Jleonen Case Digest Labor Law

UNIVERSITY OF SAN JOSE – RECOLETOS
SCHOOL OF LAW
Cebu City, Philippines

CASE DIGESTS IN

LABOR LAW
2013-2019
(Supreme Court Cases penned by
Associate Justice Marvic Leonen)

Digested and Compiled by:

BATCH SAMBIGKIS
(USJ-R Law Batch 2020)
LEONEN LABOR CASE DIGEST
2013
Case Title: Application for Survivorship Pension Benefits under R.A. 9946 of Mrs. Pacita Gruba
Subject: Labor: Social legislation: retirement benefits
Principle:
To be entitled, under sec.3 of RA 9946 - the spouse to qualify for survivorship pension, the
deceased judge or justice must (1) be at least 60 years old, (2) have rendered at least fifteen years in the
Judiciary or in any other branch of government, and in the case of eligibility for optional retirement, (3)
have served the last three years continuously in the Judiciary.
Facts:
A judge in Court of Appeals, after 16yrs 6 months of service, died at age 55, leaving only the
surviving spouse, Mrs.Gruba. Mrs Gruba applied for retirement/ gratuity benefit under RA 910, which
she benefited a 5yr lump sum remitted by GSIS. 4 years later, congress enacted RA 9946 and sec 3b
provides more benefits, including survivorship pension benefits, among other to all those members of
the judiciary, who have retired prior to the effectivity of this act. Provided further that the benefit to be
granted shall be prospective. The following year Mrs. Gruba applied for survivorship pension benefit
under RA 9946, to which she received some but later that year the Court of Tax Appeals ordered to
discontinue the payment to Mrs Gruba. In a comment, the office of the Chief Attorney recommended a
10-year lump sum death benefit under sec2 of RA 910.
Issues:
1) w/n RA 9946 applies to Judge Gruba and w/n the heirs of Judge Gruba are entitled to the 10yr lump
sum under RA 9946.
2) w/n- Mrs. Gruba is entitled to survivorship pension benefits under the same law.
Ruling:
We decide the first issues in favor of the heirs of Judge Gruba. However, we deny the
application for survivorship pension benefits of Mrs. Gruba.
Under Republic Act No. 9946, Section 2 provides for death benefits under varying
circumstances:
SEC. 2. In case a Justice of the x x x Court of Tax Appeals, x x x dies while in actual service, regardless of
his/her age and length of service as required in Section 1 hereof, his/her heirs shall receive a lump sum
of five (5) years’ gratuity computed on the basis of the highest monthly salary plus the highest monthly
aggregate of transportation, representation and other allowances such as personal economic relief
allowance (PERA) and additional compensation allowance received by him/her as such Justice or Judge:
Provided, however, That where the deceased Justice or Judge has rendered at least fifteen (15) years
either in the Judiciary or any other branch of Government, or both, his/her heirs shall instead be entitled
to a lump sum of ten (10) years gratuity computed on the same basis as indicated in this provision:
Provided, further, That the lump sum of ten (10) years gratuity shall be received by the heirs of the
Justice or the Judge who was killed because of his/her work as such: Provided, That the Justice or Judge
has served in Government for at least five (5) years regardless of age at the time of death. When a
Justice or Judge is killed intentionally while in service, the presumption is that the death is work-related.
The provision contemplates three scenarios. First, if a justice or judge dies while in service,
regardless of his or her age and length of service, his or her heirs are entitled to a five (5)-year lump sum
of gratuity. Second, if a justice or judge dies of natural causes while in service, regardless of his or her
age, but has rendered at least 15 years in government service, his or her heirs are entitled to a 10-year
lump sum of gratuity. Finally, if a justice or judge is killed intentionally and the death is considered work-
related, regardless of his or her age, but has rendered at least five (5) years in government service, his or
her heirs are entitled to a 10-year lump sum of gratuity.
1
Judge Gruba falls within the second scenario. Died due to natural causes while serving the
judiciary. He has rendered 16 yrs and 6 months 21 days, entitling him a lump sum of 10 years gratuity.
However she is not entitled to survivorship pension benefit. According to sec.3 of RA 9946 survivorship
pension benefits are given to surviving spouses of retired judges or justices or surviving spouses of
judges or justices who are eligible to retire optionally. This means that for the spouse to qualify for
survivorship pension, the deceased judge or justice must (1) be at least 60 years old, (2) have rendered
at least fifteen years in the Judiciary or in any other branch of government, and in the case of eligibility
for optional retirement, (3) have served the last three years continuously in the Judiciary. Mrs. Gruba
could have been entitled to survivorship pension benefits if her late husband were eligible to optionally
retire at the time of his death. Note: Judge Gruba died at age 55. Law requires 60 retirement age.
2014
Case Title: George A. Arriola vs. Pilipino Star Ngayon, Inc., G.R. No.: 175689 August 13, 2014
Principles:
-The prescriptive period for filing an illegal dismissal complaint is four years from the time the
cause of action accrued. This four-year prescriptive period, not the three-year period for filing money
claims under Article 291 of the Labor Code, applies to claims for backwages and damages due to illegal
dismissal.
-Abandonment is the “clear, deliberate and unjustified refusal of an employee to continue his
employment, without any intention of returning.
Facts:
In July 1986, Pilipino Star Ngayon, Inc. employed George A. Arriola as correspondent assigned in
Olongapo Cityand Zambales. Arriola had held various positions in Pilipino Star Ngayon, Inc. before
becoming a section editor and writer of its newspaper. He wrote "Tinig ng Pamilyang OFWs" until his
column was removed from publication on November 15, 1999. Since then, Arriola never returned for
work. On November 15, 2002, Arriola filed a complaint for illegal dismissal, non-payment of
salaries/wages, moral and exemplary damages, actual damages, attorney's fees, and full backwages with
the National Labor Relations Commission. Arriola alleged that Pilipino Star Ngayon, Inc. "arbitrarily
dismissed" him on November 15, 1999. Arguing that he was a regular employee, Arriola contended that
his rights to security of tenure and due process were violated when Pilipino Star Ngayon, Inc. illegally
dismissed him. Pilipino Star Ngayon, Inc. and Miguel G. Belmonte denied Arriola’s allegations. In their
position paper, they alleged that around the third week of November 1999, Arriola suddenly absented
himself from work and never returned despite Belmonte’s phone callsand beeper messages. After a few
months, they learned that Arriola transferred to a rival newspaper publisher.
The Labor Arbiter dismissed the complaint and ruled that ruled that laches had set in,
emphasizing that Arriola took three years and one day to file his complaint. According to the Labor
Arbiter, this was "contrary to the immediate and natural reaction of an aggrieved person." The Labor
Arbiter found that Arriola abandoned his employment with Pilipino Star Ngayon, Inc. to write for a rival
newspaper publisher. On Arriola’s money claims, the Labor Arbiter ruled that they have already
prescribed. She cited Article 291 of the Labor Code, which requires that all money claims arising from
employer-employee relations be filed three years from the time the cause of action accrued. The NLRC
and CA affirmed the decision of the LA.
Issues:
I. Whether or not Arriola’s money claims have prescribed
II. Whether or not Pilipino Star Ngayon,Inc. illegally dismissed Arriola
Ruling:
I. No. Arriola’s claims for backwages and damages have not yet prescribed when he filed
his complaint with the National Labor Relations Commission.
2
Article 1146 of the Civil Code of the Philippines governs complaints for illegal dismissal. Under
Article 1146, an action based upon an injury to the rights of a plaintiff must be filed within four years.
The prescriptive period for filing an illegal dismissal complaint is four years from the time the cause of
action accrued. This four-year prescriptive period, not the three-year period for filing money claims
under Article 291 of the Labor Code, applies to claims for backwages and damages due to illegal
dismissal.
In the case at bar, Arriola’s claims for backwages, damages, and attorney’s fees arising from his
claim of illegal dismissal have not yet prescribed when he filed his complaint with the NLRC. The
prescriptive period for filing an illegal dismissal complaint is four years from the time the cause of action
accrued. Since an award of backwages is merely consequent to a declaration of illegal dismissal, a claim
for backwages likewise prescribes in four years.
II. No. Pilipino Star Ngayon, Inc. did not illegally dismiss Arriola. Arriola abandoned his
employment with Pilipino Star Ngayon, Inc.
Abandonment is the "clear, deliberate and unjustified refusal of an employee to continue his
employment, without any intention of returning." It has two elements: first, the failure to report for
work or absence without valid or justifiable reason and, second, a clear intention to sever employer-
employee relations exists. The second element is "the more determinative factor and is manifested by
overt acts from which it may be deduced that the employee has no more intention to work."
Assuming that Arriola started writing for Imbestigador only on February 17, 2003, he
nonetheless failed to report for work at Pilipino Star Ngayon, Inc. after November 15, 1999 and only
filed his illegal dismissal complaint on November 15, 2002. He took three years and one day to remedy
his dismissal. This shows his clear intention to sever his employment with Pilipino Star Ngayon, Inc. As
the Court of Appeals ruled, "the removal of [Arriola’s] column from private respondent [Pilipino Star
Ngayon, Inc.’s newspaper] is not tantamount to a termination of his employment as his job is not
dependent on the existence of the column and thereafter, Arriola remained as section editor. Moreover,
a newspaper publisher has the management prerogative to determine what columns to print in its
newspaper.
Case Title: Nancy Montinola vs. PAL

One-liner:
“When disciplining employees, employer’s must have sufficient basis for their decisions and
must afford the employee with due substantive and procedural due process.”
Principles:
1. The employee is entitled to moral damages when the employer acted a) in bad faith or fraud;
b) in a manner oppressive to labor; or c) in a manner contrary to morals, good customs, or public policy.
Bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or
moral obliquity.
2. In labor cases, the court may award exemplary damages if the dismissal was effected in a
wanton, oppressive or malevolent manner.
Facts:
Montinola was employed as a flight attendant of PAL since 1996. On January 29, 2008,
Montinola and other flight crew members were subjected to custom searches in Honolulu, Hawaii, USA.
Items from the airline were recovered from the flight crew by customs officials. Nancy Grahan, US
Customs and Border Protection Supervisor, sent an email to PAL regarding the search containing the list
of PAL flight crew members involved in the search, among them was Montinola. Another email
enumerated the list of items taken from the crew members.
3
On February 1, 2008, PAL required Montinola to comment on the incident. She gave a
handwritten explanation three days after stating that she did not take anything from the aircraft. On
February 22, 2008, PAL furnished Montinola the emails from Honolulu customs official followed by a
notice of administrative charge given on March 25, 2008. On April 12, 2008 there was a clarificatory
hearing.
Montinola alleged that her counsel objected during the clarificatory hearing regarding PAL’s
failure to specify her participation in the allege pilferage. Montinola was threatened that a request for
clarification would result in a waiver of the clarificatory hearing. She was later found guilty of 11
violations of the company’s Code of Discipline and Government Regulation. She was suspended for 1
year without pay. She asked for a reconsideration but was denied.
Montinola brought the matter before the LA. The LA declared her suspension as illegal and
ordered her reinstatement with backwages, moral and exemplary damages, and attorney’s fees. PAL
appealed the LA’s decision to the NLRC. NLRC affirmed the LA’s decision. PAL appealed to CA. CA
affirmed the LA and NLRC decision but modified the award by deleting the award for moral and
exemplary damages and attorney’s fees. Montinola filed a partial motion for reconsideration, praying
that the award of moral
and exemplary damages and attorney’s fees be reintegrated into the decision. CA denied. Thus she filed
a petition for review on certiorari.
Issue:
Whether Montinola’s illegal suspension entitled her an award of moral and exemplary damages
and attorney’s fees.
Ruling:
Montinola is entitled to moral and exemplary damages, and attorney’s fees.
Under the Labor Code, Labor Arbiters are authorized by law to award moral, exemplary and
other forms of damages arising from the employer-employee relations. The nature of moral damages is
defined under our Civil Code. Article 2220 states that “willful injury to property may be a legal ground
for awarding moral damages if the court should find that, under the circumstances, such damages are
justly due”. The employee is entitled to moral damages when the employer acted a) in bad faith or
fraud; b) in a manner oppressive to labor; or c) in a manner contrary to morals, good customs, or public
policy. Bad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose
or moral obliquity.
Under Article 2229 of the Civil Code, exemplary or corrective damages are imposed by way of
example or correction for the public good, in addition to the moral, temperate, liquidated or
compensatory damages. If the case involves a contract, Article 2332 of the Civil Code provides that the
court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner. In labor cases, the court may award exemplary damages if the
dismissal was effected in a wanton, oppressive or malevolent manner.
Under 2208 of the Civil Code enumerates the instances when attorney’s fees can be awarded:
1. When exemplary damages are awarded;
2. When the defendant’s act or omission has compelled the plaintiff to litigate with third persons
or to incur expenses to protect his interest;
3. In criminal cases of malicious prosecution against the plaintiff;
4. In case of a clearly unfounded civil action or proceeding against the plaintiff;
5. Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s
plainly valid, just and demandable claim;
6. In actions for legal support;
7. In actions for the recovery of wages of household helpers, laborers and skilled workers;
8. In actions for indemnity under ‘workmen’s compensation and employer’s liablity laws’
9. In a separate civil action to recover civil liability arising from a crime;
10. When at least double judicial costs are awarded;
11. In any other case where the court deems it just and equitable that attorney’s fees and expenses
of litigation should be recovered.
4
PAL’s action in implicating Montinola and penalizing her for no clear reason show bad faith. PAL’s
denial of her request to clarify the charges against her shows its intent to do a wrongful act for moral
obliquity. It is socially deleterious for PAL to suspend Montinola without just cause in the manner
suffered by her.
Hence, exemplary damages are necessary to deter future employers from committing the same
acts. In this case, first, considering that the court have awarded exemplary damages, attorney’s fees can
likewise be awarded. Second, PAL’s acts and omission compelled Montinola to incur expenses to protect
her rights with NLRC and the judicial system. She went through four tribunals, and she was assisted by
counsel. These expenses would have been unnecessary if PAL had sufficient basis for its decision to
discipline Montinola. Finally, the action included recovery of wages.
Case Title: Sameer Overseas Placement Agency, Inc. vs. Cabiles, G.R. No. 170139 August 5, 2014
One-liner:
“Kung makigbulag ka, kanang nay saktong rason ug taronga pud ug storya para makasabot sya.”
Principle:
Settled is the rule that the courts of the forum will not enforce any foreign claim obnoxious to
the forum’s public policy.
Facts:
Sameer Overseas Placement Agency, Inc., is a recruitment and placement agency. Responding to
an ad it published, Joy C. Cabiles, submitted her application for a quality control job in Taiwan which was
accepted. Joy signed a one-year employment contract for a monthly salary of NT$15,360.00. Sameer
required her to pay a placement fee of P70,000.00 when she signed the employment contract.
Joy was deployed to work for Taiwan Wacoal, Co., Ltd. (Wacoal) on June 26, 1997. She was
asked to work as a cutter. On July 14, 1997, Joy was informed, without prior notice, that she was
terminated. She was told that she only earned a total of NT$9,000. Wacoal deducted NT$3,000 to cover
her plane ticket to Manila.
On October 15, 1997, Joy filed a complaint against Sameer and Wacoal. She claimed that she
was illegally dismissed. She asked for the return of her placement fee, the withheld amount for
repatriation costs, payment of her salary for 23 months as well as moral and exemplary damages.
Sameer alleged that Joy’s termination was due to her inefficiency, negligence in her duties, and
her “failure to comply with the work requirements of her foreign employer.” Sameer added that
Wacoal’s accreditation had already been transferred to the Pacific Manpower & Management Services,
Inc. (Pacific). Thus, Sameer asserts that it was already substituted by Pacific Manpower.
Pacific alleged that there was no employer-employee relationship between them. Therefore, the
claims against it were outside the jurisdiction of the Labor Arbiter. The Labor Arbiter dismissed Joy’s
complaint. Joy appealed to the NLRC. NLRC declared that Joy was illegally dismissed. It reiterated the
doctrine that the burden of proof to show that the dismissal was based on a just or valid cause belongs
to the employer. It found that Sameer failed to prove that there were just causes for termination.
NLRC awarded joy only three (3) months worth of salary in the amount of NT$46,080, the
reimbursement of the NT$3,000 withheld from her, and attorney’s fees of NT$300. Sameer filed a
petition for certiorari with the Court of Appeals. The Court of Appeals affirmed the decision of the NLRC.
Sameer appealed to the Supreme Court.
Issues:
1. Whether or not there is substantive due process in terminating Joy
2. Whether or not there is procedural due process in terminating Joy
3. Whether or not the award of 3 months worth of salary is proper
4. Whether or not the awards are subject to interest
5
Ruling:
1. No, there was none.
With respect to the rights of overseas Filipino workers, we follow the principle of lex loci contractus.
There is no question that the contract of employment in this case was perfected here in the
Philippines. Therefore, the Labor Code, its implementing rules and regulations, and other laws affecting
labor apply in this case. Furthermore, settled is the rule that the courts of the forum will not enforce
any foreign claim obnoxious to the forum’s public policy. Here in the Philippines, employment
agreements are more than contractual in nature.
By our laws, overseas Filipino workers (OFWs) may only be terminated for a just or authorized cause
and after compliance with procedural due process requirements.
Sameer’s allegation that Joy was inefficient in her work and negligent in her duties may, therefore,
constitute a just cause for termination under Article 282(b), but only if Sameer was able to prove it.
The burden of proving that there is just cause for termination is on the employer. Failure to show
that there was valid or just cause for termination would necessarily mean that the dismissal was illegal.
To show that dismissal resulting from inefficiency in work is valid, it must be shown that:
a) the employer has set standards of conduct and workmanship against which the employee will
be judged;
b) the standards of conduct and workmanship must have been communicated to the employee;
and
c) the communication was made at a reasonable time prior to the employee’s performance
assessment.
In this case, no evidence was shown to support such allegations. Sameer did not even bother to
specify what requirements were not met, what efficiency standards were violated, or what particular
acts of respondent constituted inefficiency.
2. No, there was none.

The employer is required to give the charged employee at least two written notices before
termination. One of the written notices must inform the employee of the particular acts that may cause
his or her dismissal. The other notice must “[inform] the employee of the employer’s decision.” Aside
from the notice requirement, the employee must also be given “an opportunity to be heard.”
Joy started working on June 26, 1997. She was told that she was terminated on July 14, 1997
effective on the same day and barely a month from her first workday. She was also repatriated on the
same day that she was informed of her termination. The abruptness of the termination negated any
finding that she was properly notified and given the opportunity to be heard. Her constitutional right to
due process of law was violated.
3. No, the award of 3 months worth of pay is improper.

In Serrano v. Gallant Maritime Services, Inc. and Marlow Navigation Co., Inc., the court ruled that
the clause “or for three (3) months for every year of the unexpired term, whichever is less” is
unconstitutional for violating the equal protection clause and substantive due process.
Since she started working on June 26, 1997 and was terminated on July 14, 1997, she is entitled to
her salary from July 15, 1997 to June 25, 1998.
4. Yes, they are subject to interest.
6
On the interest rate, the BSP Circular No. 799 of June 21, 2013, which revised the interest rate for
loan or forbearance from 12% to 6% in the absence of stipulation, applies in this case. Circular No. 799 is
not applicable when there is a law that states otherwise. While the Bangko Sentral ng Pilipinas has the
power to set or limit interest rates, these interest rates do not apply when the law provides that a
different interest rate shall be applied.
AWARD INTEREST RATE
Reimbursement of placement fee 12% per annum (specifically provided)
Salary for the unexpired portion of the employment contract 6% (Circular No. 799 applies)
Total money claims 6% from finality
Case Title: Am-Phil Food Concepts, Inc. vs. Padilla 737 SCRA 339 , October 01, 2014
Principle:
The law looks with disfavor upon quitclaims and releases by employees pressured into signing
by unscrupulous employers minded to evade legal responsibilities.
Facts:
Petitioner filed a petition for certiorari under Rule 45 to annul the decision of the Court of
Appeals sustaining the resolution of the National Labor Relations Commission which affirmed the Labor
Arbiter’s decision that respondent was illegally dismissed.
Padilla was hired on April 1, 2002 as a Marketing Associate by Am-Phil, a corporation engaged in
the restaurant business. On September 29, 2002, Am-Phil sent Padilla a letter confirming his regular
employment. Sometime in the first week of March 2004, three (3) of Am-Phil’s officers informed Padilla
that Am-Phil would be implementing a retrenchment program on account on serious and adverse
business conditions.
Padilla questioned Am-Phil’s choice to retrench him. But on March 17, 2004, Am-Phil sent
Padilla a memorandum notifying him of his retrenchment. Padilla was paid separation pay in the
amount of P26,245.38. On April 20, 2004, Padilla executed a quitclaim and release in favor of Am-Phil.
On July 28, 2004, Padilla filed a complaint for illegal dismissal (with claims for backwages,
damages, and attorney’s fees). For its defense, Am-Phil claimed that Padilla was not illegally terminated
and that it validly exercised a management prerogative.
Issue:
1. Whether or not the quitclaim and release negate respondent’s having been illegally dismissed.
2. What are the requisites of a valid retrenchment.
Ruling:
1. No.
It is of no consequence that Padilla ostensibly executed a quitclaim and release in favor of Am-
Phil. This court’s pronouncements in F.F. Marine Corporation v. National Labor Relations Commission,
455 SCRA 136 (2005), which similarly involved an invalid retrenchment, are of note: Considering that the
ground for retrenchment availed of by petitioners was not sufficiently and convincingly established, the
retrenchment is hereby declared illegal and of no effect. The quitclaims executed by retrenched
employees in favor of petitioners were therefore not voluntarily entered into by them. Their consent
was similarly vitiated by mistake or fraud. The law looks with disfavor upon quitclaims and releases by
employees pressured into signing by unscrupulous employers minded to evade legal responsibilities. As
a rule, deeds of release or quitclaim cannot bar employees from demanding benefits to which they are
legally entitled or from contesting the legality of their dismissal. The acceptance of those benefits would
7
not amount to estoppel. The amounts already received by the retrenched employees as consideration
for signing the quitclaims should, however, be deducted from their respective monetary awards.
In sum, the Court of Appeals committed no error in holding that there was no grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the National Labor Relations
Commission in affirming the May 9, 2005 decision of Labor Arbiter Eric V. Chuanico holding that
respondent Paolo Jesus T. Padilla was illegally dismissed.
2. This court has outlined the requirements for a valid retrenchment, each of which must be
shown by clear and convincing evidence, as follows:
(1) that the retrenchment is reasonably necessary and likely to prevent business losses which, if
already incurred, are not merely de minimis, but substantial, serious, actual and real, or if only
expected, are reasonably imminent as perceived objectively and in good faith by the employer;
(2) that the employer served written notice both to the employees and to the Department of
Labor and Employment at least one month prior to the intended date of retrenchment;
(3) that the employer pays the retrenched employees separation pay equivalent to one month
pay or at least 1/2 month pay for every year of service, whichever is higher;
(4) that the employer exercises its prerogative to retrench employees in good faith for the
advancement of its interest and not to defeat or circumvent the employees’ right to security of
tenure; and
(5) that the employer used fair and reasonable criteria in ascertaining who would be dismissed
and who would be retained among the employees, such as status (i.e., whether they are
temporary, casual, regular or managerial employees), efficiency, seniority, physical fitness, age,
and financial hardship for certain workers.
Case Title: FUJI TELEVISION NETWORK, INC. vs. ARLENE S. ESPIRITU, G.R. No. 204944-45
December 3, 2014
One-liner:
“Regular employee ka if you are doing activities necessary and desirable sa business ng
company.”
Principle:
It is the burden of the employer to prove that a person whose services it pays for is an
independent contractor rather than a regular employee with or without a fixed term. That a person has
a disease does not per se entitle the employer to terminate his or her services. Termination is the last
resort. At the very least, a competent public health authority must certify that the disease cannot be
cured within six (6) months, even with appropriate treatment.
Facts:
Arlene S. Espiritu (Arlene) was engaged by Fuji Television Network, Inc. (Fuji) as a news
correspondent/producer tasked to report Philippine news to Fuji through its Manila Bureau field office.
The employment contract was initially for one year, but was successively renewed on a yearly basis with
salary adjustments upon every renewal.
In January 2009, Arlene was diagnosed with lung cancer. She informed Fuji about her condition,
and the Chief of News Agency of Fuji, Yoshiki Aoki, informed the former that the company had a
problem with renewing her contract considering her condition. Arlene insisted she was still fit to work as
certified by her attending physician.
After a series of verbal and written communications, Arlene and Fuji signed a non-renewal
contract. In consideration thereof, Arlene acknowledged the receipt of the total amount of her salary
8
from March-May 2009, year-end bonus, mid-year bonus and separation pay. However, Arlene executed
the non-renewal contract under protest.
Arlene filed a complaint for illegal dismissal with the NCR Arbitration Branch of the NLRC,
alleging that she was forced to sign the non-renewal contract after Fuji came to know of her illness. She
also alleged that Fuji withheld her salaries and other benefits when she refused to sign, and that she was
left with no other recourse but to sign the non-renewal contract to get her salaries.
Labor Arbiter dismissed the complaint and held that Arlene was not a regular employee but an
independent contractor.
The NLRC reversed the Labor Arbiter’s decision and ruled that Arlene was a regular employee
since she continuously rendered services that were necessary and desirable to Fuji’s business.
The Court of Appeals affirmed that NLRC ruling with modification that Fuji immediately reinstate
Arlene to her position without loss of seniority rights and that she be paid her backwages and other
emoluments withheld from her. The Court of Appeals agreed with the NLRC that Arlene was a regular
employee, engaged to perform work that was necessary or desirable in the business of Fuji, and the
successive renewals of her fixed-term contract resulted in regular employment. The case of Sonza does
not apply in the case because Arlene was not contracted on account of a special talent or skill. Arlene
was illegally dismissed because Fuji failed to comply with the requirements of substantive and
procedural due process. Arlene, in fact, signed the non-renewal contract under protest as she was left
without a choice.
Fuji filed a petition for review on certiorari under Rule 45 before the Supreme Court, alleging
that Arlene was hired as an independent contractor; that Fuji had no control over her work; that the
employment contracts were renewed upon Arlene’s insistence; that there was no illegal dismissal
because she freely agreed not to renew her fixed-term contract as evidenced by her email
correspondences
Arlene filed a manifestation stating that the SC could not take jurisdiction over the case since
Fuji failed to authorize Corazon Acerden, the assigned attorney-in-fact for Fuji, to sign the verification.
Issues:
1. Was Arlene an independent contractor?
2. Was Arlene a regular employee?
3. Was Arlene illegally dismissed?
4. Did the Court of Appeals correctly awarded reinstatement, damages and attorney’s
fees?
Ruling:
1. Arlene was not an independent contractor.
Fuji alleged that Arlene was an independent contractor citing the Sonza case. She was hired
because of her skills. Her salary was higher than the normal rate. She had the power to bargain with her
employer. Her contract was for a fixed term. It also stated that Arlene was not forced to sign the non-
renewal agreement, considering that she sent an email with another version of her non-renewal
agreement.
Arlene argued (1) that she was a regular employee because Fuji had control and supervision
over her work; (2) that she based her work on instructions from Fuji; (3) that the successive renewal of
her contracts for four years indicated that her work was necessary and desirable; (4) that the payment
of separation pay indicated that she was a regular employee; (5) that the Sonza case is not applicable
because she was a plain reporter for Fuji; (6) that her illness was not a ground for her dismissal; (7) that
she signed the non-renewal agreement because she was not in a position to reject the same.
9
The level of protection to labor should vary from case to caese. When a prospective employee,
on account of special skills or market forces, is in a position to make demands upon the prospective
employer, such prospective employee needs less protection than the ordinary worker.
The level of protection to labor must be determined on the basis of the nature of the work,
qualifications of the employee, and other relevant circumstances such as but not limited to educational
attainment and other special qualifications.
Fuji’s argument that Arlene was an independent contractor under a fixed-term contract is
contradictory. Employees under fixed-term contracts cannot be independent contractors because in
fixed-term contracts, an employer-employee relationship exists. The test in this kind of contract is not
the necessity and desirability of the employee’s activities, “but the day certain agreed upon by the
parties for the commencement and termination of the employment relationship.” For regular
employees, the necessity and desirability of their work in the usual course of the employer’s business
are the determining factors. On the other hand, independent contractors do not have employer-
employee relationships with their principals.
To determine the status of employment, the existence of employer-employee relationship must
first be settled with the use of the four-fold test, especially the qualifications for the power to control.
The distinction is in this guise:
Rules that merely serve as guidelines towards the achievement of a mutually desired result
without dictating the means or methods to be employed creates no employer-employee relationship;
whereas those that control or fix the methodology and bind or restrict the party hired to the use of such
means creates the relationship.
In application, Arlene was hired by Fuji as a news producer, but there was no evidence that she
was hired for her unique skills that would distinguish her from ordinary employees. Her monthly salary
appeared to be a substantial sum. Fuji had the power to dismiss Arlene, as provided for in her
employment contract. The contract also indicated that Fuji had control over her work as she was rquired
to report for 8 hours from Monday to Friday. Fuji gave her instructions on what to report and even her
mode of transportation in carrying out her functions was controlled.
Therefore, Arlene could not be an independent contractor.
2. Arlene was a regular employee with a fixed-term contract.

In determining whether an employment should be considered regular or non-regular, the
applicable test is the reasonable connection between the particular activity performed by the employee
in relation to the usual business or trade of the employer. The standard, supplied by the law itself, is
whether the work undertaken is necessary or desirable in the usual business or trade of the employer, a
fact that can be assessed by looking into the nature of the services rendered and its relation to the
general scheme under which the business or trade is pursued in the usual course. It is distinguished from
a specific undertaking that is divorced from the normal activities required in carrying on the particular
business or trade.
However, there may be a situation where an employee’s work is necessary but is not always
desirable in the usual course of business of the employer. In this situation, there is no regular
employment.
Fuji’s Manila Bureau Office is a small unit and has a few employees. Arlene had to do all
activities related to news gathering.
A news producer “plans and supervises newscast [and] works with reporters in the field
planning and gathering information, including monitoring and getting news stories, rporting
interviewing subjects in front of a video camera, submission of news and current events reports
pertaining to the Philippines, and traveling to the regional office in Thailand.” She also had to report for
work in Fuji’s office in Manila from Mondays to Fridays, eight per day. She had no equipment and had to
use the facilities of Fuji to accomplish her tasks.
10
The successive renewals of her contract indicated the necessity and desirability of her work in
the usual course of Fuji’s business. Because of this, Arlene had become a regular employee with the
right to security of tenure.
Arlene’s contract indicating a fixed term did not automatically mean that she could never be a
regular employee. For as long as it was the employee who requested, or bargained, that the contract
have a “definite date of termination,” or that the fixed-term contract be freely entered into by the
employer and the employee, then the validity of the fixed-term contract will be upheld.
3. Arlene was illegally dismissed.

As a regular employee, Arlene was entitled to security of tenure under Article 279 of the Labor
Code and could be dismissed only for just or authorized causaes and after observance of due process.
The expiration of the contract does not negate the finding of illegal dismissal. The manner by
which Fuji informed Arlene of non-renewal through email a month after she informed Fuji of her illness
is tantamount to constructive dismissal. Further, Arlene was asked to sign a letter of resignation
prepared by Fuji. The existence of a fixed-term contract should not mean that there can be no illegal
dismissal. Due process must still be observed.
Moreoever, disease as a ground for termination under Article 284 of the Labor Code and Book
VI, Rule 1, Section 8 of the Omnibus Rules Implementing the Labor Code require two requirements to be
complied with: (1) the employee’s disease cannot be cured within six months and his continued
employment is prohibited by law or prejudicial to his health as well as to the health of his co-employees;
and (2) certification issued by a competent public health authority that even with proper medical
treatment, the disease cannot be cured within six months. The burden of proving compliance with these
requisites is on the employer. Non-compliance leads to illegal dismissal. blesvirtualLawlibrary
Arlene was not accorded due process. After informing her employer of her lung cancer, she was
not given the chance to present medical certificates. Fuji immediately concluded that Arlene could no
longer perform her duties because of chemotherapy. Neither did it suggest for her to take a leave. It did
not present any certificate from a competent public health authority.
4. The Court of Appeals correctly awarded reinstatement, damages and attorney’s fees.
The Court of Appeals awarded moral and exemplary damages and attorney’s fees. It also
ordered reinstatement, as the grounds when separation pay was awarded in lieu of reinstatement were
not proven.
The Labor Code provides in Article 279 that illegally dismissed employees are entitled to
reinstatement, backwages including allowances, and all other benefits.
Separation pay in lieu of reinstatement is allowed only (1) when the employer has ceased
operations; (2) when the employee’s position is no longer available; (3) strained relations; and (4) a
substantial period has lapsed from date of filing to date of finality.
The doctrine of strained relations should be strictly applied to avoid deprivation of the right to
reinstatement. In the case at bar, no evidence was presented by Fuji to prove that reinstatement was no
longer feasible. Fuji did not allege that it ceased operations or that Arlene’s position was no longer
feasible. Nothing showed that the reinstatement would cause an atmosphere of antagonism in the
workplace.
Moral damages are awarded “when the dismissal is attended by bad faith or fraud or constitutes
an act oppressive to labor, or is done in a manner contrary to good morals, good customs or public
policy.” On the other hand, exemplary damages may be awarded when the dismissal was effected “in a
wanton, oppressive or malevolent manner.
11
After Arlene had informed Fuji of her cancer, she was informed that there would be problems in
renewing her contract on account of her condition. This information caused Arlene mental anguish,
serious anxiety, and wounded feelings. The manner of her dismissal was effected in an oppressive
approach with her salary and other benefits being withheld until May 5, 2009, when she had no other
choice but to sign the non-renewal contract.
With regard to the award of attorney’s fees, Article 111 of the Labor Code states that “[i]n cases
of unlawful withholding of wages, the culpable party may be assessed attorney’s fees equivalent to ten
percent of the amount of wages recovered.” In actions for recovery of wages or where an employee was
forced to litigate and, thus, incur expenses to protect his rights and interest, the award of attorney’s
fees is legally and morally justifiable.” Due to her illegal dismissal, Arlene was forced to litigate.
Therefore, the awards for reinstatement, damages and attorney’s fees were proper.
Case Title: Philippine Electric Corporation (PHILEC) vs. Court of Appeals, GR No. 168612,
December 10, 2014
Principle:
A collective bargaining agreement constitute the law between the parties and must be complied
with in good faith.
Facts:
Philippine Electric Corporation (PHILEC) is a domestic corporation "engaged in the manufacture
and repairs of high voltage transformers." Among its rank-and-file employees were Eleodoro V. Lipio
(Lipio) and Emerlito C. Ignacio, Sr. (Ignacio, Sr.), former members of the PHILEC Workers’ Union (PWU).
PWU is a legitimate labor organization and the exclusive bargaining representative of PHILEC’s rank-and-
file employees.
On August 18, 1997 and with the previous collective bargaining agreements already expired,
PHILEC selected Lipio for promotion from Machinist under Pay Grade VIII to Foreman I under Pay Grade
B. Ignacio, Sr then DT-Assembler with Pay Grade VII to Foreman 1. PHILEC served both employees a
memorandum, instructing them to undergo training for the position of Foreman I beginning on August
25, 1997. The memos were:
You will be trained as a Foreman I,and shall receive the following training allowance until you
have completed the training/observation period which shall not exceed four (4) months.
For Lipio:
First Month- - - - -350.00
Second month- - - - -815.00
Third month- - - - -815.00
Fourth month- - - - -815.00
For Ignacio, Sr:
First Month- - - - -255.00
Second month- - - - -605.00
Third month- - - - -1,070.00
Fourth month- - - - -1,070.00
On September 17, 1997, PHILEC and PWU entered into a new collective bargaining agreement,
effective retroactively on June 1, 1997. Under Article X, Section 4 of the June 1, 1997 collective
bargaining agreement, a rank-and-file employee promoted shall be entitled to the following step
increases in his or her basic salary:
12
Pay Grade Step Increase

I - II ₱80.00
II - III ₱105.00
III - IV ₱136.00
IV - V ₱175.00
V - VI. ₱224.00
VI - VII. ₱285.00
VII - VIII. ₱361.00
VIII - IX. ₱456.00
IX - X ₱575.00
Claiming that the schedule of training allowance stated in the memoranda served on Lipio and
Ignacio,Sr. did not conform to Article X, Section 4 of the June 1, 1997 collective bargaining agreement,
PWU submitted the grievance to the grievance machinery. PWU and PHILEC designated Hon. Ramon T.
Jimenez as Voluntary Arbitrator.
PWU maintained that PHILEC failed to follow the schedule of step increases under the new
collective bargaining agreement. For PHILEC’s failure to apply the schedule of step increase, PHILEC
committed an unfair labor practice.
PHILEC emphasized that it promoted Lipio and Ignacio, Sr. while it was still negotiating a new
collective bargaining agreement with PWU. PHILEC applied the "Modified SGV" pay grade scale in
computing Lipio’s and Ignacio, Sr.’s training allowance.
Voluntary Arbitrator Jimenez held that PHILEC violated its CBA with PWU. The new CBA
governed when PHILEC selected Lipio and Ignacio, Sr. for promotion. As to PHILEC’s claim that applying
Article X, Section 4 would result in salary distortion,Voluntary Arbitrator Jimenez ruled that this was "a
concern that PHILEC could have anticipated and could have taken corrective action" before signing the
collective bargaining agreement.
PHILEC filed a motion for reconsideration however it was denied, they received the copy thereof
on August 11, 2000. On August 29, 2000, PHILEC filed a petition for certiorari before the CA which
affirmed the decisions of the Voluntary Arbitrator.
Issue:
Whether Voluntary Arbitrator Jimenez gravely abused his discretion in directing PHILEC to pay
Lipio’s and Ignacio, Sr.’s training allowance based on Article X, Section 4 of the June 1, 1997 rank-and-file
collective bargaining agreement.
Ruling:
No.
A collective bargaining agreement is "a contract executed upon the request of either the
employer or the exclusive bargaining representative of the employees incorporating the agreement
reached after negotiations with respect towages, hours of work and all other terms and conditions of
employment, including proposals for adjusting any grievances or questions arising under such
agreement." A collective bargaining agreement being a contract, its provisions "constitute the law
between the parties" and must be complied with in good faith.
In this case, PHILEC, as employer, and PWU, as the exclusive bargaining representative of
PHILEC’s rank-and-file employees,entered into a collective bargaining agreement, which the parties
agreed to make effective from June 1, 1997 to May31, 1999. Being the law between the parties, the
13
June 1, 1997 collective bargaining agreement must govern PHILEC and its rank-and-file employees within
the agreed period. Lipio and Ignacio, Sr. were rank-and-file employees when PHILEC selected them for
training for the position of Foreman I beginning August 25, 1997. They were selected for training during
the effectivity of the June 1, 1997 rank-and-file collective bargaining agreement. Therefore, Lipio’s and
Ignacio, Sr.’s training allowance must be computed based on Article X, Section 4 and ArticleIX, Section
1(f) of the June 1, 1997 collective bargaining agreement.
Further, the court also note that PHILEC filed a petition for certiorari before the CA under Rule
65 which is not the proper remedy. The proper remedy to reverse or modify a Voluntary Arbitrator’s or
a panel of Voluntary Arbitrators’ decision or award is to appeal the award or decision before the Court
of Appeals under Rule 43.
Furthermore, Article 262-A of the Labor Code provides that the award or decision of the
Voluntary Arbitrator "shall be final and executory after ten (10) calendar days from receipt of the copy
of the award or decision by the parties.
Here, PHILEC received Voluntary Arbitrator Jimenez’s resolution denying its motion for partial
reconsideration on August 11, 2000. PHILEC filed its petition for certiorari before the CA on August 29,
2000, which was 18 days after its receipt of Voluntary Arbitrator Jimenez’s resolution. The petition for
certiorari was filed beyond the 10-day reglementary period for filing an appeal. Voluntary Arbitrator
Jimenez’s decision became final and executory after 10 calendar days from PHILEC’s receipt of the
resolution denying its motion for partial reconsideration.
Case Title: MONANA vs. MEC GLOBAL SHIPMANAGEMENT, G.R. No.: 196122 November 12,
2014
Principle:
Section 20(B) of the Philippine Overseas Employment Administration Standard Employment
Contract (POEA contract). The POEA contract states that for an illness to be compensable, (1) it must be
work-related and (2) it must have existed during the term of the seafarer's employment contract.
Facts:
Joel Monana was hired as a regular seaman for a 6-month contract by MEC Global. After 4
months on board, he suffered from hypertension and was later on repatriated back to the Philippines
and referred to Dr. Susannah Ong-Salvador (Dr. Ong-Salvador), the company designated physician, who
regarded his condition as as non-work related, as the disease is mainly of a heredofamilial etiology. MEC
Global continued to give medical assistance. Monana still experienced occasional heaviness and
clumsiness especially during strenuous and prolonged activities, due to this, he was referred to a
cardiologist Dr. Glenn A. Mana-ay (Dr. Mana-ay), who also diagnosed him with S/P Stroke. Monana
sought a second opinion with Dr. Efren R. Vicaldo (Dr. Vicaldo) from the Philippine Heart Center, who
declared that Monana’s illness was work-related/-aggravated, and that he was unfit to work. Unable to
return back to work for more than 120 days, Monana claimed disability and illness allowance to which
MEC refused, thus prompting him to file a file a complaint with the Regional Arbitration Branch. LA
decided in favour of Monana ordering MEC Global to pay him $60,000 or its peso equivalent. On appeal,
NLRC vacated the decision of LA and instead ordered respondents to grant financial assistance of
US$3,000.00 or its peso equivalent. CA affirmed NLRC’s decision and denied the motion for
reconsideration. Thus this petition.
Issue:
Whether or not Joel B. Monana is entitled to total and permanent disability benefits
Ruling:
No.
Section 20(B) of the Philippine Overseas Employment Administration Standard Employment
Contract (POEA contract). The POEA contract states that for an illness to be compensable, (1) it must be
14
work-related and (2) it must have existed during the term of the seafarer's employment contract.
Further, the POEA contract defines "work-related illness" as"any sickness resulting to disability or death
as a result of an occupational disease listed under Section 32-A of this contract with the conditions set
therein satisfied.
In this case, Monana failed to prove compliance with the conditions under Section 32 of the
POEA contract, he failed to show a causal connection between his illness and his work. Thus,
respondents-appellants is not liable for the disability benefits of Monana considering that his illness of
hypertension was not proven by substantial evidence to be work related.
Case Title: Stanley Fine Furniture v. Gallano, G.R. No. 190486

One-liner:
“The filing of the complaint for illegal dismissal negates the allegation of abandonment.”
Principles:
Termination of Employment; Abandonment; Grounds for termination of employment are
provided under the Labor Code; Although abandonment of work is not included in the enumeration, the
Supreme Court (SC) has held that “abandonment is a form of neglect of duty.”
Burden of Proof; It is the burden of the employer to prove that the employee was not dismissed
or, if dismissed, that such dismissal was not illegal.
Facts:
Stanley Fine Furniture (Stanley Fine), through its owners Elena and Carlos Wang, hired
respondents Victor T. Gallano and Enriquito Siarez as painters/carpenters.
Victor and Enriquito filed a labor complaint for underpayment/non-payment of salaries, wages
however it was later amended as complaint for actual illegal dismissal, underpayment/non-payment of
overtime pay, holiday pay, premium for holiday pay, service incentive leave pay, 13th month pay,
ECOLA, and Social Security System (SSS) benefit. In the amended complaint, Victor and Enriqui to
claimed that they were dismissed on May 26, 2005. Victor and Enriquito were allegedly scolded for filing
a complaint for money claims. Later on, they were not allowed to work.
Petitioner Elena Briones claimed that Victor and Enriquito were "required to explain their
absences for the month of May 2005, but they refused.” The Labor Arbiter found that Victor and Enriqui
to were illegally dismissed. However, the National Labor Relations Commission reversed the Labor
Arbiter’s decision, ruling that the Labor Arbiter erred. On appeal, The Court of Appeals found that
Stanley Fine failed to show any valid cause for Victor and Enriquito’s termination and to comply with the
two-notice rule, it set aside the resolutions of the National Labor Relations Commission, and reinstated
the decision of the Labor Arbiter.
Elena argued that the Court of Appeals erred in ruling that Victor and Enriquito were illegally
dismissed considering that she issued several memoranda to them, but they refused to accept the
memoranda and explain their absences, thus there was abandonment on their part.
Issue:
Whether or not there was abandonment on the part of Victor and Enriquito.
Ruling:
No.
The Supreme Court held that although abandonment of work is not included in the enumeration
under Article 282 of the Labor Code, abandonment is a form of neglect of duty. To prove abandonment,
two elements must concur: 1) Failure to report for work or absence without valid or justifiable reason;
and 2) A clear intention to sever the employer-employee relationship. Further, absence must be
accompanied by overt acts unerringly pointing to the fact that the employee simply does not want to
work anymore. And the burden of proof to show that there was unjustified refusal to go back to work
rests on the employer. Long standing is the rule that the filing of the complaint for illegal dismissal
15
negates the allegation of abandonment. Human experience dictates that no employee in his right mind
would go through the trouble of filing a case unless the employer had indeed terminated the services of
the employee.
In this case, Victor and Enriquito filed an illegal dismissal case which negates the allegation of
abandonment. Further, Elena failed to pinpoint the overt acts of respondents that show they had
abandoned their work. There was a mere allegation that she was "forced to declare them dismissed due
to their failure to report back to work for a considerable length of time" but no evidence to prove the
intent to abandon work. It is the burden of the employer to prove that the employee was not dismissed
or, if dismissed, that such dismissal was not illegal. Unfortunately for Elena, she failed to do so.
2015
Case Title: ZENAIDA PAZ, vs. NORTHERN TOBACCO REDRYING CO., INC., AND/OR ANGELO ANG
Principle:
Regular seasonal employee - Article 280 of the Labor Code and jurisprudence identified three
types of employees, namely: "(1) regular employees or those who have been engaged to perform
activities which are usually necessary or desirable in the usual business or trade of the employer; (2)
project employees or those whose employment has been fixed for a specific project or undertaking, the
completion or termination of which has been determined at the time of the engagement of the
employee or where the work or service to be performed is seasonal in nature and the employment is for
the duration of the season; and (3) casual employees or those who are neither regular nor project
employees."
Yard stick used in determining - The primary standard, therefore, of determining regular
employment is the reasonable connection between the particular activity performed by the employee in
relation to the usual trade or business of the employer. The test is whether the former is usually
necessary or desirable in the usual business or trade of the employer. The connection can be
determined by considering the nature of the work performed and its relation to the scheme of the
particular business or trade in its entirety. Also if the employee has been performing the job for at least
a year, even if the performance is not continuous and merely intermittent, the law deems repeated and
continuing need for its performance as sufficient evidence of the necessity if not indispensability of that
activity to the business. Hence, the employment is considered regular, but only with respect to such
activity, and while such activity exists.
Retirement; Discharge - "Retirement is the result of a bilateral act of the parties, a voluntary
agreement between the employer and the employee whereby the latter, after reaching a certain age,
agrees to sever his or her employment with the former." Article 287, as amended, allows for optional
retirement at the age of at least 60 years old. Consequently, if "the intent to retire is not clearly
established or if the retirement is involuntary, it is to be treated as a discharge."
Retirement Pay Governing rule - An employer may provide for retirement benefits in an
agreement with its employees such as in a Collective Bargaining Agreement. Otherwise, Article 287 of
the Labor Code, as amended, governs.
Facts:
Northern Tobacco Redrying Co., Inc. (NTRCI), a flue-curing and redrying of tobacco leaves
business, employs seasonal workers "tasked to sort, process, store and transport tobacco leaves during
the tobacco season of March to September.
NTRCI hired Zenaida Paz (Paz) sometime in 1974 as a seasonal sorter, paid ₱185.00 daily. NTRCI
regularly re-hired her every tobacco season since then. On May 18, 2003, Paz was 63 years old when
NTRCI informed her that she was considered retired under company policy. Paz filed a Complaint for
16
illegal dismissal against NTRCI. She amended her Complaint on April 27, 2004 into a Complaint for
payment of retirement benefits, damages, and attorney’s fees10 as ₱12,000.00 seemed inadequate for
her 29 years of service.. The NTRCI countered that no Collective Bargaining Agreement (CBA)
existed between NTRCI and its workers. Thus, it computed the retirement pay of its seasonal workers
based on Article 287 of the Labor Code.
NTRCI raised the requirement of at least six months of service a year for that year to be
considered in the retirement pay computation. It claimed that Paz only worked for at least six months in
1995, 1999, and 2000 out of the 29 years she rendered service. Thus, Paz’s retirement pay amounted to
₱12,487.50 after multiplying her ₱185.00 daily salary by 221/2 working days in a month, for three years.
The Labor Arbiter in his Decision "[c]onfirm[ed] that the correct retirement pay of. Paz [was]
₱12,487.50."The National Labor Relations Commission in its Decision modified the Labor Arbiter’s
Decision. On appeal to the CA modified the ruling of the NLRC and granted financial assistance is
awarded to private respondent Zenaida Paz in the amount of 60,356.25; and (2) the dismissal of private
respondent Teresa Lopez is declared illegal.
Issues:
a.) Whether Paz enjoys security of tenure

b.) Whether there was illegal dismissal
Ruling:
a.) Article 280 of the Labor Code and jurisprudence identified three types of employees,
namely: "(1) regular employees or those who have been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer; (2) project employees or those
whose employment has been fixed for a specific project or undertaking, the completion or termination
of which has been determined at the time of the engagement of the employee or where the work or
service to be performed is seasonal in nature and the employment is for the duration of the season; and
(3) casual employees or those who are neither regular nor project employees."
This court explained that the proviso in the second paragraph of Article 280 in that "any
employee who has rendered at least one year of service, whether such service is continuous or broken,
shall be considered a regular employee" applies only to "casual" employees and not "project" and
regular employees in the first paragraph of Article 280
The primary standard, therefore, of determining regular employment is the reasonable

connection between the particular activity performed by the employee in relation to the usual trade or
business of the employer. The test is whether the former is usually necessary or desirable in the usual
business or trade of the employer. The connection can be determined by considering the nature of the
work performed and its relation to the scheme of the particular business or trade in its entirety. Also if
the employee has been performing the job for at least a year, even if the performance is not continuous
and merely intermittent, the law deems repeated and continuing need for its performance as sufficient
evidence of the necessity if not indispensability of that activity to the business. Hence, the employment
is considered regular, but only with respect to such activity, and while such activity exists.
The services petitioner Paz performed as a sorter were necessary and indispensable to
respondent NTRCI’s business of flue-curing and redrying tobacco leaves. She was also regularly rehired
as a sorter during the tobacco seasons for 29 years since 1974. These considerations taken together
allowed the conclusion that petitioner Paz was a regular seasonal employee, entitled to rights under
Article 279.
b) Retirement is the result of a bilateral act of the parties, a voluntary agreement between the
employer and the employee whereby the latter, after reaching a certain age, agrees to sever his or her
employment with the former." Article 287, as amended, allows for optional retirement at the age of at
least 60 years old.
17
Consequently, if "the intent to retire is not clearly established or if the retirement is involuntary,
it is to be treated as a discharge."
The National Labor Relations Commission considered petitioner Paz’s amendment of her
Complaint on April 27, 2004 akin to an optional retirement when it determined her as illegally dismissed
from May 18, 2003 to April 27, 2004, thus being entitled to full backwages from May 19, 2003 until April
26, 2004.
Again, petitioner Paz never abandoned her argument of illegal dismissal despite the amendment
of her Complaint. This implied lack of intent to retire until she reached the compulsory age of 65. Thus,
she should be considered as illegally dismissed from May 18, 2003 until she reached the compulsory
retirement age of 65 in 2005 and should be entitled to full backwages for this period. An award of full
backwages is "inclusive of allowances and other benefits or their monetary equivalent, from the time
their actual compensation was withheld. . . ."
Backwages, considered as actual damages, requires proof of the loss suffered. The Court of
Appeals found "no positive proof of the total number of months that she actually rendered
work."67 Nevertheless, petitioner Paz’s daily pay of 185.00 was established. She also alleged that her
employment periods ranged from three to seven months.
Since the exact number of days petitioner Paz would have worked between May 18, 2003 until
she would turn 65 in 2005 could not be determined with specificity, this court thus awards full
backwages in the amount of ₱22,200.00 computed by multiplying 185.00 by 20 days, then by three
months, then by two years.
Case Title: RICHARD N. RIVERA v. GENESIS TRANSPORT SERVICE, INC. AND RIZA A. MOISES, G.R. No.
215568, August 03, 2015
Principle:
For loss of trust and confidence to be a valid ground for the dismissal of employees, it must be
substantial and not arbitrary, whimsical, capricious or concocted.
Facts:
Rivera was employed by Genesis as a bus conductor in June 2002. Moises is Genesis’ president
and general manager. In his Position Paper before the Labor Arbiter, Rivera acknowledged that he was
dismissed by Genesis on account of a discrepancy in the amount he declared on bus ticket receipts. He
alleged that on June 10, 2010, he received a Memorandum giving him 24 hours to explain why he should
not be sanctioned for reporting and remitting the amount of P198 instead of the admittedly correct
amount of P394 worth of bus ticket receipts. He responded that it was an honest mistake, which he was
unable to correct "because the bus encountered mechanical problems.
According to Genesis’ inspector Villaseran he conducted a "man to man" inspection on the

tickets held by the passengers on board Bus No. 8286 who had transferred from Bus No. 1820 in San
Fernando, Pampanga. (Bus No. 1820 broke down.) In the course of his inspection, he noticed that Ticket
No. 723374 VA had a written corrected amount of P394. However, the amount marked by perforations
made on the ticket, which was the amount originally indicated by the bus conductor, was only P198.
Upon inquiring with the passenger holding the ticket, Villaseran found out that the passenger paid P500
to Rivera, who gave her change in the amount of P106. Upon verification, it was found that Rivera only
remitted P198.
On July 20, 2010, Genesis served on Rivera a written notice informing him that a hearing of his
case was set on July 23, 2010. Despite his explanations, Rivera's services were terminated through a
written notice dated July 30, 2010. Contending that this termination was arbitrary and not based on just
causes for terminating employment, he filed the Complaint[15] for illegal dismissal, which is subject of
this Petition.
18
According to the Respondents; Rivera’s act was serious misconduct, fraud, and willful breach of
trust justifying his dismissal. The Labor Arbiter agreed with respondents and dismissed Rivera’s
complaint. The NLRC affirmed LA and denied Rivera’s MR. The CA (Rule 65) sustained LA and NLRC
decisions and denied Rivera’s MR.
Issues:
1. Whether Rivera was dismissed for just cause. NO, illegal and unjust termination.
2. Whether Moises is personally liable. NO.
Ruling:
They have been adopted pursuant to the constitutional recognition of "labor as a primary social
economic force" and to the constitutional mandates for the state to "protect the rights of workers and
promote their welfare" and for Congress to "give highest priority to the enactment of measures that
protect and enhance the right of all the people to human dignity, [and] reduce social, economic, and
political inequalities."
They are means for effecting social justice, i.e., the "humanization of laws and the equalization
of social and economic forces by the State so that justice in the rational and objectively secular
conception may at least be approximated."
Article XIII, Section 3 of the 1987 Constitution guarantees the right of workers to security of
tenure. "One's employment, profession, trade or calling is a 'property right,'" of which a worker may be
deprived only upon compliance with due process requirements:
It is the policy of the state to assure the right of workers to "security of tenure" (Article XIII, Sec.
3 of the New Constitution, Section 9, Article II of the 1973 Constitution). The guarantee is an act of social
justice. When a person has no property, his job may possibly be his only possession or means of
livelihood. Therefore, he should be protected against any arbitrary deprivation of his job. LC 280 has
construed security of tenure as meaning that "the employer shall not terminate the services of an
employee except for a just cause or when authorized by" the code. Dismissal is not justified for being
arbitrary where the workers were denied due process and a clear denial of due process, or
constitutional right must be safeguarded against at all times.
Conformably, liberal construction of Labor Code provisions in favor of workers is stipulated by

LC 4:
Art. 4. Construction in favor of labor. All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of
labor.
No serious misconduct.
It is not enough for an employee to be found to have engaged in improper or wrongful conduct.
To justify termination of employment, misconduct must be so severe as to make it evident that no other
penalty but the termination of the employee's livelihood is viable.
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 serious misconduct to justify dismissal, the following requisites must be present: (a) it
must be serious; (b) it must relate to the performance of the employee's duties; and (c) it must show
that the employee has become unfit to continue working for the employer. (Yabut v. Manila Electric Co.)
No wilfull breach of trust.
19
Among the just causes for termination is the employer's loss of trust and confidence in its
employee. Article 296 (c) (formerly Article 282 [c]) of the Labor Code provides that an employer may
terminate the services of an employee for fraud or willful breach of the trust reposed in him. But in
order for the said cause to be properly invoked, certain requirements must be complied with[,]
namely[:] (1) the employee concerned must be holding a position of trust and confidence and (2) there
must be an act that would justify the loss of trust and confidence.
2 classes of positions of trust:
1. managerial employees 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;
2. fiduciary rank-and-file employees, such as cashiers, auditors, property custodians, or

those who, in the normal exercise of their functions, regularly handle significant amounts of money or
property. These employees, though rank-and-file, are routinely charged with the care and custody of the
employer's money or property, and are thus classified as occupying positions of trust and confidence.
The position an employee holds is not the sole criterion. More important than this formalistic
requirement is that loss of trust and confidence must be justified. As with misconduct as basis for
terminating employment, breach of trust demands that a degree of severity attend the employee's
breach of trust.
For loss of trust and confidence to be a valid ground for the dismissal of employees, it must be
substantial and not arbitrary, whimsical, capricious or concocted. Irregularities or malpractices should
not be allowed to escape the scrutiny of this Court. Solicitude for the protection of the rights of the
working class [is] of prime importance. Although this is not [al license to disregard the rights of
management, still the Court must be wary of the ploys of management to get rid of employees it
considers as undesirable. (China City Restaurant Corporation v. NLRC)
Nature of a bus conductor’s work.
The social justice suppositions underlying labor laws require that the statutory grounds justifying
termination of employment should not be read to justify the view that bus conductors should, in all
cases, be free from any kind of error. Not every improper act should be taken to justify the termination
of employment.
Concededly, bus conductors handle money. To this extent, their work may be analogous to that
of tellers, cashiers, and other similarly situated rank-and-file employees who occupy positions of trust
and confidence.
We take judicial notice of bus conductors' everyday work. Bus conductors receive, exchange,
and keep money paid by passengers by way of transportation fare. They keep track of payments and
make computations down to the last centavo, literally on their feet while a bus is in transit.
Regardless of whether a bus is driving through awkward spaces—through steep inclines, rugged
roads, or sharp turns—or of whether a bus is packed with standing passengers, the lonesome task of
keeping track of the passengers' payments falls upon a bus conductor.
Thus, while they do handle money, their circumstances are not at all the same as those of
regular cashiers. They have to think quickly, literally on their feet. Regular cashiers, on the other hand,
have the time and comfort to deliberately and carefully examine the transactions of their employer.
However, handling passengers' fare payments is not their sole function. Bus conductors assist
drivers as they maneuver buses through tight spaces while they are in transit, depart, or park. They
often act as dispatchers in bus stops and other such places, assist passengers as they embark and alight,
and sometimes even help passengers load and unload goods and cargo. They manage the available
space in a bus and ensure that no space is wasted as the bus accommodates more passengers. Along
with drivers, bus conductors commit to memory the destination of each passenger so that they can
anticipate their stops.
20
There are several ways to manifest the severity that suffices to qualify petitioner's alleged
misconduct or breach of trust as so grave that terminating his employment is warranted. It may be
through the nature of the act itself: spanning an entire spectrum between, on one end, an overlooked
error, made entirely in good faith; and, on another end, outright larceny. It may be through the sheer
amount mishandled. It may be through frequency of acts. It may be through other attendant
circumstances, such as attempts to destroy or conceal records and other evidence, or evidence of a
motive to undermine the business of an employer.
We fail to appreciate any of these in this case.
What is involved is a paltry amount of P196. All that has been proven is the existence of a
discrepancy. No proof has been adduced of ill-motive or even of gross negligence. From all indications,
petitioner stood charged with a lone, isolated instance of apparent wrongdoing.
The records are bereft of evidence showing a pattern of discrepancies chargeable against
petitioner. Seen in the context of his many years of service to his employer and in the absence of clear
proof showing otherwise, the presumption should be that he has performed his functions faithfully and
regularly. It can be assumed that he has issued the correct tickets and given accurate amounts of change
to the hundreds or even thousands of passengers that he encountered throughout his tenure. It is more
reasonable to assume that—except for a single error costing a loss of only P196 —the company would
have earned the correct expected margins per passenger, per trip, and per bus that it allowed to travel.
Absent any other supporting evidence, the error in a single ticket issued by petitioner can hardly
be used to justify the inference that he has committed serious misconduct or has acted in a manner that
runs afoul of his employer's trust. More so, petitioner cannot be taken to have engaged in a series of
acts evincing a pattern or a design to defraud his employer. Terminating his employment on these
unfounded reasons is manifestly unjust.
Damages
Petitioner is entitled to:
1. Full backwages and benefits from the time of his termination until the finality of this
Decision.
2. Separation pay in the amount of 1 month's salary for every year of service until the
finality of this Decision, with a fraction of a year of at least 6 months being counted as 1 whole year.
3. Attorney’s fees in the amount of 10% of total monetary award, as he was compelled to
litigate in order to seek relief for the illegal and unjust termination of his employment.
No moral or exemplary damages awarded.
"Moral damages are awarded in termination cases where the employee's dismissal was
attended by bad faith, malice or fraud, or where it constitutes an act oppressive to labor, or where it
was done in a manner contrary to morals, good customs or public policy." Also, to provide an "example
or correction for the public good," exemplary damages may be awarded.
We do not find respondent Genesis to have acted with such a degree of malice as to act out of a
design to oppress petitioner. It remains that a discrepancy and shortage chargeable to petitioner was
uncovered, although such did not justify a penalty as grave as termination of employment.
Moises is not personally liable.
A corporation has a personality separate and distinct from those of the persons composing it.
Petitioner has not produced proof to show that Moises acted in bad faith or with malice as regards the
termination of his employment. Thus, she did not incur any personal liability.
21
Case Title: PROTECTIVE MAXIMUM SECURITY AGENCY, INC., PETITIONER, VS. CELSO E.
FUENTES
Principle:
The general rule is that in a Rule 45 petition for review on certiorari, this court will not review
the factual determination of the administrative bodies governing labor, as well as the findings of fact by
the Court of Appeals. The Court of Appeals can conduct its own factual determination to ascertain
whether the National Labor Relations Commission has committed grave abuse of discretion. “In the
exercise of its power of review, the findings of fact of the Court of Appeals are conclusive and binding
and consequently, it is not our function to analyze or weigh evidence all over again.”
Facts:
Protective Maximum Security Agency, Inc. (Protective) provides security services for commercial,
industrial and agricultural firms, and personal residences.
Celso E. Fuentes (Fuentes) was hired as a security guard by Protective sometime. A group of armed
persons ransacked Post 33 and took five (5) M-16 rifles, three (3) carbine rifles, and one (1) Browning
Automatic Rifle, all with live ammunition and magazines. Agency-issued uniforms and personal items
were also taken.These armed persons inflicted violence upon Fuentes and the other security guards
present at Post.
On the same day of the incident, Fuentes and his fellow security guards reported the raid to the
PhilippineNationalPoliceinTrento,Agusandel Sur.
After its initial investigation, the Philippine National Police found reason to believe that Fuentes
conspired and acted in consort with the New People's Army. This was based on the two (2) affidavits
executed by Lindo, Jr. and Cempron, who were both present raid. In their affidavits, Lindo, Jr. and Cempron
stated that Fuentes should be prosecuted for criminal acts done.
The Philippine National Police, through Senior Police Officer IV Benjamin Corda, Jr., filed the
Complaint for robbery committed by a band against Fuentes, a certain Mario Cabatlao, and others.
Immediately upon the filing of the Complaint, Fuentes was detained at the Mangagoy Police Sub-
Station, Mangagoy, Bislig, Surigao del Sur.
The Office of the Provincial Prosecutor of Surigao del Sur issued the Resolution dismissing the
Complaint against Fuentes. It found during preliminary investigation that there was no probable cause to
warrant the filing of an Information against Fuentes.
Fuentes filed the Complaint "for illegal dismissal, non-payment of salaries, overtime pay,
premium pay for holiday and rest day, 13th month pay, service incentive leave and damages against
Protective.
Executive Labor Arbiter Rogelio P. Legaspi rendered his Decision in favor of Protective
On appeal, the National Labor Relations Commission reversed the Decision of Labor Arbiter
Legaspi and found that Fuentes was illegally dismissed.
Protective filed a Petition for Certiorari before the Court of Appeals alleging grave abuse of
discretion on the part of the National Labor Relations Commission.
The Court of Appeals dismissed the Petition.
Issues:
1. Whether or not the Court of Appeals’s power to decide a Rule 45 petition for review on
certiorari, particularly in labor cases, has its limits.
2. Whether procedural due process was violated
22
Ruling:
1. Yes.
The general rule is that in a Rule 45 petition for review on certiorari, this court will not review
the factual determination of the administrative bodies governing labor, as well as the findings of fact by
the Court of Appeals. The Court of Appeals can conduct its own factual determination to ascertain
whether the National Labor Relations Commission has committed grave abuse of discretion. “In the
exercise of its power of review, the findings of fact of the Court of Appeals are conclusive and binding
and consequently, it is not our function to analyze or weigh evidence all over again.”
In labor cases, if the petitioner before this court can show grave abuse of discretion on the part
of the National Labor Relations Commission, the assailed Court of Appeals ruling (in the Rule 65
proceedings) will be reversed. “Labor officials commit grave abuse of discretion when their factual
findings are arrived at arbitrarily or in disregard of the evidence.” If the petitioner can show that “the
[labor] tribunal acted capriciously and whimsically or in total disregard of evidence material to the
controversy,” the factual findings of the National Labor Relations Commission may be subjected to
review and ultimately rejected. In addition, if the findings of fact of the Labor Arbiter are in direct
conflict with the National Labor Relations Commission, this court may examine the records of the case
and the questioned findings in the exercise of its equity jurisdiction.
2, YES. Respondent's right to procedural due process was not observed.
The employer must always observe the employee's right to due process.
Procedurally if the dismissal is based on a just cause under Article 282, the employer must give the
employee two written notices and a hearing or opportunity to be heard if requested by the employee
before terminating the employment: a notice specifying the grounds for which dismissal is sought a
hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision
to dismiss.
Due process under the Labor Code, like Constitutional due process, has two aspects:
substantive, i.e., the valid and authorized causes of employment termination under the Labor Code; and
procedural, i.e., the manner of dismissal. Procedural due process requirements for dismissal are found in
the Implementing Rules of P.D. 442, as amended, otherwise known as the Labor Code of the Philippines in
Book VI, Rule I, Sec. 2, as amended by Department Order Nos. 9 and 10. Breaches of these due process
requirements violate the Labor Code.
Constitutional due process protects the individual from the government and assures him of his
rights in criminal, civil or administrative proceedings; while statutory due process found in the Labor
Code and Implementing Rules protects employees from being unjustly terminated without just cause after
notice and hearing.
In this case, petitioner violated respondent's right to procedural due process. The two-notice
requirement was not followed. Petitioner sought to excuse itself by claiming that there was no address
where the proper notice could have been served. However, petitioner admitted before the Court of Appeals
that "respondent's last known address was given tothe investigating court by Police Inspector Escartin.”
There was no attempt from petitioner to serve the proper notice on respondent at the address
contained in its employment records. Respondent was replaced without being given an opportunity to
explain his absence.
Case Title: Manalo v. Ateneo de Naga University, G.R. No. 185058, November 9, 2015
Principles:
By definition, constructive dismissal can happen in any number of ways. At its core, however, is
the gratuitous, unjustified, or unwarranted nature of the employer's action. As it is a question of
whether an employer acted fairly, it is inexorable that any allegation of constructive dismissal be
23
contrasted with the validity of exercising management prerogative.
Not every inconvenience, disruption, difficulty, or disadvantage that an employee must endure
results in a finding of constructive dismissal. Indeed, basic is the recognition that even as our laws on
labor and social justice impel a "preferential view in favor of labor,"
[e]xcept as limited by special laws, an employer is free to regulate, according to his own
discretion and judgment, all aspects of employment, including hiring, work assignments, working
methods, time, place and manner of work, tools to be used, processes to be followed, supervision of
workers, working regulations, transfer of employees, work supervision, lay-off of workers and the
discipline, dismissal and recall of work.
Jurisprudence has long recognized that transferring employees, to the extent that it is done
fairly and in good faith, is a valid exercise of management prerogative and will not, in and of itself,
sustain a charge of constructive dismissal:cha
nRoblesvirtualLawlibrar
[T]he transfer of an employee from one area of operation to another is a management
prerogative and is not constitutive of constructive dismissal, when the transfer is based on sound
business judgment, unattended by demotion in rank or a diminution of pay or bad faith. Thus,
in Philippine Japan Active Carbon Corp. v. NLRC, the Court ruled:
"It is the employer's prerogative, based on its assessment and perception of its employees'
qualifications, aptitudes, and competence, to move them around in the various areas of its business
operations in order to ascertain where they will function with maximum benefit to the company. An
employee's right to security of tenure does not give him such a vested right in his position as would
deprive the company of its prerogative to change his assignment or transfer him where he will be most
useful. When his transfer is not unreasonable, nor inconvenient, nor prejudicial to him, and it does not
involve a demotion in rank or a diminution of his salaries, benefits, and other privileges, the employee
may not complain that it amounts to a constructive dismissal."
Facts:
Jovita Manalo, full-time and regularly employed as faculty member of the Accountancy
Department of Ateneo de Naga University’s College of Commerce, was also the part-time Manager of
the Ateneo de Naga Multi-Purpose Cooperative before she was evicted from holding the said office.
Allegedly, she came into conflict with the Dean Bernal of College of Commerce as regards the
management of the cooperative. Bernal also recommended to the University President the termination
of her employment on the grounds of serious business malpractice, palpable dishonest and
questionable integrity allegedly due to fraud in issuance of official receipts, collection of cash without
documented remittance to the cooperative, use of inappropriate forms of documents cash receipts,
instances of bouncing checks issued by the cooperative, fraud in the issuance of an official receipt,
unauthorized cash advances.
Despite the Grievance Committee’s recommendation of termination, the University President,

having the management prerogative, instead opted to transfer Manalo to teach Economics in the
Department of Social Sciences of Ateneo de Naga University's College of Arts and Science. Alleging that
her transfer constituted constructive dismissal, Manalo filed a Complaint for illegal dismissal.
The Labor Arbiter ordered that Manalo be reinstated to her former position in the Accountancy
Department to which the National Labor Relation Commission affirmed. However, the Court of Appeals
reversed and set aside the said decision noting that there was ample factual basis for Manalo's transfer,
and that such transfer was well within the scope of Ateneo de Naga University's prerogatives as an
employer and as an educational institution.
Issue:
Whether or not the shift in Manalo's teaching load from mainly Accountancy subjects to
Economics subjects is a valid exercise of management prerogative.
24
Ruling:
Yes.
Jurisprudence has long recognized that transferring employees, to the extent that it is done
fairly and in good faith, is a valid exercise of management prerogative and will not, in and of itself,
sustain a charge of constructive dismissal: [T]he transfer of an employee from one area of operation to
another is a management prerogative and is not constitutive of constructive dismissal, when the
transfer is based on sound business judgment, unattended by demotion in rank or a diminution of pay
or bad faith. Thus, in Philippine Japan Active Carbon Corp. v. NLRC, the Court ruled: “It is the employer’s
prerogative, based on its assessment and perception of its employees’ qualifications, aptitudes, and
competence, to move them around in the various areas of its business operations in order to ascertain
where they will function with maximum benefit to the company. An employee’s right to security of
tenure does not give him such a vested right in his position as would deprive the company of its
prerogative to change his assignment or transfer him where he will be most useful. When his transfer is
not unreasonable, nor inconvenient, nor prejudicial to him, and it does not involve a demotion in rank or
a diminution of his salaries, benefits, and other privileges, the employee may not complain that it
amounts to a constructive dismissal.”
Here, Manalo’s indiscretions were noted to have been fraud in issuance of official receipts, collection of
cash without documented remittance to the cooperative, use of inappropriate forms of documents cash
receipts, instances of bouncing checks issued by the cooperative, fraud in the issuance of an official
receipt, unauthorized cash advances. These acts run afoul of the fundamental ethical principles of the
accountancy profession. The totality of the indiscretions imputed to Manalo reflects negatively on the
accountancy profession and indicates anything but professional behavior. If at all, Manalo should be
grateful to her employer that she was only transferred and her employment was not completely
terminated. At the heart of the issue of constructive dismissal is the matter of whether the employer's
actions are warranted. Here, we find ample basis not only for the precautionary measures actually taken
on Manalo, but even for other heavier penalties that could have been imposed on her. It is true that she
may have been inconvenienced by the mandated transfer, but, to reiterate, not every inconvenience,
disruption, difficulty, or disadvantage that an employee must endure sustains a finding of constructive
dismissal. With the backdrop of her professional indiscretions, respondent Ateneo de Naga University,
through its President validly exercised a management prerogative.
Case Title: CEPRADO, JR. VS. NATIONWIDE SECURITY AND ALLIED SERVICES, INC. (G.R. NO 175198,
SEPTEMBER 23, 2015)
Principle:
“Appeal is a purely statutory privilege that may be exercised only in the manner and in
accordance with the provisions of law. If an appellate court or tribunal takes cognizance of an appeal
that does not comply with the rules, the appellate court or tribunal acts without jurisdiction. The
decision on the appeal is null and void.”
Facts:
Five (5) of the security personnel — namely: Alejandro Ceprado, Jr., Ronilo Sebial, Nicanor
Olivar, Alvin Villegas, and Edgar Manato — filed before the National Labor Relations Commission
Regional Arbitration Branch No. IV a Complaint for illegal dismissal. They alleged that Nationwide
Security terminated their employment when they "persisted in seeking enforcement of the awards
under the April 19, 2001 Order.
Acting on the Motion for Reconsideration previously filed by Nationwide Security, Regional
Director Martinez reversed his April 19, 2001 Order in the Resolution dated May 8, 2002. He ruled that
the jurisdictional amount in Article 129 of the Labor Code had already been repealed by Republic Act
No. 7730. With respect to the alleged violations of Nationwide Security, Regional Director Martinez
found that they had already been rectified. The wage differentials due to the security personnel were
likewise recomputed.
25
Ceprado, Jr., et al. then wrote the Secretary of Labor and Employment, praying that the
Resolution dated May 8, 2002 be set aside.
Alleging grave abuse of discretion on the part of the Department of Labor and Employment,
Nationwide Security filed a Petition for Certiorari before the Court of Appeals. It argued that Secretary
Sto. Tomas' Order dated March 12, 2003, which treated Ceprado, Jr., et al.'s Letter dated May 27, 2002
as an appeal and subsequently granted it, was null and void for lack of due process. Nationwide Security
was allegedly not furnished a copy of the Letter-Appeal. Thus, it was deprived of the opportunity to file a
reply or opposition as provided under Rule IV, Section 4 (b) of the Rules on the Disposition of Labor
Standards Cases in the Regional Offices.
The Court of Appeals granted Nationwide Security's Petition for Certiorari upon fnding that
Nationwide Security fled its Motion for Reconsideration before Regional Director Martinez without
furnishing Ceprado, et al. a copy of the Motion. It likewise found that Ceprado, et al. filed their Letter-
Appeal before the Department of Labor and Employment without furnishing Nationwide Security a copy
of the Letter-Appeal.
Issue:
Whether the Department of Labor and Employment's Orders dated March 12, 2003, March 23,
2004, and July 19, 2004 are void.
Ruling:
We grant the Petition.
Rule II, Section 19 of the Rules on the Disposition of Labor Standards Cases in the Regional
Offices allows an aggrieved party to file a motion for reconsideration of the Order of the Regional Office.
In this case, respondent filed a Motion for Reconsideration of Regional Director Martinez's April 19,
2001 Order.
However, as found by the Department of Labor and Employment and the Court of Appeals,
respondent failed to furnish petitioners a copy of its Motion for Reconsideration. This is contrary to Rule
II, Section 12 of the Rules on the Disposition of Labor Standards Cases in the Regional Offices, 49 which
requires parties to comply with due process requirements.
The Rules of Court, which applies suppletorily in labor standards cases, requires a written notice
of every motion for reconsideration to be served on the adverse party as compliance with the
requirement of due process. Motions for reconsideration not served on the other party are pro forma
and are "mere scrap[s] of paper" not to be acted upon by the court. 54 Motions for reconsideration not
served on the other party do not toll the running of the reglementary period for filing an appeal, and the
judgment sought to be reconsidered becomes final and executory upon lapse of the reglementary
period.
The Court of Appeals, therefore, correctly set aside all the orders subsequent to the April 19,
2001 Order, specifically: the Regional Director's Resolution dated May 8, 2002 granting respondent's
Motion for Reconsideration; the Department of Labor and Employment's Order dated March 12, 2003
granting petitioners' appeal; the Order dated March 23, 2004 denying the Motion to Quash and Recall
Writ of Execution; and the Order dated July 19, 2004 denying respondent's Motion for Reconsideration.
However, the Court of Appeals erred in remanding the case to the Regional Director for further
proceedings on the Motion for Reconsideration. The proper course of action is to issue a writ of
execution to implement the April 19, 2001 Order. Further, we note that similar to respondent,
petitioners violated the requirements of due process. They never denied that they failed to furnish
respondent a copy of their Letter-Appeal to the Secretary of Labor. Worse, their appeal did not strictly
comply with the rules on appeal as provided in the Rules on the Disposition of Labor Standards Cases in
the Regional Offices.
Appeal is a purely statutory privilege that "may be exercised only in the manner and in
accordance with the provisions of law." If an appellate court or tribunal takes cognizance of an appeal
26
that does not comply with the rules, the appellate court or tribunal acts without jurisdiction. The
decision on the appeal is null and void.
Rule IV, Section 3 of the Rules on the Disposition of Labor Standards Cases in the Regional
Offices requires that "[t]he appeal [to the Secretary of Labor] . . . be filed in five (5) legibly typewritten
copies with the Regional Office which issued the Order." Section 4 adds that the appeal "shall be
accompanied by a Memorandum of Appeal which shall state the date appellant received the Order and
the grounds relied upon and arguments in support thereof[.]"
Secretary Sto. Tomas, thus, acted without jurisdiction in treating petitioners' Letter dated May
27, 2002 as an appeal. Although the Rules on the Disposition of Labor Standards Cases in the Regional
Offices provide that the rules "shall be liberally construed," still, courts and tribunals are "limited by the
legislative will and intent, as expressed in the law itself." In this case, the law consists of rules issued
under the quasi-legislative power delegated by the legislative branch to the Secretary of Labor and
Employment. The Secretary of Labor should have strictly followed the rules on appeal under the Rules
on the Disposition of Labor Standards Cases in the Regional Offices.
Case Title: G.J.T. REBUILDERS MACHINE SHOP v. RICARDO AMBOS (GR No. 174184, January 28, 2015)
Principle:
With regard to attorney’s fees, in labor cases, attorney’s fees are awarded only when there is unlawful
withholding of wages or when the attorney’s fees arise from collective bargaining negotiations that may
be charged against union funds in an amount to be agreed upon by the parties.
Facts:
G.J.T. Rebuilders, owned by the Trillana spouses, is a single proprietorship engaged in steel
works and metal fabrication employing Ricardo, Russell, and Benjamin as machinists. G.J.T. Rebuilders
rented space in the FEA Building. When fire broke out in the FEA Building, its owner notified its tenants
to vacate their rented units to avoid unforeseen accidents.
G.J.T. Rebuilders left its rented space and closed the machine shop. Ricardo, Russell, and
Benjamin lost their employment without separation pay. Thus, they filed a complaint for illegal
dismissal. They prayed for payment of allowance, separation pay, and attorney’s fees.
The Trillana spouses countered that G.J.T. Rebuilders suffered serious business losses and
financial reverses, forcing it to close its machine shop. Therefore, Ricardo, Russell, and Benjamin were
not entitled to separation pay, etc.
Issues:
1. Whether or not the G.J.T. Rebuilders suffered serious business losses and financial reverses.
2. Whether or not Ricardo, Russell, and Benjamin are entitled to payment of allowance, separation
pay, and attorney’s fees.
Ruling:
As to the first issue:
G.J.T. Rebuilders failed to sufficiently prove its alleged serious business losses.
Serious business losses are substantial losses, not de minimis. “Losses” means that the business
must have operated at a loss for a period of time for the employer to have perceived objectively and in
good faith that the business’ financial standing is unlikely to improve in the future. The employer must
show losses on the basis of financial statements covering a sufficient period of time.
Here, the financial statement submitted by G.J.T. Rebuilders covers only two fiscal years. The
two-year period covered by the financial statement was found by the Court to be insufficient for G.J.T.
Rebuilders to have objectively perceived that the business would not recover from the loss.
27
As to the second issue:
Considering that G.J.T. Rebuilders failed to prove its alleged serious business losses, it must pay
Ricardo, Russell, and Benjamin their separation pay equivalent to one-month pay or at least one-half-
month pay for every year of service, whichever is higher. In computing the period of service, a fraction
of at least six months is considered a year.
Aside from the obligation to pay separation pay, employers must comply with the notice
requirement under Article 283 of the Labor Code. Employers must serve a written notice on the affected
employees and on the Department of Labor and Employment at least one month before the intended
date of closure. Failure to comply with this requirement renders the employer liable for nominal
damages.
With regard to attorney’s fees, in labor cases, attorney’s fees are awarded only when there is
unlawful withholding of wages or when the attorney’s fees arise from collective bargaining negotiations
that may be charged against union funds in an amount to be agreed upon by the parties.
In this case, there is no unlawful withholding of wages or an award of attorney’s fees arising
from collective bargaining negotiations. Thus, Ricardo, Russell, and Benjamin are not entitled to
attorney’s fees.
Case Title: FLOR G. DAYO, PETITIONER, VS. STATUS MARITIME CORPORATION AND/OR NAFTO TRADE
SHIPPING COMMERCIAL S.A., RESPONDENTS [G.R. NO. 210660. JANUARY 21, 2015]
Principle:
For death under Section 32-A of the POEA Contract to be compensable, the claimant must fulfill
the following: (1) the seafarer’s work must involve the risks described herein; (2) the disease was
contracted as a result of the seafarer’s exposure to the described risks; (3) the disease was contracted
within a period of exposure and under such other factors necessary to contract it; and (4) there was not
notorious negligence on the part of the seafarer.
Facts:
Eduardo P. Dayo (or “Eduardo”) was hired as a bosun by Status Maritime Corporation (or
“SMC”) for and on behalf of Nafto Trade Shipping Commercial S.A. (or “NTSC”). Prior to embarkation,
Eduardo underwent a pre-employment medical examination (or “PEME”) and was declared fit to work.
During the voyage, Eduardo experienced severe pain on his hips and both knees, and total body
weakness. He was given medical attention in Bridgetown, Barbados, where he was diagnosed with
hypertension. Thereafter, he was repatriated. Eduardo then went to SMC’s office and was told that he
could seek medical attention which they would be reimburse. Eduardo went to a private physician and
the latter found the results of the former’s 2D echocardiogram as normal. Later on, Eduardo was
referred to a company-designated physician and was diagnosed with diabetes mellitus. Months later,
unfortunately, Eduardo died due to cardiopulmonary arrest.
Flor G. Day (or “Flor”), Eduardo’s wife, requested for death benefits but to no avail. Thus, she
filed a complaint against SMC.
The Labor Arbiter ruled in favor of Flor and awarded death benefits, burial expenses, and
attorney’s fees. On appeal, the NLRC reversed the decision of the Labor Arbiter. Flor then appealed the
case to the Court of Appeals which affirmed the decision of the NLRC. Hence, Flor comes now to the
Supreme Court alleging grave abuse of discretion on the part of the Court of Appeals. Flor argued that
Eduardo was given a “fit to work” certification, yet he was repatriated due to hypertension. Therefore,
his illness was contracted on board the vessel, and his death should be compensated by SMC even
though he died after the term of his contract.
Issues:
1. Whether or not the death of Eduardo is compensable.
28
2. Whether or not the “fit to work” certification is conclusive proof to show that Eduardo was
free from illness prior to his deployment.
Ruling:
1. No. Section 32-A of the POEA Contract considers the possibility of compensation for the death
of the seafarer occurring after the termination of the employment contract on account of a
work-related illness. But, for death under this provision to be compensable, the claimant must
fulfill the following:
a. The seafarer’s work must involve the risks describe herein;
b. The disease was contracted as a result of the seafarer’s exposure to the described risks;
c. The disease was contracted within a period of exposure and under such other factors
necessary to contract it; and
d. There was no notorious negligence on the part of the seafarer.
Moreover, the case of Magsaysay Maritime Services v. Laurel explained that for illness to be
compensable, it is not necessary that the nature of the employment be the sole and only reason for the
illness suffered by the seafarer. It is sufficient that there is a reasonable linkage between the disease
suffered by the employee and his work lead to a rational mind to conclude that his work may have
contributed to the establishment or, at the very least, aggravation of any pre-existing condition he might
have had.
In the case at bar, Flor was unable to fulfill these requirements. She did not allege how the nature
of Eduardo’s work as bosun contributed to the development or the aggravation of his illness. Further,
Eduardo himself admitted that he had diabetes and hypertension prior to his embarkation. Also,
diabetes mellitus is not listed as an occupational disease under the 2000 POEA SEC. Therefore, the death
of Eduardo is not compensable.
2. No. The PEME merely determines whether one is “fit to work” at sea, it does not state the real
state of health of an applicant. In short, the “fit to work” declaration in the PEME cannot be a
conclusive proof to show that the seafarer was free from any ailment prior to his deployment.
Therefore, the “fit to work” certification issued to Eduardo is not a conclusive proof that he
was free from illness prior to his deployment.
2016
CASE TITLE: Limlingan vs. Asian Institute of Management, Inc.,

Principle:
When the judgment of the court awarding a sum of money becomes final and executory, the
rate of legal interest shall be 6% per annum from such finality until its satisfaction, the interim period
being deemed to be by then an equivalent to a forbearance of credit.
Where an employee was forced to litigate and, thus, incur expenses to protect his rights and
interest, the award of attorney's fees is legally and morally justifiable.
Facts:
A complaint for "illegal suspension, non-payment of salaries, deprivation of medical benefits, life
insurance and other benefits, damages and attorney's fees" was filed by Limlingan and Leyco against
Asian Institute of Management (AIM). The Labor Arbiter declared that Limlingan and Leyco's suspension
was illegal and ordered AIM to pay the salaries and benefits withheld during the suspension, as well as
29
10% of the amount for attorney's fees. The parties appealed to the CA but the CA upheld the decision of
the Labor Arbiter. The decision became final on July 25, 2011.
Limlingan and Leyco filed a Motion for Issuance of Writ of Execution. Limlingan and Leyco
argued that they are entitled to interest at the rate of 12% per annum computed from the finality of the
Court of Appeals' May 4, 2010 Decision (or on July 25, 2011) up to June 30, 2013, and 6% per annum
from July 1, 2013 until full satisfaction of the award. AIM, however, countered that Limlingan and Leyco
are not entitled to legal interest from the time the Court of Appeals' May 4, 2010 Decision became final
until its full satisfaction since AIM already tendered payment of the judgment award. In addition,
Limlingan and Leyco are not entitled to attorney's fees since the Court of Appeals Decision never
granted them such award.
Issues:
1. Whether or not Limlingan and Leyco are entitled to interest at the rate of 12% per annum
computed from the finality of the Court of Appeals' May 4, 2010 Decision (or on July 25, 2011) up to
June 30, 2013, and 6% per annum from July 1, 2013 until full satisfaction of the award?
2. Whether or not they are entitled to attorney’s fees?
Ruling:
1. Yes. The parties are entitled to interest at the rate of 12% per annum computed from the
finality of the Court of Appeals' May 4, 2010 Decision (or on July 25, 2011) up to June 30, 2013, and 6%
per annum from July 1, 2013 until full satisfaction of the award.
With regard to the proper rate of legal interest, Nacar laid down the guidelines for the
imposition of legal interest:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi- contracts, delicts or
quasi-delicts is breached, the contravenor can be held liable for damages.
II. With regard particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan
or forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil
Code.
When an obligation, not constituting a loan or forbearance of money, is breached, an interest on
the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or
until the demand can be established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably
established at the time the demand is made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification of damages may be deemed to have
been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be
on the amount finally adjudged.
When the judgment of the court awarding a sum of money becomes final and executory, the
rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per
annum from such finality until its satisfaction, this interim period being deemed to be by then an
equivalent to a forbearance of credit.
2. Yes. The parties are entitled to attorney’s fees.
The award of attorney's fee is warranted pursuant to Article 111 of the Labor Code. Ten (10%)
percent of the total award is usually the reasonable amount of attorney's fees awarded. It is settled that
30
where an employee was forced to litigate and, thus, incur expenses to protect his rights and interest,
the award of attorney's fees is legally and morally justifiable.
Thus, they are entitled to attorney’s fees.
Case Title: Nonay vs Bahia Shipping Services

Principle:
1. To be entitled to compensation and benefits under this provision, it is not sufficient to
establish that the seafarer’s illness or injury has rendered him permanently or partially disabled; it must
also be shown that there is a causal connection between the seafarer’s illness or injury and the work for
which he had been contracted.
2. To grant petitioner’s claim for disability benefits, the following requisites must be present: (1)
he suffered an illness; (2) he suffered this illness during the term of his employment contract; (3) he
complied with the procedures prescribed under Section 20-B; (4) his illness is one of the enumerated
occupational disease[s] or that his illness or injury is otherwise work-related; and (5) he complied with
the four conditions enumerated under Section 32-A for an occupational disease or a disputably-
presumed work-related disease to be compensable.
For illness to be compensable, it is sufficient that there is a reasonable linkage between the
disease suffered by the employee and his work to lead a rational mind to conclude that his work may
have contributed to the establishment or, at the very least, aggravation of any pre-existing condition he
might have had.
For disability to be compensable under Section 20 (B) of the 2000 POEA-SEC, two elements must
concur: (1) the injury or illness must be work-related; and (2) the work-related injury or illness must
have existed during the term of the seafarer’s employment contract. In other words, to be entitled to
compensation and benefits under this provision, it is not sufficient to establish that the seafarer’s illness
or injury has rendered him permanently or partially disabled; it must also be shown that there is a causal
connection between the seafarer’s illness or injury and the work for which he had been contracted.
3. A seafarer may pursue an action for total and permanent disability benefits if:
(a) the company-designated physician failed to issue a declaration as to his fitness to engage in
sea duty or disability even after the lapse of the 120-day period and there is no indication that further
medical treatment would address his temporary total disability, hence, justify an extension of the period
to 240 days;
(b) 240 days had lapsed without any certification being issued by the company-designated
physician;
(c) the company-designated physician declared that he is fit for sea duty within the 120-day or
240-day period, as the case may be, but his physician of choice and the doctor chosen under Section 20-
B(3) of the POEA-SEC are of a contrary opinion;
(d) the company-designated physician acknowledged that he is partially permanently disabled
but other doctors who he consulted, on his own and jointly with his employer, believed that his
disability is not only permanent but total as well;
(e) the company-designated physician recognized that he is totally and permanently disabled
but there is a dispute on the disability grading;
(f) the company-designated physician determined that his medical condition is not compensable
or work-related under the POEA-SEC but his doctor-of-choice and the third doctor selected under
Section 20-B(3) of the POEA-SEC found otherwise and declared him unfit to work;
(g) the company-designated physician declared him totally and permanently disabled but the
employer refuses to pay him the corresponding benefits; and
31
(h) the company-designated physician declared him partially and permanently disabled within
the 120-day or 240-day period but he remains incapacitated to perform his usual sea duties after the
lapse of the said periods.
The company-designated physician was justified in not issuing a medical certificate on whether
petitioner was fit to work after the lapse of 120 days because petitioner’s treatment required more than
120 days. Petitioner’s illness could not be automatically considered total and permanent simply because
there was no certification that she is fit to work after 120 days.
Facts:
Bahia Shipping hired Maricel Nonay in 2008 for Fred Osen Cruise Lines, Ltd. Around the middle
of February 2010, Nonay experienced profuse and consistent bleeding, extreme dizziness, and difficulty
in breathing. She went to the ship’s clinic and was later advised by the ship’s physician to rest but her
condition did not improve. She went to a clinic in Barbados and a transvaginal ultrasound conducted on
Nonay revealed that she had two ovarian cysts. She returned to the ship and was assigned to perform
light duties.
On March 20, 2010, Nonay was medically repatriated. Bahia Shipping referred her to the
company-designated physician at the Metropolitan Medical Center in Manila. A company-designated
obstetrician-gynecologist diagnosed Nonay with “Abnormal Uterine Bleeding Secondary to an
Adenomyosis with Adenomyoma”. Nonay underwent endometrial dilation and curettage as part of her
treatment. Nonay was not fit to work by the end of the 120-day period from March 20, 2010, but she
was declared fit to resume sea duties within the 240-day period.
On September 8, 2010, she filed a Complaint for payment of disaibility benefit, medical
expenses, moral and exemplary damages, and attorney’s fees. She sought to claim permanent disability
benefits based on the collective bargaining agreement she signed.
The Labor Arbiter ruled in favor of Nonay. Bahia Shipping appealed to the NLRC which affirmed
the Labor Arbiter’s decision, that Nonay’s illness was work-related and work-aggravated, and thus
compensable. Bahia Shipping filed a Petition for Certiorari before the Court of Appeals under the
grounds of grave abuse of discretion. The Court of Appeals granted the Petition, finding that Nonay
failed to provide substantial evidence to prove her allegation that her illness is work-related, giving
greater weight to the findings of the company-designated physician.
Nonay argues that the test in claims for disability benefits is "not the absolute certainty that the
nature of employment . . . caused the illness of the worker." Instead, the test only requires "the
probability that the nature of employment of the worker . . . caused or contributed in the enhancement,
development[,] and deterioration of such illness." Further, "in case of doubt as to the compensability of
an ailment, the doubt is always settled in favor of its compensability." It is not the gravity of the injury
that is compensated but the loss of earning capacity.
Bahia Shipping argues that Nonay is not entitled to total and permanent disability benefits
because she "was declared fit to work within the 240-day period[.]" She filed the Complaint before the
Labor Arbiter without complying with the mandated procedure that the medical assessment be referred
to a third doctor in the event that the company-designated physician and the personal physician differ in
their findings, as in this case.
Issues:
(a) Whether Nonay is entitled to full disability benefits under the Norwegian Collective
Bargaining Agreement;
(b) Whether the employee has the burden to prove to the court that the illness was acquired or
aggravated during the period of employment before the disputable presumption that the illness is work-
related or work-aggravated arises; and
(c) Whether Nonay is permanently and totally disabled because the company-designated
physician failed to certify that she is fit to work after the lapse of 120 days.
Ruling:
(a) (b)
32
To grant petitioner’s claim for disability benefits, the following requisites must be present: (1) he
suffered an illness; (2) he suffered this illness during the term of his employment contract; (3) he
complied with the procedures prescribed under Section 20-B; (4) his illness is one of the enumerated
occupational disease[s] or that his illness or injury is otherwise work-related; and (5) he complied with
the four conditions enumerated under Section 32-A for an occupational disease or a disputably-
presumed work-related disease to be compensable.
For illness to be compensable, it is sufficient that there is a reasonable linkage between the
disease suffered by the employee and his work to lead a rational mind to conclude that his work may
have contributed to the establishment or, at the very least, aggravation of any pre-existing condition he
might have had.
For disability to be compensable under Section 20 (B) of the 2000 POEA-SEC, two elements must
concur: (1) the injury or illness must be work-related; and (2) the work-related injury or illness must
have existed during the term of the seafarer’s employment contract. In other words, to be entitled to
compensation and benefits under this provision, it is not sufficient to establish that the seafarer’s illness
or injury has rendered him permanently or partially disabled; it must also be shown that there is a causal
connection between the seafarer’s illness or injury and the work for which he had been contracted.
(c)
A seafarer may pursue an action for total and permanent disability benefits if:
(a) the company-designated physician failed to issue a declaration as to his fitness to
engage in sea duty or disability even after the lapse of the 120-day period and there is no
indication that further medical treatment would address his temporary total disability, hence,
justify an extension of the period to 240 days;
(b) 240 days had lapsed without any certification being issued by the company-
designated physician;
(c) the company-designated physician declared that he is fit for sea duty within the 120-
day or 240-day period, as the case may be, but his physician of choice and the doctor chosen
under Section 20-B(3) of the POEA-SEC are of a contrary opinion;
(d) the company-designated physician acknowledged that he is partially permanently
disabled but other doctors who he consulted, on his own and jointly with his employer, believed
that his disability is not only permanent but total as well;
(e) the company-designated physician recognized that he is totally and permanently
disabled but there is a dispute on the disability grading;
(f) the company-designated physician determined that his medical condition is not
compensable or work-related under the POEA-SEC but his doctor-of-choice and the third doctor
selected under Section 20-B(3) of the POEA-SEC found otherwise and declared him unfit to
work;
(g) the company-designated physician declared him totally and permanently disabled
but the employer refuses to pay him the corresponding benefits; and
(h) the company-designated physician declared him partially and permanently disabled
within the 120-day or 240-day period but he remains incapacitated to perform his usual sea
duties after the lapse of the said periods.
The company-designated physician was justified in not issuing a medical certificate on
whether petitioner was fit to work after the lapse of 120 days because petitioner’s treatment
required more than 120 days. Petitioner’s illness could not be automatically considered total
and permanent simply because there was no certification that she is fit to work after 120 days.
Case Title: REPUBLIC vs. NLRC

Principle:
33
The employer-employee relationship is severed upon the sale or disposition of assets of a

company undergoing privatization. This, however, is without prejudice to "benefits incident to their
employment or attaching to termination under applicable employment contracts, collective bargaining
agreements, and applicable legislation"
An employer may terminate employment to prevent business losses.
All money claims arising from employer- employee relations accruing during the effectivity of
this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they
shall be forever barred.
Facts:
Asset Privatization Trust was a government entity for the purpose of conserving, provisionally
managing, and disposing of assets that have been identified for privatization or disposition.
NACUSIP/BISUDECO Chapter is the exclusive bargaining agent for the rank-and-file employees of
Bicolandia Sugar Development Corporation, a corporation engaged in milling and producing sugar.
Bicolandia Sugar Development Corporation had been incurring heavy losses. It obtained loans from
Philippine Sugar Corporation and Philippine National Bank, secured by its assets and properties.
Philippine National Bank ceded its rights and interests over Bicolandia Sugar Development Corporation's
loans to the government through Asset Privatization Trust. Due to Bicolandia Sugar Development
Corporation's continued failure to pay its loan obligations, Asset Privatization Trust filed a Petition for
Extrajudicial Foreclosure of Bicolandia Sugar Development Corporation's mortgaged properties and
there being no other qualified bidder, Asset Privatization Trust was issued a certificate of sale upon
payment of P1,725,063,044.00.
The Asset Privatization Trust decided to sell the assets and properties of Bicolandia Sugar
Development Corporation and issued a Notice of Termination to Bicolandia Sugar Development
Corporation's employees, advising them that their services would be terminated within 30 days.
NASUCIP/BISUDECO Chapter received the Notice under protest.
As a result, several members of the NACUSIP/BISUDECO Chapter filed a Complaint charging
Asset Privatization Trust, Bicolandia Sugar Development Corporation, Philippine Sugar Corporation, and
Bicol Agro-Industrial Producers Cooperative, Incorporated-Peñafrancia Sugar Mill with unfair labor
practice, union busting, and claims for labor standard benefits. The Labor Arbiter dismissed the
Complaint and found that there was no union busting when Asset Privatization Trust and Philippine
Sugar Corporation disposed of Bicolandia Sugar Development Corporation's assets and properties since
Asset Privatization Trust was merely disposing of a non-performing asset of government. However, the
Labor Arbiter found that although Asset Privatization Trust previously released funds for separation pay,
13th month pay, and accrued vacation and sick leave credits for 1992’ George Emata, Bienvenido Felina,
Domingo Rebancos, Jr., Nelson Berina, Armando Villote, and Roberto Tirao (Emata, et al.) refused to
receive their checks "on account of their protested dismissal." Their refusal to receive their checks was
premised on their Complaint that Asset Privatization Trust's sale of Bicolandia Sugar Development
Corporation violated their Collective Bargaining Agreement and was a method of union busting.
Issues:
1. Whether or not there was an employer-employee relationship between petitioner
Privatization and Management Office (then Asset Privatization Trust) and private respondents
NACUSIP/BISUDECO Chapter employees, and thus, whether petitioner is liable to pay the separation
benefits of private respondents George Emata, Bienvenido Felina, Domingo Rebancos, Jr., Nelson
Berina, Armando Villote, and Roberto Tirao;
2. Whether or not Bicolandia Sugar Development Corporation's closure could be considered
serious business losses that would exempt petitioner from payment of separation benefits; and
3. Whether or private respondents' claim for labor standard benefits had already prescribed
under Article 291 of the Labor Code.
Ruling:
1. NO.
34
Section 24 of Proclamation No. 50 Series of 1986 states: The transfer of any asset of government
directly to the national government as mandated herein shall be for the purpose of disposition,
liquidation and/or privatization only, any import in the covering deed of assignment to the contrary
notwithstanding. Such transfer, therefore, shall not operate to revert such assets automatically to the
general fund or the national patrimony, and shall not require specific enabling legislation to authorize
their subsequent disposition, but shall remain as duly appropriated public properties earmarked for
assignment, transfer or conveyance under the signature of the Minister of Finance or his duly authorized
representative, who is hereby authorized for this purpose, to any disposition entity approved by the
Committee pursuant to the provisions of this Proclamation.
In this case, the petitioner was not liable for the Union's claims for labor standard benefits. Its
acquisition of Bicolandia Sugar Development Corporation's assets was not for the purpose of continuing
its business. It was to conserve the assets in order to prepare it for privatization. When Philippine
National Bank ceded its rights and interests over Bicolandia Sugar Development Corporation's loan to
petitioner in 1987, it merely transferred its rights and interests over Bicolandia's outstanding loan
obligations. The transfer was not for the purpose of continuing Bicolandia Sugar Development
Corporation's business. Thus, petitioner never became the substitute employer of Bicolandia Sugar
Development Corporation's employees. It would not have been liable for any money claim arising from
an employer-employee relationship.
While petitioner per se is not liable for private respondents' money claims arising from an
employer-employee relationship, it voluntarily obliged itself to pay Bicolandia Sugar Development
Corporation's terminated employees separation benefits in the event of the Corporation's privatization.
Under Section 27 of Proclamation No. 50, the employer-employee relationship is severed upon
the sale or disposition of assets of a company undergoing privatization. This, however, is without
prejudice to "benefits incident to their employment or attaching to termination under applicable
employment contracts, collective bargaining agreements, and applicable legislation"
When petitioner's Board of Trustees issued the Resolution dated September 23, 1992, it
acknowledged its contractual obligation to be liable for benefits arising from an employer-employee
relationship even though, as a mere conservator of assets, it was not supposed to be liable. Under
Article III, Section 12(6) of Proclamation No. 50, Asset Privatization Trust had the power to release claims
or settle liabilities, as in this case. When it issued its Resolution dated September 23, 1992, petitioner
voluntarily bound itself to be liable for separation benefits to Bicolandia Sugar Development
Corporation's terminated employees.
2. NO.
Art. 298. Closure of establishment and reduction of personnel. The employer may also
terminate the employment of any employee due to the installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving
a written notice on the workers and the Ministry of Labor and Employment at least one (1) month
before the intended date thereof. In case of termination due to the installation of labor-saving devices
or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least
his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses, the separation pay
shall be equivalent to one (1) month pay or at least one-half (1/2) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.
Bicolandia Sugar Development Corporation's financial standing when petitioner took over as its
conservator clearly showed that it was suffering from serious business losses and would have been
exempted from paying its terminated employees their separation pay. This exemption, however, only
applies to employers. It does not apply to petitioner. Even assuming that petitioner became
NACUSIP/BISUDECO's substitute employer, the exemption would still not apply if the employer
voluntarily assumes the obligation to pay terminated employees, regardless of the employer's financial
situation. Petitioner's Board of Trustees issued the Resolution dated September 23, 1992 authorizing the
payment of separation benefits to Bicolandia Sugar Development Corporation's terminated employees
in the event of the Corporation's privatization. It voluntarily bound itself to pay separation benefits
35
regardless of the Corporation's financial standing. It cannot now claim that it was exempted from paying
such benefits due to serious business losses.
3. NO.
Art. 291. Money claims. All money claims arising from employer- employee relations accruing
during the effectivity of this Code shall be filed within three (3) years from the time the cause of action
accrued; otherwise they shall be forever barred.
Private respondents filed their Complaint for unfair labor practices, union busting, and labor
standard benefits on April 24, 1996,73 or three (3) years, seven (7) months and 24 days after their
termination. Their Complaint essentially alleged that their termination was illegal because it was made
prior to Bicolandia Sugar Development Corporation's sale to Bicol Agro-Industrial Producers
Cooperative, Incorporated-Peñafrancia Sugar Mill. They also alleged that the sale was illegal since it was
made for the purpose of removing NACUSIP/BISUDECO Chapter as the sugar mill's Union. Under the
prescriptive periods stated in the Labor Code and Arriola, private respondents' cause of action and any
subsequent money claim for illegal termination has not yet prescribed. Their Complaint dated April 24,
1996 before the Labor Arbiter was filed within the prescriptive period.
Case Title: SONEDCO Workers Free Labor Union v. Universal Robina Corporation,
Principle:
An employer is guilty of unfair labor practice when it fails in its duty to bargain in good faith.
Unfair labor practice not only involves acts that violate the right to self-organization but also
covers several acts enumerated in Article 259 of the Labor Code, thus:
ARTICLE 259. [248] Unfair Labor Practices of Employers.—It shall be unlawful for an employer to
commit any of the following unfair labor practices:
To interfere with, restrain or coerce employees in the exercise of their right to self-organization;
Xxxx
(e) To discriminate in regard to wages, hours of work and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization.
Xxxx
(g) To violate the duty to bargain collectively as prescribed by this Code; (Emphasis supplied)
Under this provision, an employer is guilty of unfair labor practice when it fails in its duty to
bargain in good faith.
Facts:
On 6 May 2002, Universal Robina Corporation, Sugar Division-Southern Negros Development
Corporation (URC-SONEDCO) and Philippine Agricultural Commercial and Industrial Workers Union-
Trade Union Congress of the Philippines (PACIWU-TUCP), the then exclusive bargaining representative
(EBR) of URC-SONEDCO’s rank-and-file employees, entered into a Collective Bargaining Agreement
(2002 CBA) effective Jan. 1, 2002 to Dec. 31, 2006. Under the 2002 CBA, rank-and-file employees were
entitled to a wage increase of P14.00/day for 2002 and P12.00/day for the succeeding years until 2006.
On 17 May 2002, days after the 2002 CBA was signed, a certification election was conducted.
SONEDCO Workers Free Labor Union (SWOFLU) won and replaced PACIWU-TUCP as the EBR.
URC-SONEDCO consistently refused to negotiate a new collective bargaining agreement with
SWOFLU, despite several demands, allegedly due to the 2002 Collective Bargaining Agreement, which it
signed with PACIWU-TUCP.
Despite being the incumbent EBR, SWOFLU filed before the DOLE a Petition for certification
election (PCE) on December 6, 2006 in view of the approaching expiration of the 2002 CBA. On
36
December 31, 2006, the 2002 CBA expired with no new CBA being signed. On August 28, 2007, with no
CBA in effect, URC-SONEDCO informed the rank-and-file employees that they would be granted the
several economic benefits which include, inter alia, wage increase of P16.00/day effective 1 Jan. 2007.
URC-SONEDCO asked the employees who wished to avail themselves of these benefits to sign an
acknowledgment receipt/waiver (2007 waiver), which stated that “[i]n the event that a subsequent CBA
is negotiated between Management and Union, the new CBA shall only be effective 1 Jan. 2008.” This
was designed to avoid and/or prevent double compensation. Several SONEDCO Workers Free Labor
Union members refused to sign the 2007 waiver. Hence, they did not receive the benefits given to other
members of the bargaining unit who had done so.
In 2008, another wage increase of P16.00/day effective January 1, 2008 were given to
employees who signed an acknowledgment receipt/waiver (2008 waiver) with a similar statement
stated in the 2007 waiver except that the new CBA shall only be effective 1 Jan. 2009. Again, several
SWOFLU members refused to sign the 2008 waiver. They did not receive the benefits from URC-
SONEDCO.
In August 2008, a certification election was conducted in which SWOFLU won again and
proceeded to negotiate a new CBA which became effective 1 Jan. 2009 to 31 Dec. 2013 (2009 CBA).
On 2 July 2009, SWOFLU and its members who refused to sign the 2007 and 2008 waivers filed a
complaint for Unfair Labor Practices (ULP) against URC-SONEDCO.
The Labor Arbiter (LA) found that URC-SONEDCO did not commit ULP. However, the LA ordered
URC-SONEDCO to pay the employees who refused to sign the 2007 and 2008 waivers of the benefits
received by their fellow employees for 2007 and 2008. On appeal, the National Labor Relations
Commission (NLRC) affirmed the LA’s Decision. Aggrieved, members of SWOFLU filed before the Court
of Appeals (CA) a Petition for Certiorari assailing the NLRC Decision. The CA found no grave abuse of
discretion in the assailed decision and dismissed the Petition. Hence, this Petition was filed.
Issue:
Whether or not respondent URC-SONEDCO committed ULP.
Ruling:
YES.
Respondent is guilty of unfair labor practice.
The Court of Appeals failed to take into account that unfair labor practice not only involves acts
that violate the right to self-organization but also covers several acts enumerated in Article 259 of the
Labor Code, thus:
ARTICLE 259. [248] Unfair Labor Practices of Employers.—It shall be unlawful for an employer to
commit any of the following unfair labor practices:
To interfere with, restrain or coerce employees in the exercise of their right to self-organization;
Xxxx
(e) To discriminate in regard to wages, hours of work and other terms and conditions of
employment in order to encourage or discourage membership in any labor organization.
Xxxx
(g) To violate the duty to bargain collectively as prescribed by this Code; (Emphasis supplied)
Under this provision, an employer is guilty of unfair labor practice when it fails in its duty to
bargain in good faith.
In ruling that respondent did not commit unfair labor practice, the NLRC and the CA failed to
consider the totality of respondent’s acts, which showed that it violated its duty to bargain collectively.
This constitutes unfair labor practice under Article 259(g) of the Labor Code.
37
Xxxx
Respondent’s reliance on the 2002 CBA is contrary to jurisprudence. In Associated Labor Unions
(ALU-TUCP) v. Trajano, this Court explicitly held that the winning union had the option to either continue
the existing collective bargaining agreement or negotiate a new one.
Xxxx
Respondent was remiss in its duty when it repeatedly refused negotiations with petitioners. Xxx
Respondent repeatedly refused to meet and bargain with SWOFLU, the EBR of its rank-and-file
employees. Xxx If respondent had truly intended to bargain in good faith, it could have easily waited a
few more days to know the result of the certification election. Xxx If respondent did indeed act in good
faith, it would have undergone agreement negotiations with petitioners. Xxx In effect, respondent
hindered petitioners’ bargaining power when it made them waive the bargaining efforts for 2007 and
2008.
Case Title: Philippine Geothermal, Inc. Employees Union vs. Unocal Philippines, Inc
Principle:
1. “The merger of a corporation with another does not operate to dismiss the employees of the
corporation absorbed by the surviving corporation.”
2. the surviving corporation automatically assumes the employment contracts of the absorbed
corporation, such that the absorbed corporation’s employees become part of the manpower
complement of the surviving corporation.
It is more in keeping with the dictates of social justice and the State policy of according full
protection to labor to deem employment contracts as automatically assumed by the surviving
corporation in a merger, even in the absence of an express stipulation in the articles of merger or the
merger plan.
To reiterate, Section 80 of the Corporation Code provides that the surviving corporation shall
possess all the rights, privileges, properties, and receivables due of the absorbed corporation. Moreover,
all interests of, belonging to, or due to the absorbed corporation “shall be taken and deemed to be
transferred to and vested in such surviving or consolidated corporation without further act or deed.”
The surviving corporation likewise acquires all the liabilities and obligations of the absorbed corporation
as if it had itself incurred these liabilities or obligations.
This acquisition of all assets, interests, and liabilities of the absorbed corporation necessarily
includes the rights and obligations of the absorbed corporation under its employment contracts.
Consequently, the surviving corporation becomes bound by the employment contracts entered into by
the absorbed corporation. These employment contracts are not terminated. They subsist unless their
termination is allowed by law.
Facts:
Philippine Geothermal, Inc. Employees Union is a legitimate labor union that stands as the
bargaining agent of the rank-and-file employees of Unocal Philippines. Unocal Philippines, formerly
known as Philippine Geothermal, Inc., is a foreign corporation licensed to do business in the Philippines.
It is a wholly owned subsidiary of Unocal California, which, in turn, is a wholly owned subsidiary of
Unocal Corporation.
Unocal Corporation executed a Merger Agreement with Chevron Texaco Corporation and Blue
Merger Sub, Inc., a wholly owned subsidiary of Chevron. Unocal Corporation merged with Blue Merger,
and Blue Merger became the surviving corporation. Chevron then became the parent corporation of the
merged corporations. After the merger, Blue Merger, as the surviving corporation, changed its name to
Unocal Corporation. Then, Unocal Philippines executed a CBA with the Union. However, the Union
wrote Unocal Philippines asking for the separation benefits provided for under the CBA on the ground
that the Merger Agreement resulted in the closure and cessation of operations of Unocal Philippines
and the implied dismissal of its employees.
38
Unocal Philippines refused the Union’s request and asserted that the employee-members were
not terminated and that the merger did not result in its closure or the cessation of its operations.
Issues:
Whether or not the employees of Unocal Philippines were impliedly dismissed as a result of the
Merger Agreement
Ruling:
No.
A merger is a consolidation of two or more corporations, which results in one or more
corporations being absorbed into one surviving corporation. The separate existence of the absorbed
corporation ceases, and the surviving corporation “retains its identity and takes over the rights,
privileges, franchises, properties, claims, liabilities and obligations of the absorbed corporation(s).”
If Unocal Philippines is a subsidiary of Unocal California, which, in turn, is a subsidiary of Unocal
Corporation, then the merger of Unocal Corporation with Blue Merger and Chevron does not affect
Unocal Philippines or any of its employees. Unocal Philippines has a separate and distinct personality
from its parent corporation. Nonetheless, if Unocal Philippines is indeed a party to the merger, the
merger still does not result in the dismissal of its employees.
The effects of a merger are provided under Section 80 of the Corporation Code. Although this
provision does not explicitly state the merger’s effect on the employees of the absorbed corporation,
Bank of the Philippine Islands v. BPI Employees Union-Davao Chapter-Federation of Unions in BPI
Unibank has ruled that the surviving corporation automatically assumes the employment contracts of
the absorbed corporation, such that the absorbed corporation’s employees become part of the
manpower complement of the surviving corporation.
It is more in keeping with the dictates of social justice and the State policy of according full
protection to labor to deem employment contracts as automatically assumed by the surviving
corporation in a merger, even in the absence of an express stipulation in the articles of merger or the
merger plan.
To reiterate, Section 80 of the Corporation Code provides that the surviving corporation shall
possess all the rights, privileges, properties, and receivables due of the absorbed corporation. Moreover,
all interests of, belonging to, or due to the absorbed corporation “shall be taken and deemed to be
transferred to and vested in such surviving or consolidated corporation without further act or deed.”
The surviving corporation likewise acquires all the liabilities and obligations of the absorbed corporation
as if it had itself incurred these liabilities or obligations.
This acquisition of all assets, interests, and liabilities of the absorbed corporation necessarily
includes the rights and obligations of the absorbed corporation under its employment contracts.
Consequently, the surviving corporation becomes bound by the employment contracts entered into by
the absorbed corporation. These employment contracts are not terminated. They subsist unless their
termination is allowed by law.
Thus, the merger of Unocal Corporation with Blue Merger and Chevron does not result in an
implied termination of the employment of petitioner’s members. Should they be unhappy with the
surviving corporation, the employees may retire or resign from employment.
Given these considerations, the employees of Unocal Philippines are not entitled to the
separation benefits it claims from the latter.
39
2017
Case Title: Cristina Barsolo vs. Social Security System, G.R. No. 187950, January 11, 2017
One-Liner:
“A compensable occupational illness becomes compensable only which should be proven by

substantial evidence.”
Principle:
It is not refuted that myocardial infarction is a compensable occupational illness. However, it

becomes compensable only when it falls under any of the three conditions, which should be proven by
substantial evidence.
Facts:
Cristina Barsolo's (Cristina) deceased husband, Manuel M. Barsolo (Manuel), "was employed as
a seaman by various companies from 1988 to 2002. Manuel served as a Riding Gang/ Able Seaman
onboard MT Polaris Star with Vela International Marine Ltd., (Vela). After his separation from
employment with Vela, Manuel was diagnosed with hypertensive cardiovascular disease, coronary
artery disease, and osteoarthritis. He was examined and treated at the Philippine Heart Center as an
outpatient from April 2, 2003 to October 22, 2004. 8 When he died on September 24, 2006, the autopsy
report listed myocardial infarction as his cause of death.
Believing that the cause of Manuel's death was work-related, Cristina filed a claim for death
benefits with the Social Security System but the latter denied her claim on the ground that there was no
longer an employer-employee relationship at the time of Manuel's death and that his being a smoker
increased his risk of contracting the illness. On Appeal, the Court of Appeals ruled that while there was
no doubt that myocardial infarction was a compensable disease, Cristina failed to prove a causal
relationship between Manuel's work and the illness that brought about his death. Hence, this Petition
was filed.
Issue:
Whether or not Cristina is entitled to compensation for the death of her husband Manuel.
Ruling:
No. The pertinent portions of Annex A of the Amended Rules on Employee Compensation read:
For an occupational disease and the resulting disability or death to be compensable, all of the
following conditions must be satisfied:
(1) The employee's work must involve the risks described herein;
(2) The disease was contracted as a result of the employee's exposure to the described risks;
(3) The disease was contracted within a period of exposure and under such other factors
necessary to contract it;
(4) There was no notorious negligence on the part of the employee.
Section l(h), Rule III of the ECC Amended Rules on Employees Compensation, now considers
cardio-vascular disease as compensable occupational disease. Included in Annex "A" is cardio-vascular
disease, which cover myocardial infarction. However, it may be considered as compensable
occupational disease only when substantial evidence is adduced to prove any of the following
conditions:
40
If the heart disease was known to have been present during employment there must be proof
that an acute exacerbation clearly precipitated by the unusual strain by reason of the nature of his work;
The strain of work that brings about an acute attack must be of sufficient severity and must be
followed within twenty-four (24) hours by the clinical signs of a cardiac assault to constitute causal
relationship.
If a person who was apparently asymptomatic before subjecting himself to strain of work
showed signs and symptoms of cardiac injury during the performance of his work and such symptoms
and signs persisted, it is reasonable to claim a causal relationship.
Since there was no showing that her husband showed any sign or symptom of cardiac injury
during the performance of his functions, petitioner clearly failed to show that her husband's
employment caused the disease or that his working conditions aggravated his existing heart ailment. To
emphasize, it is not refuted that myocardial infarction is a compensable occupational illness. However, it
becomes compensable only when it falls under any of the three conditions, which should be proven by
substantial evidence.
Case Title: Rodriguez vs. Park N Ride, Inc. G.R. No. 222980, March 20, 2017
One- Liner:
“There is constructive dismissal when an employer's act of clear discrimination, insensibility or

disdain becomes so unbearable on the part of the employee so as to foreclose any choice on his part
except to resign from such employment.“
Principle:
There is constructive dismissal when an employer's act of clear discrimination, insensibility or

except to resign from such employment. It exists where there is involuntary resignation because of the
harsh, hostile and unfavorable conditions set by the employer.
Facts:
Lourdes Rodriguez was hired by spouses Vicente & Estelita B. Javier as Restaurant Supervisor for
their restaurant. When the restaurant closed, she was given a job as an Administrative and Finance
assistant to Estelita Javier. She handled personnel, finance and administrative matters of Estelitas
companies without additional compensation She was also tasked to take care of the household concerns
of the Javier spouses, such as preparing payrolls for drivers and helpers, shopping for household needs,
and looking after the spouses’ house whenever they travelled abroad.
She allegedly was on call on Sundays; and worked during Christmas and other holidays. She was
deducted an equivalent of two (2) days' wage for every day of absence and was not paid any service
incentive leave pay.
She filed a resignation letter effective April 25, 2009 however the spouses did not accept her
resignation and convinced her to stay on. On September 29, 2009, when she was late in opening the
Makati office after going on her usual “pamalengke” for the spouses, Estelita called her on the phone
and scolded her for it, once again berating her and telling her that if she did not want to continue work,
the company could manage without her. Thus, On September 29, 2009, she wrote a resignation letter
to the spouses expressing her grievances at them. The Javier Spouses accepted her resignation .
On October 7, 2009, Rodriguez filed a Complaint for constructive illegal dismissal against the
Javier Spouses.
The Labor Arbiter dismissed the complaint and deemed her resigned. The NLRC reversed the
ruling of the LA. On appeal, the Court of Appeals reinstated the decision of the Labor Arbiter.
Issue:
41
If there is constructive dismissal in this case
Ruling:
No, there was no constructive dismissal.
There is constructive dismissal when an employer's act of clear discrimination, insensibility or

except to resign from such employment.71 It exists where there is involuntary resignation because of
the harsh, hostile and unfavorable conditions set by the employer.
Here, Complainant was not pressured into resigning. It seems that the complainant was not
comfortable anymore with the fact that she was always at the beck and call of the respondent Javier
spouses. Her supervisory and managerial functions appear to be impeding her time with her family to
such extent that she was always complaining of her extended hours with the company. It is of no
moment that respondent spouses in many occasions reprimanded complainant as long as it was
reasonably connected and an offshoot of the work or business of respondents.
From the representation of petitioner, what triggered her resignation was the incident on
September 22, 2009 when Estelita told her "Kung ayaw mo na ng ginagawa mo, we can manage! " These
words, however, are not sufficient to make the continued employment of petitioner impossible,
unreasonable, or unlikely.
Petitioner was neither terminated on September 22, 2009 nor was she constructively dismissed.
There was no showing of bad faith or malicious design by the respondents that would make her work
conditions unbearable. On the other hand, it is a fact that petitioner enjoyed the privilege of working
closely with the Javier Spouses and having their full trust and confidence. Spontaneous expressions of an
employer do not automatically render a hostile work atmosphere. The circumstances in this case negate
its presence.
Case Title: Manggagawa ng Komunikasyon sa Pilipinas vs. PLDT Inc., G.R. No. 190389, April 19, 2017
One-Liner:
“An employer's declaration of redundancy becomes a valid and authorized cause for dismissal
when the employer proves by substantial evidence that the services of an employee are more than what
is reasonably demanded by the requirements of the business enterprise”
Principle:
Separation pay for either redundancy or retrenchment: For either redundancy or retrenchment,
the law requires that the employer give separation pay equivalent to at least one (1) month pay of the
affected employee, or at least one (1) month pay for every year of service, whichever is higher. The
employer must also serve a written notice on both the employees and the Department of Labor and
Employment at least one (1) month before the effective date of termination due to redundancy or
retrenchment
Facts:
In this case there was two notice of strike which was filed by the Manggagawa ng
Komunikasyon sa Pilipinas, first, On June 27, 2002, the labor organization, which represented the
employees of Philippine Long Distance Telephone Company, filed a notice of strike with the National
Conciliation and Mediation Board (NCMB). Manggagawa ng Komunikasyon sa Pilipinas charged
Philippine Long Distance Telephone Company (PLDT) with unfair labor practice, on the ground that
PLDT's abolition of the Provisioning Support Division. Such action, together with the consequent
redundancy of PSD employees and the farming out of the jobs to casuals and contractuals, violates the
duty to bargain collectively with MKP in good faith; second: On November 11, 2002, the labor
organization while the first notice of strike was pending, filed another notice of strike.
42
On December 23, 2002, Manggagawa ng Komunikasyon sa Pilipinas went on strike. On

December 31, 2002, Philippine Long Distance Telephone Company declared only 323 employees as
redundant as it was able to redeploy 180 of the 503 affected employees to other positions. On January
2, 2003, the Secretary of Labor and Employment certified the labor dispute for compulsory arbitration,
consequently all striking workers are directed to return to work. Manggagawa ng Komunikasyon sa
Pilipinas filed a Petition for Certiorari before the Court of Appeals, challenging the Secretary of Labor
and Employment's Order insofar as it created a distinction among the striking workers in the return-to-
work order. The petition was docketed as CA-G.R. SP No. 76262.
The Court of Appeals granted the Petition for Certiorari, setting aside and nullifying the
Secretary of Labor and Employment's assailed Order. The Philippine Long Distance Telephone Company
appealed the Court of Ap eals' Decision to this Court. The appeal was docketed as G.R. No. 162783.
On July 14, 2005, this Court upheld the Court of Appeals' Decision, and directed Philippine Long
Distance Telephone Company to readmit all striking workers under the same terms and conditions
prevailing before the strike. On October 28, 2005, the National Labor Relations Commission dismissed
Manggagawa ng Komunikasyon sa Pilipinas' charges of unfair labor practices against Philippine Long
Distance Telephone Company.
On May 8, 2006, Manggagawa ng Komunikasyon sa Pilipinas filed a Petition for Certiorari with
the Court of Appeals. The petition was docketed as CA-G.R. SP No. 94365, and it assailed the National
Labor Relations Commission's resolutions, which upheld the validity of Philippine Long Distance
Telephone Company's redundancy program . The Court of Appeals consolidated CA-G.R. SP No.
94365 with CA G.R. SP No. 98975, and dismissed Manggagawa ng Komunikasyon sa Pilipinas' appeals on
August 28, 2008.
For CA-G.R. SP No. 94365, the Court of Appeals ruled that the National Labor Relations
Commission did not commit grave abuse of discretion when it found that Philippine Long Distance
Telephone Company's declaration of redundancy was justified and valid, as the redundancy program
was based on substantial evidence.
Issues:
First, whether the Court of Appeals committed grave abuse of discretion in upholding the
validity of Philippine Long Distance Telephone Company's 2002 redundancy program; and
Second, whether the return-to-work order of the Secretary of Labor and Employment was
rendered moot when the National Labor Relations Commission upheld the validity of the redundancy
program.
Ruling:
Redundancy is one of the authorized causes for the termination of employment provided for in
Article 298 of the Labor Code, as amended:
Article 298. Closure of Establishment and Reduction of Personnel. -The employer may also
terminate the employment of any employee due to the installation of labor-saving devices, redundancy,
retrenchment to prevent losses or the closing or cessation of operation of the establishment or
undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving
a written notice on the workers and the Ministry of Labor and Employment at least one (1) month
before the intended date thereof. In case of termination due to the installation of labor-saving devices
or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least
his one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses, the separation pay
shall be equivalent to one (1) month pay or at least one-half (112) month pay for every year of service,
whichever is higher. A fraction of at least six (6) months shall be considered one (1) whole year.
43
Wiltshire File Co. Inc. v. National Labor Relations Commission77 has explained that redundancy
exists when "the services of an employee are in excess of what is reasonably demanded by the actual
requirements of the enterprise."78 While a declaration of redundancy is ultimately a management
decision in exercising its business judgment, and the employer is not obligated to keep in its payroll
more employees than are needed for its day to-day operations,79 management must not violate the law
nor declare redundancy without sufficient basis.
Asian Alcohol Corporation v. National Labor Relations Commission81 listed down the elements
for the valid implementation of a redundancy program: For the implementation of a redundancy
program to be valid, the employer must comply with the following requisites: (1) written notice served
on both the employees and the Department of Labor and Employment at least one month prior to the
intended date of retrenchment; (2) payment of separation pay equivalent to at least one month pay or
at least one month pay for every year of service, whichever is higher; (3) good faith in abolishing the
redundant positions; and (4) fair and reasonable criteria in ascertaining what positions are to be
declared redundant and accordingly abolished.
To establish good faith, the company must provide substantial proof that the services of the
employees are in excess of what is required of the company, and that fair and reasonable criteria were
used to determine the redundant positions.
In order to prove the validity of its redundancy program, Philippine Long Distance Telephone
Company has presented data on the decreasing volume of the received calls by the Operator Services
Center for the years 1996 to 2002. Philippine Long Distance Telephone Company has stated that "from
1996 to 2002, the [t]otal [d]emand of [c]alls dropped by 334,972,997 or a 72% reduction. Long Distance
Telephone Company's declaration of redundancy was backed by substantial evidence showing a
consistent decline for operator-assisted calls for both local and international calls because of cheaper
alternatives like direct dialing services, and the growth of wireless communication. Thus, the National
Labor Relations Commission did not commit grave abuse of discretion when it upheld the validity of
PLDT's redundancy program. Redundancy is ultimately a management prerogative, and the wisdom or
soundness of such business judgment is not subject to discretionary review by labor tribunals or even
this Court, as long as the law was followed and malicious or arbitrary action was not shown.
II. For either redundancy or retrenchment, the law requires that the employer give separation
pay equivalent to at least one (1) month pay of the affected employee, or at least one (1) month pay for
every year of service, whichever is higher. The employer must also serve a written notice on both the
employees and the Department of Labor and Employment at least one (1) month before the effective
date of termination due to redundancy or retrenchment.
While we agree that Philippine Long Distance Telephone Company complied with the notice
requirement, the same cannot be said as regards the separation pay received by some of the affected
workers. Philippine Long Distance Telephone Company claims that most employees who were declared
redundant received a very generous separation package or "as much as 2.75 months [worth of salary]
for every year of service, with the average separation package at [P]586,580.27." However, the records
belie its claims as shown by the notice of termination of employment received by the workers affected
by the redundancy program
Case Title: Mario C. Madridejos vs. NYK-FIL Ship Management Inc., G.R. No. 204262, June 7, 2017
One- Liner:
“Seafarers must prove through substantial evidence the correlation between their illness and
the nature of their work for their claim for disability benefits to prosper.”
Principle:
Illnesses not listed as an occupational disease under Section 32 of the 2000 Philippine Overseas
Employment Administration Amended Standard Terms and Conditions Governing the Employment of
Filipino Seafarers on Board Ocean-Going Vessels are disputably presumed to be work-related.
44
Facts:
Madridejos signed an employment contract for 10 months with NYK-FIL as a Demi Chef aboard a
vessel. Two weeks after Madridejos commenced to work, he claimed that he accidentally fell down on a
stairway. He was brought to the ship doctor and was diagnosed to have a "sebaceous cyst." The next
day, Madridejos was treated at a hospital in England where his cyst was removed under a local
anethesia. After 2 months, NYK-FIL terminated Madridejos' services through its foreign principal with
reference to Item No. 7 in the "Employment Agreement'', which states, that First time EMPLOYEES shall
be subject to a probationary period of 3 months which can be terminated by either party without cause
at any time upon 14 days prior written notice. Madridejos filed a complaint "for disability benefits
against NYK-FIL before the labor arbiter arguing that he did not finish his employment contract due to
his unwanted health condition. NYK-FIL countered that the early termination of his employment
contract was pursuant to "Item 7" of their employment agreement. The Labor Arbiter found that
Madridejos' illness "was incurred during the term of his employment contract," making it
"compensable." On appeal, the NLRC ruled in favor of NYK-FIL finding that the cyst was not work-
related. The Court of Appeals affirmed the NLRC decision as his repatriation was not due to his medical
condition but due to the expiration of his contract as a probationary employee.
Issue:
Whether Madridejos is entitled to disability benefits.
Ruling:
No. Madridejos cannot claim disability benefits since he was not medically repatriated. "The
employment of seafarers and its incidents are governed by the contracts they sign every time they are
hired or re-hired. These contracts have the force of law between the parties as long as their stipulations
are not contrary to law, morals, public order or public policy." Given that he submitted himself with the
terms of his contract, NYK-FIL may validly terminate his services pursuant to their agreed terms.
Even assuming that Madridejos was medically repatriated, he still cannot claim for disability
benefits since his sebaceous cyst was not work-related. The POEA Standard Employment Contract,
which is deemed integrated into Madridejos' employment contract with NYK-FIL, governs his claim for
disability benefits. A work-related illness is any sickness resulting to disability or death as a result of an
occupational disease listed under Section 32-A with the following conditions satisfied: 1. The seafarer's
work must involve the risks' described herein; 2. The disease was contracted as a result of the seafarer's
exposure to the described risks; 3. The disease was contracted within a period of exposure and under
such other factors necessary to contract it; 4. There was no notorious negligence on the part of the
seafarer. A sebaceous cyst is not included under Section 32 or 32-A of the 2000 POEA Standard
Employment Contract. However, the guidelines expressly provide that those illnesses not listed in
Section 32 "are disputably presumed as work[-]related." The disputable presumption implies "that the
non-inclusion in the list of compensable diseases/illnesses does not translate to an absolute exclusion
from disability benefits." Similarly, "the disputable presumption does not signify an automatic grant of
compensation and/or benefits claim." There is still a need for the claimant to establish, through
substantial evidence, that his illness is work-related. Madridejos cannot solely rely on the disputable
presumption. For his failure to substantiate his claim that his cyst was either work-related or work-
aggravated, this Court cannot grant him relief.
Case Title: Yolando T. Bravo vs Urios College G.R. No. G.R. No. 198066, June 07, 2017
One-Liner:
“The employer must adduce proof of actual involvement in the alleged misconduct for loss of
trust and confidence to warrant the dismissal.”
Principle:
45
The employer must adduce proof of actual involvement in the alleged misconduct for loss of
trust and confidence to warrant the dismissal of fiduciary rank-and-file employees. However, “mere
existence of a basis for believing that the employee has breached the trust and confidence of the
employer” is sufficient for managerial employees.
Facts:
Yolando Bravo was employed as a part-time teacher by Urios College, now called Father
Saturnino Urios University. In addition to his duties as a part-time teacher, Bravo was designated as the
school’s comptroller. Urios College organized a committee to formulate a new ranking system for non-
academic employees for school year 2001-2002. Under the proposed ranking system, the position of
Comptroller was classified as an office head while the position of Vice-President for Finance was
classified as middle management. Bravo suggested that since he assumed the duties of Comptroller and
Vice-President of Finance, his salary scale should be upgraded. The committee allegedly agreed with
Bravo and accepted his recommendations. Later, Bravo obtained his employee ranking slip, which
showed his evaluation score and the change of his rank from office head to middle management level
IV. The change, however, was merely superimposed.
In October 2004, Urios College organized a committee to review the ranking system
implemented during school year 2001-2002. In its report, the committee found that the ranking system
for school year 2001-2002 caused salary distortions among several employees. There were also
discrepancies in the salary adjustments of Bravo and of two (2) other employees. The committee
discovered that "the Comptroller's Office solely prepared and implemented the [s]alary [a]djustment
[s]chedule" without prior approval from the Human Resources Department. Bravo allegedly
misclassified several positions and miscomputed his and other employees' salaries. Bravo received a
show cause memo requiring him to explain in writing why his services should not be terminated for his
alleged acts of serious misconduct. Hearings were conducted, after which the parties submitted their
respective position papers. Bravo was found guilty of serious misconduct for which he was ordered to
return the sum of P179,319.16, representing overpayment of his monthly salary.
On July 25, 2005, Urios College notified Bravo of its decision to terminate his services for serious
misconduct and loss of trust and confidence. Upon receipt of the termination letter, Bravo immediately
filed before the Executive Labor Arbiter a complaint for illegal dismissal with a prayer for the payment of
separation pay, damages, and attorney's fees.The Executive Labor Arbiter dismissed the complaint for
lack of merit. The National Labor Relations Commission found that Bravo's dismissal from service was
illegal.The Court of Appeals reversed the National Labor Relations Commission's Resolution and
reinstated the decision of Executive Labor Arbiter.
Issues:
Whether or not petitioner's employment was terminated for a just cause
Whether or not petitioner was deprived of procedural due process;
Whether or not petitioner is entitled to the payment of separation pay, backwages, and
attorney's fees.
Ruling:
Petitioner's dismissal from employment was valid. To warrant termination of employment under
Article 297(a) of the Labor Code, the misconduct must be serious or "of such grave and aggravated
character." The Court has emphasized that the rank-and-file employee's act must have been "performed
with wrongful intent" to warrant dismissal based on serious misconduct. Dismissal is deemed too harsh
a penalty to be imposed on employees who are not induced by any perverse or wrongful motive despite
having committed some form of misconduct.There is no evidence that the position of Comptroller was
officially reclassified as middle management by respondent. Petitioner's employment ranking slip, if at
all, only constituted proof of petitioner's evaluation score. It hardly represented the formal act of
respondent in reclassifying the position of Comptroller. Hence, petitioner could not summarily assign to
himself a higher salary rate without rendering himself unfit to continue working for respondent.
46
However, it appears that petitioner was neither induced nor motivated by any wrongful intent.
He believed in good faith that respondent had accepted and approved his recommendations on the
proposed ranking scale for school year 2001-2002.Nevertheless, due to the nature of his occupation,
petitioner's employment may be terminated for willful breach of trust under Article 297(c), not Article
297(a), of the Labor Code.
A dismissal based on willful breach of trust or loss of trust and confidence under Article 297 of
the Labor Code entails the concurrence of two (2) conditions. First, the employee whose services are to
be terminated must occupy a position of trust and confidence. The second condition that must be
satisfied is the presence of some basis for the loss of trust and confidence. This means that "the
employer must establish the existence of an act justifying the loss of trust and confidence.
In Caoile v. National Labor Relations Commission:[W]ith respect to rank-and-file personnel, loss

of trust and confidence as ground for valid dismissal requires proof of involvement in the alleged events
in question, and that mere uncorroborated assertions and accusations by the employer will not be
sufficient. But, as regards a managerial employee, mere existence of a basis for believing that such
employee has breached the trust of his employer would suffice for his dismissal. Hence, in the case of
managerial employees, proof beyond reasonable doubt is not required, it being sufficient that there is
some basis for such loss of confidence, such as when the employer has reasonable ground to believe
that the employee concerned is responsible for the purported misconduct, and the nature of his
participation therein renders him unworthy of the trust and confidence demanded by his position.
Petitioner was not an ordinary rank-and-file employee. His position of responsibility on delicate
financial matters entailed a substantial amount of trust from respondent. The entire payroll account
depended on the accuracy of the classifications made by the Comptroller. It was reasonable for the
employer to trust that he had basis for his computations especially with respect to his own
compensation. The preparation of the payroll is a sensitive matter requiring attention to detail.
Petitioner's act in assigning to himself a higher salary rate without proper authorization is a clear
breach of the trust and confidence reposed in him. Petitioner offered no explanation about the
Comptroller's Office's deviation from company procedure and the discrepancies in the computation of
other employees' salaries. Petitioner's position made him accountable in ensuring that the Comptroller's
Office observed the company's established procedures. It was reasonable that he should be held liable
by respondent on the basis of command responsibility.
No. In termination based on just causes, the employer must comply with procedural due process
by furnishing the employee a written notice containing the specific grounds or causes for dismissal. The
notice must also direct the employee to submit his or her written explanation within a reasonable
period from the receipt of the notice. Afterwards, the employer must give the employee ample
opportunity to be heard and defend himself or herself. A hearing, however, is not a condition sine qua
non. A formal hearing only becomes mandatory in termination cases when so required under company
rules or when the employee requests for it.
In this case, respondent complied with all the requirements of procedural due process in
terminating petitioner's employment. Respondent furnished petitioner a show cause memo stating the
specific grounds for dismissal. The show cause memo also required petitioner to answer the charges by
submitting a written explanation. Respondent even informed petitioner that he may avail the services of
counsel. Respondent then conducted a thorough investigation. Three (3) hearings were conducted on
separate occasions. The findings of the investigation committee were then sent to petitioner. Lastly,
petitioner was given a notice of termination containing respondent's final decision. Ordinarily,
employees play no part in selecting the members of the investigating committee. That petitioner was
not given the chance to comment on the selection of the members of the investigating committee does
not mean that he was deprived of due process. In addition, there is no evidence indicating that the
investigating committee was biased against petitioner. Hence, there is no merit in petitioner's claim that
he was deprived of due process.
No.
47
Under Article 294 of the Labor Code, the reliefs of an illegally dismissed employee are
reinstatement and full backwages. "Backwages is a form of relief that restores the income that was lost
by reason of the employee's dismissal" from employment. It is "computed from the time that the
employee's compensation was withheld until his or her actual reinstatement." However, when
reinstatement is no longer feasible, separation pay is awarded. Considering that there was a just cause
for terminating petitioner from employment, there is no basis to award him separation pay and
backwages. There are also no factual and legal bases to award attorney's fees to petitioner.
Case Title: SONEDCO Workers Free Labor Union (SWOFLU) vs.Universal Robina Corporation, Sugar
Division-Southern Negros Development Corporation, G.R. No. 220383 July 5, 2017
One- Liner:
“A wage increase not included in the Collective Bargaining Agreement is not demandable.”
Principle:
Generally, a wage increase not included in the Collective Bargaining Agreement is not
demandable. However, if it was withheld by the employer as part of its unfair labor practice against the
union members, this benefit should be granted.
Facts:
SONEDCO Workers Free Labor Union filed a complaint for unfair labor practice against its
employer, Universal Robina Corporation, Sugar Division-Southern Negros Development Corporation
(URC-SONEDCO).
In 2007, while there was no Collective Bargaining Agreement in effect, URC-SONEDCO offered a
₱l6.00/day wage increase to their employees and to receive the benefits, employees had to sign a
waiver that said: "In the event that a subsequent CBA is negotiated between Management and Union,
the new CBA shall only be effective on January 1, 2008." Realizing that the waiver was an unfair labor
practice, some members of SONEDCO Workers Free Labor Union refused to sign.
URC-SONEDCO offered the same arrangement in 2008. It extended an additional ₱l6.00/day

wage increase to employees who would agree that any CBA negotiated for that year would only be
effective on January 1, 2009. Several members of SONEDCO Workers Free Labor Union again refused to
waive their rights. Consequently, they did not receive the wage increase which already amounted to a
total of ₱32.00/day, beginning 2009.
As a result, those who refused to sign the 2007 and 2008 waivers filed a complaint for unfair
labor practices against URC-SONEDCO. They argued that the requirement of a waiver prior to the
release of the wage increase constituted interference to the employees' right to self-organization,
collective bargaining, and concerted action.
Both the National Labor Relations Commission and the Court of Appeals found URC-SONEDCO
not guilty of unfair labor practice.
On October 5, 2016, Supreme Court found URC-SONEDCO guilty of unfair labor practice for
failing to bargain with SONEDCO Workers Free Labor Union in good faith. URC-SONEDCO restricted
SONEDCO Workers Free Labor Union's bargaining power when it asked the rank-and-file employees to
sign a waiver foregoing Collective Bargaining Agreement negotiations in exchange for wage increases.
Thus, SC ordered URC-SONEDCO to grant the union members the 2007 and 2008 wage increases.
Nevertheless, SC denied the claim for the 2009 wage increase and ruled that if SONEDCO Workers Free
Labor Union wished to continue receiving the additional wage after 2008, the proper recourse was to
include it in the 2009 Collective Bargaining Agreement.
A motion for reconsideration was filed by URC-SONEDCO but was denied. Petitioners, who are
members of SONEDCO Workers Free Labor Union, filed a Motion for Partial Reconsideration. Petitioners
48
aver that the ₱l6.00 wage increases granted in 2007 and 2008 were integrated in the salary of the
employees who signed the waiver. Thus, since the start of 2009, employees who signed the waiver have
been receiving ₱32.00/day more than petitioners.
Issue:
Whether a ₱32.00/day wage increase beginning January 1, 2009 to present should be awarded
to petitioners.
Ruling:
YES.
Generally, a wage increase not included in the Collective Bargaining Agreement is not
demandable. However, if it was withheld by the employer as part of its unfair labor practice against the
union members, this benefit should be granted.
The wage increase was integrated in the salary of those who signed the waivers. When the
affiants waived their rights, respondent rewarded them with a P32.00/day wage increase that continues
to this day. The respondent company granted this benefit to its employees to induce them to waive
their collective bargaining rights. This Court has declared this an unfair labor practice. Accordingly, it is
illegal to continue denying the petitioners the wage increase that was granted to employees who signed
the waivers. To rule otherwise will perpetuate the discrimination against petitioners. All the
consequences of the unfair labor practice must be addressed. The grant of the P32.00/day wage
increase is not an additional benefit outside the Collective Bargaining Agreement of 2009.
Hence, by granting this increase to petitioners, SC is eliminating the discrimination against them,
which was a result of respondent’s unfair labor practice.
Case Title: Grieg Philippines, Inc. v. Gonzales, G.R. No. 228296 July 26, 2017
One Liner:
“For a disability claim to prosper, a seaman only needs to show that his work and contracted
illness have a reasonable linkage that must lead a rational mind to conclude that the seaman's
occupation may have contributed or aggravated the disease.”
Principle:
Settled is the rule that for illness to be compensable, it is not necessary that the nature of the
employment be the sole and only reason for the illness suffered by the seafarer. It is sufficient that there
is a reasonable linkage between the disease suffered by the employee and his work to lead a rational
mind to conclude that his work may have contributed to the establishment or, at the very least,
aggravation of any pre-existing condition he might have had.
Facts:
This is a Petition for Review filed by Grieg Philippines, Inc., Grieg Shipping Group AS (Grieg)
and/or Manuel F. Ortiz after the Court of Appeals July 25, 2016 Decision3 upheld the disability benefits
awarded by the National Labor Relations Commission and by the Labor Arbiter to Michael John M.
Gonzales (Gonzales), a seaman who was diagnosed with acute promyelocytic leukemia while onboard a
cargo vessel.
Gonzales was first hired by Grieg, a shipping agent, sometime in 2010. On April 20, 2013,
Gonzales was deployed to the general cargo vessel Star Florida after he was re-hired for a nine (9)-
month contract. This was his third contract with Grieg.
Gonzales' employment contract was covered by the Associated Marine Officers' and Seaman's
Union of the Philippines Collective Bargaining Agreement. Before being deployed, Gonzales underwent
Pre-Employment Medical Examination and was certified to be fit for sea duty.
49
Gonzales was admitted at the Metropolitan Medical Center after his medical repatriation. The
company physicians diagnosed him with acute promyelocytic leukemia. They opined that Gonzales'
leukemia was not work-related; although, for humanitarian reasons, Grieg continued to pay for his
treatment.
Grieg claimed that Gonzales suddenly stopped consulting the company physicians. Gonzales
denied this, countering that he informed Grieg that he would be unable to attend the scheduled
appointment on April 28, 2014 because he was still raising money to travel from his hometown to
Manila.
Gonzales claimed that his request to reschedule his appointment was granted, and thus, was
surprised with the notification that Grieg had discontinued his treatment. Gonzales sought a second
opinion from an independent physician, Dr. Emmanuel Trinidad, who certified that his leukemia was
work-related.
On July 15, 2014, after his disability claims were refused, Gonzales filed a complaint against
Grieg before the Labor Arbiter. On November 28, 2014, the Labor Arbiter found that Gonzales' leukemia
was work-related and that it had permanently incapacitated him to work as a seafarer.
Grieg appealed the Labor Arbiter's Decision before the National Labor Relations Commission. On
May 25, 2015, the National Labor Relations Commission affirmed the Labor Arbiter's ruling. It also
denied Grieg's motion for reconsideration.
Issues:
Whether the Public Respondent Commission committed grave abuse of discretion when it relied
upon the mere allegations of the private respondent that his condition is work-related[;]
Whether the Public Respondent Commission committed grave abuse of discretion when it
disregarded the Supreme Court rulings with respect to disputable presumption of work-relation[;]
Whether the Public Respondent Commission committed grave abuse of discretion when it
awarded attorney's fees despite the absence of any evidence showing bad faith or malice on the part of
the petitioners.
Ruling:
The Court of Appeals upheld the findings of the National Labor Relations Commission and
denied Grieg's Petition.
In granting the full permanent disability benefits, the Court noted in the recent case of Grieg
Philippines vs. Michael John Gonzalez (July 26, 2017, G.R. No. 228296) that the functions as an Ordinary
Seaman aboard the vessel , among others, included removing rust accumulations and refinishing
affected areas of the ship with chemicals and paint to retard the oxidation process. This meant that he
was frequently exposed to harmful chemicals and cleaning aids which may have contained benzene.
Furthermore, the vessel transported chemicals, which could have also contributed to the seafarer's
leukemia.
The company miserably failed to dispute the medical finding that the seafarer's leukemia is not
hereditary, as his tests reveal no apparent chromosome abnormality. This undeniable circumstance,
plus the fact that he was declared fit for sea duty prior to boarding the vessel for two (2) consecutive
employment contracts with the same company, all the more bolster the conclusion that the conditions
set forth in Section 32-A regarding the work-relatedness of his leukemia are present in this case.
Most court cases arise due to the fact that the only types of cancer on the occupational illnesses
list are (a) cancer of the epithelial lining of the bladder (papilloma of the bladder), (b) cancer,
epithellomatous or ulceration of the skin or of the corneal surface of the eye due to tar, pitch, bitumen,
mineral oil or paraffin, or compound product. (c) Acute myeloid leukemia and (d) chronic lymphocytic
leukemia. In reality, many seafarers suffer from other type of cancers like that affects the lungs, kidney,
liver, pancreas, nasopharyngeal and many more that are not one of the occupational diseases listed in
50
the POEA Contract. An illness not otherwise listed in Section 32-A is disputably presumed work-
related.This presumption works in favor of a seafarer, because it then becomes incumbent upon the
employer to dispute or overturn this presumption.
Case Title: Heirs of Zoleta vs. Land Bank of the Philippines, G.R. No. 205128, August 9, 2017
One-Liner:
“Jurisdiction, or the legal power to hear and determine a cause or causes of action, must exist as
a matter of law.”
Principle:
It is settled that the authority to issue writs of certiorari, prohibition, and mandamus involves
the exercise of original jurisdiction which must be expressly conferred by the Constitution or by law. It is
never derived by implication. Indeed, while the power to issue the writ of certiorari is in some instance
conferred on all courts by constitutional or statutory provisions, ordinarily, the particular courts which
have such power are expressly designated.”
Facts:
On September 29, 1996, Eliza Zoleta (Eliza), through Venancio Q. Zoleta, voluntarily offered for
sale to the government, under the Comprehensive Agrarian Reform Program, a parcel of land covered
by Transfer Certificate of Title No. T-87673. This lot was located in Barangay Casay, San Francisco,
Quezon and had an area of approximately 136 hectares. Pursuant to Executive Order No. 405, 7
Landbank made a valuation of the land and determined that only 125.4704 hectares of the property's
136 hectares were covered by the Comprehensive Agrarian Reform Program. It valued the covered
portion at P3,986,639.57. Landbank then deposited this amount in the name of Eliza.
Landbank sought from the Special Agrarian Court the quashal of the alias writ of execution and,
in the interim, the issuance of a temporary restraining order against its implementation. In the
Resolution dated March 27, 2001, the Special Agrarian Court denied Landbank's plea as DARAB had
never been impleaded by Landbank as respondent, thereby failing to vest the Special Agrarian Court
with jurisdiction over DARAB.
Unable to obtain relief from the Special Agrarian Court, Landbank, on April 2, 2001, filed before
DARAB a "petition for certiorari pursuant to paragraph 2, Section 3, Rule VIII of the [1994] DARAB New
Rules of Procedure. “It ascribed "grave abuse of discretion amounting to lack or in excess of jurisdiction"
on the part of Regional Adjudicator Miñas in issuing the January 16, 2001 Order and the February 15,
2001 Alias Writ of Execution.
DARAB faulted Regional Adjudicator Miñas for relying on Rule XIV, Section 1 of the 1994 DARAB
New Rules of Procedure (1994 Rules), which allows for 15 days for petitions for certiorari from DARAB
rulings involving agrarian disputes to be brought to the Court of Appeals, in concluding that her October
3, 2000 Decision had attained finality. It noted that she should have instead relied on Rule XIII, Section
11 regarding the specific course of relief from adjudicators' decisions on just compensation or valuation
cases.
Petitioners then filed a Petition for Certiorari and Prohibition under Rule 65 of the 1997 Rules of
Civil Procedure before the Court of Appeals, alleging that DARAB exceeded its authority when it granted
Landbank's Petition for Certiorari under Rule VIII, Section 3 of the 1994 Rules. In its assailed July 23,
2012 Decision, the Court of Appeals held that DARAB's actions were sustained by its general
"supervisory authority" and appellate jurisdiction over rulings of RARADs and PARADs. In its assailed
January 9, 2013 Resolution, the Court of Appeals denied petitioners' Motion for Reconsideration. Hence,
the present Petition was filed.
Issue:
51
Whether it was proper for respondent DARAB to issue its May 12, 2006 Resolution, which
granted respondent Landbank's "petition for certiorari pursuant to paragraph 2, Section 3, Rule VIII of
the [1994] DARAB New Rules of Procedure.
Ruling:
It was not.
Jurisprudence has settled that DARAB possesses no power to issue writs of certiorari. This
Court's 2005 Decision in Department of Agrarian Reform Adjudication Board v. Lubrica concerned a
controversy over the amount of just compensation due to a landowner, which was initially brought
before RARAD. RARAD decided in favor of the landowner and ordered Landbank to pay an amount that
was greater than its initial valuation. Landbank then filed a petition for just compensation before the
Regional Trial Court, acting as a Special Agrarian Court.This petition was dismissed as Landbank failed to
timely pay docket fees. RARAD then considered its ruling on the amount of just compensation final and
executory, and issued a writ of execution. Landbank filed a Petition for Certiorari before DARAB, under
Rule VIII, Section 3 of its 1994 Rules.This prompted the landowner to file a Petition for Prohibition
before the Court of Appeals, asking that DARAB be enjoined from proceeding with the case, as it did not
have jurisdiction over special civil actions for certiorari.
The Court of Appeals ruled that DARAB had no jurisdiction over petitions for certiorari. This
Court sustained the ruling of the Court of Appeals. In doing so, this Court emphasized that jurisdiction
over the subject matter must be provided by law. It noted that there was no law that vested DARAB with
jurisdiction over petitions for certiorari. Rather than finding constitutional or statutory basis, DARAB's
supposed certiorari power was provided only by its own rules of procedure: Jurisdiction, or the legal
power to hear and determine a cause or causes of action, must exist as a matter of law. It is settled that
the authority to issue writs of certiorari, prohibition, and mandamus involves the exercise of original
jurisdiction which must be expressly conferred by the Constitution or by law. It is never derived by
implication. Indeed, while the power to issue the writ of certiorari is in some instance conferred on all
courts by constitutional or statutory provisions, ordinarily, the particular courts which have such power
are expressly designated.
In general, the quantum of judicial or quasi-judicial powers which an administrative agency may
exercise is defined in the enabling act of such agency. In other words, the extent to which an
administrative entity may statute creating or empowering such agency. The grant of original jurisdiction
on a quasi-judicial agency is not implied. There is no question that the legislative grant of adjudicatory
powers upon the DAR, as in all other quasi-judicial agencies, bodies and tribunals, is in the nature of a
limited and special jurisdiction, that is, the authority to hear and determine a class of cases within the
DAR's competence and field of expertise. In conferring adjudicatory powers and functions on the DAR,
the legislature could not have intended to create a regular court of justice out of the DARAB, equipped
with all the vast powers inherent in the exercise of its jurisdiction. The DARAB is only a quasi-judicial
body, whose limited jurisdiction does not include authority over petitions for certiorari, in the absence
of an express grant in R.A. No. 6657, E.O. No. 229 and E.O. No. 129-A.
This Court calibrates the pronouncements made in Department of Agrarian Reform Adjudication
Board v. Lubrica . It is true that the lack of an express constitutional or statutory grant of jurisdiction
disables DARAB from exercising certiorari powers. Apart from this, however, is a more fundamental
reason for DARAB's disability.
As an administrative agency exercising quasi-judicial but not consummate judicial power, DARAB
is inherently incapable of issuing writs of certiorari. This is not merely a matter of statutorily stipulated
competence but a question that hearkens to the separation of government's tripartite powers:
executive, legislative, and judicial.
52
Case Title: Antonio Manansala vs. Marlow Navigation Phils., G.R. No. 208314, August 23, 2017
Principle:
To speak of fraudulent misrepresentation is not only to say that a person failed to disclose the
truth but that he or she deliberately concealed it for a malicious purpose.
Facts:
On April 2010, Manansala, petitioner, were engaged by Marlow Navigation Phils., respondent.
Before boarding the vessel, petitioner underwent Pre-Employment Medical Examination (PEME).
Petitioner examination certificate indicated that he denied having hypertension and diabetes and
accordingly he was declared fit for sea duty and was deployed.
On May 2010, petitioner, while on board the vessel, suffered a stroke. He was admitted in
Maldives then later on repatriated on June 2010. He was confined in the hospital under the care of the
company’s physician and he repeatedly denied that he had any past history of diabetes and
hypertension. The company’s doctor issued a final Grade 10 Disability Assessment on September 2010.
Accordingly, Manansala filed a complaint against respondent for total and permanent disability
benefits. Two months thereafter, petitioner own doctor issued a medical opinion that petitioner should
be permanently disabled. The same opinion indicated that Manansala admitted having had a long
history of hypertension and diabetes and admitted taking maintenance medications.
The LA rendered that petitioner was suffering from pre-existing, rather than work-related
ailment. Hence, he was not entitled to disability. NLRC and CA affirmed the decision of LA hence this
petition.
Issue:
Whether or not petitioner is entitled to total and permanent disability benefits occasioned by
work-related illnesses.
Ruling:
He is not.
The POEA-SEC bars the compensability of disability arising from a preexisting illness when
attended by an employees fraudulent misrepresentation. Section 20(E) of the POEA-SEC states: E. A
seafarer who knowingly conceal and does not disclose past medical condition, disability and history in
the pre employment medical examination constitutes fraudulent misrepresentation and shall disqualify
him from any compensation and benefits. This may also be a valid ground for termination of
employment and imposition of appropriate administrative and legal sanctions. The POEA-SEC’s
terminology is carefully calibrated: it does not merely speak of correctness or falsity, or of
incompleteness or inexactness. Rather, to negate compensability, it requires fraudulent
misrepresentation. To speak of fraudulent misrepresentation is not only to say that a person failed to
disclose the truth but that he or she deliberately concealed it for a malicious purpose. To amount to
fraudulent misrepresentation, falsity must be coupled with intent to deceive and to profit from that
deception.
Here, during his PEME, petitioner was recorded to have answered “NO” when asked whether he
has ever suffered from hypertension and diabetes. He again denied the same while being treated by the
company’s physician. However, petitioner’s own physician indicated that not only that he had a past
history of hypertension but he was regularly taking maintenance to treat the said illnesses.
53
Case Title: Sharpe Sea Personnel vs. Macario Mabunay
One-liner:
“If an illness or injury prevents a seafarer from engaging in gainful employment for more than
120 or 240 days, he shall be deemed totally and permanently disabled.”
Principle:
Under Section 32 of the POEA-SEC, only those injuries or disabilities that are classified as Grade
1 may be considered as total and permanent. However, if those injuries or disabilities with a disability
grading from 2 to 14, hence, partial and permanent, would incapacitate a seafarer from performing his
usual sea duties for a period of more than 120 or 240 days, depending on the need for further medical
treatment, then he is, under legal contemplation, totally and permanently disabled. While the seafarer
is partially injured or disabled, he is not precluded from earning doing the same work he had before his
injury or disability or that he is accustomed or trained to do. Otherwise, if his illness or injury prevents
him from engaging in gainful employment for more than 120 or 240 days, as the case may be, he shall
be deemed totally and permanently disabled.
Facts:
Mabunay entered into a contract of employment with Sharpe Sea as an oiler for a period of nine
(9) months aboard M/V Larisa.
On April 14, 2009, Mabunay boarded M/V Larisa. The following day, Mabunay slipped and hit his
back on the purifier, while he was cleaning the second floor of the engine room. He lost consciousness
when he fell and when he awoke, his back was numb and he had difficulty getting up.
Mabunay informed a certain 2nd Engineer Castro of his accident . However, 2nd Engineer Castro
directed him to continue with his assigned duties. Mabunay continued working from April 16 to April 18,
until Chief Engineer Manuel De Leon allowed him to have a medical checkup when the ship docked in
China.
Mabunay was diagnosed with chest and spinal column bone damage. He was declared unfit to
work. Thus, he was medically repatriated to Manila. Mabunay reported to Sharpe Sea's office. Mabunay
was confined at Manila Doctors Hospital. He was diagnosed with "Cervical Spondylosis, C4C5;
Thoracolumbar Spondylosis; and Mild chronic compression fracture of T12 & L1 vertebral bodies." Later,
Dr. Cruz recommended that Mabunay undergo a discectomy. Mabunay underwent surgery and Dr. Cruz
observed that Mabunay "tolerated the procedure well."
Mabunay filed a complaint against Sharpe Sea, Monte Carlo, and Florem for the payment of his
medical expenses, total disability benefits, damages, and attorney's fees. Subsequently, Mabunay
sought the opinion of two orthopedic doctors who both declared him unfit to work.
Sharpe Sea argued that its company-designated physicians assessed Mabunay with a disability
rating of Grade 8. Thus, he is not permanently or totally disabled.
Issue:
Whether or not Mabunay is permanently or totally disabled.
Ruling:
Mabunay is considered to be permanently and totally disabled.
After Dr. Cruz issued the interim disability rating of Grade 8, Mabunay underwent a discectomy
where Dr. Cruz's only feedback was that respondent "tolerated the procedure well." This is not the
"definite and conclusive assessment of the seafarers disability or fitness to return to work" required by
law from the company-designated physician or appointed third-party physician that would have the
effect of binding the parties.
54
Under Section 32 of the POEA-SEC, only those injuries or disabilities that are classified as Grade
1 may be considered as total and permanent. However, if those injuries or disabilities with a disability
grading from 2 to 14, hence, partial and permanent, would incapacitate a seafarer from performing his
usual sea duties for a period of more than 120 or 240 days, depending on the need for further medical
treatment, then he is, under legal contemplation, totally and permanently disabled. While the seafarer
is partially injured or disabled, he is not precluded from earning doing the same work he had before his
injury or disability or that he is accustomed or trained to do. Otherwise, if his illness or injury prevents
him from engaging in gainful employment for more than 120 or 240 days, as the case may be, he shall
be deemed totally and permanently disabled.
Case Titile: DEMEX RATTANCRAFT, INC. AND NARCISO T. DELA MERCED, vs. ROSALIO A. LERON, G.R.
No. 204288, November 8, 2017
One-Liner:
“Abandonment of work has been construed as "a clear and deliberate intent to discontinue
one's employment without any intention of returning back."
Principles:
To justify the dismissal of an employee on this ground, two (2) elements must concur, namely:
"(a) the failure to report for work or absence without valid or justifiable reason; and, (b) a clear intention
to sever the employer-employee relationship.
Only questions of law may be raised in a petition for review brought under Rule 45 of the Rules
of Court. This Court, not being a trier of facts, would no longer disturb the lower court's factual findings
when supported by substantial evidence.
Facts:
Leron was hired as a weaver by Demex Rattancraft , Inc . ( Demex ) , a domestic corporation
engaged in manufacturing handcrafted rattan products for local sale and export . Narciso T. Dela Merced
was Demex's president. Leron was paid on a piece-rate basis and his services were contracted through
job orders. Leron received his wages at the end of every week but he never received standard benefits
such as 13th month pay, Service incentive leave, rest day pay, holiday pay, and overtime pay.
Sometime in June 2006, Leron was dismissed by Demex's foreman, Marcelo Viray (Viray), and
Demex's personnel manager, Nora Francisco (Francisco). Both accused him of instigating a campaign to
remove Viray as the company's foreman. Before Leron was dismissed from service , he was given a
memorandum stating that the dining chair he had previously weaved for export to Japan was rejected .
For this reason, Demex expressed that it would no longer avail of his services. Leron filed a complaint
against Demex for illegal dismissal before the Labor Arbiter (LA).
LA dismissed the complaint holding that Leron’s termination from employment was valid. NLRC
declared that Leron's absence was a valid ground to terminate him from employment.
Issue:
Whether or not respondent Rosalio A. Leron was illegally dismissed from employment by
petitioners Demex Rattancraft, Inc. and Narciso T. Dela Merced on the ground of abandonment of work.
Ruling:
Yes, Leron was illegally dismissed
Firstly, only questions of law may be raised in a petition for review brought under Rule 45 of the
Rules of Court. This Court, not being a trier of facts, would no longer disturb the lower court's factual
findings when supported by substantial evidence.
55
The determination of whether or not an employee is guilty of abandonment is a factual matter.

It involves a review on the probative value of the evidence presented by each party and the correctness
of the lower courts' assessments. The Court of Appeals' finding that respondent did not abandon his
work would generally be binding upon the parties and this Court. However, an exception should be
made in this case considering that there is a variance in the findings of the Court of Appeals and the
National Labor Relations Commission.
Although abandonment of work is not expressly enumerated as a just cause under Article 297 of
the Labor Code, jurisprudence has recognized it as a form of or akin to neglect of duty.
Abandonment of work has been construed as "a clear and deliberate intent to discontinue one's
employment without any intention of returning back." To justify the dismissal of an employee on this
ground, two (2) elements must concur, namely: "(a) the failure to report for work or absence without
valid or justifiable reason; and, (b) a clear intention to sever the employer-employee relationship."
Mere failure to report to work is insufficient to support a charge of abandonment. The employer
must adduce clear evidence of the employee's "deliberate, unjustified refusal to resume his or her
employment," which is manifested through the employee's overt acts. Set against these parameters,
this Court finds that the Court of Appeals did not err in holding that the National Labor Relations
Commission gravely abused its discretion in upholding respondent's dismissal from service.
Thus, Leron was illegally dismissed.
Case Title: UNITED DOCTORS MEDICAL CENTER vs. CESARIO BERNADAS, represented by Loenila
Bernadas. G.R. No. 209468. December 13, 2017.
One-liner:
“Retirement benefits are the property interests of the retiree and his or her beneficiaries.”
Principle:
Retirement is characterized as "the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter, after reaching a certain age, agrees to
sever his or her employment with the former."
It is settled that doubts must be resolved in favor of labor. Moreover, "retirement laws should
be liberally construed and administered in favor of the persons intended to be benefited and all doubts
as to the intent of the law should be resolved in favor of the retiree to achieve its humanitarian
purposes."
Retirement benefits are the property interests of the retiree and his or her beneficiaries. The
CBA does not prohibit the employee's beneficiaries from claiming retirement benefits if the retiree dies
before the proceeds could be released. Even compulsory retirement plans provide mechanisms for a
retiree's beneficiaries to claim any pension due to the retiree.
Facts:
On July 17, 1986, Cesario started working as an orderly in United Doctors Medical Center's
housekeeping department but was eventually promoted as a utility man. United Doctors and its rank-
and-file employees had a CBA under which RFE were entitled to optional retirement benefits. Under the
optional retirement policy, an employee who has rendered at least 20 years of service is entitled to
optionally retire. The optional retirement pay is equal to a retiree's salary for 11 days per year of service.
In addition to the retirement plan, employees are also provided insurance, with United Doctors paying
the premiums. The employees' family members would be the beneficiaries of the insurance. On October
20, 2009, Cesario died from a "freak accident" while working in a doctor's residence. He was 53 years
old.
56
Leonila Bernadas, representing her deceased husband, fied a Complaint for payment of
retirement benefits, damages, and attorney's fees with the NLRC. Leonila and her son also claimed and
were able to receive insurance proceeds of P180,000.00 under the CBA. Labor Arbiter dismissed
Leonila's complaint. According to the LA, Cesario should have applied for optional retirement benefits
during his lifetime, the benefits being optional. Since he did not apply for it, his beneficiaries were not
entitled to claim his optional retirement benefits.
Leonila appealed to NLRC. NLRC reversed LA's Decision. United Doctors filed a MR but this was
denied. Hence, this Petition for Review on Certiorari.
Issues:
Whether or not Cesario Bernadas is entitled to receive his optional retirement benefits despite
his untimely death.
Whether or not Leonila Bernadas as her husband's representative, may claim his optional
retirement benefits.
Ruling:
YES.
Retirement is characterized as "the result of a bilateral act of the parties, a voluntary agreement
between the employer and the employee whereby the latter, after reaching a certain age, agrees to
sever his or her employment with the former."
The grant of insurance proceeds will not necessarily bar the grant of retirement benefits. These
are 2 separate and distinct benefits that an employer may provide to its employees.
It is settled that doubts must be resolved in favor of labor. Moreover, "retirement laws should
be liberally construed and administered in favor of the persons intended to be benefited and all doubts
as to the intent of the law should be resolved in favor of the retiree to achieve its humanitarian
purposes."
Optional, by its ordinary usage, is the opposite of compulsory. It requires the exercise of an
option. For this reason, petitioner insists that respondent Cesario would not have been entitled to his
optional retirement benefits as he failed to exercise the option before his untimely death. However,
retirement encompasses even the concept of death. This Court has considered death as a form of
disability retirement as "there is no more permanent or total physical disability than death." Compulsory
retirement and death both involve events beyond the employee's control.
In this case, Cesario was qualified because he has been employed for 23 years. While the choice
to retire before the compulsory age of retirement was within Cesario's control, his death foreclosed the
possibility of him making that choice. Petitioner's optional retirement plan is premised on length of
service, not upon reaching a certain age. It rewards loyalty and continued service by granting an
employee an earlier age to claim his or her retirement benefits even if the employee has not reached his
or her twilight years. In any case, the CBA does not mandate that an application must first be filed by the
employee before the right to the optional retirement benefits may vest. Thus, this ambiguity should be
resolved in favor of the retiree.
Retirement benefits are the property interests of the retiree and his or her beneficiaries. The
CBA does not prohibit the employee's beneficiaries from claiming retirement benefits if the retiree dies
before the proceeds could be released. Even compulsory retirement plans provide mechanisms for a
retiree's beneficiaries to claim any pension due to the retiree. Thus, Leonila, being the surviving spouse
of respondent Cesario, is entitled to claim the optional retirement benefits on his behalf.
57
Case Title: Magsaysay Maritime Corporation V. Cynthia De Jesus G.R. No. G.R. No. 203943, August 30,
2017
One- Liner:
“A conditional settlement of a judgment award may be treated as a compromise agreement and

a judgment on the merits of the case if it turns out to be highly prejudicial to one of the parties.”
Principle:
Section 32-A of the POEA-SEC acknowledges the possibility of “compensation for the death of the
seafarer occurring after the employment contract on account of a work-related illness” as long as the
following conditions are met: (1) The seafarer’s work must involve the risks described herein; (2) The
disease was contracted as a result of the seafarer’s exposure to the described risks; (3) The disease was
contracted within a period of exposure and under such other factors necessary to contract it; (4) There
was no notorious negligence on the part of the seafarer.
Facts:
Magsaysay Maritime Corporation, the local manning agent of Princess Cruise Lines, Limited,
hired Bernardine De Jesus as an Accommodation Supervisor for the cruise ship Regal Princess.
Bernardine boarded Regal Princess and he eventually disembarked 10 months later, after his contract of
employment ended. Bernardine was soon diagnosed with Aortic Aneurysm and had a coronary
angiography. He underwent a Left Axillofemoral Bypass but later died.
Respondent Cynthia De Jesus, Bernardine's widow, filed a complaint against Magsaysay for
"payment of death benefits, medical expenses, sickness allowance, damages, and attorney's fees." The
Labor Arbiter granted Cynthia's complaint and directed Magsaysay to pay her claims for death benefits,
additional benefits, burial expenses, and attorney's fees. The National Labor Relations Commission
denied Magsaysay's appeal and upheld the Labor Arbiter's finding that Bernardine's cardio-vascular
disease was work-related.
On May 13, 2011, Magsaysay filed a Petition for Certiorari before the Court of Appeals. On June
30, 2011, Magsaysay paid Cynthia P3,370,514.40 as conditional satisfaction of the judgment award
against it and without prejudice to its Petition for Certiorari pending before the Court of Appeals.
In light of the conditional settlement between the parties, the Labor Arbiter considered the case closed
and terminated but without prejudice to Magsaysay's pending petition before the Court of Appeals. The
Court of Appeals dismissed the petition for being moot and academic. On October 19, 2012, the Court of
Appeals denied Magsaysay's motion for reconsideration. Petitioners filed their Petition for Review on
Certiorari where they continue to assert that the Court of Appeals erred in dismissing their Petition for
Certiorari for being moot and academic. Petitioners argue that the labor tribunals committed grave
abuse of discretion in awarding death benefits to Cynthia and her three (3) minor children considering
that Bernardine's death was not compensable under the POEA-SEC and that respondent failed to prove
her claims of compensability with substantial evidence.
Furthermore, petitioners claim that Bernardine's death was not compensable under the
Philippine Overseas Employment Agency Standard Employment Contract (POEA-SEC) because he died
after his contract of employment was terminated. Petitioners also highlight that Bernardine was not
repatriated due to illness but because of the completion of his contract.
Issues:
Whether or not the payment of money judgment has rendered the Petition for Certiorari before
the Court of Appeals moot and academic;
Whether or not the award of death benefits was issued with grave abuse of discretion.
Ruling:
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Yes. Article 2028 of the Civil Code defines a compromise agreement as “a contract whereby the
parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.”
Parties freely enter into a compromise agreement, making it a judgment on the merits of the case with
the effect of res judicata upon them. While the general rule is that a valid compromise agreement has
the power to render a pending case moot and academic, being a contract, the parties may opt to modify
the legal effects of their compromise agreement to prevent the pending case from becoming moot.
In the instant case, the parties entered into a compromise agreement when they executed a
Conditional Satisfaction of Judgment Award. In the Conditional Satisfaction of Judgment Award, both
parties agreed that the payment of the judgment award was without prejudice to the pending certiorari
proceedings before the Court of Appeals and was only made to prevent the imminent execution being
undertaken by respondent and the National Labor Relations Commission. However, in the Affidavit of
Heirship, respondent was prohibited from seeking further redress against petitioners, making the
compromise agreement ultimately prejudicial to respondent. Philippine Transmarine Carriers, Inc. v.
Legaspi clarified that this Court ruled against the employer in Career Philippines Ship Management Inc.
v. Madjus not because the parties entered into a conditional settlement but because the conditional
satisfaction of judgment was "highly prejudicial to the employee."
This prohibition on the part of respondent to pursue any of the available legal remedies should
the Court of Appeals or this Court reverse the judgment award of the labor tribunals or prosecute any
other suit or action in another country puts the seafarer's beneficiaries at a grave disadvantage. Thus,
Career Philippines Ship Management Inc. v. Madjus is applicable and the Court of Appeals did not err in
treating the conditional settlement as an amicable settlement, effectively rendering the Petition for
Certiorari moot and academic.
No. Section 20(A) of the POEA-SEC requires that for a seafarer to be entitled to death benefits,
he must have suffered a work-related death during the term of his contract. However, Section 32-A of
the POEA-SEC acknowledges the possibility of “compensation for the death of the seafarer occurring
after the employment contract on account of a work-related illness” as long as the following conditions
are met: (1) The seafarer’s work must involve the risks described herein; (2) The disease was contracted
as a result of the seafarer’s exposure to the described risks; (3) The disease was contracted within a
period of exposure and under such other factors necessary to contract it; (4) There was no notorious
negligence on the part of the seafarer.
Both labor tribunals found that Bernardine first experienced chest pains while he was still
onboard the cruise ship, i.e., during the term of his employment contract. It was likewise established
that while Bernardine requested medical attention when he started to feel ill and upon his repatriation,
his requests were repeatedly ignored. It is therefore evident that the illness which caused Seaman de
Jesus' death occurred during the term of his employment contract, though it may not have fully
manifested at once. The fact that the seaman's work exposed him to different climates and
unpredictable weather also helped trigger the onset of his disease. There is therefore a reasonable
connection between the conditions of employment and work actually performed by the deceased
seafarer and his illness.
59
2018
Case Title: Hubilla v. HSY Marketing Ltd., January 10, 2018

One-Liner:
“When the evidence in labor cases is in equipoise, doubt is resolved in favor of the employee.”
Principle:
When the evidence of the employer and the employee are in equipoise, doubts are resolved in
favor of labor. In illegal dismissal cases, the burden of proof is on the employer to prove that the
employee was dismissed for a valid cause and that the employee was afforded due process prior to the
dismissal.
Facts:
Petitioners claim they have been illegally dismissed by Novo Jeans. The latter denied it and
claimed that these employees voluntarily severed their employment. The Labor Arbiter found that the
employees did not present any evidence, aside from their bare allegations, showing that their
employment was terminated. NLRC reversed said decision finding that the allegations of both parties
were unsubstantiated and thus [were] equipoised" and that "if doubt exists between the evidence
presented by the employer and that by the employee, the scales of justice must be tilted in favor of the
latter." A petition for certiorari was filed. CA reversed the decision of NLRC because Novo was able to
present the First Notice of Termination of Employment and said notice did not indicate that the
employees were dismissed. Petitioners (employees) filed a Petition for review on Certiorari; they aver
that the Court of Appeals should not have used the special remedy of certiorari merely to re-evaluate
the findings of a quasi-judicial body absent any finding of grave abuse of discretion.
Issue:
Whether or not the equipoise rule applies
Ruling:
YES.
When the evidence of the employer and the employee are in equipoise, doubts are resolved in
favor of labor. In illegal dismissal cases, the burden of proof is on the employer to prove that the
employee was dismissed for a valid cause and that the employee was afforded due process prior to the
dismissal. No evidence has been presented proving that each and every petitioner received a copy of the
First Notice of Termination of Employment. There is likewise no proof that petitioners abandoned their
employment. They merely alleged that petitioners have already voluntarily terminated their
employment due to their continued refusal to report for work. However, this is insufficient to prove
abandonment.
Case Title: La Consolacion College of Manila v. Pascua; March 14, 2018

One- Liner:
“When termination of employment is occasioned by retrenchment to prevent losses, an
employer must declare a reasonable cause or criterion for retrenching an employee.”
Principle:
Retrenchment that disregards an employee's record and length of service is an illegal
termination of employment. The Labor Code recognizes retrenchment as an authorized cause for
terminating employment. It is an option validly available to an employer to address “losses in the
operation of the enterprise, lack of work, or considerable reduction on the volume of business”:
Retrenchment is normally resorted to by management during periods of business reverses and
60
economic difficulties occasioned by such events as recession, industrial depression, or seasonal

fluctuations. It is an act of the employer of reducing the work force because of losses in the operation of
the enterprise, lack of work, or considerable reduction on the volume of business. Retrenchment is, in
many ways, a measure of last resort when other less drastic means have been tried and found to be
inadequate.
As to the substantive requisites, an employer must first show “that the retrenchment is
reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de
minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as
perceived objectively and in good faith by the employer.” Second, an employer must also show “that [it]
exercises its prerogative to retrench employees in good faith for the advancement of its interest and not
to defeat or circumvent the employees’ right to security of tenure.” Third, an employer must
demonstrate “that [it] used fair and reasonable criteria in ascertaining who would be dismissed and who
would be retained among the employees, such as status (i.e., whether they are temporary, casual,
regular or managerial employees), efficiency, seniority, physical fitness, age, and financial hardship for
certain workers.”
Procedurally, employers must serve a “written notice both to the employees and to the
Department of Labor and Employment at least one month prior to the intended date of retrenchment.”
Likewise, they must pay “the retrenched employees separation pay equivalent to one month pay or at
least 1/2 month pay for every year of service, whichever is higher.”
Jurisprudence requires that the necessity of retrenchment to stave off genuine and significant
business losses or reverses be demonstrated by an employer’s independently audited financial
statements. Documents that have not been the subject of an independent audit may very well be self-
serving. Moreover, it is not enough that it presents its audited financial statement for the year that
retrenchment was undertaken for even as it may be incurring losses for that year, its overall financial
status may already be improving. Thus, it must “also show that its losses increased through a period of
time and that the condition of the company is not likely to improve in the near future.”
The Supreme Court (SC) in Asia World Publishing House, Inc. v. Ople, 152 SCRA 219 (1987),
considered seniority, along with efficiency rating and less-preferred status, as a crucial facet of a fair and
reasonable criterion for effecting retrenchment.
Facts:
Pascua started working part-time as school physician in La Consolacion, later she served full-
time. She was invited to a meeting at the Office President wherein a termination of employment letter
was handed to her explaining the reason for her dismissal was to prevent serious losses due to the
current financial situation of La Consolacion College Manila caused by the decrease in enrollment. Not
satisfied, Pascua questioned the validity of her termination contending the criteria of their
retrenchment selection, pointed out that the part-time school physician, Dr. Venus should have been
considered for dismissal first and why was she the only one who is dismissed. She also noted that rather
than dismissing her outright, La Consolacion could have asked her to revert to part-time status instead.
La Consolacion explained that Pascua was retrenched because her position, the highest paid in
the health services division, was dispensable. They argued that one obvious measure to prevent serious
business losses was to downsize the health services division, by eliminating her position as a full-time
physician. Since the purpose of the downsizing was to reduce payroll costs, the employees with the
highest rates of pay would be the first to be retrenched, if their services could be dispensed with. For
this reason, you were the employee terminated. This same objective criterion was used in downsizing
the nursing faculty which resulted in the retrenchment of the six highest paid faculty members out of a
faculty of eleven.
The Labor Arbiter rendered a decision holding that Pascua's employment was illegally
terminated and noting that La Consolacion failed to justify the criteria used in terminating her
employment. The National Labor Relation Commission reversed the said decision holding that the
primary criterion used in selecting Pascua for termination was valid considering that they faced a
substantial drop in income, and sought to directly address the problem by reducing the larger of the
college expenses, such as salaries and allowances of its more expensive staff members including but not
limited to her. On appeal, the Court of Appeals reinstated the Labor Arbiter’s decision.
61
Issue:
Whether or not the reason cited for Pascua’s retrenchment—that she had the highest rate of
pay—justified her dismissal.
Ruling:
No.
The Labor Code recognizes retrenchment as an authorized cause for terminating employment. It
is an option validly available to an employer to address “losses in the operation of the enterprise, lack of
work, or considerable reduction on the volume of business. To exercise valid retrenchment, the
substantive requisites must be complied; an employer must first show that the retrenchment is
reasonably necessary and likely to prevent business losses which, if already incurred, are not merely de
minimis, but substantial, serious, actual and real, or if only expected, are reasonably imminent as
perceived objectively and in good faith by the employer. Second, an employer must also show that it
exercises its prerogative to retrench employees in good faith for the advancement of its interest and not
to defeat or circumvent the employees’ right to security of tenure. Third, an employer must
demonstrate “that it used fair and reasonable criteria in ascertaining who would be dismissed and who
would be retained among the employees, such as status, efficiency, seniority, physical fitness, age, and
financial hardship for certain workers.”
Here, La Consolacion’s failure was noncompliance with the third substantive requisite of using
fair and reasonable criteria that considered the status and seniority of the retrenched employee. There
is no dispute here about Pascua’s seniority and preferred status. She had been employed initially as a
part-time physician then serving full-time beginning. It is also not disputed that while respondent was a
full-time physician, La Consolacion had another physician, Dr. Dimagmaliw, who served part-time.
Precisely, respondent's preeminence is a necessary implication of the very criteria used by La
Consolacion in retrenching her, i.e., that she was the highest paid employee in health services division.
La Consolacion's disregard of respondent's seniority and preferred status relative to a part-time
employee indicates its resort to an unfair and unreasonable criterion for retrenchment.
Indeed, it may have made mathematical sense to dismiss the highest paid employee first.
However, appraising the propriety of retrenchment is not merely a matter of enabling an employer to
augment financial prospects. It is as much a matter of giving employees their just due. Employees who
have earned their keep by demonstrating exemplary performance and securing roles in their respective
organizations cannot be summarily disregarded by nakedly pecuniary considerations. The Labor Code's
permissiveness towards retrenchments aims to strike a balance between legitimate management
prerogatives and the demands of social justice. Concern for the employer cannot mean a disregard for
employees who have shown not only their capacity, but even loyalty. La Consolacion's pressing financial
condition may invite commiseration, but its flawed standard for retrenchment constrains this Court to
maintain that respondent was illegally dismissed.
Besides, La Consolacion could have also modified respondent's status from full-time to part-
time. When retrenchment becomes necessary, the employer may, in the exercise of its business
judgment, implement cost-saving measures, but at the same time, should respect labor rights.
Case Title: Renante Remoticado vs Typical Construction Trading Corp.

One-Liner:
“There can be no illegal termination when there was no termination.”
Principle:
There can be no case for illegal termination of employment when there was no termination by
the employer. While, in illegal termination cases, the burden is upon the employer to show just cause
for termination of employment, such a burden arises only if the complaining employee has shown, by
substantial evidence, the fact of termination by the employer.
62
Before the employer must bear the burden of proving that the dismissal was legal, the
employee must first establish by substantial evidence the fact of his dismissal from service. If there is no
dismissal, then there can be no question as to the legality or illegality thereof.
Facts:
Remoticado, petitioner, were engaged by Typical Construction Trading Corp., respondent as a
laborer in its projects. On December 6, 2010, petitioner was absent for 2 days without an official leave
until December 20, 2010. He showed up to informed Pedro Nielo, the company’s Human Resource
Officer, that he was resigning for personal reasons. The following day, petitioner was handed P5,082.53
as his final pay. He protested saying that he was entitled to separation pay computed at 2 months for his
service for 2 years. Nielo responded that he could be entitled to separation because voluntarily resigned
and offered him to continue to work if he is not satisfied with the said amount. Petitioner was resolute
and proceeded to sign the waiver of quitclaim.
Petitioner filed a complaint for illegal dismissal against Typical Construction. He claimed he was
told to stop working due to debt at the canteen and that he was prevented from entering the premises.
The Labor Arbiter dismissed the complaint for lack of merit. Likewise the NLRC and CA. Hence,
this petition.
Issue:
Whether or not petitioner voluntarily resigned or his employment was illegally terminated in the
manner he averred in his complaint.
Ruling:
It is petitioner who is in error.
Before the employer must bear the burden of proving that the dismissal was legal, the
employee must first establish by substantial evidence the fact of his dismissal from service. If there is no
dismissal, then there can be no question as to the legality or illegality thereof.
Here, petitioner only made general statement that he was illegally dismissed. His bare allegation
is that he was told to stop working on account of his debt at the canteen. He did not state how he was
terminated or mentioned who prevented him from reporting for work.
This bare insistence is all the petitioner has. He failed to present convincing evidence.
Case Title: Abuda Vs Natividad Poultry Farms

One- Liner:
“The primary standard, therefore, of determining a regular employment is the reasonable
connection between the particular activity performed by the employee in relation to the usual business
or trade of the employer."
Principle:
A regular employee is an employee who is engaged to perform tasks usually necessary or
desirable in the usual business or trade of the employer, unless the employment is one for a specific
project or undertaking or where the work is seasonal and for the duration of a season; or 2) has
rendered at least 1 year of service, whether such service is continuous or broken, with respect to the
activity for which he is employed and his employment continues as long as such activity exists.
The connection is determined by considering the nature of the work performed vis-a-vis the
entirety of the business or trade. Likewise, if an employee has been on the job for at least one (1) year,
even if the performance of the job is intermittent, the repeated and continuous need for the employee's
services is sufficient evidence of the indispensability of his or her services to the employer's business.
Facts:
63
The workers of L. Natividad Poultry Farms (L. Natividad) filed complaints for "illegal dismissal,
unfair labor practice, overtime pay, holiday pay, premium pay for holiday and rest day, service incentive
leave pay, thirteenth month pay, and moral and exemplary damages" against it and its owner, Juliana
Natividad (Juliana), and manager, Merlinda Natividad (Merlinda).
The workers claimed that L. Natividad employed and terminated their employment after several
years of employment.
Labor Arbiter Robert A. Jerez (Labor Arbiter Jerez) dismissed the complaint due to lack of
employer-employee relationship between the workers and L. Natividad. He ruled that San Mateo
General Services (San Mateo), Wilfredo Broñola (Broñola), and Rodolfo Del Remedios (Del Remedios)
were the real employers as they were the ones who employed the workers, not L. Natividad. The
workers appealed Labor Arbiter Jerez's Decision.
The National Labor Relations Commission found that the workers were hired as maintenance
personnel by San Mateo and Del Remedios on pakyaw basis to perform specific services for L. Natividad.
Furthermore, it ruled that Jose Gonzales (Gonzales) and Roger Martinez (Martinez) could not be
considered as regular employees because their jobs as poultry livestock mixers were not necessary in L.
Natividad's line of business. However, it found Broñola, Jeremias Capellan (Jeremias), Arnel Capellan
(Arnel), Temmie Nawal (Nawal), and Eduardo Capillan (Eduardo) to be regular employees and ordered L.
Natividad to reinstate them and pay their thirteenth month pay and service incentive leave pay.
The Court of Appeals also reversed the National Labor Relations Commission's ruling on
Gonzales' and Martinez's employment status since as poultry and livestock feed mixers, they performed
tasks which were necessary and desirable to L. Natividad's business and were not mere helpers. It
deemed them to be L. Natividad's regular employees.
However, the Court of Appeals upheld the National Labor Relations Commission's finding that
the maintenance personnel were only hired on a pakyaw basis to perform necessary repairs or
construction within the farm as the need arose.
As for the issue of illegal dismissal, the Court of Appeals also affirmed the National Labor
Relations Commission's finding that the workers failed to substantiate their bare allegation that L.
Natividad verbally notified them of their dismissal.
Issue:
Whether or not the maintenance personnel in L. Natividad Poultry Farms can be considered as
its regular employees.
Ruling:
Before determining whether or not they are regular employees, employer-employee
relationship must first be established.
A resort to the four (4)-fold test of "(1) the selection and engagement of the employee; (2) the
payment of wages; (3) the power of dismissal; and (4) the power to control the employee's conduct"49
also strengthens the finding that respondent L. Natividad is petitioners' employer.
Respondents hired petitioners directly or through petitioner Del Remedios, a supervisor at
respondents' farm.50 They likewise paid petitioners' wages, as seen by the vouchers51 issued to Del
Remedios and San Mateo. They also had the power of dismissal inherent in their power to select and
engage their employees. Most importantly though, they controlled petitioners and their work output by
maintaining an attendance sheet and by giving them specific tasks and assignments.
With an employer-employee relationship between respondent L. Natividad and petitioners duly
established, the next question for resolution is whether petitioners can be considered to be regular
employees.
Going back to the main issue.
64
Yes.
A regular employee is an employee who is:
1) engaged to perform tasks usually necessary or desirable in the usual business or trade of the
employer, unless the employment is one for a specific project or undertaking or where the work is
seasonal and for the duration of a season; or 2) has rendered at least 1 year of service, whether such
service is continuous or broken, with respect to the activity for which he is employed and his
employment continues as long as such activity exists.
This finds basis in Article 280 of the Labor Code which provides:
Article 295. [280] Regular and casual employment. — The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an employment shall
be deemed to be regular where the employee has been engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or where the work or service to be
performed is seasonal in nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph:
Provided, that any employee who has rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with respect to the activity in which he is
employed and his employment shall continue while such activity exists.
The Supreme Court also held in De Leon v. National Labor Relations Commission instructs that
"the primary standard, therefore, of determining a regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual business or trade of
the employer." The connection is determined by considering the nature of the work performed vis-a-vis
the entirety of the business or trade. Likewise, if an employee has been on the job for at least one (1)
year, even if the performance of the job is intermittent, the repeated and continuous need for the
employee's services is sufficient evidence of the indispensability of his or her services to the employer's
business.
Respondents did not refute petitioners' claims that they continuously worked for respondents
for a period ranging from three (3) years to 17 years. At first glance it may appear that maintenance
personnel are not necessary to a poultry and livestock business. However, in this case, respondents kept
several farms, offices, and sales outlets, meaning that they had animal houses and other related
structures necessary to their business that needed constant repair and maintenance.
Thus, the maintenance personnel are considered as regular employees.
Case Title: Magsaysay Mol Marine Inc. V. Atrase

One- Liner:
“The third doctor rule does not apply when there is no final and definitive assessment by the
company-designated physician.”
Principle:
Permanent total disability does not mean a state of absolute helplessness but the inability to do
substantially all material acts necessary to the prosecution of a gainful occupation without serious
discomfort or pain and without material injury or danger to life. In disability compensation, it is not the
injury per se which is compensated but the incapacity to work.
Under Section 20(A)(3) of the 2010 POEA-SEC, "If a doctor appointed by the seafarer disagrees
with the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The
third doctor's decision shall be final and binding on both parties." The assessment refers to the
declaration of fitness to work or the degree of disability, as can be gleaned from the first paragraph of
Section 20(A)(3). It presupposes that the company-designated physician came up with a valid, final, and
65
definite assessment on the seafarer's fitness or unfitness to work before the expiration of the 120- or
240-day period.
Facts:
This is a Petition for Review on Certiorari against the Court of Appeals. The Court of Appeals
affirmed the Decision of the Office of the Panel of Voluntary Arbitrators of the National Conciliation and
Mediation Board granting Michael Paderes Atraje (Atraje) permanent total disability benefits in the
amount of US$95,949.00 and 10% attorney's fees. It also denied Magsaysay Mol Marine, Inc.
(Magsaysay Mol) and Mol Ship Management (Singapore) Pte. Ltd.'s (Mol Ship) Motion for
Reconsideration.
Petitioners maintain that respondent is not entitled to permanent total disability benefits
because his illnesses are not work-related, according to the letter of Dr. Quetulio on October 2, 2014.
They add that respondent's repatriation was not due to his alleged accident but due to a single episode
of seizure, the cause of which was unknown per the medical report of the same company-designated
doctor .Finally, petitioners argue that referral to a third doctor in case of conflicting findings of the
company-designated doctor and the seafarer's personal doctor is mandatory. Since respondent failed to
comply with this requirement, the assessment of the company-designated doctor should prevail.
Respondent counters that non-referral to a third doctor is not a drawback to his complaint. In
the first place, the medical assessment and opinion of the company-designated doctors were not
disclosed to him. He came to know about them only after his complaint had been filed. The company
stopped providing for his treatment and he was, since then, left on his own. He could not have complied
with the third doctor rule since he was not given any assessment by the company-designated physicians
even after his treatment had been supposedly terminated. If at all, it was petitioners who committed a
breach.
Issues:
Whether the respondent is not entitled to permanent total disability benefits
Whether the referral to a third doctor in case of conflicting findings of the company-designated
doctor and the seafarer's personal doctor is mandatory
Ruling:
1. Yes
Permanent total disability does not mean a state of absolute helplessness but the inability to do
substantially all material acts necessary to the prosecution of a gainful occupation without serious
discomfort or pain and without material injury or danger to life. In disability compensation, it is not the
injury per se which is compensated but the incapacity to work.
Respondent's inability to perform his customary sea duties, coupled with the company-designated
physicians' abdication of their primary duty to declare his fitness or unfitness to work within the
prescribed period, transforms his disability to permanent and total by operation of law.
2. Petitioners' contention on non-compliance with the third doctor rule is untenable.
Under Section 20(A)(3) of the 2010 POEA-SEC, "If a doctor appointed by the seafarer disagrees with
the assessment, a third doctor may be agreed jointly between the Employer and the seafarer. The third
doctor's decision shall be final and binding on both parties." The assessment refers to the declaration of
fitness to work or the degree of disability, as can be gleaned from the first paragraph of Section 20(A)(3).
It presupposes that the company-designated physician came up with a valid, final, and definite
assessment on the seafarer's fitness or unfitness to work before the expiration of the 120- or 240-day
period.
In this case, the third doctor-referral provision does not apply because there is no definite disability
assessment from the company designated physician.
66
2019
Case Title: Esteva vs. Wilhelmsen Smith Bell Manning Inc., G.R. No. 225899, July 10, 2019
One-Liner:
“It is the seafarer’s duty to signify the intention to resolve the conflict through the referral to a
third doctor.”
Principle:
When a company-designated physician fails to arrive at a final and definite assessment of a

seafarer's fitness to work or level of disability within the prescribed periods (120/240 days), a
presumption arises that the seafarer's disability is total and permanent.
It is the seafarer’s duty to signify the intention to resolve the conflict through the referral to a
third doctor. If the seafarer does not contest the findings and fails to refer the assessment to a third
doctor, “the company can insist on its disability rating even against a contrary opinion by another
physician.”
Facts:
Esteva was hired by Wilhelmsen as a seafarer and was deployed on April 15, 2012. sometime in
June 2012, while on board the vessel, he began to suffer severe back pains. October 7, 2012, Esteva
returned to the PH and reported to his employer. On April 3, 2013, the company designated physician,
Dr. Cruz-Balbon, diagnosed him with Pott’s disease. In the medical certificate, Esteva’s suggested
disability grading was Grade 8, with 2/3 loss of lifting power. On September 17, 2013, Esteva consulted
another doctor, Dr. Raymundo, which contradicted the diagnosis of Dr. Cruz. Dr. Raymundo diagnosed
Esteva’s condition as a total and permanent disability. As a consequence, Esteva filed a complaint for
total permanent disability benefits.
Issue:
Whether or not Esteva can claim the total permanent disability benefits.
Ruling:
Yes.
Section 20 of the POEA Standard Employment Contract states: “…If a doctor appointed by the
seafarer disagrees with the assessment, a third doctor may be agreed jointly between the Employer and
the seafarer. The third doctor's decision shall be final and binding on both parties.” In Marlow vs. Osias,
the court held that the referral to a third doctor is mandatory when: (1)there is a valid and timely
assessment made by the company-designated physician (before the lapse of 120 or 240 days); and (2)
the seafarer’s appointed doctor refuted such assessment. However, as the one contesting the company-
designated physician’s findings, it is the seafarer’s duty to signify the intention to resolve the conflict
through the referral to a third doctor. If the seafarer does not contest the findings and fails to refer the
assessment to a third doctor, “the company can insist on its disability rating even against a contrary
opinion by another physician.” Moreover, the significance of the 120/240 days period is for the
determination of the disability. After the lapse of the period, the disability shall be considered as total
and permanent, regardless of reason for the delay in assessment.
In this case, although Esteva failed to raise the intention to refer the case to a third doctor, the
Court nonetheless, awarded him of the benefits prayed. The court’s reason in awarding Esteva of the
benefits is due to the fault of the respondent. When petitioner learned of Dr. Cruz-Balbon's assessment
during the submission of the position papers before the Labor Arbiter, the prescribed 240-day period
had already lapsed. Based on the records, petitioner immediately submitted himself to the company-
designated physician's examination on October 7, 2012. He later filed the Complaint after his chosen
physician, Dr. Raymundo, had issued the Medical Certificate on July 19, 2013. A total of 285 days had
already lapsed from October 7, 2012 to July 19, 2013, which is beyond the period allowed by the law.
67
Case Title: The Secretary of the Department of Agrarian Reform vs Heirs Abucay, GR G.R. No. 186432
& G.R. No. 186964, March 12, 2019
Principle:
The jurisdiction over the administrative implementation of agrarian laws exclusively belongs to
the Department of Agrarian Reform Secretary.
Facts:
On October 14, 1983, the Spouses Abucay purchased a 182-hectare of land from Cabahug. The
Deed of Sale provided that the property is untenanted except for 39.4459 hectares which is appears to
be within the coverage of Operation Land Transfer. In 1986, Emancipation Patents were issued covering
the 22 hectares of the lot to the farmer-beneficiaries.
Heirs of Spouses Abucay filed before the REGIONAL AGRARIAN REFORM ADJUDICATOR for
proper determination of just compensation. They claimed that they did not receive any just
compensation for the 22 hectares that was placed under Operation Land Transfer Program. The
Certificate of Deposit issued by LandBank was not only inadequate but was also issued to Cabahug, the
previous owner of the land.
The Regional Agrarian Reform Adjudicator (Regional Adjudication Diloy) found that there was no
proper just compensation and the administrative process was not followed because the Final
Notification Letter was not sent to the registered owner. Hence, the emancipation patents were void.
Thereafter, Heirs of Abucay also filed cancellation of original certificates of title and emancipation
patents. Regional Director Diloy cancelled above certificates.
However, the Department of Agrarian Reform Adjudication Board reversed the decision of the
Regional Adjudicator Diloy for wanting of jurisdiction over the appeal. It found that the nature of the
action filed by the Hiers of Abucay was an Operation Land Transfer protest under the jurisdiction of
REGIONAL DIRECTOR OF THE DEPARTMENT OF AGRARIAN REFORM and the appeal to the DEPARTMENT
OF AGRARIAN REFORM SECRETARY.
In the petition before Court of Appeals, it reversed the rulings of the DAR Adjudication Board. It
held that the Regional Director had primary jurisdiction over complaints for cancellation of
emancipation patent only if these were not yet registered. Since they are already registered with the
Register of Deeds of Leyte, jurisdiction over the complaint belong to REGIONAL AGRARIAN REFORM
ADJUDICATOR.
Petitioners maintain that respondents' Complaint for cancellation of original certificates of title
and emancipation patents is essentially an Operation Land Transfer protest that assails the coverage of
the 22-hectare property under the Operation LandTransfer Program.
Issue:
Whether or not Regional Agrarian Reform Adjudicator Felixberto Diloy and the Department of
Agrarian Reform AdjudicationBoard have jurisdiction over the Complaint for cancellation of original
certificates of title and emancipation patents filed by respondents, the Heirs of Abucay.
Ruling:
Yes.
It is settled that the Regional Trial Courts, sitting as special agrarian courts, have original and
exclusive jurisdiction over the determination of the value of just compensation. Nonetheless, the
Department of Agrarian Reform still exercises primary jurisdiction to preliminarily determine this value.
This is different from determining the validity of property transfer to the farmer-beneficiaries and,
consequently, the validity of the certificates of title issued to them. When the issue in a case hinges on
whether a beneficiary has made insufficient or no payments for the land awarded to him or her, primary
administrative jurisdiction is under the Department of Agrarian Reform.
68
Indeed, per the rules it has promulgated, the Department of Agrarian Reform has taken
cognizance of cases involving either the issuance or cancellation of certificates of land ownership award
and emancipation patents. Cases involving registered certificate of land ownership awards,
emancipation patents, and titles emanating from them are agrarian reform disputes, of which
theDepartment of Agrarian Reform Adjudication Board takes cognizance. Meanwhile, cases involving
unregistered ones are agrarian law implementation cases, put under the jurisdiction of the Regional
Directors and the Secretary of the Department of Agrarian Reform.
In 2009, however, Congress amended the Comprehensive Agrarian Reform Law through
Republic Act No. 9700. Under the new Section 24, all cases involving the cancellation of registered
emancipation patents, certificates of land ownership awards, and other titles issued under any agrarian
reform program are now within the exclusive original jurisdiction of the Department of Agrarian Reform
Secretary. He or she takes jurisdiction over cases involving the cancellation of titles issued under any
agrarian reform program, whether registered with the Land Registration Authority or not. Here, the
doctrine should be read amid the ambient facts and without prejudice to a future case that will deal
with transfer certificates of title, considering the relevant statutes, as well as the equal protection and
social justice provisions of the Constitution.
Case Title: George Toquero vs Crossworld Marine Services (GR No. 213482, June 26, 2019)
One-Liner:
“Disability ratings should be adequately established in a conclusive medical assessment by a

company-designated physician.”
Principles:
A disability is compensable under the POEA Standard Employment Contract if two (2) elements
are present: (1) the injury or illness must be work-related; and (2) the injury or illness must have existed
during the term of the seafarer's employment contract. Hence, a claimant must establish the causal
connection between the work and the illness or injury sustained.
To be conclusive, a medical assessment must be complete and definite to reflect the seafarer's
true condition and give the correct corresponding disability benefits. Similarly, between the company-
designated physician's assessment and the findings of the petitioner's chosen physician, it is given more
weight to the latter's assessment of permanent and total disability.
Facts:
Toquero was employed by Crossworld as fitter for vessel. He underwent a pre-employment

medical examination and was declared fit for sea duty. Then, he was deployed on board.
While on board the vessel, he was assaulted by his fellow seafarer while doing his work. He was
hit at the back of his head with big and heavy metal spanner, knocking him unconscious. He was given
first aid treatment at the ship clinic, where his vital signs were monitored. He was then hospitalized and
evaluated by a neurosurgeon. The Medical Certificate noted a large lacerated wound with a large
depression on the left parietal area.
He was then repatriated to the Philippines and referred to the company-designated physician
who concluded that his frequent headaches and dizziness were due to the jarring of the brain. However,
he is still fit to work. Alarmed by his physical condition, he consulted his chosen physicians: Dr. Pascual
and Dr. Runas. Dr. Pascual assessed that his hysical discomfort was due to trauma and skull defect. Dr.
Runas declared Toquero "permanently unfit to return to work as a seaman in any capacity" and
diagnosed him with a total and permanent disability.
Toquero then asked Crossworld for his sickness allowance, but this was rejected because the
company physician had already issued that he is fit to work.
69
The National Labor Relations Commission found that Toquero's injury was work-related because
the master of vessel directed Toquero and Fong to work together despite knowing their previous
altercation. Despite this, it ruled that Toquero's injury was not compensable because it resulted from a
criminal assault, which was not an accident. It also did not give weight to the findings of Toquero's
chosen physicians as they were not supported by medical examinations
Issue:
Whether petitioner’s injury is compensable hence he is entitled to sickness allowances?

Ruling:
YES. A disability is compensable under the POEA Standard Employment Contract if two (2)
elements are present: (1) the injury or illness must be work-related; and (2) the injury or illness must
have existed during the term of the seafarer's employment contract. Hence, a claimant must establish
the causal connection between the work and the illness or injury sustained.
To be deemed "work-related," there must be a reasonable linkage between the disease or injury
suffered by the employee and his work. Thus, for a disability to be compensable, it is not required that
the seafarer's nature of employment was the singular cause of the disability he or she suffered. It is
sufficient that there is a reasonable linkage between the disease or injury suffered by the seafarer and
his or her work to conclude that the work may have contributed to establishment or, at least, aggravate
any preexisting condition the seafarer might have had.
In this case, petitioner was able to prove that his injury was work-related and that it occurred
during the term of his employment. Hence, his injury is compensable.
Disability ratings should be adequately established in a conclusive medical assessment by a

company-designated physician. To be conclusive, a medical assessment must be complete and definite
to reflect the seafarer's true condition and give the correct corresponding disability benefits.
Here, the medical assessment issued by the company-designated physician cannot be regarded
as definite and conclusive. A review of the records shows that the company-designated physician failed
to conduct all the proper and recommended tests. Similarly, between the company-designated
physician's assessment and the findings of the petitioner's chosen physician, it is given more weight to
the latter's assessment of permanent and total disability.
Case Title: Manuel Acosta vs Matiere SAS and Philippe Gouvary
Principle:
For the implementation of a redundancy program to be valid, the employer must comply with
the following requisites: (1) written notice served on both the employees and the Department of Labor
and Employment at least one month prior to the intended date of retrenchment; (2) payment of
separation pay equivalent to at least one month pay or at least one month's pay for every year of
service, whichever is higher; (3) good faith in abolishing the redundant positions; and (4) fair and
reasonable criteria in ascertaining what positions are to be declared redundant and accordingly
abolished.
Facts:
Matiere SAS is a French Company engaged in the fabrication, supply and delivery of unibridges
and flyovers. On November 1, 2009, Matiere SAS, represented by its resident manager Philippe Gouvary
executed a Consulting Agreement with Acosta. Per the agreement, Matiere SAS engaged Acosta as its
technical consultant for 12 months, with a monthly salary of P70,000.00. Upon the Consulting
Agreement's expiration, Matiere SAS hired Acosta as its technical assistant with the same P70,000.00
monthly salary.
On June 27, 2013, Matiere SAS sent Acosta a letter informing him the end of their employment
contract. The decision was due to the cessation of the delivery operations and the diminution of
70
activities. In a June 26, 2013 letter, Martiere SAS informed the DOLE it would terminate the employment
of its 5 workers, including Acosta.
On July 23, 2013, Acosta filed before the NLRC a complaint for illegal dismissal against Martiere
SAS and Gouvary. Labor Arbiter Gonzales found Acosta’s dismissal illegal She held that Matierre SAS and
Gouvary failed to prove the factual bases for the reduction of its workforce. NLRC reversed LA’s decision.
Issue:
Whether or not Acosta was validly dismissed from employment on the ground of redundancy.
Ruling:
Redundancy is recognized as one of the authorized causes for dismissing an employee under the
Labor Code. The requirements for a valid redundancy program were laid down in Asian Alcohol
Corporation v. National Labor Relations Commission: For the implementation of a redundancy program
to be valid, the employer must comply with the following requisites: (1) written notice served on both
the employees and the Department of Labor and Employment at least one month prior to the intended
date of retrenchment; (2) payment of separation pay equivalent to at least one month pay or at least
one month pay for every year of service, whichever is higher; (3) good faith in abolishing the redundant
positions; and (4) fair and reasonable criteria in ascertaining what positions are to be declared
redundant and accordingly abolished.
Assuming that respondents can declare some positions redundant due to the alleged decrease
in volume of their business, they still had to comply with the above-cited requisites. This, they failed to
do.
Respondents complied with the first and second requisites. There is no contention that they
notified both petitioner and the Department of Labor and Employment at least a month before the
planned redundancy. However, as to the third and fourth requisites, this Court held that "[t]o establish
good faith, the company must provide substantial proof that the services of the employees are in excess
of what is required of the company, and that fair and reasonable criteria were used to determine the
redundant positions." Here, respondents' only basis for declaring petitioner's position redundant was
that his function, which was to monitor the delivery of supplies, became unnecessary upon completion
of the shipments. However, upon careful scrutiny, this Court finds that the Employment Agreement
itself contradicts respondents' allegation.
There was no mention of monitoring shipments as part of petitioner's tasks. If his work pertains
mainly to the delivery of supplies, it should have been specifically stated in his job description.
Respondents did not even present any evidence to support their claim or to contradict petitioner's
documentary evidence. There was, hence, no basis for respondents to consider his position irrelevant
when the shipments had been completed.
Likewise, respondents failed to show that they used fair and reasonable criteria in determining
what positions should be declared redundant.
71

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UNIVERSITY OF SAN JOSE – RECOLETOS

CASE DIGESTS IN

Case Title: Nancy Montinola vs. PAL

2. No, there was none.

3. No, the award of 3 months worth of pay is improper.

4. Yes, they are subject to interest.

2. Arlene was a regular employee with a fixed-term contract.

3. Arlene was illegally dismissed.

Pay Grade Step Increase

Case Title: Stanley Fine Furniture v. Gallano, G.R. No. 190486

a.) Whether Paz enjoys security of tenure

The primary standard, therefore, of determining regular employment is the reasonable

According to Genesis’ inspector Villaseran he conducted a "man to man" inspection on the

2. Whether Moises is personally liable. NO.

Conformably, liberal construction of Labor Code provisions in favor of workers is stipulated by

No wilfull breach of trust.

2 classes of positions of trust:

1. managerial employees whose primary duty consists of the management of the

2. fiduciary rank-and-file employees, such as cashiers, auditors, property custodians, or

Nature of a bus conductor’s work.

We fail to appreciate any of these in this case.

Petitioner is entitled to:

No moral or exemplary damages awarded.

Moises is not personally liable.

The Court of Appeals dismissed the Petition.

2. Whether procedural due process was violated

2, YES. Respondent's right to procedural due process was not observed.

contrasted with the validity of exercising management prerogative.

Despite the Grievance Committee’s recommendation of termination, the University President,

We grant the Petition.

As to the first issue:

As to the second issue:

1. Whether or not the death of Eduardo is compensable.

a. The seafarer’s work must involve the risks describe herein;

d. There was no notorious negligence on the part of the seafarer.

CASE TITLE: Limlingan vs. Asian Institute of Management, Inc.,

Case Title: Nonay vs Bahia Shipping Services

Case Title: REPUBLIC vs. NLRC

The employer-employee relationship is severed upon the sale or disposition of assets of a

“A compensable occupational illness becomes compensable only which should be proven by

It is not refuted that myocardial infarction is a compensable occupational illness. However, it

(4) There was no notorious negligence on the part of the employee.

“There is constructive dismissal when an employer's act of clear discrimination, insensibility or

There is constructive dismissal when an employer's act of clear discrimination, insensibility or

If there is constructive dismissal in this case

No, there was no constructive dismissal.

There is constructive dismissal when an employer's act of clear discrimination, insensibility or

On December 23, 2002, Manggagawa ng Komunikasyon sa Pilipinas went on strike. On

Whether Madridejos is entitled to disability benefits.

Whether or not petitioner's employment was terminated for a just cause

Whether or not petitioner was deprived of procedural due process;

In Caoile v. National Labor Relations Commission:[W]ith respect to rank-and-file personnel, loss

URC-SONEDCO offered the same arrangement in 2008. It extended an additional ₱l6.00/day

Case Title: Sharpe Sea Personnel vs. Macario Mabunay

Whether or not Mabunay is permanently or totally disabled.

Mabunay is considered to be permanently and totally disabled.

Yes, Leron was illegally dismissed

The determination of whether or not an employee is guilty of abandonment is a factual matter.

Thus, Leron was illegally dismissed.

“A conditional settlement of a judgment award may be treated as a compromise agreement and

Case Title: Hubilla v. HSY Marketing Ltd., January 10, 2018

Whether or not the equipoise rule applies

Case Title: La Consolacion College of Manila v. Pascua; March 14, 2018