA.

§ Requisites for dismissal on the ground of loss of trust and confidence

§ Classes of positions of trust

§ Gross Negligence

Q: What are the requisites for dismissal on the ground of loss of trust and confidence?

Article 297 (formerly 282) of the Labor Code provides that an employer may terminate its
employee for "[f]raud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative."

"The requisites for dismissal on the ground of loss of trust and confidence are: (1) the
employee concerned must be holding a position of trust and confidence; (2) there must be an
act that would justify the loss of trust and confidence; [and (3)] such loss of trust relates to the
employee's performance of duties."

Loss of trust and confidence as a valid ground for dismissal is premised on the fact that the
employee holds a position whose functions may only be performed by someone who enjoys the
trust and confidence of the management. Such employee bears a greater burden of
trustworthiness than ordinary workers, and the betrayal of the trust reposed is the essence of the
loss of trust and confidence that becomes the basis for the employee's dismissal.

Q: What are the classes of positions of trust?

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 There are two (2) classes of positions of trust. The first class consists of managerial
employees. They are defined as those vested with the powers or prerogatives to lay down
management policies and to hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees or effectively recommend such managerial actions. The second class
consists of cashiers, auditors, property custodians, etc. They are defined as those who in the
normal and routine exercise of their functions, regularly handle significant amounts of money or
property.

"Managerial employees refer to those whose primary duty consists of the management of
the establishment in which they are employed, or of a department or a subdivision thereof, and
to other officers or members of the managerial staff."

Q: What is the concept of gross negligence?

"Neglect of duty, as a ground for dismissal, must be both gross and habitual."In Casco, We
pronounced that:

Gross negligence implies a want or absence of or a failure to exercise slight

care or diligence, or the entire absence of care. It evinces a thoughtless
disregard of consequences without exerting any effort to avoid them. Habitual
neglect implies repeated failure to perform one's duties for a period of time,
depending upon the circumstances.

In termination cases, the employer bears the burden of proving that the employee's
dismissal was for a valid and authorized cause. Consequently, the failure of the employer to
prove that the dismissal was valid, would mean that the dismissal was unjustified, and thus
illegal.

G.R. No. 217101, February 12, 2020

LBC EXPRESS-VIS, INC. v. MONICA C. PALCO

Leonen, J:

Palco started working for LBC Express-Vis Inc. (LBC) as a customer associate in its
Gaisano Danao Branch (LBC Danao). The Branch's Team Leader and Officer-in-Charge,
Batucan, endorsed her application for the post and acted as her immediate superior.

While employed at LBC, Palco had initially noticed that Batucan would often flirt with her,
which made her uncomfortable. Later, Batucan started sexually harassing her.

She reported the incident to the LBC Head Office in Lapu Lapu City. She had a
resignation letter prepared in case management would not act on her complaint. Acting on
her complaint, management advised her to request for a transfer to another team while they
investigated the matter.

Palco returned to the LBC Head Office with her mother and submitted her formal
complaint against Batucan. Later, they proceeded to the police station to report the incident.

Sensing that management did not immediately act on her complaint, Palco resigned.
She asserted that she was forced to quit since she no longer felt safe at work.

Batucan was served a copy of a Notice to Explain.

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 LBC held the administrative hearing for the incident. On the same day, Palco filed a
Complaint for Illegal Dismissal against the company.

The area head of LBC Cebu sent a letter addressed to Batucan containing a suspension
with last warning.

Palco filed a Complaint for sexual harassment before the Danao City Prosecutor's
Office.

The Labor Arbiter ruled in favor of Palco.

The National Labor Relations Commission affirmed with modification the Labor Arbiter's
decision but reduced the amount of moral damages.

The Court of Appeals affirmed the National Labor Relations Commission. It denied
LBC's Motion for Reconsideration.

The Supreme Court affirmed the decision of the CA. Petitioner's insensibility to
respondent's sexual harassment case is a ground for constructive dismissal. In this instance,
it cannot be denied that respondent was compelled to leave her employment because of the
hostile and offensive work environment created and reinforced by Batucan and petitioner.
She was thus clearly constructively dismissed.

§ Constructive Dismissal

§ Voluntary Resignation v Constructive Dismissal

§ Sexual Harassment in the workplace

§ Liability of the employer

Q: What is the concept of constructive dismissal?

Constructive dismissal occurs when an employer makes an employee's continued

employment impossible, unreasonable or unlikely, or has made an employee's working
conditions or environment harsh, hostile and unfavorable, such that the employee feels obliged
to resign from his or her employment. Common examples are when the employee is demoted,
or when his or her pay or benefits are reduced. However, constructive dismissal is not limited to
these instances. The gauge to determine whether there is constructive dismissal, is whether a
reasonable person would feel constrained to resign from his or her employment because of the
circumstances, conditions, and environment created by the employer for the employee:

Constructive dismissal does not always involve forthright dismissal or diminution in rank,
compensation, benefit and privileges. There may be constructive dismissal if an act of clear
discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the
employee that it could foreclose any choice by him except to forego his continued employment.

Q: Differentiate Voluntary Resignation from Constructive Dismissal

In Bilbao v. Saudi Arabian Airlines, this court defined voluntary resignation as "the voluntary
act of an employee who is in a situation where one believes that personal reasons cannot be
sacrificed in favor of the exigency of the service, and one has no other choice but to dissociate
oneself from employment. It is a formal pronouncement or relinquishment of an office, with the

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intention of relinquishing the office accompanied by the act of relinquishment." Thus, essential to
the act of resignation is voluntariness. It must be the result of an employee's exercise of his or
her own will.

In the same case of Bilbao, this court advanced a means for determining whether an
employee resigned voluntarily:

As the intent to relinquish must concur with the overt act of relinquishment, the acts of the
employee before and after the alleged resignation must be considered in determining whether
he or she, in fact, intended to sever his or her employment. (Emphasis supplied)

On the other hand, constructive dismissal has been defined as "cessation of work because
'continued employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank or a diminution in pay' and other benefits."

In Penaflor v. Outdoor Clothing Manufacturing Corporation, constructive dismissal has been

described as tantamount to "involuntarily [sic] resignation due to the harsh, hostile, and
unfavorable conditions set by the employer." In the same case, it was noted that "[t]he gauge for
constructive dismissal is whether a reasonable person in the employee's position would feel
compelled to give up his employment under the prevailing circumstances."

Q: When is there sexual harassment in the workplace?

One of the ways by which a hostile or offensive work environment is created is through the
sexual harassment of an employee.

Workplace sexual harassment occurs when a supervisor, or agent of an employer, or any other
person who has authority over another in a work environment, imposes sexual favors on
another, which creates in an intimidating, hostile, or offensive environment for the latter. Section
3 of Republic Act No. 7877, otherwise known as the Anti-Sexual Harassment Act, states:

SECTION 3. Work, Education or Training-related Sexual Harassment Defined.

— Work, education or training-related sexual harassment is committed by an employer,
employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach,
trainor, or any other person who, having authority, influence or moral ascendancy over another
in a work or training or education environment, demands, requests or otherwise requires any
sexual favor from the other, regardless of whether the demand, request or requirement for
submission is accepted by the object of said act.

(a) In a work-related or employment environment, sexual harassment is committed when:

(1) The sexual favor is made as a condition in the hiring or in the employment, re-employment or
continued employment of said individual, or in granting said individual favorable compensation,
terms, conditions, promotions, or privileges; or the refusal to grant the sexual favor results in
limiting, segregating or classifying the employee which in any way would discriminate, deprive or
diminish employment opportunities or otherwise adversely affect said employee;

(2) The above acts would impair the employee's rights or privileges under existing labor laws; or

(3) The above acts would result in an intimidating, hostile, or offensive environment for the
employee. (Emphasis supplied)

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This Court has held that "[t]he gravamen of the offense in sexual harassment is not the violation
of the employee's sexuality but the abuse of power by the employer."

Q: What is the liability of the employer in sexual harassment cases?

Under Section 5 of the Anti-Sexual Harassment Act, the employer is only solidarity liable for
damages with the perpetrator in case an act of sexual harassment was reported and it did not
take immediate action on the matter:

SECTION 5. Liability of the Employer, Head of Office, Educational or Training Institution. —

The employer or head of office, educational or training institution shall be solidarily liable for
damages arising from the acts of sexual harassment committed in the employment, education or
training environment if the employer or head of office, educational or training institution is
informed of such acts by the offended party and no immediate action is taken thereon.
(Emphasis supplied)

This provision thus illustrates that the employer must first be informed of the acts of the
erring managerial officer before it can be held liable for the latter's acts. Conversely, if the
employer has been informed of the acts of its managerial staff, and does not contest or question
it, it is deemed to have authorized or be complicit to the acts of its erring employee.

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