SAN BEDA COLLEGE - ALABANG SCHOOL OF LAW

CENTRALIZED BAR OPERATIONS 2022

ACADEMICS COMMITTEE

HANNAH KEZIAH T. MORALES

Chairperson for Academics

ANDREA JOSES P. TAN ADRIAN R. MACASAQUIT

Deputy Deputy

ELOISA FE C. BUÑO
Chairperson for Electronic Data Processing

SUBJECT HEADS

MARY GRACE B. DOMINGUEZ PAMELA A. PAEZ

Civil Law Legal and Judicial Ethics

DAVID GABRIEL V. PALLASIGUE BRIANT ALLEN S. ROSARIO

Criminal Law Mercantile Law

KARLA MARIE V. GABRIEL JOSHUA REED C. LOPEZ

Labor Law Political Law

JUSTINN ANTONIO ALON ALEXANDRE JANUS B. BIDO

Remedial Law Taxation Law

ASSISTANT HEADS

DAVE CHRISTIAN C. UMERAN MARIA ARIELLE SAMANTHA T. ALVAREZ

Civil Law Legal and Judicial Ethics

MAEIA MIKHAELA N. MAYUGA HANNAH MIKAELLA C. YAMIT

Criminal Law Mercantile Law

MIGUEL JULIO RAFAEL SORIANO III JESSICA LAURA C. SY

Labor Law Political Law

LANCE LIZOR A. PUNZALAN JAN EROS NIKE V. CABAUATAN

Remedial Law Taxation Law
 LABOR LAW TEAM

KARLA MARIE V. GABRIEL

Subject Head

MIGUEL JULIO RAFAEL SORIANO III

Assistant Head

ISABEL FRANCESCA ANUNCIACION

JEAN JERZEL F. BALAURO
GLENN ANDREW BAYSA
AMABEL CONTRERAS
RITA MARIE JACOBE C. DIAZ
ANNA ELAINE LADAO ESPELETA
NICOLLEEN D. DIMABUUYU
MARIA EDEN DINO
NEIL HECHANOVA
PATRICK T. JOSE
IRIS ANGELA S. LAT
ROMAR BAE MONTESA
ROSANNA NAIG
MA. MONRELLE PONCE DE LEON
BIANCA MARGARITA P. PUJALTE
SHARMAINE B. PUJANES
KRISTIN ANNE S. REYES
PRINCESS SANTIAGO
PATRICIA ANN P. SALVADOR
AARON SUACO
TIMOTHY G. SY
NIKKI ANGELI LB. TUBLE
LYNDEN ALYANNA M. VALENZUELA
 ADMINISTRATION

DR. ULPIANO P. SARMIENTO III

Dean

ATTY. CARLO D. BUSMENTE

Vice Dean

ATTY. MA. ELIZA YAMAMOTO-SANTOS

Prefect of Student Affairs

ATTY. ROBEN B. CADUGO JR.

Administrative Officer

ATTY. PAULINO Q. UNGOS III

Adviser

SAN BEDA COLLEGE - ALABANG SCHOOL OF LAW

CENTRALIZED BAR OPERATIONS 2022
EXECUTIVE COMMITTEE

KATHLEEN L. CAPULONG
Over-All-Chairperson

HANNAH KEZIAH T. MORALES ELOISA FE C. BUÑO

Chairperson for Academics Chairperson for Electronic Data Processing

LOUIE ANN S. SOMEROS ROZELLE DIANNE I. MATEO

Chairperson for Operations Chairperson for Secretariat

JOSEPH M. LIBROJO ROLEEN WENDEE N. GUINTO

Chairperson for Academic Operations Chairperson for Bar Matters

JULIUS ROBERT A. JUICO EDWARD JAYSON B. SANTILLAN

Chairperson for Communications Chairperson for Logistics

FEMME ANGELA C. ARMAMENTO JOSHUA REED C. LOPEZ

Chairperson for Finance Chairperson for Recruitment and Membership

ANNA MARIE N. OBESO

Chairperson for Bar Mentoring Program
 NOTICE

This work is the intellectual property of the SAN BEDA COLLEGE ALABANG
SCHOOL OF LAW and SAN BEDA COLLEGE ALABANG CENTRALIZED BAR
OPERATIONS 2022. It is intended solely for the use of the individuals to which
it is addressed – the Bedan community.

Publication, reproduction, dissemination, and distribution, or copying of the

document without the prior consent of the SAN BEDA COLLEGE ALABANG
SCHOOL OF LAW CENTRALIZED BAR OPERATIONS ACADEMICS COMMITTEE 2022
is strictly prohibited.

Material includes both cases penned by Justice Caguioa and recent landmark
cases decided by the Supreme Court.

Copyright © 2022
SAN BEDA COLLEGE ALABANG SCHOOL OF LAW
SAN BEDA COLLEGE ALABANG SCHOOL OF LAW CENTRALIZED BAR
OPERATIONS 2022
All Rights Reserved by the Authors.
 LABOR LAW
CASE DOCTRINESS FOR THE 2022 BAR EXAMINATIONS

LABOR CONTRACTING 1
Daguinod v. Southgate Foods Inc. 1

ILLEGAL RECRUITMENT 1
People vs Rios y Catagbui 1

EMPLOYER-EMPLOYEE RELATIONSHIP AND ILLEGAL DISMISSAL 2

Bishop Shinji Amari of Abiko Baptist Church, et. al. v. Villaflor, Jr. 2

DIMINUTION OF BENEFITS 3
COMPREHENSIVE AGRARIAN REFORM PROGRAM 4
Farmer-Beneficiaries Belonging to the Samahang Magbubukid ng Bagumbong, Jalajala, Rizal vs
Heirs of Juliana Maronilla 4

Vivencio Dalit vs. Sps. Rolando Sr. Balagtas 4

Benito Marasigan Jr. vs. Provincial Agrarian Reform Officer 5

TRANSFER OF FARMHOLDINGS UPON DEATH OF THE FARMER-BENEFICIARY 5

LEASEHOLD TENANCY; SECURITY OF TENURE 6
SOCIAL SECURITY LAW 6
GSIS LAW – LIABILITY OF THE HEAD OF OFFICE OF NATIONAL GOVERNMENT’S
POLITICAL SUBDIVISION FOR NON-REMITTANCE OF PREMIUM CONTRIBUTIONS. 7
GSIS; SICKNESS BENEFITS 8
DISABILITY BENEFITS 8
DEATH COMPENSATION 9
POEA-STANDARD EMPLOYMENT CONTRACT FOR SEAFARERS 10
PERMANENT AND TOTAL DISABILITY BENEFITS 11
CONFLICT RESOLUTION PROCEDURE 12
DISABILITY CLAIMS 12
Ventis Maritime Corp. v. Salenga 12

DISABILITY BENEFITS 13
TOTAL AND PERMANENT DISABILITY BENEFITS 14
DISABILITY BENEFITS 15
DISABILITY AND DEATH BENEFITS 16
Cariño v. Maine Marine Phils, Inc. 18
COLLECTIVE BARGAINING AGREEMENT 20
ILLEGAL DISMISSAL 21
VALID STRIKE; REQUISITES, DISMISSAL OF UNION OFFICERS 22
TERMINATION OF EMPLOYMENT 23
San Fernando Coca-Cola Rank-and File Union v. Coa-Cola Bottlers Philippines, Inc. vs. Coca Cola
Bottlers Philippines 24

Pardillo v. Bandojo 27

Rodriguez vs. Sintron Systems, Inc. 29

BACKWAGES 31
Albay Electric Cooperative, Inc. v. ALECO Labor Employees Organization 31

Elpidio Que vs Asia Brewery 34

LBC Express-Vis, Inc. vs. Palco 36

Airborne Maintenance and Allied Services Inc. v. Egos Airborne Maintenance and Allied Services
Inc. 37

MANAGEMENT PREROGATIVE 39
JURISDICTION AND RELIEFS 40
 LABOR CONTRACTING

Daguinod v. Southgate Foods Inc.

CAGUIOA, J.
G.R. No. 227795 (Formerly UDK-15556) February 20, 2019

SUMMARY
In the case for illegal dismissal, respondent Generation One admitted that
Daguinod was its employee. On the other hand, Southgate asserted that Daguinod was
an employee of Generation One and not Southgate. Both respondents affirmed that
Generation One was a legitimate labor contractor.
DOCTRINE
1. Registration with DOLE as an independent contractor does not automatically vest
it with the status of a legitimate labor contractor, it is merely presumptive proof.

2. Substantive due process pertains to the just and authorized causes for dismissal
as provided under Articles 297, 298, and 299 of the Labor Code. Procedural due process
pertains to the twin requirements of notice and hearing.

───※ ·❆· ※───

ILLEGAL RECRUITMENT

People vs Rios y Catagbui

CAGUIOA, J.
GR No. 226140 February 26, 2020

SUMMARY
Isabel Rios y Catagbui (Rios) is the owner of Green Pastures International Staffing
Incorporated (Green Pastures) which is engaged in the business of overseas recruitment as
licensed by the Philippine Overseas Employment Agency. Sometime during the period from July
2007 to December 2008, Rios with intent to defraud, promised employment and received varying
amounts as placement and documentation fees from private complainants.
DOCTRINE
The offense of illegal recruitment is malum prohibitum where the criminal intent of the
accused is not necessary for conviction, while estafa is malum in se where the criminal intent of
the accused is crucial for conviction. It follows that one's acquittal of the crime of estafa will not
necessarily result in his acquittal of the crime of illegal recruitment in large scale, and vice versa.

───※ ·❆· ※───

1
 EMPLOYER-EMPLOYEE RELATIONSHIP AND ILLEGAL
DISMISSAL

Bishop Shinji Amari of Abiko Baptist Church, et. al. v. Villaflor,

Jr.
CAGUIOA, J.
A.M. No. 15-09-102-MTCC June 26, 2019
SUMMARY
Villaflor, Jr. became a missionary sponsored by BSAABC, and he was appointed as an
instructor at the MBIS. When he was removed as a missionary, he filed a complaint for illegal
dismissal. His proof, however, was about his dismissal as an instructor of MBIS, and not his
removal from the said church.
DOCTRINE
The lower tribunals used the "four-fold test" in determining the existence of an employer-
employee relationship, to wit: (a) the selection and engagement of the employee; (b) the payment
of wages; (c) the power of dismissal; and (d) the power to control the employee's conduct. In the
absence of the first two requisites, there could be no employer-employee relationship which would
warrant a finding of illegal dismissal.
NOTES
There is no evidence or allegation to show that said person’s status as a missionary
is the same or dependent on his appointment as an instructor of MBIS. True, the removal as
a missionary may have affected his status as instructor of MBIS, but the Court is not
convinced that there was an illegal dismissal.

It is more appropriate to say that being an instructor of MBIS was part of his
mission work as a missionary/minister of BSAABC.

───※ ·❆· ※───

Marsman & Company vs Sta. Rita

CAGUIOA, J.
G.R. No. 194765 April 23, 2018
SUMMARY
An employee (Sta Rita) was hired by a company which later on was purchased by another
company. He is dismissed on the ground of redundancy. He contends that he was illegally
dismissed.
DOCTRINE
The elements of the four-fold test to establish employer-employee relationship are: 1)
the selection and engagement of the employees; 2) the payment of wages; 3) the power of
dismissal; and 4) the power to control the employee's conduct.

───※ ·❆· ※───

2
 Arnulfo Fernandez v. Kalookan Slaughterhouse, Inc. / Ernesto
Cunanan
CAGUIOA, J.
G.R. No. 225075 Case Date
SUMMARY
Petitioner Arnulfo Fernandez (Arnulfo) claimed that he was informed by Kalookan
Slaughterhouse Inc. that he could no longer report for work due to his old age, therefore, he
filed an illegal dismissal case against the latter. Kalookan Slaughterhouse. Inc asserted that
Arnulfo is an independent butcher working under its Operation Supervisor, Cirilo Tablit (Tablit)
and he was not illegally dismissed.
DOCTRINE
The four elements of an employer-employee relationship are: (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.

Generally, the computation of backwages and separation pay is computed until the finality
of the decision that awarded them. However, given the foregoing, the LA and petitioner's counsel
are directed to confirm petitioner's death, and if confirmed, the LA is directed to compute petitioner's
backwages and separation pay only until his death.

───※ ·❆· ※───

DIMINUTION OF BENEFITS
BELTRAN VS AMA COMPUTER COLLEGE
CAGUIOA, J.
G.R. No. 223795 April 3, 2019
SUMMARY
Petitioner Beltran filed a complaint for payment of retirement benefits/separation pay
and other claims. He argues that by virtue of AMAs unwritten early retirement program, as it had
a longstanding company policy to grant early retirement benefits to its employees even if they
had not reached retirement age or 20 years of service, he is entitled to early retirement benefits.
Respondent argued that Petitioner failed to prove that the grant of early retirement did not ripen
into company practice.

DOCTRINE
The Labor Code expressly prohibits the elimination or reduction of benefits received by
employees.

───※ ·❆· ※───

3
 COMPREHENSIVE AGRARIAN REFORM PROGRAM

Farmer-Beneficiaries Belonging to the Samahang Magbubukid ng

Bagumbong, Jalajala, Rizal vs Heirs of Juliana Maronilla
CAGUIOA, J.
G.R. No. 194765 April 23, 2018
SUMMARY
The Heirs of Juliana Maronilla claimed that the subject lands had been classified as
mineral, forest, residential, institutional, commercial or agro-industrial as early as July 11, 1981
by the Human Settlements Regulatory Commission (HSRC), precursor of the Housing and Land
Use Regulatory Board (HLURB), and as such, cannot be considered as agricultural lands within
the contemplation of Republic Act No. 6657 or PD 27.

DOCTRINE
In order to be not considered agricultural land, and hence, not covered under the CARP,
the land must not have been classified: (a) as mineral or forest by the DENR and its predecessor
agencies; and (b) for residential, commercial or industrial use in town plans and zoning
ordinances as approved by the HLURB and its preceding competent authorities prior to June 15,
1988. Reclassification by LGUs of agricultural lands into "forest conservation zones," which is in
the nature of a secondary classification, does not have the effect of converting such lands into
forest lands as to be exempt from CARP coverage. However, while DAR AO No. 6, Series of 1994
declares that the reclassification of lands to non-agricultural uses shall not operate to divest FBs
of their rights over lands covered by PD 27, such rights must have vested prior to June 15, 1988.

───※ ·❆· ※───

Vivencio Dalit vs. Sps. Rolando Sr. Balagtas

CAGUIOA, J.
G.R. No. 202799 March 27, 2019
SUMMARY
Vivencio Dalit is a tenant farmer of a disputed lot and was directed to vacate by
respondents claiming that he was merely employed as a bulldozer and street roller and therefore,
has no right of possession. CLOA No. T-2165 was issued in Dalit's favor, and it thus confirms his
right to retain possession over the portion of the Disputed Lot, and such possession being an
attribute of ownership granted in his favor.

DOCTRINE
One of the modes by which DAR implements the distribution of agricultural lands under
the CARP is through the issuance of a CLOA. A CLOA is a document evidencing ownership of the
land granted or awarded to the qualified ARB, and contains the restrictions and conditions of
such grant.
Under DAR Administrative Order No. 07-14, the cancellation of erroneously issued CLOAs
may be allowed only in the manner and under the conditions prescribed thereunder. Until duly
cancelled in accordance with the prescribed procedure, CLOAs issued by the DAR shall remain
valid and subsisting and enjoy the same respect accorded to those issued through other modes
of acquisition of title.

4
 ───※ ·❆· ※───

Benito Marasigan Jr. vs. Provincial Agrarian Reform Officer

CAGUIOA, J.
G.R. No. 222882 December 2, 2022
SUMMARY
The DAR had to file administrative proceedings with the PARAD because petitioner
Marasigan disagreed with the valuation of Land Bank of his two parcels of land. When the
Provincial Agrarian Reform Officer agreed with the valuation of Land Bank, Marasigan filed an
appeal to DARAB. The DARAB denied the appeal saying that it was the Speacial Agrarian Court
which had jurisdiction over the appeal.

DOCTRINE
Sec 6 of the DARAB Rules provides that the party who disagrees with the decision of the
Board/Adjudicator may contest the same by filing an original action with the Special Agrarian
Court (SAC) having jurisdiction over the subject property. This is consistent with the clear
jurisdiction of the RTC-SACs provided for under Sections 56 and 57 of R.A. 6657. Sec 57 in
particular provides that The Special Agrarian Courts shall have original and exclusive jurisdiction
over all petitions for the determination of just compensation to landowners, and the prosecution
of all criminal offenses under this Act.

───※ ·❆· ※───

TRANSFER OF FARMHOLDINGS UPON DEATH OF THE

FARMER-BENEFICIARY

Golez vs Abais
CAGUIOA, J.
G.R. No. 191376 January 8, 2020
SUMMARY
Presentacion Golez filed a case against her brother-in-law Mariano Abais, for ejectment
from the disputed lots in Zarraga, Iloilo and for damages. Presentacion won, but the decision
was reversed when Mariano appealed Court of Appeals (CA) and argued that the DARAB Decision
is barred by res judicata, inasmuch as two prior judgments of the RTC and another issued by the
DARAB have already upheld his rights as a tenant.

DOCTRINE
Where there are several heirs, and in the absence of extra-judicial settlement or waiver of
rights in favor of one heir who shall be the sole owner and cultivator, the heirs shall within one month
from death of the tenant-beneficiary be free to choose from among themselves one who shall have
sole ownership and cultivation of the land. Provided, however, that the surviving spouse shall be
given first preference; otherwise, in the absence or due to the permanent incapacity of the surviving
spouse, priority shall be determined among the heirs according to age.

5
 ───※ ·❆· ※───

LEASEHOLD TENANCY; SECURITY OF TENURE

Romero vs Sobrino
CAGUIOA, J.
G.R. No. 241353 January 22, 2020
SUMMARY
Respondent Sombrino alleges that there exists an agricultural leasehold tenancy
relationship between the petitioners Heirs of Lutero and himself and enjoys security of tenure
as guaranteed by tenancy laws.

DOCTRINE
Security of tenure may be invoked only by tenants de jure and not by those who are not
true and lawful tenants but became so only through the acts of a supposed landholder who had no
right to the landholdings. Tenancy relations can only be created with the consent of the landholder
who is either the owner, lessee, usufructuary or legal possessor of the land.

───※ ·❆· ※───

SOCIAL SECURITY LAW

Haveria vs SSS
CAGUIOA, J.
G.R. No. 181154 August 22, 2018
SUMMARY
Haveria’s retirement benefits were suspended by the SSS on the grounds that he was not
entitled to is since there was no employment relationship between the petitioner and the SSS
Employees’ Association (SSEA).

DOCTRINE
A labor organization, cannot be considered an employer under the law. The Labor Code
expressly excludes labor organizations from the definition of an employer, except when they directly
hire employees to render services for the union or association

───※ ·❆· ※───

6
 GSIS LAW – LIABILITY OF THE HEAD OF OFFICE OF
NATIONAL GOVERNMENT’S POLITICAL SUBDIVISION
FOR NON-REMITTANCE OF PREMIUM CONTRIBUTIONS.

People vs. Talaue

CAGUIOA, J.
G.R. No. 248652 January 12, 2021
SUMMARY
An information was filed against the municipal mayor, accountant and treasurer of Sto.
Tomas, Isabela for having failed to remit the GSIS premium contributions of its municipal
employees for January 1, 1997 to January 31, 2004. Sandiganbayan found the municipal mayor
guilty beyond reasonable doubt of Section 52(g) in relation to Section 6(b) of R.A. 8291 or Revised
GSIS Act of 1977.

DOCTRINE
Section 52(g) of the GSIS Act of 1997 penalizes the heads of the offices of the national
government, its political subdivisions, branches, agencies and instrumentalities, including
government-owned or controlled corporations and government financial institutions, and the
personnel of such offices who are involved in the collection of premium contributions, loan
amortization and other accounts due the GSIS, who fail, refuse, or delay the payment, turnover,
remittance or delivery of such accounts to the GSIS within thirty (30) days from the time the
same have become due and demandable.

A municipality is a political subdivision of the national government. Appellant, as

Municipal Mayor of Sto. Tomas, Isabela, is unquestionably the head of office of the said
Municipality as the chief executive officer thereof. As head of office, he, as well as other
employees involved in the collection of contributions due the GSIS, are responsible for the
prompt and timely payment and/or remittance of the said premiums to the GSIS.

NOTES
As municipal mayor, Section 444(a) of the Local Government Code of 1991 commands
appellant not only to exercise such powers and perform such duties and functions as provided by
said Code, but also such duties as may be imposed upon him by other laws, which certainly
includes his responsibility under the GSIS Act of 1997. Further, Section 444(b)(l)(x) of said Code
obligates him to ensure that all executive officials and employees of the municipality faithfully
discharge their duties and functions as provided by law and said Code, and to cause the institution
of administrative or judicial proceedings against any official or employee of the municipality who
may have committed an offense in the performance of his official duties.

───※ ·❆· ※───

7
 GSIS; SICKNESS BENEFITS

Verzonilla vs Employees’ Compensation Commission

CAGUIOA, J.
G.R. No. 232888 August 14, 2019
SUMMARY
Julieta the surviving spouse of Reynaldo (who died due to "cardio pulmonary arrest,
etiology undetermined".) filed a claim for compensation benefits before the Government Service
Insurance System (GSIS) under Presidential Decree (PD) 626. GSIS denied the claim of Julieta,
stating that based on the documents submitted, the ailment of Reynaldo was not connected to
his work and that no evidence was found that his duties as SOO III increased the risk of contracting
said ailment.

DOCTRINE
The Court stresses that in determining the compensability of an illness, it is not necessary
that the employment be the sole factor in the growth, development, or acceleration of a claimant's
illness to entitle him to compensation benefits. It is enough that his employment contributed, even
in a small degree, to the development of the disease and the degree of proof in establishing at least
a small work-connection is merely substantial evidence. Despite the abandonment of Presidential
Decree No. 626 where the presumption of compensability and the theory of aggravation prevalent
under the Workmens Compensation Act, the present law has not ceased to be an employees'
compensation law or a social legislation; hence, the liberality of the law in favor of the working man
and woman still prevails.

───※ ·❆· ※───

DISABILITY BENEFITS

Rickmer’s Marine Agency Philippines vs San Jose

CAGUIOA, J.
G.R. No. 220949 July 23, 2018
SUMMARY
San Jose was injured onboard a vessel; he contends that he is entitled to total and
permanent disability benefits because the company-designated physician did not issue any
assessment within the 120/240-day period.

DOCTRINE
The seafarer's condition is considered to be temporary total disability for the duration of
his treatment which shall have an initial maximum period of 120 days. If the seafarer requires
further medical treatment, the period may be extended to 240 days. Within the said periods,
the company-designated physician must assess and certify the seafarer's condition; that is,
whether he is "fit to work" or if the seafarer's permanent disability has become partial or total.

8
 However, if after the lapse of 240 days, the company-designated physician has not made
any assessment at all (whether the seafarer is fit to work or whether his permanent disability is
partial or total), it is only then that the conclusive presumption that the seafarer is totally and
permanently disabled arises.

───※ ·❆· ※───

Ylaos Manning Services Inc. vs Overseas Ship Management

CAGUIOA, J.
G.R. No. 227216 July 4, 2018
SUMMARY
Borja was injured onboard a vessel; he claims that his disability is total and permanent
as certified by his appointed physician. On the other hand, his employer claims that his ailment
is only "Grade 11" as diagnosed by the company-designated physician.

DOCTRINE
In case there is a conflict between the medical findings of the company-designated physician
and the seafarer-appointed physician as to the disability rating of the seafarer, the parties must
comply with the conflict-resolution procedure mandated under the POEA-SEC.

The seafarer must be the one to signify his intent to refer to a third doctor as he is the party
contesting the findings of the company-designated physician; without the opinion of the third doctor,
the medical pronouncements of the company-designated physician prevail.

───※ ·❆· ※───

DEATH COMPENSATION

Menez vs Status Marine Corporation

CAGUIOA, J.
G.R. No. 227523 August 29, 2018
SUMMARY
Jonathan Menez was diagnosed with (a) uncal herniation 2 to the parenchymal
hemorrhages, right frontal and temporal cortical areas; (b) upper GI bleed; and (c) acute
myelogenous leukemia and died shortly after he arrived in the Philippines. His wife, Amalia
Menez, the petitioner, is now claiming for death benefits on the ground that the cause of death
of her husband was work related.

9
DOCTRINE
In order for the beneficiaries of a seafarer to be entitled to death compensation from the
employer, it must be proven that the death of the seafarer (1) is work-related; and (2) occurred
during the term of his contract.

───※ ·❆· ※───

POEA-STANDARD EMPLOYMENT CONTRACT FOR

SEAFARERS

Jose Aspiras Malicdem vs Asia Bulk Transport Phils Inc.

CAGUIOA, J.
G.R. No. 224753 June 19, 2019
SUMMARY
Malicdem was hired by respondent local manning agent Asia Bulk TransportPhils, Inc. in
behalf of a foreign principal, SKM Korea Ltd to board the vessel MV Yushio Princess II for a period
of three (3) months. He consulted a private doctor who assessed him to be disabled for work due
to medical condition. He then filed a disability benefits claiming that he is entitled to permanent
and total disability benefits that hypertension and glaucoma are work related as he was exposed
to risk factors aggravated his conditions while on board.

DOCTRINE
Company-designated physician who is entrusted with the task of assessing a seafarer's illness
for purposes of claiming disability benefits. Jurisprudence is likewise replete with cases where the
Court upheld the findings of the company-designated physicians as against those of the private
physician hired by the seafarer-claimant, because the former devoted more attention and time in
observing and treating the claimant's condition.

NOTES
Section 20(A) of the Amended Standard Terms and Conditions Governing the Overseas
Employment of Filipino Seafarers on-Board Ocean-Going Ships issued on October 26, 2010 (2010 POEA-
SEC), two (2) 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

───※ ·❆· ※───

10
 PERMANENT AND TOTAL DISABILITY BENEFITS

Jebsens Maritime, Inc. v. Mirasol

CAGUIOA, J.
G.R. No. 213874 June 19, 2019

SUMMARY
Mirasol alleged, inter alia, that: he is entitled to total permanent disability benefits of
US$60,000.00 under the POEA Standard Employment Contract; his illness is work-related as it
was sustained in the course of his duties; said illness was not pre-existing since he underwent
the mandatory pre-employment medical examination before he was employed by the
respondents, and was found to be fit and given a clean bill of health; the law does not require
that a seafarer be totally paralyzed in order to claim total permanent disability benefits.

DOCTRINE
A final, conclusive, and definite medical assessment must clearly state whether the seafarer
is fit to work or the exact disability rating, or whether such illness is work-related, and without any
further condition or treatment. It should no longer require any further action on the part of the
company-designated physician and it is issued by the company-designated physician after he or she
has exhausted all possible treatment options within the periods allowed by law.

NOTES
The Court summarized the rules when a seafarer claims total and permanent disability benefits, as
follows:
1. The company-designated physician must issue a final medical assessment on the seafarer's
disability grading within a period of 120 days from the time the seafarer reported to him;
2. If the company-designated physician fails to give his assessment within the period of 120 days,
without any justifiable reason, then the seafarer's disability becomes permanent and total;
3. If the company-designated physician fails to give his assessment within the period of 120 days
with a sufficient justification (e.g., seafarer required further medical treatment or seafarer
was uncooperative), then the period of diagnosis and treatment shall be extended to 240 days.
The employer has the burden to prove that the company-designated physician has sufficient
justification to extend the period; and
4. If the company-designated physician still fails to give his assessment within the extended
period of 240 days, then the seafarer's disability becomes permanent and total, regardless of
any justification.

───※ ·❆· ※───

11
 CONFLICT RESOLUTION PROCEDURE

Julleza vs Orient Line Philippines

CAGUIOA, J.
G.R. No. 225190 July 29, 2019
SUMMARY
Petitioner Julleza allegedly slipped while cleaning the cargo hold under bad weather
condition. It was found that petitioner suffered from lumbar spondylosis but the company-
designated and the independent physicians arrived at different findings.

DOCTRINE
When a seafarer sustains a work-related illness or injury while on board the vessel, his fitness
or unfitness for work shall be determined by the company-designated physician. If the physician
appointed by the seafarer disagrees with the company-designated physician's assessment, the opinion
of a third doctor may be agreed jointly between the employer and the seafarer to be the decision
final and binding on them. Thus, while petitioner had the right to seek a second and even a third
opinion, the final determination of whose decision must prevail must be done in accordance with an
agreed procedure. After receipt of his own doctor's medical report, petitioner did not show any proof
that he sent the medical report to respondents and signify to respondents that he would like to refer
the conflicting medical findings to a third doctor.
NOTES
In Gargallo v. Dohle Seafront Crewing (Manila), Inc., the Court ruled that the seafarer is
required to comply with the conflict-resolution procedure, which was the same under the 2010
Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC) and the
CBA. The word “accident” may be employed as denoting a calamity, casualty, catastrophe, disaster,
an undesirable or unfortunate happening; any unexpected personal injury resulting from any unlooked
for mishap or occurrence; any unpleasant or unfortunate occurrence, that causes injury, loss,
suffering or death; some untoward occurrence aside from the usual course of events.

───※ ·❆· ※───

DISABILITY CLAIMS

Ventis Maritime Corp. v. Salenga

CAGUIOA, J.
G.R. No. 238578 June 8, 2020
SUMMARY
Respondent Salenga filed for permanent disability benefit claims against the employer
on grounds that he contracted an illness which was Diabetes Mellitus Type II and cardiovascular
disease while in service of or at work, however upon further investigation of the court it was
found that his illness was not contracted after the term of his contract and not included in those
of occupational illness listed under Section 32-A of the POEA-SEC that could entitle him disability
benefits. Given this consideration, the court further explained that even if his sickness was such
12
 of those listed, the burden to prove that his work had contributed to the establishment or
aggravation of such illness, being such an employer exposed him at risk and was notoriously
negligent was not proven by the respondent. Failure to present substantial evidence that his
illness was work-related, the court found that LA, NLRC, and CA erred in awarding total and
permanent disability benefits to Salenga. The petition was dismissed.

DOCTRINE
The terms and conditions for claiming disability benefits by a seafarer against his employer are
contained in the Standard Terms and Conditions Governing the Employment of Filipino Seafarers On-
Board Ocean-Going Vessels (POEA-SEC). Specifically, Section 20[(A)] provides that the employer is
liable for disability benefits when the seafarer suffers from a work-related injury or illness during the
term of his contract. To be compensable, the injury or illness;
1) must be work-related; and
2) must have arisen during the term of the employment contract.

NOTES
In instances where the illness manifests itself or is discovered after the term of the seafarer's
contract, the illness may either be (1) an occupational illness listed under Section 32-A of the POEA-
SEC, in which case, it is categorized as a work-related illness if it complies with the conditions stated
in Section 32-A, or (2) an illness not listed as an occupational illness under Section 32-A but is
reasonably linked to the work of the seafarer.

───※ ·❆· ※───

DISABILITY BENEFITS

Razonable vs Maersk Filipinas Crewing Inc.

CAGUIOA, J.
G.R. No. 241674 June 10, 2020
SUMMARY
Razonable consulted an orthopedic expert, Dr. Manuel Fidel Magtira (Dr. Magtira), who
issued a Medical Report concluding that Razonable was permanently unfit in any capacity to
resume his sea duties as a seaman. Razonable claimed total and permanent disability benefits in
accordance with the law and the CBA.

DOCTRINE
The company-designated physician must issue a final medical assessment on the seafarer's
disability grading within a period of 120 days from the time he was repatriated. However, If the
company-designated physician fails to give his assessment within the period of 120 days, without any
justifiable reason, then the seafarer's disability becomes permanent and total. If the company-
designated physician fails to give his assessment within the period of 120 days with a sufficient
justification, then the period of diagnosis and treatment shall be extended to 240 days. The employer

13
 has the burden to prove that the company designated physician has sufficient justification to extend
the period; and if the company-designated physician still fails to give his assessment within the
extended period of 240 days, then the seafarer's disability becomes permanent and total, regardless
of any justification.

───※ ·❆· ※───

TOTAL AND PERMANENT DISABILITY BENEFITS

BSM Crew Service Centre Philippines, Inc. v. Jones

CAGUIOA, J.
GR No. 240518 December 9, 2020
SUMMARY
While loading food provisions on board the vessel, Jones felt a sudden snap in his back
followed by pain which radiated to his lower extremities, his pain did not subside, he was
medically repatriated subsequently Jones undertook a functional capacity evaluation where the
company-designated physician certified that Jones was "cleared to return to work." He was not
re-engaged by BSM.
Parties then underwent grievance proceedings.
DOCTRINE
In instances where the illness manifests itself or is discovered after the term of the seafarer's
contract, the illness may either be (1) an occupational illness listed under Section 32-A of the POEA-
SEC, in which case, it is categorized as a work-related illness if it complies with the conditions stated
in Section 32-A, or (2) an illness not listed as an occupational illness under Section 32-A but is
reasonably linked to the work of the seafarer.

───※ ·❆· ※───

Jebsens Maritime, Inc. v. Gutierrez

CAGUIOA, J.
G.R. No. 244098 March 3, 2021
SUMMARY
A seafarer (Guttierez) working as the Third Cook for a foreign vessel was medically
repatriated and after being declared by the Company’s ship doctor “FIT TO WORK.” Guttierez
applied for re-engagement but was denied because he failed to pass the pre-employment medical
examination (PEME). The seafarer filed two cases for work-related illness. The Company invoked
res judicata. However, the Court ruled in favor of the seafarer.

DOCTRINE
After the medical treatment, if the seafarer is found to be suffering from permanent
total or partial disability due to the work-related injury or illness, the employer has an obligation
to pay the seafarer disability benefits under Section 20 (A)(6). In some cases, these benefits may
14
 be claimed together since they usually arise from the same injury or illness. In this case,
Gutierrez has the right to claim the two causes of action separately, even if they arose from the
same illness.

NOTES
Jebsens and Sea Chef’s maintain that Gutierrez is not entitled to total and permanent
disability benefits because he was already declared fit to work by the company-designated
physician.

However, under the POEA-SEC, the seafarer is not absolutely bound by the opinion of the
company-designated physician. He has a right to seek the second medical opinion which he
obtained in this case. Section 20 (A) (3) of the POEA-SEC mandates that when there are
conflicting findings by the company-designated physician and the seafarer’s personally appointed
physician, the parties may refer to a third doctor mutually agreed upon, whose decision shall be
final and binding on both parties. In this case, both parties had agreed to refer to a third doctor
during the conference. Petitioner’s refusal or failure to actively participate in the process of
choosing the third doctor was a waiver of their right to do so, and cannot be used to challenge
the third doctor’s final and binding opinion.

───※ ·❆· ※───

DISABILITY BENEFITS

Elevera v. Orient Maritime Services, Inc.

CAGUIOA, J.
G.R. No. 240054 March 18, 2021
SUMMARY
The company-designated physician must issue a medical assessment that is final and
definitive within the periods provided by law. In this case, the company-designated physician
failed to indicate the appropriate rating corresponding to the petitioner’s disability. It cannot,
therefore, be determined with certainty whether he is suffering from total or mere partial
permanent disability. This makes the Medical Report fatally defective for being incomplete and
indefinite within the 120-day period set by law. Because of this, the petitioner is deemed in law
to be suffering from total and permanent disability.

DOCTRINE
If there is a claim for total and permanent disability benefits by a seafarer, the following rules shall
govern:
1. The company-designated physician must issue a final medical assessment on the seafarer’s
disability grading within a period of 120 days from the time the seafarer reported to him;
2. If the company-designated physician fails to give his assessment within the period of 120 days,
without any justifiable reason, then the seafarer’s disability becomes permanent and total;
3. If the company-designated physician fails to give his assessment within the period of 120 days
with a sufficient justification (e.g., seafarer required further medical treatment or seafarer was
uncooperative), then the period of diagnosis and treatment shall be extended to 240 days. The
15
 employer has the burden to prove that the company-designated physician has sufficient
justification to extend the period; and
4. If the company-designated physician still fails to give his assessment within the extended period
of 240 days, then the seafarer’s disability becomes permanent and total, regardless of any
justification.

───※ ·❆· ※───

United Philippine Lines v. Ramos

CAGUIOA, J.
G.R. No. 225171 March 18, 2021
SUMMARY
The petitioner, United Philippine Lines, Inc. (UPL), was not provided with the medical
assessment of the company designated physician to contest. As such, there was no impetus to
seek a neutral third doctor. Therefore, for the respondents' failure to inform the petitioner of
his medical assessment within the prescribed period, the petitioner's disability grading is, by
operation of law, total and permanent.

DOCTRINE
Governing the Overseas Employment of Filipino Seafarers Onboard Ocean-going Ships (POEA-
SEC) is clear that "in the event that a seafarer suffers a [work-]related/aggravated illness or an injury
during the course of his/her employment, it is the company-designated physician's medical
assessment that shall control the determination of the seafarer's disability grading. Should the
seafarer's personal physician disagree, then the matter shall be referred to a neutral third-party
physician, who shall then issue a final and binding assessment.

The company-designated physician is mandated to issue a medical certificate, which should

be personally received by the seafarer, or, if not practicable, sent to him/her by any other means
sanctioned by present rules. For indeed, proper notice is one of the cornerstones of due process, and
the seafarer must be accorded the same especially so in cases where his/her well-being is at stake.

───※ ·❆· ※───

DISABILITY AND DEATH BENEFITS

Abella vs. Abosta

CAGUIOA, J.
G.R. No. 249358 April 28, 2021
SUMMARY
The company-designated physician and Abosta, the respondent, failed to furnish Abella,
the complainant with a copy of the medical assessment within the periods mandated by law.

16
 Instead, they merely informed Abella of his disability rating during the conference before the
Labor Arbiter.

DOCTRINE
A verbal notice of the seafarer’s disability rating is not enough. The seafarer must be
furnished a copy of the final medical assessment issued by the company-designated physician in
order to afford the seafarer the opportunity to evaluate the same and decide whether he agrees
with it or not. And if he does not agree with it, he ought to bring the same to an independent
doctor who can only get a better understanding of the opinion of the company-designated
physician through a copy of the latter’s medical assessment.

NOTES
Under Section 20 of the POEA-SEC, the seafarer has the obligation to report to the
company-designated physician within three days from his repatriation, while the company-
designated physician has the corresponding obligation to issue a final assessment of the seafarer’s
disability within the periods mandated by law. It is, however, not enough for the company-
designated physician to issue a medical assessment within 120 or 240 days from the seafarer’s
repatriation. In order to be binding, the medical assessment must be final, definite, and
conclusive, otherwise, the law will step in and consider the seafarer totally and permanently
disabled. A final, conclusive and definite medical assessment must clearly state whether the
seafarer is fit to work or the exact disability rating, or whether such illness is work-related, and
without any further condition or treatment. It should no longer require any further action on the
part of the company-designated physician, and it is issued by the company-designated physician
after he or she has exhausted all possible treatment options within the periods allowed by law.
Apart from issuing a final, conclusive, and definite medical assessment, the company-designated
physician and/or the company must also furnish the seafarer a copy thereof.

───※ ·❆· ※───

Pacific Ocean Manning v. Castillo

CAGUIOA, J.
G.R. No. 230527 June 14, 2021
SUMMARY
The company-designated physician and seafarer’s appointed physician were consistent
in their diagnoses that Castillo, the respondent, was suffering from partial permanent disability.
They differed only as to the disability rating. The parties agreed to refer Castillo to a third
independent doctor, which also declared a different disability rating from the previous doctors.

DOCTRINE
The third doctor’s medical report is final and conclusive on the parties.
NOTES
Section 20 (A)(6) of the POEA-SEC expressly states that the disability shall be based
exclusively on the disability ratings under Section 32 and shall not be measured or determined by
the number of days a seafarer is under treatment or the number of days in which sickness
allowance is paid.

───※ ·❆· ※───

17
 Cariño v. Maine Marine Phils, Inc.
CAGUIOA, J.
G.R. No. 231111 October 17, 2018
SUMMARY
A complaint for permanent and total disability benefits, payment of sickness
allowance, reimbursement of medical and related expenses, damages and attorney's
fees was filed by Cariño who was deck boy aboard "M/V Raga.

DOCTRINE
The employer has the duty to provide all the medical treatment to a medically
repatriated seafarer. It also has to pay the sickness allowance based on his daily wage
until the seafarer is declared fit. This is clear from Section 20(A)(2) and (3) of the POEA-
SEC. Section 20(A) of the POEA-SEC

───※ ·❆· ※───

Esposo v. Epsilon Maritime Services, Inc.

CAGUIOA, J.
GR No. 218167 November 7, 2018
SUMMARY
Petitioner Esposo has been continuously hired by respondent Epsilon Maritime
Services since September 2011The present complaint is based on the finding of a private
physician of Esposo’s unfitness to work due to his cardiovascular disease. He avers that
Epsilon did not provide any financial assistance and he was forced to shoulder all the
expenses. According to him, his condition did not improve within 120 days, hence the
claim for permanent disability benefits.

DOCTRINE
1. For disability to be compensable under Section 20-B of the POEA SEC,68 two (2)
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.
2. While a seafarer has the right to seek the opinion of other doctors under Section
20-B(3) of the POEA-SEC, this is on the assumption that there is already a certification by
the company-designated physician as to his fitness or disability which he disagrees with. It
is the company-designated physician who is entrusted with the task of assessing a seafarer's
disability and there is a procedure to contest his findings.

───※ ·❆· ※───

18
 Pacific Ocean Manning vs Solacito
CAGUIOA, J.
G.R. No. 217431 February 19, 2020
SUMMARY
Petitioner Pacific Ocean Manning, Inc. hired respondent Roger P. Solacito
(Solacito) as an Able Seaman on board M/V Eurocardo Salerno on behalf of its principal,
petitioner Industria Armamento Meridionale. Solacito alleged that while he was on
pirate watch, an insect entered and lodged itself inside his left ear which caused pain,
itchiness, and dizziness. When his condition did not improve, he was again off-boarded
for treatment in a Moroccan hospital. When he was repatriated, The company-
designated physician diagnosed him with an ear infection which became aggravated
chronic otitis media. Solacito filed a complaint for total and permanent disability
benefits
DOCTRINE
The failure of the respondent to signify the intent to submit himself to the third
physician was a direct contravention of the terms and conditions of his contract with the
petitioners. Such contravention unauthorized the making of the claim for the benefits.

───※ ·❆· ※───

Magsaysay vs Buico
CAGUIOA, J.
GR No. 230901 December 5, 2019
SUMMARY
Petitioner Magsaysay Maritime Corporation entered into a contract of
employment with Respondent Allan Buico. While on board, Buico had an accident which
caused him an injury on his right leg and ankle. The company-designated physician
assessed Buico’s disability and gave a grading of at Grade 10 disability pursuant to POEA-
SEC. Buico filed a complaint with the Labor Arbiter (LA) against Petitioners in this case
claiming for permanent and total disability benefits.
DOCTRINE
The failure to comply with the requirement of referral to a third doctor is
tantamount to a violation of terms under the POEA-SEC. Consequently, without a binding
third-party opinion, the final, accurate and precise findings of the company-designated
physician prevail over the conclusion of the seafarer's personal doctor.

───※ ·❆· ※───

19
 Mangubat, Jr. vs Dalisay Shipping Corp.
JUSTICE, J.
GR No. 226385 August 19, 2019
SUMMARY
Celso Mangubat was contracted by the respondents to work as an oiler on board
the vessel M.V. SG Capital. While they were trying to lift the motor, Celso took a step
but went out of balance and fell off with his right leg hitting the deck floor. Petitioner
filed a complaint against respondents for disability benefits.
DOCTRINE
The same standards to determine the validity of the assessment should be the same
for the company-designated physician, seafarer's physician, and the third doctor. Thus, in
order for the seafarer to dispute the assessment of the company-designated physician, the
assessment of the seafarer's doctor should state the seafarer's fitness to work or the
disability rating. Given the lack of a valid and definite assessment from the seafarer's doctor,
the definite and valid assessment of the company-designated physician stands and is binding
on the seafarer

───※ ·❆· ※───

COLLECTIVE BARGAINING AGREEMENT

GSIS Family Bank Employees Union vs Sec. Villanueva

CAGUIOA, J.
G.R. No. 210773 January 23, 2019
SUMMARY
The Government Service Insurance System effectively owned 99.55% of
Comsavings Bank's outstanding shares of stocks. Emmanuel L. Benitez, GSIS Family Bank's
president, sought opinion from the Bangko Sentral ng Pilipinas as to whether GSIS Family
Bank may be considered as a government-owned or controlled corporation or
government bank under Republic Act No. 10149.
DOCTRINE
Government-owned or controlled corporations, whether Chartered or Non-
chartered, may not negotiate with their officers and employees the economic terms of their
collective bargaining agreements.

───※ ·❆· ※───

20
 Hongkong Bank Independent Labor Union v. Hongkong and
Shanghai Banking Corporation Ltd.
CAGUIOA, J.
G.R. No. 218390 February 28, 2018
SUMMARY
BSP issued a manual requiring that financial plans, with regard to financial
assistance provided by banks to their employees, shall be with prior approval of the BSP.
Subsequently, when HSBC and HBILU’s CBA was about to expire, HSBC unilaterally
incorporated the provisions of its BSP-approved plan, which contained a credit checking
proviso, despite HBILU’s objection to incorporate the said provision to their existing
CBA.
DOCTRINE
The provisions of the CBA must be respected since its terms and conditions constitute
the law between the parties. Until a new CBA is executed by and between the parties, they
are duty-bound to keep the status quo and to continue in full force and effect the terms
and conditions of the existing agreement.

NOTES
Although jurisprudence recognizes the validity of the exercise by an employer of its
management prerogative and will ordinarily not interfere with such, this prerogative is not
absolute and is subject to limitations imposed by law, collective bargaining agreement, and
general principles of fair play and justice. Where the CBA is clear and unambiguous, it
becomes the law between the parties and compliance therewith is mandated by the express
policy of the law.

───※ ·❆· ※───

ILLEGAL DISMISSAL

Raymond A. Son vs UST

CAGUIOA, J.
G.R. No. 211273 April 18, 2018
SUMMARY
Petitioners were professors of UST who were employed under a CBA that
stipulated the requirement for a Master’s Degree. They contend that they were illegally
dismissed
DOCTRINE
While every individual has autonomy to enter into any contract, the contractual
stipulations, however, must not be contrary to law, morals, good customs, public order, or
public policy.

21
 ───※ ·❆· ※───

VALID STRIKE; REQUISITES, DISMISSAL OF UNION

OFFICERS

Bigg’s Inc vs Boncacas

CAGUIOA, J.
G.R. Nos. 207281 & 210922 March 5, 2019
SUMMARY
Bigg’s (employer) alleges that 50 union members staged an illegal “sit-down
strike” in Bigg’s restaurant. The union did not comply with the requirement of sending
Notice of Strike to the National Conciliation and Mediation Board (NCMB). Neither did
the union obtain the “strike vote” from its members. Likewise, it alleges that union
members were disruptive and violent. They prevented ingress and egress of employees
and customers to and from the company’s premises.
DOCTRINE
For a valid strike, the union must observe the following procedural requirements as
required under Article 263 of the Labor Code:
1. Notice of strike
2. Cooling-off period
3. During the cooling-off period, the NCMB mediates and conciliates the parties.
They are not allowed to do any act that may disrupt or impede the early
settlement of the dispute
4. Before a strike may start, a strike vote should be taken by secret balloting,
with 24-hour prior notice to NCMB
5. The result of the strike vote should be reported to the NCMB at least 7 days
before the intended strike.

For union officers, it suffices that they knowingly participated in an illegal strike.

───※ ·❆· ※───

22
 TERMINATION OF EMPLOYMENT

Umali v. Hobbywing Solutions, Inc.

CAGUIOA, J.
G.R. No. 221356 March 14, 2018
SUMMARY
After seven (7) months since she started working for the respondent, the
petitioner Umali was asked to sign two employment contracts. The first employment
contract was for a period of five (5) months. On the other hand, the second contract
was for a period of three (3) months, running from. She signed both contracts as
directed. Later, the petitioner was informed by the respondent that her employment
has already ended and was told to just wait for advice whether she will be rehired or
regularized.
DOCTRINE
It bears stressing that while in a few instances the Court recognized as valid the
extension of the probationary period, still the general rule remains that an employee
who was suffered to work for more than the legal period of six (6) months of
probationary employment or less shall, by operation of law, become a regular employee.

───※ ·❆· ※───

Minsola v. New City Builders Inc.

JUSTICE, J.
G.R. No. 207613 January 31, 2018
SUMMARY
New City hired Minsola as a laborer for the structural phase of its Avida Tower 3
Project (Avida 3). The employment contract stated that the duration of Minsola's
employment will last until the completion of the structural phase. When the project
was finished, Minsola received a notice of termination. New City re-hired Minsola as a
mason for the architectural phase of the Avida 3.
DOCTRINE
In a project-based employment, the employee is assigned to a particular project or
phase, which begins and ends at a determined or determinable time. Consequently, the
services of the project employee may be lawfully terminated upon the completion of such
project or phase. For employment to be regarded as project-based, it is incumbent upon
the employer to prove that (i) the employee was hired to carry out a specific project or
undertaking, and (ii) the employee was notified of the duration and scope of the project.39
In order to safeguard the rights of workers against the arbitrary use of the word "project" as
a means to prevent employees from attaining regular status, employers must prove that the
duration and scope of the employment were specified at the time the employees were
engaged, and prove the existence of the project.
NOTES
In Malicdem, et al. v. Marulas Industrial Corporation, et al., the Court took judicial
notice of the fact that in the construction industry, an employee's work depends on the
availability of projects. The employee's tenure "is not permanent but coterminous with the
23
 work to which he is assigned. Consequently, it would be extremely burdensome for the
employer, who depends on the availability of projects, to carry the employee on a
permanent status and pay him wages even if there are no projects for him .to work on. An
employer cannot be forced to maintain the employees in the payroll, even after the
completion of the project. "To do so would make the employee a privileged retainer who
collects payment from his employer for work not done. This is extremely unfair to the
employers and amounts to labor coddling at the expense of management.

───※ ·❆· ※───

EVIC Human Resource Management vs. Panahon

CAGUIOA, J.
G.R. No. 206890 July 31, 2017
SUMMARY
The employment of a member of the crew was dismissed for allegations of
negligence, intoxication, and arrogance. Such allegations were stated in a report
created by the Ship Captain which prompted the employer to relieve the employee of
his services without due process invoking Section 33 of the POEA-SEC.
DOCTRINE
For dismissal to be valid, the employer must show through substantial evidence — or
such amount of relevant evidence that a reasonable mind might accept as adequate to
support a conclusion — that (1) the dismissal was for a just or authorized cause; and (2) the
dismissed employee was afforded due process of law
NOTES
A report from the Ship Captain resulting to the dismissal of the crew should be
corroborated by statements of other members of the crew in order to be considered as
adequate.
Under Section 17 of the POEA-SEC, the "two — notice rule" is indicated. An erring seaman
is given a written notice of the charge against him and is afforded an opportunity to explain
or defend himself. Should sanctions be imposed, then a written notice of penalty and the
reasons for it shall be furnished the erring seafarer. It is only in the exceptional case of
clear and existing danger to the safety of the crew or vessel that the required notices are
dispensed with

───※ ·❆· ※───

San Fernando Coca-Cola Rank-and File Union v. Coa-Cola

Bottlers Philippines, Inc. vs. Coca Cola Bottlers Philippines

24
 CAGUIOA, J.
G.R. No. 200499 October 4, 2017
SUMMARY
27 union members were issued notices of termination on the ground of
redundancy due to the implementation of a system of operations in the employer-
company. The said termination resulted in a collective action of the employees to strike.
The issue of unfair labor practices from the said redundancy program averred by the
employer-company.
DOCTRINE
For there to be a valid implementation of a redundancy program, the following
should be present:
(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 prove the existence of unfair labor practice, substantial evidence has to be

presented. The union's mere allegation of ULP is not evidence, it must be supported by
substantial evidence.

───※ ·❆· ※───

Bautista vs Eli Lilly Philippines

CAGUIOA, J.
G.R. No. 235865 February 3, 2021
SUMMARY
Bautista was hired by respondent Eli Lilly Philippines, Inc. (ELPI) in 1998 as a
Professional Sales Representative. After several promotions, he was retrenched in 2003,
rehired in 2005, 2011, ELPI issued a Show-Cause Letter, charging Bautista with violation
of the company rules and breach of trust and confidence.
DOCTRINE
In a petition for review on certiorari arising from labor cases, the Court is limited to
the examination of whether the CA correctly determined the existence of grave abuse of
discretion on the part of the NLRC.

───※ ·❆· ※───

25
 Villanueva v. Ganco Resort and Recreation, Inc.
CAGUIOA, J.
G.R. No. 227175 January 8, 2020
SUMMARY
Petitioner Neren Villanueva files a complaint for illegal dismissal and money
claims against the respondent. The LA and NLRC ruled in favor of the petitioner stating
that the petitioner's past violations may not be held against her and that failure to sign
the Notice of Transfer does not warrant the employer to terminate her employment,
thus granting relief and money claims to the petitioner. However, upon respondents'
appeal with the CA, the court finds that the petitioner's refusal to sign the Notice to
Transfer is amounting to insubordination or willful disobedience. Thus, her previous
infraction of refusal to accept walk-in guests, taken in conjunction with her manifest
refusal to accept her new assignment pursuant to the Notice of Transfer, served as valid
grounds for her dismissal from employment. This was upheld by the SC stating and
agreeing with the CA that her dismissal was justified, however, the SC stated that there
were numerous procedural lapses and the respondent failed to observe such
requirements. Affirming and Modifying the CA’s ruling and upholding awards of nominal
damages and Service Incentive Leave Pay with interest.

DOCTRINE
In an illegal dismissal case, the onus probandi rests on the employer to prove that
the employee's dismissal was for a valid cause. A valid dismissal requires compliance with
both substantive and procedural due process — that is, the dismissal must be for any of the
just or authorized causes enumerated in Article 297 [282] and Article 298 [283],
respectively, of the Labor Code, and only after notice and hearing.

Insubordination or willful disobedience requires the concurrence of the following

requisites:

(1) the employee's assailed conduct must have been willful or intentional, the
willfulness being characterized by a "wrongful and perverse attitude"; and

(2) the order violated must have been reasonable, lawful, made known to the
employee and must pertain to the duties which he had been engaged to discharge.

The requirements of procedural due process in King of Kings Transport, Inc. v.

Mamac;
(1) The first written notice to be served on the employees should contain the
specific causes or grounds for termination against them, and a directive that the
employees are given the opportunity to submit their written explanation within a
reasonable period. "Reasonable opportunity" under the Omnibus Rules means every kind
of assistance that management must accord to the employees to enable them to prepare
adequately for their defense. This should be construed as a period of at least five (5)
calendar days from receipt of the notice to give the employees an opportunity to study
the accusation against them, consult a union official or lawyer, gather data and evidence,
and decide on the defenses they will raise against the complaint. Moreover, in order to
enable the employees to intelligently prepare their explanations and defenses, the notice
should contain a detailed narration of the facts and circumstances that will serve as the
basis for the charge against the employees. A general description of the charge will not
suffice.

26
 (2) Lastly, the notice should specifically mention which company rules, if any, are
violated and/or which among the grounds under Art. 282 is being charged against the
employees.

In Auto Bus Transport Systems, Inc. v. Bautista, Service Incentive Leave being
cumulative, the three-year prescriptive period should be reckoned from the time the
employer refuses to pay its monetary equivalent or upon the termination of employment,
as the case may be.
NOTES
In Auto Bus Transport Systems, Inc. v. Bautista, the Court held that the three-year
prescriptive period commences not at the end of the year when the employee becomes entitled to
the commutation of his service incentive leave, but only from the time the employee becomes
entitled to the commutation of his service incentive leave, i.e., from the time he demands its
commutation or upon the termination of his employment, as the case may be.

───※ ·❆· ※───

Pardillo v. Bandojo
CAGUIOA, J.
GR No. 224854 March 27, 2019
SUMMARY
Lucita S. Pardillo (Pardillo) claims that she was illegally dismissed by her
employer.
DOCTRINE
While the law and this Court recognize the right of an employer to dismiss an
employee based on loss of trust and confidence, the evidence of the employer must clearly
and convincingly establish the facts upon which the loss of trust and confidence in the
employee is based. To be a valid ground for dismissal, loss of trust and confidence must be
based on a willful breach of trust and founded on clearly established facts. It must rest on
substantial grounds and not on the employer's arbitrariness, whims, caprices or suspicion;
otherwise, the employee would remain eternally at the mercy of the employer.

───※ ·❆· ※───

De Leon v. Philippine Transmarine Carriers, Inc.

CAGUIOA, J.
G.R. No. 213874 June 19, 2019
SUMMARY
In 2010, he was served with two written memoranda by the Human Resources
Department of PTC regarding a supposed violation of PTC's Code of Discipline,
particularly Section 3, Number 2. One of the two written memoranda served on de Leon
was regarding an incident on October 11, 2010, caught on PTC's closed-circuit television
(CCTV) where he appeared to have violated the policy of receiving "pasalubong" which
was prohibited under the written instruction of the company. On November 22, 2013,
27
 de Leon received a written resolution from PTC notifying him of the termination of his
employment.
DOCTRINE
The Court has, in the past, upheld a company's management prerogatives so long as
they are exercised in good faith for the advancement of the employer's interest and not for
the purpose of defeating or circumventing the rights of the employees under special laws or
under valid agreements. In this case, the Court holds that PTC was well within its
management prerogative in terminating de Leon's employment upon a finding of violation
of its company rules.

───※ ·❆· ※───

Del Rosario v. ABS-CBN Broadcasting Corp.

CAGUIOA, J.
G.R. No. 190654 October 4, 2017
SUMMARY
Ushering in more changes in the employees' status, sometime in 2007, ABS-CBN
required the workers in ABS-CBN Corporation v. Payonan, et al., to sign an employment
contract, which stated that they were "freelance employees." Because the workers
refused to comply, ABS-CBN effected a series of mass dismissals of workers on various
dates
DOCTRINE
In ascertaining the existence of an employer-employee relationship, the Court has
invariably adhered to the four-fold test, which pertains to: (i) the selection and engagement
of the employee; (ii) the payment of wages; (iii) the power of dismissal; and (iv) the power
of control over the employee's conduct, or the so-called "control test."

An essential characteristic of regular employment as defined in Article 280 of the

Labor Code is the performance by the employee of activities considered necessary and
desirable to the overall business or trade of the employer. The necessity of the functions
performed by the workers and their connection with the main business of an employer shall
be ascertained "by considering the nature of the work performed and its relation to the
scheme of the particular business or trade in its entirety.

The necessary consequence of a declaration that the workers are regular employees is the
correlative rule that the employer shall not dismiss them except for a just or authorized
cause provided in the Labor Code. This is the essence of the tenurial security guaranteed by
the law: “An employee who is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other privileges, and to his full back
wages, inclusive of allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him up to the time of his
actual reinstatement.”

───※ ·❆· ※───

28
 Rodriguez vs. Sintron Systems, Inc.
JUSTICE, J.
G.R. No. 240254 July 24, 2019
SUMMARY
Petitioner Rodriguez was warned that her continued absence may be a ground
for termination and was required to respond to the memorandum, else her termination
would be reported to the DOLE. The company informed her that the act of deleting
information and files from her company-issued computer and the removal of company
documents constitute serious misconduct, willful disobedience to a lawful order and
dishonesty or breach of trust which are just causes for dismissal.
DOCTRINE
In illegal dismissal cases, 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 its legality or illegality. The evidence to prove the fact of dismissal must be clear,
positive and convincing. Reinstatement restores the employee who was unjustly dismissed
to the position from which he was removed, that is, to his status quo ante dismissal.
Considering that there has been no dismissal at all, there can be no reinstatement as one
cannot be reinstated to a position he is still holding.
NOTES
While it is not expressly enumerated under Article 297 of the Labor Code as a just
cause for dismissal of an employee, it has been recognized by jurisprudence as a form of,
or akin to, neglect of duty. It requires the concurrence of two elements: 1) failure to report
for work or absence without valid or justifiable reason; and 2) a clear intention to sever the
employer- employee relationship as manifested by some overt acts. One who alleges a fact
bears the burden of proving it.

───※ ·❆· ※───

29
 Consolidated Distillers of the Far East, Inc. v. Zaragosa,
CAGUIOA, J.
G.R. No. 229302 June 20, 2018
SUMMARY
In this case, the petitioner Consolidated Distillers of the Far East, Inc (CDFEI)
does not question the propriety of the award of separation pay in lieu of reinstatement.
The petitioner only questions the computation of backwages which it argued should be
computed only until 200r or prior the execution of the Asset Purchase Agreement.
DOCTRINE
When there is a supervening event that renders reinstatement impossible, backwages
is computed from the time of dismissal until the finality of the decision ordering separation
pay.

In Bani Rural Bank v. De Guzman, The LA then recomputed the award and ruled that
backwages should only be paid until the date that the employees manifested that they no
longer wanted to be reinstated. The NLRC and the CA, however, both ruled that the
backwages should be counted until the finality of the NLRC decision awarding separation
pay. The Supreme Court held therein that when there is a supervening event that renders
reinstatement impossible, backwages is computed from the time of dismissal until the
finality of the decision ordering separation pay.

The reason for this, as the Court explained in Bani, is that "[w]hen there is an order
of separation pay (in lieu of reinstatement or when the reinstatement aspect is waived or
subsequently ordered in light of a supervening event making the award of reinstatement no
longer possible), the employment relationship is terminated only upon the finality of the
decision ordering the separation pay. The finality of the decision cuts-off the employment
relationship and represents the final settlement of the rights and obligations of the parties
against each other."

───※ ·❆· ※───

30
 BACKWAGES

Albay Electric Cooperative, Inc. v. ALECO Labor Employees

Organization
CAGUIOA, J.
G.R. No. 241437 Sept. 14, 2020
SUMMARY
This case covers the retrenchment of the employees of an electric cooperative.
The cooperative argued that it did not need to pay back wages that came along with
the retrenchment as it complied with the return-to-work order of the Secretary of
Labor.

DOCTRINE
In illegal dismissal cases, backwages refer to the employee's supposed earnings had
he/she not been illegally dismissed. As applied in this case, backwages correspond to the
amount ought to have been received by the affected employees if only they had been
reinstated following the Assumption Order. This shall similarly include not only the
employee's basic salary but also the regular allowances being received, such as the
emergency living allowances and the 13th month pay mandated by the law, as well as those
granted under a CBA, if any.

NOTES
In cases where a strike has already taken place, the assumption order shall have the
effect of: (a) directing all striking workers to immediately return to work (return-to-work
order), and (b) mandating the employer to immediately resume operations and readmit all
workers under the same terms and conditions prevailing before the strike. The status quo
to be maintained under Article 278 [263] of the Labor Code refers to that which was
prevailing the day before the strike.

───※ ·❆· ※───

Nacar v. Gallery Frames

CAGUIOA, J.
G.R. No. 189871 Aug.13, 2013
SUMMARY
Petitioner Nakar, was dismissed without just cause by his employer, respondent,
Gallery Frames. Nakar argues that the October 15, 1998 decision and computation of
back wages and separation pay of the Labor Arbiter has not become final and executory.
Petitioner contends that the reckoning point for the computation of the backwages and
separation pay should be on May 27, 2002, the day when the Resolution of the Supreme
Court became final and executory, and not when the decision of the Labor Arbiter was
rendered on October 15, 1998. Further, petitioner posits that he is also entitled to the
payment of interest from the finality of the decision until full payment by the
respondents. The Court granted the petition.

31
DOCTRINE
Until June 30, 2013, In the absence of an express stipulation as to the rate of interest
that would govern the parties, the rate of legal interest for loans or forbearance of any
money, goods or credits and the rate allowed in judgments shall be twelve percent (12%)
per annum. The above guideline were changed by the Monetary Board, now, the amount of
legal interest is only 6% effective July 1, 2013 onwards (applies prospectively not
retroactively). It shall be note that in this case, judgments that have become final and
executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented
applying the rate of interest fixed therein (which was 12%).

NOTES
“xxxx
Recently, however, the Bangko Sentral ng Pilipinas Monetary Board (BSP-MB), in its
Resolution No. 796 dated May 16, 2013, approved the amendment of Section 2 of Circular
No. 905, Series of 1982 and, accordingly, issued Circular No. 799, Series of 2013, effective
July 1, 2013, the pertinent portion of which reads:
The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the
following revisions governing the rate of interest in the absence of stipulation in loan
contracts, thereby amending Section 2 of Circular No. 905, Series of 1982:
Section 1. The rate of interest for the loan or forbearance of any money, goods
or credits and the rate allowed in judgments, in the absence of an express contract as
to such rate of interest, shall be six percent (6%) per annum.
Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations
for Banks and Sections 4305Q.1, 4305S.3 and 4303P.1 of the Manual of Regulations for
Non-Bank Financial Institutions are hereby amended accordingly.
This Circular shall take effect on 1 July 2013.
Thus, from the foregoing, in the absence of an express stipulation as to the rate of
interest that would govern the parties, the rate of legal interest for loans or forbearance of
any money, goods or credits and the rate allowed in judgments shall no longer be twelve
percent (12%) per annum - as reflected in the case of Eastern Shipping Lines40 and
Subsection X305.1 of the Manual of Regulations for Banks and Sections 4305Q.1, 4305S.3 and
4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions, before its
amendment by BSP-MB Circular No. 799 - but will now be six percent (6%) per annum
effective July 1, 2013. It should be noted, nonetheless, that the new rate could only be
applied prospectively and not retroactively. Consequently, the twelve percent (12%) per
annum legal interest shall apply only until June 30, 2013. Come July 1, 2013 the new rate
of six percent (6%) per annum shall be the prevailing rate of interest when applicable.
xxxxx”
“xxxx
In the recent case of Advocates for Truth in Lending, Inc. and Eduardo B. Olaguer v. Bangko
Sentral Monetary Board, this Court affirmed the authority of the BSP-MB to set interest rates
and to issue and enforce Circulars when it ruled that "the BSP-MB may prescribe the maximum
rate or rates of interest for all loans or renewals thereof or the forbearance of any money,
goods or credits, including those for loans of low priority such as consumer loans, as well as
such loans made by pawnshops, finance companies and similar credit institutions. It even

32
 authorizes the BSP-MB to prescribe different maximum rate or rates for different types of
borrowings, including deposits and deposit substitutes, or loans of financial intermediaries."
Nonetheless, with regard to those judgments that have become final and executory prior to
July 1, 2013, said judgments shall not be disturbed and shall continue to be implemented
applying the rate of interest fixed therein.
To recapitulate and for future guidance, the guidelines laid down in the case of Eastern Shipping
Lines are accordingly modified to embody BSP-MB Circular No. 799, as follows:
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. The provisions
under Title XVIII on "Damages" of the Civil Code govern in determining the measure of
recoverable damages.
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. xxxxx”

───※ ·❆· ※───

Symex Security Services Inc. v. Rivera

CAGUIOA, J.
G.R. No. 202613 November 8, 2017
SUMMARY
A complaint for non-payment of overtime pay and other benefits was filed by
the respondents. They were relieved from their positions as security guards because
they refused to withdraw their complaints. Hence, the respondents filed an amended
complaint for illegal dismissal. The Supreme Court ruled in favor of the respondents for
the failure of the petitioner to present proof that the dismissal was valid.

33
DOCTRINE
In cases of illegal dismissal, the employees must first establish by substantial
evidence that they were dismissed. If there is no dismissal, then there can be no question
as to the legality or illegality thereof. The employer, on the other hand, must prove that
the dismissal was valid.
NOTES
To constitute abandonment, it must show that there must be clear and deliberate
intent to discontinue one’s employment, and the concurrence of the following requisites:
1. failure to report for work or absence without valid or justifiable reason
2. a clear intention to sever the employer-employee relationship, with the second
element as the more determinative factor and being manifested by some overt acts

Under the doctrine of strained relations, the payment of separation pay is considered
an acceptable alternative to reinstatement when the latter option is no longer desirable or
viable. On one hand, such payment liberates the employee from what could be a highly
oppressive work environment. On the other hand, it releases the employer from the grossly
unpalatable obligation of maintaining in its employ a worker it could no longer trust.

Strained relations must be demonstrated as a fact. The doctrine of strained relations

should not be used recklessly or applied loosely nor be based on impression alone.

───※ ·❆· ※───

Jarabelo v. Household Goods Patrons, Inc.

CAGUIOA, J.
G.R. No. 22316 Dec 2, 2020
SUMMARY
Gil Sambu Jarabelo was accusing his employer and Dulalia of illegal dismissal
after he was given the option to resign due to his poor performance as an employee.
DOCTRINE
It is settled that "in illegal dismissal cases 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."
NOTES
There have been instances where the Court directed the payment of separation pay
even if there was no dismissal of the employee instead of a directive for the employee to
return to work and for the employer to accept him. IIn Nightowl Watchman & Security
Agency, Inc. v. Lumahan (Nightowl), the Court directed the payment of separation pay even
if it found that no dismissal took place considering that more than 10 years had already
passed since the employee stopped reporting for work.

───※ ·❆· ※───

Elpidio Que vs Asia Brewery

34
 CAGUIOA, J.
G.R. No. 202388 April 10, 2019
SUMMARY
According to Petitioner Elpidio Que, he was forced to resign by the management
and the offer was unlawful and too low. He refused the offer and continued however he
was later prevented from entering the office and was served by the Human Resources
Department a letter informing him of his termination due to redundancy
DOCTRINE
Constructive dismissal has been defined as the "cessation of work because 'continued
employment is rendered impossible, unreasonable or unlikely, as an offer involving a
demotion in rank or a diminution in pay' and other benefits." It may exist "if an act of clear
discrimination, insensibility, or disdain by an employer becomes so unbearable on the part
of the employee that it could foreclose any choice by him except to forego his continued
employment.
NOTES
ART. 298. [283] 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. As defined, "redundancy exists when the
service of an employee is in excess of what is reasonably demanded by the actual
requirements of the business. A redundant position is one rendered superfluous by any
number of factors, such as overhiring of workers, decreased volume of business, dropping
of a particular product line previously manufactured by the company or phasing out of a
service activity formerly undertaken by the enterprise

───※ ·❆· ※───

35
 Ebus v. The Results Company, Inc.
CAGUIOA, J.
G.R. No. 244388 March 3, 2021
SUMMARY
Petitioner Ebus, a Team Leader of The Results Company, INC. (TRCI), a Business
Process Outsourcing (BPO) Company, failed to inform his subordinate of the penalty
imposable on her because of her error during a call which resulted to the Company
temporarily laying him off without proving that such infraction was detrimental to the
Company and failing to provide a legitimate ground for such thereby constituting
constructive dismissal on the Company’s part.
DOCTRINE
Although the exercise of management prerogative will ordinarily not be interfered
with, it is not absolute and it is limited by law, collective bargaining agreement, and general
principles of fair play and justice.” Indeed, having the right should not be confused with
the manner in which that right is exercised
NOTES
Measured against the standard of valid transfer of employees as stated in Morales v.
Harbour Centre Port Terminal, Inc. (Morales), the Court is convinced that the Company
failed to prove any valid and legitimate ground to re-profile as the drastic action was
not commensurate to the transgressions.
In cases of transfer of an employee, the employer has the burden to prove
that its conduct is valid and legitimate and that it would not be prejudicial to the employee;
otherwise, it will be deemed as constructive dismissal.

───※ ·❆· ※───

LBC Express-Vis, Inc. vs. Palco

CAGUIOA, J.
G.R. No. 217101 Feb. 12, 2020
SUMMARY
Employee Palco reported before her employer LBC her immediate superior for
its sexual harassment committed against her. She filed a formal complaint but sensing
that employer LBC would not immediately act, she resigned six days after. LBC did not
immediately act on the formal complaint hence employee Palco filed a complaint for
constructive dismissal.
DOCTRINE
An employee is considered constructively dismissed if he or she was sexually harassed
by her superior and her employer failed to act on his or her complaint with prompt and
sensitivity.

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

employment impossible, unreasonable or unlikely, or has made an employee’s working
conditions or environment harsh, hostile and unfavorable, such that the employee feels
obliged to resign from his or her employment. Common examples are when the employee is
demoted, or when his or her pay or benefits are reduced. The gauge to determine whether
there is constructive dismissal, is whether a reasonable person would feel constrained to
36
 resign from his or her employment because of the circumstances, conditions, and
environment created by the employer for the employee.

One of the ways by which a hostile or offensive work environment is created is

through the sexual harassment of an employee.

Workplace sexual harassment occurs when a supervisor, or agent of an employer, or

any other person who has authority over another in a work environment, imposes sexual
favors on another, which creates in an intimidating, hostile, or offensive environment for
the latter.
NOTES
Sec. 3 of R.A. No. 7877 (Anti-Sexual Harassment Act) states that:
. In a work-related or employment environment, sexual harassment is committed when:
xxx
1. the above acts would result in an intimidating, hostile, or offensive environment for the
employee.

Resignation vs. Constructive Dismissal

In Saudi Arabian Airlines (Saudia) v. Rebesencio, this Court differentiated between voluntary
resignation and constructive dismissal:

In Bilbao v. Saudia, this court defined voluntary resignation as “the voluntary act of an
employee who is in situation where one believes that personal reasons cannot be sacrificed
in favor of the exigency of the service, and one has no other choice but to disassociate
oneself from employment. It is a formal pronouncement or relinquishment of an office, with
the intention of relinquishing the office accompanied by the act of relinquishment. Thus,
essential to the act of resignation is voluntariness. It must be the result of an employee’s
exercise of his or her own will.

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

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

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

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

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

───※ ·❆· ※───

Airborne Maintenance and Allied Services Inc. v. Egos Airborne

Maintenance and Allied Services Inc.
37
 CAGUIOA, J.
G.R. No. 222748 April 3, 2019
SUMMARY
Private respondent reported for work but was just ignored by Airborne
(employer) and was told that there was no work available for him. Feeling aggrieved,
he filed a complaint for constructive/illegal dismissal. Airborne, on the other hand,
insisted that private respondent was never dismissed from service.
DOCTRINE
Petitioner's acts of not informing respondent and the DOLE of the suspension of its
operations, failing to prove the bona fide suspension of its business or undertaking, ignoring
respondent's follow-ups on a new assignment, and belated sending of letters/notices which
were returned to it, were done to make it appear as if respondent had not been dismissed.
These acts, however, clearly amounted to a dismissal, for which petitioner is liable.

───※ ·❆· ※───

Seventh Fleet Security Services vs Loque

CAGUIOA, J.
GR No. 230005 January 22, 2020
SUMMARY
Respondent Rodolofo Loque (Loque) was hired as a security guard by the
petitioner Seventh Security Services in May 2006. A few years later, Loque alleged that
he experienced hostility after he filed a complaint for underpayment of wages and other
money claims against Seventh Fleet and its President, Medy Latica. He was suspended
for 10 days and when he reported back to work, he was informed that he was placed on
“floating status”
DOCTRINE
While there are no specific provisions in the Labor Code governing “floating status”
of employees, the Court considers this as a form of temporary retrenchment or lay-off. In
security service, this may take place when there are no available posts to which the
employee may be assigned which may be due to the non-renewal of contracts with existing
clients or from client’s request for replacement of security guards assigned to it.

───※ ·❆· ※───

Abanto vs Abanto Board of Directors of the Development Bank of

the Philippines
CAGUIOA, J.
G.R. Nos. 207281 & 210922 March 5, 2019
SUMMARY
In its Petition for Certiorari, DBP claims that the COA gravely abused its discretion and
maintains that the prohibition in the Teves Retirement Law does not preclude the adoption of
an early retirement incentive plan.

38
DOCTRINE
1. In determining whether a retirement plan is indeed an early retirement incentive
plan, the primary consideration is the objective.

2. Retirement benefits and separation pay are not mutually exclusive. Retirement
benefits are a form of reward for an employee’s loyalty and service to an employer and are
under existing laws, CBA’s employment contracts and company policies. On the other hand,
separation pay is that amount which an employee receives at the time of his severance from
employment, designed to provide the employee with the wherewithal during the period that
he is looking for another employment and is recoverable only in instances enumerated under
Articles 283 and 284 of the Labor Code or in illegal dismissal cases when reinstatement is
not feasible.

───※ ·❆· ※───

MANAGEMENT PREROGATIVE

The Heritage Hotel, Manila v. Sio

CAGUIOA, J.
G.R. No. 217896 (Resolution) June 26, 2019
SUMMARY
Sio was involved in two separate incidents which led to the questioned
suspensions. Both the LA and the NLRC found that, in both occasions, Sio committed the
acts which justified her suspension. For the first incident, the labor tribunals found that
she arrogantly talked to the VIP client, Tiozon and the PAGCOR employee, Bumatay. For
the second incident, she made utterances which embarrassed another client, Mendoza.
DOCTRINE
An employer has a free reign and enjoys wide latitude of discretion to regulate all
aspects of employment, including the prerogative to instill discipline in its employees and
to impose penalties, including dismissal, upon erring employees.

───※ ·❆· ※───

39
 JURISDICTION AND RELIEFS

Katj Global Marketing Network Inc., vs Mara

CAGUIOA, J.
G.R. No. 190654 October 4, 2017
SUMMARY
Employer Karj appealed without the requisite bond to the NLRC from the LA
regarding a monetary claim of its employee. Karj’s reasoning for failing to file a bond
was that there was an ongoing insolvency proceeding and there was an RTC order which
prevented it from disposing its assets.
DOCTRINE
The general rule is that the posting of the bond is "an indispensable requisite for the
perfection of an appeal by the employer." in accordance with Article 223 of the Labor Code.
However, as against this rule, the Court has recognized exceptional circumstances where it
relaxed the requirement for an appeal bond. To determine whether to allow a liberal
application of the rule on bonds, it is crucial to understand, whether the employee stands
to lose the security provided by the appeal bond as the purpose of the appeal bond, as held
in Viron, is to ensure that when the workers prevail, they will receive the money judgment
in their favor.

In this case, the Court deems the existence of the insolvency proceedings as an
exceptional circumstance to warrant the liberal application of the rules requiring an appeal
bond. The failure to file an appeal bond did not contradict the need to ensure that
respondent, if his claim is deemed valid, will receive the money judgment.

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